May 24, 2010

Gallivanting around the globe is usually not advisable for political leaders in the midst of sweeping domestic changes, possible bankruptcy and public protests. Unless that is, you are Prime Minister George Papandreou.

To encourage foreign investment in Greece after the government began implementing austerity measures, the Prime Minister regressed into his role as Minister of Foreign Affairs to chat with Larry King in Atlanta, attend the Latin America-EU Summit in Madrid, and most recently, to visit Beirut for the opening session of the Arab Economic Forum.

Erstwhile back home, his constituents in the public sector remain determined to keep Greece on its long march of folly, indulging in strategies that only degrade the confidence of investors within and abroad: 

Seething at tax hikes, pension reform, and slashed salaries, a fourth general strike of the public sector took place on May 20—a day after Greece repaid an 8.5 billion dollar bond to stave off default.

Coolly washing their hands of responsibility, the union representing the workers at the Public Power Corporation, a government monopoly on electricity, condemned the government for “succumbing to the pressure of [global financial] markets” to the detriment of the Greek people and threatened to strike again on May 25 for a rolling forty-eight hours. 

Clearly, though the government has no choice but to enforce the new laws, these measures merely address the economics of the nation and not the mindsets that ultimately determine whether a country recovers from a crisis or not.

Bernard Lewis points out that when things “go wrong in a society in a way and degree that can no longer be concealed or denied,” there are two questions people can ask: One is, “What did we do wrong?” and the other is “Who did this to us?” In Greece, asking the first question leads to efforts to make things right while asking the second question leads to blaming foreign scapegoats and the perpetuation of the problem.

For at least three decades, the public sector enjoyed a symbiotic and Faustian pact with the alternating governments of both New Democracy and PASOK, who provided some one million people with jobs in exchange for votes. More importantly, as long as workers were receiving their 14-month salaries, early retirements, additional benefits, and another 463 million euros annually in bribes, they not only assured their indifference to the venality of politicians and their ‘kick-back’ relationships with businessmen, but also made sure that privatization and free-market competition had no viable place in the Greek economy. 

Naturally, most people were loathe to pay taxes to sponsor the lives of a bloated public sector and a corrupt government that would, ever so often, plunder taxpayer money with impunity.

According to Transparency International, Greece enjoys the same level of corruption as the West African republic of Ghana, with tax evasion costing the country an estimated 15 billion euros a year while the public sector makes up 40 percent of Greece’s GDP. 

This unsustainable cycle flourished until Greece amassed a damning public debt of 310 billion euros, rendered the Eurozone into a danger zone and obliged the European Commission, the ECB, and the IMF to intervene with a loan not only for Greece’s ‘salvation’ but also for the EU as a project and even as an idea.  

“How the government handles unrest depends on whether it will strengthen law enforcement, hold both private citizens and public officials accountable, and make bold changes in the deregulation of its market.”

Indeed, according to Robert B. Edgerton, professor of psychological anthropology at UCLA, though “people may complain incessantly about a variety of destructive things in their lives…only rarely do they attempt any fundamental changes in their traditional beliefs or practices. Large changes, if they occur at all, are typically imposed by some external event or circumstance.”

Of course, the measures imposed by the EU and IMF will not only affect Greece’s public sector. For the foreseeable future, the country will go into recession and various stages of disintegration. How the government handles unrest depends on a few additional factors: whether it will strengthen law enforcement, hold both private citizens and public officials accountable, and whether it will make bold changes in the deregulation of its market. 

To Papandreou’s credit, nearly 100 potential trouble-makers were detained by the police on the morning of May 20th, making for a peaceful protest of over 20,000 people who marched to parliament shouting “Thieves!” Also,  the tax-axe is being wielded far and wide, and not only on members of the private sector like doctors and businessmen. Greeks were pleasantly surprised when the Deputy Culture and Tourism Minister resigned over an alleged tax scandal—a first for Greece.

Furthermore, the law granting all 300 members of parliament immunity from criminal persecution will be repealed in June. Luckily for rats who may have to jump ship,  this law is in stark contrast to justice as perceived in ancient Athens, where thieves were executed and officials caught helping themselves to public funds were flogged or exiled (prostitutes paid their taxes and primarily kept their hands in their clients’ pockets). 

As President Karolos Papoulias said, “I’m certain that the Greek people will respond, but they have to be convinced there will be justice. That tax evasion will be combated. That those who got rich at the expense of the Greek people will be punished.”

In this spirit, there is a silent minority in Greece which recognizes, if not welcomes, the new austerity measures, hoping that they would painfully but slowly transform the mentality and practices of the nation as a whole. There is a further hope that a transparent, trimmed down and streamlined government will help reignite the growth of small business in Greece, attract foreign investment, and perhaps, re-haul the dismal public education system that compels so many Greeks to bet their money on a private education abroad. 

In the German version of Faust by Goethe, angels intervene at the last minute and Faust is spared from going to hell. In the original version of the legend however, Faust is not so lucky. Which version applies to this Greek tragedy remains to be seen,  but if “high ancestral fields are its quest” one thing is for certain: the nation itself must raise “itself forcibly from dust” and for that, mindsets must change, taxes must be paid, and heads must roll.


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