The View From Greece

Wall Street Greek columnist Alex Miral's trip to Greece coincided with the most challenging time for the Greek people since the military Junta fell in 1974. From the moment of his arrival, practically every day brought increasingly negative news about what Greece owed to foreign creditors, the amount of sacrifice much of the population would have to bear, Greece's standing in the world, and to make matters worse, the demonstrations and violence of the last week. In the paragraphs that follow, Alex offers readers a personal and exclusive look at the tragic view from within Greece.

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The View From Greece

I have been in Greece during the past two weeks to deal with an urgent matter regarding my family's house in central Athens. Though my name does not indicate it, I am of Greek origin and have been visiting Greece almost every year since I was in college and have a profound love and connection to this country. My lifelong connection with Greece makes what is now happening here extremely hard to take.

As it turns out, my trip here has coincided with the most challenging time for the Greek people since the military Junta fell in 1974. Since I arrived, practically every day has brought increasingly negative news about what Greece owes to foreign creditors, the amount of sacrifice much of the population has to bear, Greece's standing in the world, and to make matters worse, the demonstrations and violence of the past few days. Many here, whether they are civil servants, own small businesses or work in companies, do not know how they will pay their rent, feed their families or basically survive with the deep cuts to already low salaries and the imminent deep recession that will last at least a few years.

I have seen the fear and uncertainty of friends and relatives. This has greatly increased since the Marfin Bank in Stadiou Street was firebombed by anarchists during demonstrations against austerity on May 5th, leaving four dead, one man and two young women, one of whom was pregnant. This was a bank I have passed by many times over the years and the deaths of those innocent people, and seeing its effect on their families has shaken me to the core. Furthermore, witnesses say the hooded thugs that broke into the bank shouted something like: You work for a bank – you shouldn't have worked today like us. After hearing them choke, they said "Choke and die". This was a murder with a brutality that I never thought could happen here. Since then, I have walked through many of my favorite streets and neighborhoods thinking how wonderful it was here for at least 20 years and how sad and bleak it seems now. The cafes and trolleys normally filled with tourists and locals this time of year are half empty. With what seem to me a weak government and a police force with a poor record of catching criminals, I wonder whether these murderers will ever be brought to justice.

However, I heard that there were thousands of ordinary people protesting, shouting at politicians in a chant calling them thieves. With what I have heard over the years about many Greek politicians, those chants are most likely not far off the mark. Thursday evening, after meeting a friend in Ommonia Square I happened on a thankfully peaceful protest by the communist affiliated Union P.A.M.E. that moved on the Parliament building and was shown around the world on CNN, and was reported to be one of the contributing factors to the stock market selloff in the U.S. Thousands were waving red flags accompanied by loud protest songs. Though I am not a leftist, I understand the grief many of these ordinary people feel. There has clearly been corruption on a large scale by politicians of every political party. Most wealthy people pay little if any taxes. The corruption is so widespread, it includes practically all government and municipal agencies, even doctors and hospitals. People pay under the table for almost every service here.

I didn't take real notice until my family was affected. We had an old Athenian house that shared a staircase with our neighbor, one of the only of its kind left in Athens. One day on a trip, we found the staircase demolished and our house dangling in the air unprotected, severely damaged, and clearly a hazard for those passing by. We found out that the neighbor submitted fraudulent plans to the Athens building department to get an illegal approval to remove the common stair and was apparently not required to take any safety precautions. No-one from the building department bothered to check what happened let alone any investigation. In fact, the county public works department sent us a summons that we had to make this building safe at our expense, which was practically impossible to do. We have had to go through great lengths to protect ourselves including demolishing most of the house and commencing a lawsuit against the neighbor that is guaranteed to take several years in Greece's overburdened legal system. I never heard of this happening in any other country. In other EU countries, I have been told that this would have been declared a criminal act and those responsible prosecuted to the full extent of the law.

In my time here, I have met some interesting people that are giving me some insight as to the mood of the people here; for example, the owner of a photocopy store in Ommonia, a taxi driver, and a real estate broker in Thissio. I have been impressed with their capacity for introspection and keen awareness of what is going on around them, which has given me hope that perhaps there will be positive changes starting at the grass roots level. The real estate broker said something quite profound: the Crisis is showing the Greeks their insides, forcing them to face the reality of their character. The shop keeper told me that he felt all the Greeks are at fault for the situation they are in. The taxi driver was mourning the deaths of the bank workers and wondered what kind of future his teenage children will have.

EU Contradiction

Some of the Greek debt is not entirely the fault of the Greek state. Greece has the highest per capita military spending in the E.U., because of unsolved issues with Turkey - including Cyprus, and needs to keep an army of 150,000 soldiers in a country of under 11 million people. By comparison Germany has 220,000 soldiers but a population of 80,000,000 people. France and Germany have not allowed Greece to cut back on their several billion dollar purchases of military equipment from them, even with this aid package. An integral part of this problem is that the EU has not guaranteed the border of Greece. It is an astonishing failure of the E.U. that it has not guaranteed the border of one its member states, an action that could help streamline the budget deficit of the country. To give Greece some further credit, the private sector has performed OK; their banks were not exposed to U.S. subprime mortgages as in other parts of Europe and they largely escaped the crisis of two years ago. The private debt in Spain, Portugal and several other E.U. countries is considerably higher. However, the Greek government sector is another story.

The Greek state is way too large and public sector unions too powerful, so much so they can bring the country to a halt and have prevented much needed reforms. A close friend Dimitrios Tsomocos, Professor at Oxford SAID Business School, explained to me that there is no meritocracy in Greece, which means that the good and talented human capital often cannot find work in Greece; and many left the country and have excelled elsewhere. He explained further to me that the entire public sector operates by party politics resulting in people with questionable CV's and little or no experience getting important positions due to party affiliation. This adversely affects important departments such as Education, Public Works, Athletics, etc. that are often run by politicians that only care about their narrow political interests. Consequently, if there is not a timely overhaul of the Greek political system, there is a danger of a wave of emigration, a brain drain that will dwarf that of the 60's and 70's, endangering decades of future growth.

With the impending difficulties for much of the population if Greece successfully implements the austerity mandated by the EU – IMF or poverty if Greece leaves the Eurozone, I have been surprised that not one wealthy Greek has stepped up and said they would create a fund to help the poor make it through the hard times ahead. These are people that took great advantage of the system here for years and amassed great wealth, some in the billions of Euros. This is clearly visible in Athens' northern and southern suburbs and in the many huge yachts that are seen in the islands, and huge villas seen in the country, but few or none seem willing to help those less fortunate. For example, there has been no Greek equivalent to Warren Buffet or Bill Gates, who have given billions to education, hospitals, medical research, and tools to create opportunities for the less fortunate. Many of these people must be well known to the government here and in Europe but none so far are volunteering or being forced to pay something back to their country. This is a disgrace of the highest order. I have heard ordinary people say that they would sacrifice but so should the rich and the politicians. They have a point; it is high time the Greek wealthy make the type of contributions to their society similar to those that are made by their counterparts in other developed western countries.

The crisis has now moved well beyond Greek borders, and has shown the need for introspection and policy action in many advanced economies that are highly indebted, including the U.S., the U.K. and Japan. Last week, sovereign bond spreads widened in Spain and Portugal, interbank lending rates in Europe are increasing, and there are growing fears of contagion to Spain and Portugal and potential serious ramifications in Britain, the U.S.A. (which are both highly indebted nations), and the rest of the planet. Greece is a country that has a history of division and in-fighting going back to ancient times. However, historically its people have also come together, mostly during times of crisis, and accomplished great feats, the sort of which are required here now. Considering the present global economic conditions, policies required to combat indebtedness could result in civil unrest in many other developed countries. For example, in my home town New York City, what would happen if the New York State / Bloomberg Administration cut the salaries of MTA workers or teachers by 20% and raised taxes? At this time it seems to me that both locally and internationally, there needs to be unprecedented cooperation between opposing political parties, between rich and poor, governments and the private sector to solve these immense problems that are now becoming global. I sincerely hope this happens for the future of all of us.



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