Currently the news pages are full of stories about Greece and the Financial Crisis and its possible default on its enormous debt. It is all very confusing because it is not clear to the average reader how can a country so mismanage its affairs that bankruptcy is the result.
I served in Greece for several years and I have read quite a bit about the modern country we know today. Greece was never a rich country to begin with, I am excluding here the period of the City States of Antiquity. During the Ottoman occupation of Greece which lasted for 400 years the country was small population lived on a agricultural and pastoral economy, the Greeks living on the numerous islands faced a subsistence living based on fishing and were mostly isolated during the winter months given the Aegean Sea storms. Lawrence Durrell wrote an excellent book on the Islands of Greece in the 1930’s, it was not the life of today. Given Greece’s economic woes and role as yet another Mediterranean holiday destination, it is hard to appreciate the freedom, sunlight and sense of space that it provided 50 or more years ago. Intrepid travellers would come to explore ruins and ancient villages in solitary peace, and sleep under the stars on empty sandy beaches.
Greece had a Monarchy until April 1967 when a group of Colonels took over in a Coup and sent King Constantine packing. He has been living in exile in Spain, he is related to the King of Spain and to Queen Elizabeth II and Prince Philip. His naiveté and lack of action in the face of military action caused his downfall.
The Junta finally fell from power in 1974 after the Cyprus Crisis which saw Turkey occupy half of the Island to this day. A crisis which is still unfolding today and has repercussions in Greece proper. After the fall of the military Junta the subsequent Greek governments did all they could to foster a sense of prosperity and worked at joining the European Union. Something that was not possible during the years of military dictatorship when Greece a member of NATO, was an international pariah. Government spent lavishly on the population and introduced many economic measures which could not be sustained. Greece’s economy is heavily dependent on tourism and tax evasion was and is a national sport with little consequences. Finally Greece joined the EU in 1981 and adopted the Euro as its currency 2001, however it did so by presenting to the European Economic Commission cooked books on its real financial situation. An investigation was opened in 2004 when the true economic picture of Greece became known. The Greek Government had misrepresented the extent of its debts and its lack of hard currency to pay back what it owed. However the true extent of the crisis took hold in 2010. To this day Greece has received 290 Billion Euros in loans to help it get out of this financial crisis it created through years of large deficit spending on a population of 10 million people, most of whom work in government related jobs. Another scandal was the building of the Megaron in Athens with EU funds. The Greek government had asked for and received generous subsidies to build a Convention Centre however the money was used instead to build a marble Opera palace on a lavish scale. I went to the opera in Athens and was stunned by the luxury of the place. It is this lack of honesty and the widespread corruption within the Greek administration that has the EU up in arms now.
The austerity program denounced by the current newly elected left wing government is nothing more than economic reforms which are necessary to avoid more debt. Greece use to give at Christmas time a full 13th month salary to all State employees. A free month pay for no work, just one example of the many extravagances it could not afford. But who was going to complain about free money. Tax evasion remains a large scale problem with little effort to tackle the beast, capital flight another. The EU has run out of patience and it is understandable. Germany has held a firm line like anyone who is afraid that it will never see the money it lent paid back. The canard bandied about in the media that Greece forgave Germany its debts in 1953 and now Germany should do the same, ignores the fact that in 1953 Greece was in turmoil and dealing with the aftermath of a Civil War following the end of WWII. It was in no position as a poor European country whose population largely immigrated to the USA and Canada for work to do any such thing. It was the Marshall Plan and other countries like Canada who came to the rescue of Europe and Greece.
The banks and the IMF are not at fault here and suggesting that they are is nonsense and ignores the facts of the case and history. Germany, France, the EU are also not at fault. For the last 5 years they have been asking while lending money to float the Greek boat, economic reforms which have not come. The left wing Syrisa Party now in power made wild promises to the Greek people to get elected, of those promises nothing has come,they wasted opportunities to make economic reforms and now are unable to negotiate a better deal with the EU. Syrisa refused to negotiate knowing this would mean concessions, they promised the Greek people to stand firm, now Prime Minister Alexis Tsipras has painted himself in a corner. His Financial Minister Yanis Varoufakis has been intransigeant and today called the other EU governments ”terrorists” showing a lack of maturity and silly bravado. Greeks are truly caught now in a terrible situation. If Greece is forced out of the European Union it will fall into a third world status amongst the poor countries of Southern Europe. The EU will recover from any exit (Grexit) by Greece, it is the Greeks who have all to loose and then some. Sunday 5 July is the referendum date ordered by Greek PM Tsipras, Greece knows that a NO vote will send them out the door with all the terrible consequences that entails. A YES vote will not be the end of the problems but it will be a clear signal to Europe.
Syntagma Square and the Greek Parliament
This referendum is in fact not so much about the debt and more austerity it is a referendum on PM Alexis Tsipras and his Syrisa government, if the Greeks vote YES it will be a terrible defeat for him and he will be forced out, his government will fall and Greeks will have to return to the Polls to elect a new Government. This is really what it is all about.