Greece's Financial Crisis; a Perspective

Greece’s Financial Crisis; a Perspective

By

Spyros Pavlou, PhD.

“Are you still proud to be a Greek?” somebody asked me a few days ago.

I answered with, “Yes”! It was 52 years ago when I first stepped on American soil, and in spite of all the chaos Greece has been in I still feel very proud of my Greek heritage. We Greeks have been a survivalist nation for thousands of years; we will weather the current crisis too.

What I we feel now is that our identity is at stake, because suddenly it seems the Greek people have lost some of their pride because of the financial crisis that is affecting them so dramatically.

Greeks have always been extremely proud people, some would call it a superiority complex because of the accomplishments the Greeks made in the ancient past. Now with the debt crisis weighing so heavily on the citizens of Greece their superiority is waning and a feeling of hopelessness ensues. What I see is a culture that feels like there is no solution.

“You Greeks are doing everything wrong”, the pundits say.

As an American-Greek I say really? Not everything. However, I don’t believe Greeks can rely on the glory of their ancestors any more. They have to learn the financial vocabulary of our times: bond spreads, income cuts, credit default swaps, austerity measures, joblessness, bailouts, fraud penalties. 

 As an outsider, what I see is that Greeks are saying, “It’s all Chinese to me”. They don’t seem to want to change.

The government has lost its people’s confidence by raising taxes, taking away benefits and lowering pay. Thousands are protesting by strikes, riots, and crime. This is causing public despair and anxiety.

In the past, demonstrators were comprised of enthusiastic youth brimming of patriotism and national pride because they were eager for change in society.

When I was a young student, I remember acting as a demonstrator in Syntagma square, the exact spot of the riots last month. I remember we were protesting against the British who were trying to quench the Greek revolt to unify Cyprus with Greece. That was in 1956, fifty-five years ago. The outcome was not what we intended, Cyprus is shared today, Greeks and Turks have it split, but our motives were legal, honorable, and peaceful.

Interestingly, today the majority of the demonstrators are middle class Greeks waving the blue-white national flag or wrapped in it. The protesters are angry and violent. Their way of living is at stake.

Last week I saw a demonstrator on TV who was a young Greek woman with short blond hair. She was holding a sign high above her head in front of the Parliament Building across from Syntagma Square; it read:

“Greek Politicians and their bosses are having a party with our money”!!

 On the bottom left of the rectangular white sign was a STOP sign with a yellow inscription on it

“The party is here”.

What I see is that modern Greeks are not winning financial wars; they don’t know how to. The history of Greece created heroes fighting physical wars. They were considered experts. As recent as World War II, Winston Churchill wrote:

“Hence we will not say that Greeks fight like heroes, but that heroes fight like Greeks”.

Today, I see that the Greek public is outraged because they see the injustice their government’s austerity measures are imposing on the people. Unemployment is at a record high, above 16%, and a deep recession is raging for more than 3 years. Where is the glory of the Greek Italian war? Where are the sacrifices of the resistance against the Nazis?

 Now, the demonstrators gather around the parliament building shaking their fists shouting, “thieves, thieves”, as the politicians decimate Greece’s welfare system.

Obviously, Greece as a Euro-zone member is not working. The economic interdependence of the members only ensures that each country gets caught in an economic death spiral, not necessarily a result of their own financial troubles. Greece, Italy, Portugal, Spain, Ireland, seem to be caught in a financial, “Tower of Vavel”.

With the real danger of the country ending in default, holders of the Greek debt may take large losses if any restructuring takes place.

Maybe for Greece, a national bankruptcy, an exit from the Euro-zone membership, a return to the old currency (Drachma) and its subsequent devaluation, could be the only option left for return to economic normalcy, eventually prosperity.