Lovers of liberty should beware of Greeks bearing too many burdens
Most days here at The Slog, I get 15-20 emails from Greece. About half are from regular sources, and the rest are from people who’ve heard about (or found) the Slog via its posts about the Greek debt crisis. They go right across the political spectrum, but they all describe pretty much the same social situation: evasion of tax and justice by the rich elites, abject poverty among many who are ill or old, and a growing hatred of the corrupt political set which has brought a sword of Damocles down on their country.
Yesterday’s beauts included the Greek National debt rising to 303 bn euros, up from 280 bn at the end of March (inevitable given the ‘bailout deal’); two Greek men arrested by police on Saturday after beating a 30-year-old migrant worker, jamming his head in the window of a car door and dragging him for around a kilometer (rise of the Far Right); and more cases involving MP’s hiring their entire families – while circa 500,000 unemployed Greeks exist on a monthly benefit of €420 which…..hasn’t been paid in quite some time (corrupt elites).
The ordinary people are not, of course, entirely innocent – nobody is in this world. Cash business and tax evasion are a way of life in the Hellenic Republic, but this reflects two longstanding cultural facets: an informal, generally tolerant attitude towards payment, and an unwillingness to hurry (or worry) too much about anything. These are the very things that have always made Greece such a popular holiday destination for young and old alike: a relaxed way of life, the laissez faire that works out fair, tavernas on the beach, and cosy B&Bs where you pay in cash. Ferries leave when they leave, bars close when they close, and if you stay at a table long enough, a complimentary Metaxa will arrive.
When it comes to tax in particular, however, there are some deeply-held beliefs, and most of them are based on solid experience. Basically, the Sun headline is that 50% of what you pay will be embezzled, 25% will be wasted on pointless exercises, and the rest will buy arms. Thus, most ordinary Greeks pay the very minimum possible, many actively evade – and about 1 in 7 pay nothing.
Now in southern Europe (and if we’re being honest here, large areas of France) the same manana, tax-evading culture exists…almost to the letter. “Don’t pay tax, it only encourages them,” is a common gallic observation. In Italy, the government bends the rules about everything, and then the Mafia takes its cut. In Spain, the vast majority of EU laws are ignored if they cost money to implement or obey.
To sum up, the mass culture is one of what you might call gentle, disinterested pragmatism. And as such, it is totally different to the Netherlands, Germany, Scandinavia and still even the UK. At the very top in each of the ClubMed nations, however, the bare-faced cheating and cynical corruption is hard to take in at times. In Greece itself, for instance, by far the biggest tax evaders are wealthy – and by far the biggest embezzlers are tax inspectors and politicians
At this point, I’m going to pose a very obviously rhetorical question: is there anyone out there who thinks all those self-righteous Nord-European countries didn’t know this was the state of affairs before they let the ClubMeds into the eurozone?
And then I’d like to follow that up with an assertion – but one about which the facts have been so comprehensively proven over the years, I’m not going to waste space going on yet again about your milk for my cars and my coal for your grain: does anyone reading this really believe that the allowance of ClubMed into the club was an honest process?
Finally, if I may I will pose another perhaps less straightforward, querulous suggestion: I wonder if size, critical mass, and above all hubris-powered greed allowed the Brussels loons to turn a blind eye to all this during the period 1996-2000.
All these are vital (and essentially moral) questions for any serious observer of the EU debt crisis to address; for the hypocrisy involved in the bullying of Greece is near infinite. France, for example, has never once met an EU fiscal target for debt to gdp ratio. Its rate of debt aggregation right now is faster than any ClubMed. But this stems directly from the Germans’ weakness in not insisting on central controls with teeth from Day One. A major British criticism of the single currency idea throughout the 1990s was this glaring flaw – one that will always haunt the euro’s creators.
I feel a parallel coming on, and it goes like this. I am the very successful landlord Monsieur Escargottinhimmel, and I spot that consumer credit is relaxed to the point of madness. I have some empty properties renovated when the economy was going very strongly, but I now see that by linking up with a credit provider, I can let those properties to the poorer end of the market. I also know that I can get affordable bad-debt insurance. So even though I’m fully aware of the fact that Mr & Mrs O’Bese can’t afford the rent, I will let the property to them, rake in the money, and leave the problem for someone else to sort out.
After a few years, Escargottinhimmel hits on the ruse of fitting his tenants out with state-of-the-art security….again on credit. The tenants are delighted, not noticing when the landlord fits one burglar alarm box but charges them for two. They happily sign up, and continue with their retail therapy.
But some years on, Mr & Mrs O’Bese get maxed out on their credit cards…along with Ms Chicklit, Mr Goforit, and a million other believers in the Free Lunch myth. The bad debt insurer gets on the phone to the landlord and says, “Guess what? I’m going bust from all these claims. I’ll have to quadruple your premium, or cancel your cover”.
At this point, Monsieur Escargottinhimmel rushes out into the street, gnashes his teeth and yells, “This is all the fault of lazy Mr & Mrs O’Bese and their spendthrift ways”, but the words are hardly out of his mouth before the local bank manager Lloyd Morgan (who happens to be passing, the way they do) says, “Quite right: put them in jail immediately, and force them to pay back the debt at a rate guaranteed to keep the debt rising”.
Cries to the effect that one cannot earn money while locked in a cell fall on ears rendered deaf by loudly feigned outrage. M. Escargottinhimmel pushes a new debt statement under the cell door of Mr & Mrs O’Bese every week. Mr Morgan smiles and repeats that this is the only way they will learn the error of their ways.
The situation is not entirely resolved by lots of citizens debating whether to feed the O’Beses a little food to keep up their energy levels, or execute them. But before the discussion can take a decisive turn, the cell inmates starve to death.
“You see?” observes Escargottinhimmel, “they will never run up another bad debt. They have learned their lesson”.
The current impasse in the EU really is this insanely self-righteous, unfair to the point of obscenity, and completely removed from reality. And what’s more, I know that having written this piece, the usual suspects will turn up in the comment thread and continue to ignore the widespread hypocrisy and – above all – inevitably fruitless outcome. The tediously moralising berks in Berlin will keep alternately saying “Debts must be paid” followed by “Lalalalalalah”. But not only are they in no position at all to so conveniently judge in their own favour, this spectacularly failing policy is costing we taxpayers a mind-boggling amount of money…with no hope of any return on it.
How much has the Greek debt crisis really cost Germany? Let’s examine this in more detail.
Despite the constant neurotic whining from Berlin (if you’ve ever seen a German footballer dive and then roll over, you’ll know precisely what I mean) Germany’s contribution to bailing out Greek insolvency is minute. The potty notion that it’s being bled to death by bailing out its weaker neighbours goes beyond spin and into the sort of pernicious disinformation peddled by Schäuble and the tabloids to which his Ministry leaks this drivel 24/7. Greece’s biggest creditors do not include Germany: the ECB’s Greek bonds were purchased with newly printed euros that the ECB continues to drain from the banking system.
As part of the IMF, Germany must of course make its contribution….as do the UK, the US and China – none of whom have anything to gain except heavy flak from their taxpayers.
The Eurozone has helped Greece, and Germany is exposed to the liabilities that go with that. But any and all debts embraced by the Bundesrepublik have so far been dwarfed by the savings Germany is making through lower interest rates and an incredibly cheap euro.
The truth is that already hard-pressed and recessed european taxpayers are funding a German obsession with Lutheran debt refusal and inflation paranoia – not the other way round. Had all the ClubMed debts been forgiven in mid 2010, and a new centrally controlled fiscal union created immediately, the euro would be in the clear today, the ClubMeds would not be drowning in debt, and the European taxpayer would not have condemned his grandchildren to purgatory for no other reason than Teutonic inflexibility.
I say ‘no other reason’, but that’s not entirely correct. By and large, this lunacy was undertaken partly to give Merkel an opportunity to look tough – a stance that just today has given her a lift in the polls; but primarily to help, um, the lunatics. True, the bankalunatics were owed money: fair play. But only three years earlier, the world’s taxpayers had coughed up $26 trillion to bail out their idiotic investment and lending policies. In mid 2010, Greece owed around $260 billion – or roughly 1% of the 2008-9 final bailout cost. That’s not fair exchange, it’s robbery: but for the investment banker, even robbery isn’t enough: nothing less than extortion with menaces will do.
The banking community, the Chancellery (or China for that matter – to where Merkel flew today in search of more German prosperity) can’t put every debtor in jail. A programme of controlled default and subsequent debt forgiveness is the only rational way out of the mess. Mark my words, once the Fuhrerin has marched her CDU Schützstaffel up to the top of the hill, she will march them down again and do a deal with Samaras. The one and only gainer at the end of this pavanne will be Angela Merkel – the woman whose political ambitions recognise no ethics, and know no bounds.
To suggest that she and the Berlin-am-Brussels elite played no part in the corrupt deals that led up to EMU is ludicrous: one of the most blatant was carried out by Helmut Köhl with Italy’s leader Prodi. Köhl was her direct mentor and protector – until she shafted him ruthlessly of course…and then denied any of the leaks she had so obviously given to the German media. And to suggest that Germany faces abject poverty because of the Greek debt crisis is pathetic: Berlin could’ve let Athens out of its arms contract two years ago, and cleared off almost the whole debt.
No: the fable of Monsieur Escargottinhimmel is entirely sound. Greece is being pounded to death pour encourager les autres, to save French banks, to save Wall Street’s arse, but above all to save the idea of a politically united Europe that Merkel and Schäuble want so badly to run. It is time more of the MSM robots like Peston and Rusbridger stopped churning out the same old mendacity, and took some time instead to examine the bare facts. The ambition to create a monocultural European superstate in which the entire population converts into ersatz Prussians in half a generation is sick, and it is contagious. It is killing Greece, and before long it will take Spain and Italy with it.
Now is the hour. These people must be stopped.
Related: Merkel flies to China in search of more trade deals