Sunday, February 12, 2012

Greece’s Choice

In a narrow sense, the Greek parliament has to choose between a second bailout and a disorderly default. But the prospect of default merely epitomizes a broader bankruptcy – political, institutional and moral. The choice facing Greece is simple: will this be a race to the bottom or a race to the top? There are two Greeces out there, and the battle is on about which Greece is going to prevail. 

One Greece is laid back and relaxed. It is not particularly ambitious, and it dreams of a job that pays well but demands little. It is a Greece that wants to eat well, drink well and live well – so long as it can do this without having to work hard. It is content and not at all shamed to work two or three hours a day and get paid a full day’s work. It sees nothing wrong with evading taxes, crossing a red light, or throwing trash onto the ground. It treats laws as guidelines – follow them when convenient, ignore them when not. It is a Greece that glorifies rebellion and roots for the underdog, not matter what the rebellion is about or what the underdog stands for. It is a Greece that wants to judge but fears to be judged. It knows and celebrates that no one is watching – and acts accordingly. It is paranoid and conspiratorial and finds blame everywhere else but in itself. It is a petty Greece, violent, entitled, spoiled and lazy. It is insular and insecure – insecure about its position in Europe, about its capabilities, about its potential to succeed. And it is a Greece that fears success and envies the success of others – better if we all fail or better yet if no one ever tries. 

The other Greece is hungry and anxious. It is ambitious, and wants to succeed and do big things. It is proud of its history but wants to make its own mark in the world. It is a Greece that can win championships and that can host the Olympics. It is confident, intelligent and highly educated. It has studied or teaches at the world’s premier universities. It conducts research at world-class labs, staffs the world’s top companies, and writes award-winning music and films. It is a Greece that can compete in cut-throat businesses like shipping – and come out on top. It is an entrepreneurial Greece, one that will look for the tiniest opening to profits. It is liberal, tolerant, and commonsensical. It has real worries and real concerns and it has no time for fake battles and illusory struggles. It wants to get things done. And yet it sees that its future is held hostage, that there too many shackles that hold it back. It is a Greece whose one hope and demand from life is to be given the opportunity to succeed. 

Bailout or no bailout, default or no default, the Greek people have to make up their minds. Which Greece do you want to live in?

67 comments:

  1. What if the first Greece vastly outnumbers the second Greece? Most of second Greece has already left I am afraid. And look at the politicians left behind...most represent the first Greece! I wish and pray this acts as a catalyst to get their act together as we all know the charade of continuous bailouts can not go on any longer. Then I look at the destruction tonight and I look at the ongoing statements of the union leaders that they will resist dynamically and I look at what must be done in such a short time and...well, I would not make a bet that Greece #2 will prevail and I so hope I am wrong!!!

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    1. George, I think the first Greece is more vocal, is more willing to shout and will fight stronger for its privileges and "rights." But I still think there is enough evidence that it does not outnumber the second Greece (see, for e.g., my post on Why Can't Greece Reform).

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    2. No doubt that the first Greece is more vocal! And it is fighting stronger than ever lately. I am afraid their numbers are getting larger and the second Greece is getting...quieter! I have interacted with some high school kids in Greece and I am very disturbed that that generation will achieve anything worthy! Did you notice that the molotov bombs were being made in the...Law School building of the University in Athens? Greeat way to learn about justice:-) This article was pretty good in the NYT

      http://mobile.nytimes.com/article?a=912156&f=20

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  2. I am 52 yrs old and of Greek decent and although I never lived there I have visited on a couple of occasions and have known many Greeks in Canada and the USA… not just immigrants… I have Greek friends from my University days that I stayed in touch with over the years and countless relatives.

    I will not argue that there are Greeks that fit your definitions but how is that any different than the citizens of Canada and the USA? If it will make you feel better let me share that there are countless Canadians and Americans that fit both of your descriptions.

    Perhaps you’re concerned that Greece leans a bit more towards the “One Greece”. To that, let me say that Greece’s character has changed significantly in my lifetime and it will continue to change. I’ve seen it happen so fast that I can assure you your dream will come true in your lifetime.

    In the meantime, I suggest you stay focused on the real story. Don’t know if you noticed but Greece is being raped and pillaged by the bankers in front of your very eyes. One reporter described it as a “financial holocaust”. I think he hit the nail on the head.

    Your argument about “the One Greece and the other Greece”, is irrelevant and is not telling at all about the true magnitude of this disaster.

    I don’t think this is about which Greece is going to prevail. It’s about will Greece survive.

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    1. Why don't YOU stay focused on the real story? Who cares if there are the same citizens in the US, Canada or Mongolia or whereever? This story is about Greece! Do you feel blamed or why do you bring up people from other countries??

      And please explain to us: How can bankers "rape" your country? Because they offer Greece to gift money but want at least 30% of the money back which Greece once borrowed to live a life it could never afford? Because the banks to refuse to lend any more money to Greece? It seems it is Greece which is raping the banks and the rest of Europe!!!

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    2. You do have a point. The lazy Greek image something that has been promoted by the tourist industry and Zorba the Greek. If this was the case Greece would have been comparatively cheap. This is not the case. Everything from real estate to a cup of coffee in Athens costs as much as Paris and London.

      The "Zorba" type of people exists but it is not what racked up 350billion in debt. This group would not manage to build even 10B of debt even if they tried.

      A substantial portion of this debt(30 to 50% over the last 20 years of outstanding debt) was accumulated by expenditures which was directly or indirectly a result of the arms bazaar. And rolling over the debt as greece was almost consistently in deficit for at least 20 years.

      If you keep rolling over 50Billion in principal and borrow more to pay interest over twenty years you will end up with 100s of billions in outstanding debt.

      Financing the military complex in Greece has been a problem since the 1950s(the unsustainability was pointed out by old Giorgios) before they had a big welfare state via his son.. Andreas.

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    3. Every society has these two social forces - that's true. What distinguishes Greece and other societies (but not Canada or the USA) is that the first Greece can so easily and importantly get in the way of the second Greece. So while in many places these two forces co-exist and inhabit parallel worlds, in Greece they do not.

      As for whether this crisis is really a crisis of bankers pillaging the country, I don't share that view. This is a Greek crisis, not a European or bankers' crisis.

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    4. The blame game is getting old fast. I am Greek and fed up of seeing fingers pointed out Germany, the EU and the IMF. We had many years to get our house in order, for politicians to raise a red flag but no.....! Everybody satisfied with the status quo.

      Eh well......it's time to get busy and deal with difficult issues and not I repeat NOT demand from the germany WWII reparations. How ridiculous. Good starting point is start throwing the corrupt politicians in jail. Please!

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    5. Anonymous, I am a German and I see it like that: The Greek government should go to court and demand open WWII obligations if it thinks they exist. I say that as objectively as I can because I am simply neither a historian nor a lawyer and cannot judge that. So it is very simple: If the courts agree, the Greek government is right and gets the money, otherwise not. I agree with you that this story should not be used as an excuse for current problems.

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    6. I am an American who always wanted to visit Greece---I was born in New York and now live in Florida----I have no pension plan to retire on---work at least 70 hours a week and take 2 weeks of vacation a year. I cannot see myself taking my family to Greece anywhere in the near future. I must add that we have visited China four times in the past few years and have always felt safe there. If l lived in Germany I would be beyond pissed to be the keeper for my lazy ass brother, but then I could never live in a "Euro" anything zone. Greece should take of Greece. We are fighting our own battles with our President idiot who wants to give everything to all the lazy ass shits that do nothing. It has affected me in that now I give nothing to the poor, because I no longer care about them. Work harder---work longer--the world owes you nothing---and more people are becoming more pissed at the people who think the world owes them something. I take nothing from anyone and in return I owe no one anything.

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    7. I think it's high time we realized that this "Lazy Greeks" lollipop is something the media has so easily given us to suck up on.

      I am a 35-year-old Greek living in Athens, hard working since I graduated and did my obligatory military service. What can you actually do when half of the work power of your country has the ambition to work less than you? Could I revolt? My friends work for 10 hours a day, does this sound enough? Could WE MAKE the rest work more, in any way?

      There is an institution that can affect the obligation/will of people to work more or less in the public or private sector and it is called a GOVERNMENT. It's a government that offered 2000 euros a month to someone working 27 hours a week. It's a government that imposed so stupid taxation on entrepreneurial initiatives that it felt a torture to have a company that did NOT evade taxes in Greece. And so, and so...

      So, please, enough with the lazy Greeks. Corrupt politicians - sure. Immature voters - of course. But, lazy?

      The knowledge of how an official state functions doesn't come from immature voters. It is historically proven that this comes from the ones in power, the intellectuals, the scientists and the philosophers. Working people don't INVENT nations and they don't make decisions regarding their operation. When we object in democratic manifestations, they spray gases on us, for God's sake!

      I have to agree with Mr Tsafos on that: there ARE two Greeces. And one of them sleeps an eternal sleep.

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  3. From a historical point of view the "first greece" has always won. So it was in the time of Trikoupis and his failed reform, so it was with king Otto and his reform fiasco, so it has been in all the clashes between the educated, west oriented Greeks of the Diaspora and the local landowners, extorsionists and more recently party leaders and their trade union mob. I very much doubt the outcome will be any different this time.

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    1. Indeed, history is not on the side of the second Greece...

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  4. Other than the fact that Greece desperately needs to reform herself,I don't see how there can be a "Greece #2" when they put forward measures that endanger political and social cohesion.It's not that surprising that there are many(non-populist)voices here that advocate that bankruptcy and a fresh start are much better than austerity and recession-I don't share that view of course.

    The prime minister predicted that Greece will return to growth by 2013,let's all hope for the best.

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  5. I'll finish up my studies and move to Japan or wherever. Greece #2 is not going to happen any time soon.

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  6. Yeah lets be the Greece that can host the Olympics. And then steal a huge pile of money through the event, and sink the whole country in misery and debts for years to come.

    The Olympics... yeah, that went good.

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    1. Enough, really. I am not Greek but I am living in Greece since 10 years now. Do you know why the Olympics where the event that sink the country in misery and debts. 2004 were the first games after 2011 twin tower. GREECE was obliged to dramatically increase - in comparison to any other Olympic games - the money spent for security. this money were quite totally given to SIEMENS (German company) who was at the center of a big scandal for buying the support of all political side. So US has a request and Germany get rich on the shoulders of Greece!
      You can say whatever you want about political corruption, but the majority of Greek People ara hard worker. do you know any other EU country where young people are able to speak so many languages as the lazy Greek ones?

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  7. An underlying factor not mentioned here is that bribery is accepted by the Greek people as a part of life. This isn't just at the top its in day to day events: doctors, construction companies, driving examiners, even tax collectors ask for bribes and this isn't normal in an EU country and shouldn't be accepted as normal in Greece (or should it?).

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  8. Problem is, both those definitions of 'Greekness' define selfishness and self-interest. The only hope is in community and concern for others, something I have found in short supply in Greece. It IS there, but is overshadowed by the bullies and cheats. It is often undermined by vulnerability, weakness created by people's own actions in circumnavigating overburdening bureaucracy and contradictory laws. They need to start with the courts. An truly independent, effective and reliable system of justice has to be cornerstone of any Greek revival. A means of combating corruption and enforcing the rules of society in the interests of that society as a whole.

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    1. You're absolutely right - as I wrote, there is a sense that "no one is watching" - and you can't get far as long as that persists.

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  9. I appreciate this clever analysis which is rare and largely drowned out by the theatralic noises coming from the Greek media.

    I have made a telling experience since I work in an international organisation with three types of Greeks.

    The Greek Greeks are largely from the first Greece described here. The ex-pat Greeks are largely from the second variety.

    And then there are the Cypriot Greeks who do not resemble at all the first variety.

    If we compare the Greek and the Cypriot Greeks, there is one striking historical difference. 400 years of Turkish rule against 200 years of British rule. I just don't know how to draw any operational conclusions from this.

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    1. I come from a Venetian,Frankish and British-occupied region of Greece.What conclusions do you draw from this?

      It's really amazing how people use this web-site to spit their anti-Greek venom.Why don't you set aside that mundane stereotyping and pay attention to what the author says instead?

      "George, I think the first Greece is more vocal, is more willing to shout and will fight stronger for its privileges and "rights." But I still think there is enough evidence that it does not outnumber the second Greece (see, for e.g., my post on Why Can't Greece Reform)."

      Just for the record,the reason why Greece is in this predicament is that it was not properly re-integrated into Europe after the fall of the junta in 1974.

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    2. Selene, I too am amazed at some of the reactions that my blog brings out in people and how much anger (on both sides) ends up on the comment pages of this blog.

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  10. Interesting that contrary to your other (some rather interesting) articles this one has no data - zero, nil, nix, nought, zilch - nothing. Only wild simplifications that reproduce the folk psychology promoted by media propaganda about 'the Greeks'.

    No mention of class differences, corrupt political and economic elites (that made billions out of your 'successful' Olympic Games), or the dynamics of pro-German/pro-Banks Euro architecture. No, none of that: let us not get bored with important 'details'.

    Only the simplistic assertion this is all down to two idealised versions of 'one Greece' and another.

    If any of my sociologist students was writing these rubbish in an essay would have secured an F.

    Try again, this time with more facts; as you clearly know next to nothing about modern Greek society, let alone history.

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    1. Whether I "clearly know next to nothing about modern Greek society, let alone history" I will let my readers judge. But a blog - like any piece of work - has to combine qualitative and quantitative analysis, and it has to blend fact as well as emotion.

      Thankfully, this is not an essay in your sociology class.

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    2. "the dynamics of pro-German/pro-Banks Euro architecture."

      Dear Anonymous, you should keep on talking with your students about sociology and not try to talk about topics that you lack the education and knowledge for ... such as economics. If any of my economics students was writing the rubbish that you write, it "would have secured an "F"".

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    3. I could not see any 'qualitative analysis' in this piece; only a lot of 'emotion' with no 'facts'.

      With the exception of your piece entitled 'Are We All Greeks Now? Greek Political Economy and the Origins of Greek Debt' (well written, as far as the DOMESTIC reasons regarding the dynamics of the Debt is concerned) there is little reference in your other work in:

      - the Greek political history of 20th century,
      - the class composition of Greek society
      - the impact of the entry in EEC(now EU) or in Euro,upon the Greek productive structure
      - the role of the Greek politico-economic (kleptocratic) elites in the ballooning of the debt,
      - the position of the country in the world market system and the EU/Euro as a semi-peripheral economy

      to mention but a few key topics.

      Fair enough, you cannot cover everything; but, this implies that you should also be far more careful when you make wider assertions, beyond economic or politico-economic analysis, to speak about 'Greece' or 'Greeks' as the totality of this social formation.

      This is what I objected too (and I got rather 'emotional' about it) - the unsophisticated simplistic folk psychology that underpins your essay above.

      And I a gesture of good will, I offer you my apology if I offended you but, honestly, based on how well articulated are your other pieces I think this was truly below your capabilities.

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    4. As far the comment by the Anonymous 2 (Feb 15, 2012 04:00 AM) that 'I lack the education and knowledge in economics', please keep this for yourself dear Anonymous. I am always happy to annoy those economists who Soros calls 'market fundamentalists', de-constructing their theological belief in the market utopia (that has ruined so many societies) and their simplistic moral philosophy of humans as 'utility maximizing calculators' or their economic 'models' that pass for ...'science'. I dedicate you the following quotations:

      The belief that markets tend towards equilibrium has given rise to policies which seek to give financial markets free rein. I call this policies market fundamentalism and I contend that market fundamentalism is no better than Marxist dogma.
      Both ideologies cloak themselves in scientific guise in order to make themselves more acceptable but the theories they invoke do not stand up to the test of reality... all we have to do is renounce the doctrine...There is a heavy price to pay:
      Economists have to accept a reduction in their status.
      (George Soros, 2008)

      There has been 'a very fundamental shock to the 'efficient market hypothesis' which has been in the DNA of the FSA and securities and banking regulators throughout the world'....'the idea that more complete markets were good and more liquid markets are definitionally good' [is no longer trusted. This crisis] 'requires a very major reconstruct of the global financial regulatory system, [not] a minor adjustment'.

      Adair Turner, (2009) Chairman of the UK's Financial Services Authority

      As far as my 'pro-Germany/pro-Banks Euro architecture' comment is concerned - which you so much objected to - I refer you to the data and commentry in 'Neo-Calvinists and the Euro Crisis' by Paul Krugman
      ------------------------------------

      Now, I would give all these guys A+ in my economic sociology class.

      On a more serious note: let's get a grip with reality here and let's move analysis beyond market fundamentalism and morality tales.

      The real problem is not the debt but the fact that there is no growth model in the Euroland, neither there is hope for one, as long as the Euroland, its institutions and governments are full of market fundamentalists.

      If you do not believe me see the latest growth stats - they speak for themselves.

      I hope they will not blame the 'lazy Greeks' for these too.

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  11. Dear Nicos,

    what's the likelihood that Greece stays in the Eurozone from your point of view?

    The number "experts" who say that Greece should exit increases every day. These people are economists, politicians and industry bosses from all over Europe. Especially the latter say that they won't invest in Greece as long as there is such an uncertain environment. Samaras has already said that he will try to "renegotiate" everything again, so the wrangling will continue. No investments in sight, the Greek economy crashed once again last quarter, Greeks get more angry by the day and keep on protesting ... and it just seems impossible to conduct all the required reforms because the Greek public servants and politicians seem to be unable to cope with the tasks. Now it is even unclear if European parliaments will vote in favour of the next bailout tranches.

    Moreover, I would like to ask you what you think about the wage cuts in the public sector. On the one hand I understand them because the Greek economy is very uncompetitive and lower minimum wages might increase employment. And Greeks do still earn by far more than many people in Eastern Europe (e.g. Slovaks). On the other hand I heard that living in Greece is very expensive due to monopolistic market structures/cartells. So it is clear that many people are hit very hard by austerity. Moreover, it should be attractive to switch from the public to the private sector, and the latter needs to grow (not only by increasing exports, or?). And the "psychological costs" of loosing what you once had seem to be enourmous.

    A Greek exit would result in even lower purchasing power, maybe even some poverty in the short term. But a devaluation might be smoother than this internal devaluation if the latter is not accepted by the public. And as long as Greek people are not convinced of all these programs, nothing will really change for the better, there will just be a lot of animosity against foreigners.

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    1. My sense is that exiting the Eurozone carries enormous risks for the Eurozone without much upside (as it will force savings from other peripheral countries to leave). See also:

      http://www.greekdefaultwatch.com/2010/12/is-greece-leaving-euro-good-for-euro.html

      http://www.greekdefaultwatch.com/2010/12/is-leaving-euro-good-for-greece.html

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    2. Thank you for your reply!

      I like your articles and follow them since a long time. But I think your opinions are very rational, maybe too rational compared to what many other people think.

      So even if there is a risk for the rest of the Eurozone if Greece quits, it seems to be percieved differently by many decision makers in Europe, especially during the latest weeks. And even if decision makers perceive the risks to be high, they face the trade-off of risking a Greek default or continuing to lend to a Greek government which doesn't comply... meaning that in the end their losses might become even bigger. So every decision includes big risks for them. Moreover, the risks for the banks and other peripheral countries to be effected are said to have decreased since 2010/12.

      So if we look at the current political climate both in Greece and the rest of Europe, the latest Greek GDP crash (7%), the latest Troika measures and the anger of the Greek people: Do you think Greece stays in the Eurozone? And would you say that all of these Troika measures make sense? What do you mean that it would force savings from other peripheral countries to leave?

      I really hope Greek politicians get their act together. If you have time to answer my questions, I thank you very much in advance for that! If not, I want to say that your blogg is amazing, thanks for writing it and letting us share it!

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    3. There is absolutely a risk that European leaders get fed up with Greece and let it go. But it's not clear that a default (a bigger one that the haircut) would *have* to force Greece to leave the Eurozone. When I talk about savings, I mean that if you are a Spaniard or an Italian, and you see Greece getting kicked out, you will wonder if your own Euros will turn into pessetas and lira. And you will move your money abroad, thereby worsening the banking situation in those countries.

      More generally, I think the broad outline of measures advocated by the troika is necessary to correct structural distortions accumulated over a long period time. I am more disappointed that the Greek side seems unwilling to really implement those provisions and I blame the pain more on that inability to execute reform rather than the plans for reform themselves.

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    4. Thank you for your reply!

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  12. In a similar vein as the contribution above: There is a lot of - sometimes rather passionate and bitter - discussion about the underlying causes of the Greek crisis. But there seems to be a high degree of consensus that at least a large part of the problem comes from the Greeks themselves: tax evasion, corruption, inefficient bureaucracy, lack of readiness to give up outdated privileges, tendency to blame others; you describe much of that very eloquently in your blog.
    I am afraid that such attitudes will not change quickly; they may change, perhaps also as a consequence of the current crisis. But that might require years, if not decades. In the meantime, would it not perhaps be better to go back to the Drachma? That would certainly be very costly in the short term, but could give Greece the possibility to adapt more gradually. Greece would regain control of its monetary and economic policy (and lose the possibility to blame others for their financial problems). It might also give them back what some seem to regard as their dignity (if this isn't just rhetoric). Maybe Greece and the Greeks would be happier in the old situation, with high budget deficits, credit-financed government handouts, big wage increases and the high inflation rates and the devaluations of the currency that would come with that. It would probably also mean low growth and low average income, but if that were the choice of the country, should the rest of Europe urge them to live differently - and be hated for that?

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    1. I sympathize with that view - but I have never quite endorsed it. My best explanations would be here:

      http://www.greekdefaultwatch.com/2011/11/greeces-choice-undo-or-format.html

      http://www.greekdefaultwatch.com/2011/07/should-greece-default-revisited.html

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    2. I had read the two posts that you mention, and I have read them again. I understand why you prefer Greece to avoid default, and if things play out as you hope, that would certainly the better outcome. Unlike me, you are Greek (I am German), and therefore you are in a much better position to judge what is likely to happen. Indeed, I do hope that you are right, but I must confess that I am getting more and more concerned as time goes by, not only for Greece. but also the future of the European integration process.

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  13. I gathered by the end that you think the 'first Greece' would be in favour of default. I think that would be the 'second Greece'. Austerity, and schools running out of books, isn't going to lead anyone to be 'confident, intelligent and highly educated'. On the contrary, austerity has promoted the 'first Greece' more and more.

    I think this is the stuff of myth by the way - people everywhere are lazy, people everywhere are greedy, in equal measure in all countries. The culture of not paying taxes is a problem specific to Greece but it's not because the people are so very different.

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    1. As I wrote above, it is that every society has these two social forces. What is a bit different in Greece is that the first Greece gets in the way of the second - the two do not co-exist but one Greece overwhelms the other.

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  14. A very superficial and simplistic argument. As others have pointed out, you could say pretty much the same thing about any country. England, for example.

    One England is not particularly ambitious. It flunked out of school and is uneducated. It wants to live well and eat well, while not having to work at all and getting paid a state benefit.

    Another is ambitious and wants to succeed. It was educated at some of the best universities in the world. It is proud of its history and wants to stage the most impressive Olympic Games ever.

    So what exactly is your point? That Greek society has both lazy and hard-working people in it? I think we all knew that already anyway.

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    1. My point is that the lazy England will not regularly block the roads that the working England will take to work; they will not burn down London (and when they do it will be real news)! Nor will they drive hard working English people to flee the country.

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    2. Oh come on! Weren't you reading the news last August? The first England had a wonderful time looting, trashing and burning. And will do so again. We live on the brink...
      What you seem to miss is the third Greece in which, as everywhere, there are honest, decent, hard-working men and women who do the best they can in difficult circumstances and who are tossed about the winds of economic turbulence and geo-politics. They work hard but cannot live decently on what they earn, and they fall ill or can no longer work they will be left to fade away. Where is your compassion???

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  15. Niko, your assertion that the first Greece is more vocal is undoubtedly true - twice this week I've nearly been mown down on a pedestrian crossing, and then been cursed at for the pleasure!!

    It's up to those of us then, who consider ourselves part of the 'better' Greece (Xenos though I may be) to make our voices heard.

    Every country has its share of arseholes but εδω βασιλευουν.

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    1. εδω βασιλευουν - well said!

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  16. I've been following your blog for some time now, and because this is my first comment, I just want to thank you for writing such an informative and insightful blog about Greece. In my opinion, the best source for sane and objective information one can find about the Greek crisis online.

    I also regonize the two Greeces out there and I'd like to think most of my Greek friends belong to the second Greece. However, I have to say some cultural traits are present throughout society. For example, the idea of laws as guidelines and the glorifying of rebellion against authority. To me it seems that the silent majority accepts lawbreaking and to some extent even sympathizes with the "underdogs".

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  17. Anders, thanks for the kind words - much appreciated. Of course, these two Greeces are caricatures - there are elements of each that can be present in people. And the examples you highlight may in fact be more applicable to people from both extremes.

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  18. Dear Nikos,

    I liked this article, but I think adding a sentence or two explaining what you say in the comments, that the 1st Greece goes in the way of the 2nd, will make your point more obvious, especially for people who dont read the comments.

    One more point: there is also a Greece in between the two categories you mention. It comprises people who are not leaders, who are not highly educated, not ambitious, they know they can only live a simple life, but they are happy with that. The also respect the laws, they pay taxes, they dont use whatever wisdom they have for cheating.

    But they also cause Greece a problem, without knowing. Because they saw e.g. in the past job advertisements for the public sector, they applied and they got them. They didnt really know that the state didnt need them, and they were getting paid with imaginary money. None of them, of course, checked the country's economy indices before deciding whether to accept the job offer (and a relatively generous salary).

    That's a big part of Greece (and maybe every other country), for me. The 1st and the 2nd Greece has people can affect the goverment's decisions. The Greeks I am describing are mainly guided by the goverment's decisions. Being overly passive is maybe their biggest mistake, but in all cases, you will get the best out of them only with good goverment leaders. Something that Greece is lacking.

    Maybe the fact that PASOK's popularity is below 10% (compared to 44% they got in elections) is a sign that some people are waking up. But again, that's just one number...

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  19. My first reaction to this post was that the analysis was over-simplified, but I realise that type of analysis is often necessary for a blog post (to cover the topic thoroughly would require an entire dissertation I think).

    But aside from that, I have a few points to make. First, until joining the eurozone, Greece was a relatively poor and underdeveloped country as compared with Northern Europe. And it still is, but there have been clear improvements in development, even in such simple things as paved roads in areas where a decade ago there were none. The point is, the period of prosperity for Greece, from joining the eurozone until the crisis, was such a short period of time. It was unrealistic for anyone to think that the old way of doing things would simply die overnight and be replaced by a Northern European way of life. The internal, societal reforms necessary to rid Greece of the bribery, tax evasion and criminal politicians need to be carried out over the course of a generation, not 5 or 10 years. And the best way to foster those reforms is through growth and opportunity, to end the idea that many people of the "1st Greece" grow up with that the best situation they can possibly have is a public sector job with a pension. I don't believe that the majority of Greeks lack ambition, but many do lack hope that in Greece they will ever be able to dream bigger than that and succeed. Not every Greek grows up with the benefits of attending private schools and private tutors and studying in the UK/US/Germany/etc, benefits which I would argue many of those "2nd Greeks" you refer to did enjoy.

    And these societal problems stem from what is to me the main problem in Greece, and the main reason for the existence of the two Greeces you describe - and that is the corrupt political system, which really resembles more a feudal lordship than a democracy. Career/legacy/criminal politicians - and might I add "lazy", as these are the true lazy Greeks in my opinion who contribute absolutely nothing to our society - rather than doing the real job of a government and finding real solutions to better our country, were simply content for the past decades to do the easy thing and make more and more unsustainable promises funded by borrowing and corrupt business dealings, as long as it would keep them in office and keep their Swiss bank accounts getting fatter. These are also the ones that look the other way to all the bribery and tax evasion because (1) they do it as well and benefit from it with millions rather than the average Greek who maybe has to do it to afford basic needs, and (2) because if they were to crack down on such behaviour they fear they might lose an election and those Swiss bank accounts might start to slim down.

    Greece will never be able to move forward until these people are out. They can't be trusted either to implement austerity measures or to guide Greece through an incredibly difficult situation of defaulting and returning to the drachma. And the social problems will never go away with those at the top perpetuating those problems for their own benefit.

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  20. this is a the most narrow minded, uneducated article I have ever read which clearly exhibits the brainwashed stream of thought that the West has provided. I am a foreigner in Greece, and trust me that description is not what I see before my eyes. Everyone should mind their own business and look at themselves and their nation's problem, instead of trying to analyze and critique something you have no idea about....shame shame shame shame on you.

    ReplyDelete
    Replies
    1. I also find it pretty disgusting when foreigners (in any country) with no or very limited experience of local conditions, pontificate.
      In this situation, I agree, shame shame shame on them.

      The EU is making an example of Greece. And it's not pleasant to watch. I just read an article in the Suddeutsche Zeitung (one of Germany's leading newspapers) where there is a front-page article calling for Greece to be thrown out of the eurozone AND out of the EU. Yes, they want to throw Greece out of the EU.

      I would much rather throw GERMANY out of the EU.

      Delete
    2. I think Germany would like that

      Delete
    3. The relationship between the EU and Greece is starting to resemble that of the one between Manchester City and Carlos Tevez, although there is probably more money at stake in the latter…

      P.S.: Germany out of EU? How should Greece survive that? There wouldn't be any more nipples for Greece to suck on ...

      Delete
  21. The corrupted politicians need to step aside for sure, a mentality change to be implemented but also the Germans need to understand that a nation can only take so much. The austerity measures and the constant negativity is causing more harm than good. No one will invest in Greece now or in the foreseeable future with a "profligate"/irresponsible reputation. The media, speculators, credit rating agencies etc.., all played a role in this mess. Europe has shown little to no solidarity (people forget that the initial debt figure was in the $120 billion range, which eventually skyrocketed to $350 billion or more due to the "fleecing" Greece sustained in the markets. Germans are bailing out their banks, not the people.

    No matter what Greeks are, no investments will arrive with an expensive currency. The Germans prefer to invest in Turkey for example than help their own partners. Greece has served as a market expansion to them, as well as other periphery countries. Instead of bribing Greek politicians(see Siemens scandals etc.., better example the $185 mil fine on Daimler (by the US gov) for bribing politicians worldwide), the Germans should've taken into account that a 4.5 million workforce cannot possibly re-pay all the money loaned to them. Greeks are at fault for spending it, but the European banks are at fault as well. This has nothing to do with the Greek mentality, it has to do with doing business.

    Greece needs to default, go back to the drawing board and learn to live within their means(as was the case before the Euro). The United Europe idea has always been flawed.

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    Replies
    1. 1) "The austerity measures and the constant negativity is causing more harm than good."
      Since Greece cannot afford to spend more (other people's money) than it earns any longer, there is no alternative to austerity. The political charades, lack of reliability and ridiculous scape-goating in Greece are causing more harm than good. Greece's president felt insulted today because of the international critisicm about Greek politics, the poor man. Imagine how insulted the other Europeans must feel after continuously being fooled by the Greek politicians...

      2) "Germans are bailing out their banks"
      Of course, they protect their savings, pensions, banking system and their economy; On the other hand, Greeks have no right to spend this money instead because it's not theirs

      3) "The Germans prefer to invest in Turkey for example"
      Yes, investors go where they consider investments to be profitable (for example not Greece). Greek politicians are doing their best to avoid investments in Greece.

      4) "than help their own partners."
      Not even rich Greeks are investing in Greece, they are buying property in London and Berlin instead. Why should any foreigners trust Greece if not even Greeks trust Greece?

      5) "Greece has served as a market expansion to them"
      How horrible, Greece was forced to make business!

      6) "bribing Greek politicians(see Siemens scandals etc.."
      Because making business in Greece without bribing is impossible. There are no international companies in the world which don't have budgets for this "adopting to local standards" to make business in South America, Greece, ...

      7) "This has nothing to do with the Greek mentality"
      This is about Greek the mentality, see my comment above about "bribing" and "scape-goating"

      Delete
  22. http://www.bendbulletin.com/article/20120215/NEWS0107/202150334/

    """Unlike Greece, Portugal is a debtor nation that has done everything that the European Union and the International Monetary Fund have asked it to, in exchange for the 78 billion euro (about $103 billion) bailout it received in May.

    And yet, by the broadest measure of a country’s ability to repay its debts, Portugal is going deeper into the hole.
    It’s all pseudo-science,” he said. “That is why I think Portugal will have to default on its debt, and you can argue that Italy will have to restructure as well.""""

    People wake up...it's been all staged in the markets. Oppression of the masses is the game. The have's vs the have not's.

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  23. It is a very interesting, yet somewhat of a superficial and oversimplified ‘analysis’ and interpretation of the Greek crisis. That is understandable given the limitations of a blog post. I will not attempt to offer any of my layman ‘wisdom’ to such a complex issue, out of fear that I might be placed in one of the ‘two’ Greece’s. Instead I will ask some questions. Could there possibly be a hybrid branch of the 2 Greeces (G1, G2) comprising people who want to both eat, drink and live well, but also work hard in order to enjoy these perks? Does your grouping of people in G1, who work as little as they can and get the highest possible returns, refer to: a) all public servants, b) some public servants, c) the majority of public servants, d) all private sector employees and small businessmen and e) some of (d), f) no-one in the private sector? Is it possible that someone might glorify rebellion and root for the underdog, if the cause is just? Is it a unique characteristic of G1 to want to judge and fear to be judged, or is it something that one can find in all people, regardless of whether they belong to G1 or G2, or even in non-Greeks for that matter? Is it possible that there are some Greeks who blame themselves, but who also blame others, if those others do actually deserve to be blamed? Could you be a little more specific about what you mean by ‘insular’ (from what)? Is it likely that some Greek shipping magnates, who you mention as an example grouped under G2, have cheated, bribed etc, and if so would they be relegated to G1 (the same goes for other ‘successes’ too)? Could you please define ‘liberal’ and ‘tolerant’ in this context? Are you in favour of the second ‘loan’ and the austerity measures or a default? Is an economy saved if, according to all economic projections its debt to GDP ratio will stand at 130% in 2020 and recession is most likely to deepen? On a final note, a query to another person, since when is the discipline of economics separate from sociology? Thank you.

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  24. My friend your arguments have no scientific background. There is no statistic-demographic research that stands for them. As a statistician i would be able to tell... It is more an opinion rather than a conclusion and seems anthellenic.
    Κοντολογίς, έχω ένα κτηματάκι με αμπέλια πάνω στα Γιάννενα αν το λέει η καρδιά σου αντί να κρίνεις κόπιασε...

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  25. good article Nikos

    I think your change is coming sooner than you think

    As regards the current "bailout" negotiations

    the Greek Gov are sh^t^ing themselves and quite rightly too - they are staring at political oblivion - they've got the Brian Cowen Nov 2010 (our former PM here in Ireland) look all over them.


    its all part of the choreography leading up to Greece defaulting and hopefully exiting the eurozone.


    Lets look at the facts here: who actually wants this deal to go through?



    Not the Greek people - who really want this situation to come to an end - one way or the other - how much worse can default and eurozone exit possibly be - well it will be brutal - but in the long term things can only get better.


    Not the rest of the Eurozone - they have already written off the current greek political establlishments ability to do anything - they would much rather keep their money in their pockets and let Greece default and exit the eurozone. they'll take a hit - how big and how contagious it will be is open to conjecture - but they've been getting ready for this eventuality for the bones of 2 years now and seems they are ready to draw a line and let it happen now -


    In fact the only ones who really want this deal are the Greek political establishment - its their only hope of clinging on to power and all its perks - thats why they are screaming for a better deal - not for the people - but for themselves - thats why Mr Papoulias was freaking out today and wrapping himself in the flag - he knows his beloved PASOK are heading for the dustbin of history - if and when Greece defaults - then the entire political establishment will be blown away - the rest of the EU knows that they are dead men walking and thats why they dont want to give the loan - it will better to deal with Greece and its new political leaders after they default and exit the eurozone.


    ThE whirlwind is going to hit - its going to be a hell of year for Greece and a defining moment for the Euro.

    Its been coming a long time - Eurozone 2.0 is about to be born - Greece is going - how many more will be taking the same trip?

    Greece is going to get the chance to reinvent itself - as a person who spent 6 happy years working and living there and have 3 greek godchildren - I sincerely hope that you and your generation finally get the chance to shine - all those political geriatrics and nepotism need to fade away - Greece needs a new future.

    καλή τύχη my friend and keep up this great blog - its a pleasure to come here and read it

    Edo

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  26. To some of the commenters above, of course things are more than black or white, and most people would fall somewhere in between the 2 Greeces, with a tendency to lean towards one of the two "extremes." And of course it's not a scientifically conducted study of a people but I feel that it DOES capture the sentiment that the hardworking Greeks (of which there are many) have to support a system that glorifies underachievement as a virtue, and "rebellion against the system" as automatically justified even when in practice it only hurts fellow Greeks who are forced to work even harder. To top things off, rebels and underachievers are handsomely compensated, with salaries that in the free market would be unthinkable.

    To oversimplify a bit, the 2nd Greece is the one with the ideas and the willingness to go the extra mile (or kilometer, to keep things metric) and to work hard to produce "wealth" for the country. Of course the 1st Greece must be there and the public sector/welfare state is necessary to provide the services that are too costly for the private sector to provide successfully, but there must be some tangible measure of return for money spent on the public sector, and when that return falls short the system should right that wrong. The system as it is currently structured works to appease the vocal and outspoken 1st Greece, at the cost of the 2nd.

    Therefore, the important question IMHO is, when the smoke clears, who will be left in Greece?

    The 2nd Greece feels that since they do “all the hard work” there should be some recognition of that fact. Government claiming that “we all did this and it’s everyone’s fault” does nothing to motivate hard working Greeks to keep working hard, as they are thrown in with all the others who are more directly to blame for the current predicament. Furthermore, when faced with a system that shuns and penalizes hard and honest work and fails to cultivate respect for boundaries (whether that be parking at a handicapped spot, smoking everywhere, throwing trash out the window, cutting in line etc.), why would someone one opt to be part of the system if he/she has the option to go somewhere else where there is at least some form of meritocracy?

    Greece has a lost standing history of pushing its brightest minds/talents to seek refuge elsewhere, where they are free to shine. However, when a Greek living abroad achieves something that they would probably not be able to achieve at home, the country swells with emotion and claims that person as a true Greek that does the country proud.

    Honest Greeks are proud of their achievements and rightly so. Greeks are hard working and persistent and will stick together when the need arises. What is the country doing to keep these Greeks home?

    ReplyDelete
  27. Have you heard the NEWS:

    Brussels' opinion reflects scepticism that Greece is willing or able to deliver on its promises of reform.

    Mr Schaeuble said: "We can help, but we are not going to pour money into a bottomless pit."

    "I do not accept having my country taunted by Mr Schaeuble, as a Greek I do not accept it," Mr Papoulias said.

    Mr Evangelos Venizelos, next boss for PASOK, says “forces in Europe” are pushing his country out of the Euro

    Nea Dimokratia (ND) next ”Parteichef” Mr Antonis Samaras is not standing by the promises he gave for getting the bail-out.

    Well then Greeks, what are you going to do now?
    Burn some buildings and destroy more?

    Mr Evangelos Venizelos is 100% correct in his analyze that “forces in Europe are pushing his country, but NOT OUT of Europe.

    The “forces” are pushing GREECE into this “BOTTOMLESS PIT” which Mr Schaeuble knows where it is.

    The “BOTTOMLESS PIT” is close to Achropolis, which you are so proud of, go and look for yourselves but don’t fall in because you will land on all the Greek politicians already there, deviding the last EURO's between themselves. They all know where the back-door in this "bottomless pit" is situated so they all can get out from there.

    Greek politicians have reached the “Star Trek” level in arguments, well done old chaps, we never thought of this, “the Force is with you” Mr Venizelos.

    And yes, you have finally transformed this comic tragedy into a good “German - Bashing – Farce”.

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  28. The troika should really leak the meetings minutes to the public. You will find pearls such as:

    1) We are going to pay you back. Trust me.
    2) We gave you our promise, what more do you want?
    3) The Greeks are proud people. By doubting our word you are impugning our honor.
    4) We deserve the money because we deserve the money.
    5) We are the Cradle of Civilization(tm). Who are you?
    6) We'll deduct the bailout money from the $80 billion the Germans stole from us.

    For kicks and giggles, try the Greek approach next time you go to your bank and apply for a loan. Don't forget to report back on the outcome :)

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  29. Dear Nikos,
    I've been working in the cut-throat shipping business for 10 years. Are you familiar with law 89 of 1967? Shipping companies just don't pay taxes. And they do so by law.
    They pay the minimum for social security (=based on one's salary, so they will hire you with the minimum by law salary and you'll get the rest of the money agreed in an envelope every month). Ship-owners bribe social security collectors, get VAT exemptions as they purchase on behalf of their offshores, they buy superyachts but still don't pay VAT as they claim to charter out their yachts to their Filipino servants. As soon as my country defaults, they and their friends will bring back their tax free money and buy whatever they like for peanuts and keep sustaining the subculture of flowers at bouzoukia. No wonder why we come up first. Do you think that Norwegians operate the same way?
    Our EU saviors keep earning some bps since they lend us on a rate higher than they borrowed, but will not assist nor advise us in implementing tax mechanisms and reforms needed in the public sector. Greek politicians knew. EU partners knew. They all knew! But did nothing because they want more. And got more.
    Don't forget Nikos that for every ship, sub, fighter, train, bridge, highway, stadium, you name it we paid at premium... We always paid more. More and more and more...
    And for my non Greek friends, yes we messed up real good.
    Yes corruption is cross-sectional and everywhere. That is why every time you came for vacations you had the time of your life. Yes we got in the euro through the window. Half the eurozone did. So help us. We need your public administration know-how. We need your help. Ask your politician to stop supporting our crook-politicians. Show the solidarity you showed for East Germany. Spaniards were Europe’s shield in the southwest. We were in the southeast. For more than a thousand years. Don’t treat us like garbage. Europe has sustained Greek corruption. Siemens, Vodafone, HDV are just the tip of the iceberg. For now, what Europe does is buying time. By lending… And they will make sure that they will get their money back as Stross-Khan had pointed out. We don’t need favors. Just honest help. And don’t worry. If we default, we are the only ones responsible. Us alone. For putting up with our crook-politicians, crook-doctors, crook-public servants and cunning euro partners. But it was never a battle meant to win.
    In the way you put it and as things are going, I know which Greece will prevail. Don’t you?

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    Replies
    1. Dear Anomymous, I think there is already a lot of help going on and even more help offered ... but it seems that not all Greeks want help, Nikos calls them the 1st Greece in this fine article.

      But there is also Niko's "2nd" Greece and hope, at least you get the impression when you read this interesting piece:

      http://www.spiegel.de/international/europe/0,1518,815289,00.html

      "European Union officials have nothing but praise for the mayor of the Greek city of Thessaloniki. Yiannis Boutaris has been pushing ahead with far-reaching reforms to undo the abuses of his predecessors and has already slashed the city's spending by 30 percent. He's even asking the Germans for advice."

      The "even" in the last sentence seems to highlight the fact that many Greeks are too proud, distrustful or even hostile to ask especially Germans for help.

      Business minister Michalis Chrysochoidis does also seem to belong to the "2nd", reform oriented and ambitious Greece.

      Is anyone here from Thessaloniki who can tell us something about Yiannis Boutaris and what's going on there?

      Delete
    2. Dear Friend,

      I will only comment on the first part of your post as i work in the shipping industry myself, albeit on the cruise side. The fact is that tax exemption is not a priviledge of the Greek flag, and furthermore, the regulations imposed by the Greek flag are really hurting shipping companies, and making them less competitive. Especially concerning the salaries of seamen there are some of the highest in the world, and this refers to the legal salaries. Where else do you see seamen without a highschool education scraping floors for €3000 a month? And this is on ships doing voyages within Greece where the sailors get to go home every night.

      The thing is that the State has promised high paying jobs to the unions and then forces the shipping companies to hire people they do not need, at salaries they cannot afford to pay. I am not saying that you should feel bad for the shipping companies but no companies means no jobs. And to compete, Greek companies are forced to move, or switch flags so that they can hire lower paid staff for their ships.

      I agree 100% about the corruption that exists, but unfortunately it is not limited to a specific industry/sector.

      Bottom line is that there is a reason no ships carry the Greek flag anymore (unfortunately). That would not be the case if the flag was so beneficial.

      Delete
  30. Hi Guys,
    check the bellow link from BBC to see some interesting stats about debts and nations and who owes what to whom... is interesting

    http://www.bbc.co.uk/news/business-15748696#germany

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  31. Niko, I for one cannot "see" myself in either one or the other Greece. I have to say I feel your article "stands" only on the premise of your beliefs ie in markets, banks etc. You describe one Greece who doesn't like working but wants the good life. I am certainly not part of that. My father instilled a work ethic in me from early on...
    Your other Greece wants to excel, be the best and sees profit in the tiniest openings...
    I am sorry, but I want to be a part of neither. Can I please have the Greece with the hospitable, friendly people, who know a lovely word called "filotimo"? This is the Greece I want to be a part of. One where the markets can go and jump off of a cliff for all I care, one where the politicians will be me and everyone, jointly making decisions for the common good. A Greece where I can work in my shop and see people coming through the door, rather than "pockets".
    This is the Greece I want to be a part of.
    I am 44 yrs old born in England, grew up in Greece. I have 3 children. I started my own business 14 yrs ago, and was fairly successful until the crisis started and the "markets" and the bankers together with the politicians ,slowly but surely took my future prospects away... I never avoided paying taxes, in fact I was told by everyone, repeatedly, I was doing "too much" for my country, there was no need to be so correct! But my children, never mind me, will see no benefit ever of all the money I gave in taxes. My daughter's school is a relic from 1953, they still don't have some books, and when I protested in june I got sprayed with teargas too. I live in Corfu, by the way. But when I went to Athens in June I realised that my government was at war with me...

    ReplyDelete

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