The Crisis in Greece is not financial but cultural
Greece will default one day on its debt. The “when” will be decided by the ECB and Berlin, the current creditors of the Greek Government. Debts can be restructured through deliberation, strategy and negotiations. Numbers are pliable and never lie. The biggest problem Greece faces is the restructuring of its society and its ethics. The present model (started in 1981) has failed miserably economically. Unfortunately most people in Greece do not acknowledge its failure and on top of that, wish for the current system to remain (so they can partake more in the current party of sleaze and sloth).
While truth does hurt, truth shouldn’t be ignored (like it has been for the last 35 years). Words like kletpocracy (look at the irony, it has Greek roots), corruption and strikes are an integral part the Public sector. It seems fit to a Greek Drama that the hero (main actor) is the son of the Arch villain. Andreas Papandreou, a charismatic populist engendered the current despicable culture and its inner workings. Under his watch the state turned into a patronage machineryoffering public sector jobs(security, persk and no supervision) to party loyalists no matter their skills or the job’s need to exist at the first place.
The country’s statistical data are a testament to his colossal failure as a Prime Minister over a decade. The ratio of Public debt to GDP rose from 28% to 90% by 1989. Those were the years Greece mortgaged its future (present). On the other hand he succeeded on his other job, to make his Party the only major political force for 20 years. The system he created proved to be so powerful that even the “conservative” party had to follow the same recipe in order to win office. They actually perfected the socialist formula. Deficits were ignored and cronyism was reinforced to a awful degree
In this environment, chances are low that a phoenix will arise from the ashes, most probably he will ask for a bribe in order to do so. With minor exceptions all the political class in Greece has never worked in a free market before and is shrouded in a veil of kickbacks and perks. The society didn’t care about anything and they were putting up with that as long as they knew they would get a piece of the action. While Europe is doing its best to get back as much money as it can from Greece, Greek politicians (and society) still are oblivious to the need for consensus and a change of mindset. For example citizens blame Capitalism and free market policies(something Greece never experienced).
In time of crisis, people give their best efforts and overcome their limitations, leaders rise up to the challenges. Greece’s economic torpor can be attributed to Greece’s unwillingness to go the extra mile. For the last 10 years prices in Greece have improved 15% than the EU average, a clear sign that the free market is not working properly. Greece before the Great Catastrophe (Andreas Papandreou) was exporting food. Now Greece is importing more than 50% of the food it consumes (those who advocate Bankruptcy bear in mind this statistic).
Taxes, the highest in every category, were used not for investment reasons to improve infrastructure but to finance the vampiric tendencies of the Government and its armies of overpaid samurais. Even now that the government needs to balance its books is avoiding reducing the money it spends on those vampires, opting to raise taxes more and lower all pensions (even the lowest ones).
The Greek Debt will never be repaid 100%. It is mathematically feasible with a growth rate of 6% for more than 4 decades. 230.000 people lost their jobs in the private sector. If those were public employees that could have saved the budget a figure of more than 8 billion Euros (average salary 2500, year in the public sector, 14 salaries minimum). Instead those 230.000 were adding to the country’s GDP and not sucking blood like vampires do.
Privatization, a word in Greece whose meaning is on par with blasphemy, should have happened already. The leftists and the unions of course are opposed to any plans aimed at curbing their excesses and easy way of life. The public property is not utilized at all, not even the state knows what it owns. Some people say Greece wasted 2 years. The truth is Greece wasted 3 decades.
Time is not on Greece’s side. What is happening now is the decoupling. Once Germany, France have covered their positions and sold the greke debt and their exposure to Greek Debt is limited, Ireland recapitalizes its banks and Portugal is recovering, the Europeans will drop Greece off the boat with lighting speed. Europeans cannot be feeding Greece and Greeks indefinitely. Greece will exit its crisis when people change their ways. Current events show that this will require years and extreme poverty. Patience is a virtue.