The Time for Greek Unity is NOW!

I was sitting at the table this Easter over some ouzo and retsina, listening intently to what the old guard had to say about Greece's economic crisis. "The farmers took EU money to change their crops, and nothing changed other than the new house and car...kala na pathoun (they deserve what they are getting)." After a bite of lamb, one of the other elders piped up and said that "the government bureaucrats are useless and corrupt. It takes five of them to do the job of one, and even then it doesn't get done without a fakelo (bribe)...kala na pathoun!"

The most effective way to defeat an opponent is to divide and conquer, and the powers that be have been doing a phenomenal job. As Greece reaches out to the IMF and EU for a ‘rescue package’ organized labour is taking to the streets for a 24-hour strike. However, polling shows strong public support for the impending austerity measures, most of which focus on the public sector. Labour is still the strongest force in Greece, but if the broader public doesn’t stand in solidarity, the IMF will see even freer reign to impose its policies. And Greeks are delusional if they think that only unions will feel the impact.

Policies like IMF-mandated wage concessions, service cuts and higher personal taxes will not improve Greece's financial outlook, even with lower loan interest and 'bailout' funds in exchange. These restrictions have been shown time and again to hamper economic growth and cause social instability (eg. Argentina). With assistance from the IMF in Greece’s moment of desperation, the bleed will be slowed (and mildly less painful), but will make the reckoning much worse in the future.

The same conversation that went on at my family's Easter dinner table is going on all over Greece. I recently wrote about the trading of my homeland's formerly enviable lifestyle for the trappings of a consumer-driven society- new cars, televisions and the devastating credit card and mortgage debt that goes with it. Greece, long viewed as the ‘irresponsible stepchild’ of Europe, is having the blame for its crisis placed exclusively on its reckless personal and public spending. They even believe it themselves.

However, this story sounds awfully familiar.

Here's an excerpt from an article published in the Washington Post back in 2001:

"But it is neither necessary nor desirable for a government to balance its budget during a recession, when tax revenues typically fall and social spending rises. The "zero-deficit" target may make little economic sense, but it has great public relations value. By focusing on government spending, the IMF has managed to convince most of the press that Argentina's "profligate" spending habits are the source of its troubles."

Stellar public relations indeed- the world's financial institutions have already succeeded in making Greece a global laughing stock, a caricature of irresponsibility and lack of self-control. Not only that, but they've convinced most Greeks of it, too. It keeps them too busy pointing fingers at each other to acknowledge and take action against the true architects of their disaster. But wasn’t there the same culture of ‘fakela’, ‘meson’ (cronyism) and tax evasion long before Greece’s economy went into a tailspin – why do these failings account for the whole problem now?

As soon as Greece joined the Eurozone, deregulation and corporate tax cuts were the order of the day - all imposed by the EU in accordance with policies that were completely disconnected from the reality of each individual member state. Greece has never had a strong economy, and there is plenty of evidence to support that joining the EU – in doing so, losing control of its currency, being forced to aggressively deregulate, throw open the door to foreign investment, and cut corporate taxes – turned Greece’s stable-but-weak economy into the abject failure it is today.

“Greece shouldn’t have joined the Eurozone in the first place,” said M. Nicolas Firzli, Director of the CEE Council – a Paris-based economic strategy think-tank – and member of the International Committee of the French Society of Financial Analysts (SFAF), in a telephone interview. “Greece was de facto blackmailed by Brussels, Berlin, and Washington into severing its ties to Serbia in the mid-nineties, in exchange for the promise of further financial integration within the EU at a time when Greece clearly wasn’t ready to join the euro.”

PIIGs Strike Back

Through EU liberalization, the global banks forced open Greece’s market for debt, and are the primary benificiaries of its current state. Did the Greeks have to take advantage of readily-available debt? Of course not. But the Americans didn’t have guns held to their heads when they took out high-risk mortgages, either. If a financial product is being aggressively sold to people without the background or experience to understand its implications – being sold, no less, by people who should know better – it doesn’t take a genius to see the consequences. I won’t bother to mention the USA’s astronomical deficit.

Argentina’s crisis of the early 2000’s, while not exactly comparable to Greece’s in many respects, offers some important clues for how the Greek people should proceed. IMF-mandated policies like tax cuts, deregulation and the cessation of government spending drove the country deeper into crisis – and recovery only started after declaring bankruptcy. Now, Argentina is viewed as a moderate success story. Even Iceland, where the public is demanding a default on foreign debt and refuse most austerity measures, just received an upgrade from Moody’s. Upon the news that Greece wanted a rescue package, their rating went down.

The problem isn't the 50 extra Euros in the pocket of a government bureaucrat. If the people of Greece don't realize who the real enemies are and band together, the bondage of the Ottoman Empire will have been fully replaced with shackles of a different variety. Despite what many in Greece think, the restructuring will impact everyone from government workers to the unemployed to the private sector. And future generations will also pay. The only solution is to not pay now.

Declare bankruptcy. Default on loans. Find an exit from the Eurozone and fully restructure their debt. Just like with Iceland, another and better solution will be offered when it becomes clear that Greece won’t play ball. And before any of this can happen, all of the people of Greece need to rise up, take to the streets en mass, and make it abundantly clear that they won’t sell out the future of the country – and any prospects for a good life for their children – to ‘take responsibility’ for a crisis that was NOT their fault.

Throughout history, all of the disparate Greek states have been able to stand together against a common external enemy – no matter how much they ordinarily fought each other. Make no mistake, the Greeks will have to get their house in order, but if they are not united in their opposition, it will be shoved down their throats.

P.S. All Greeks should be yelling a hell of a lot louder, because they are hardly getting any international press - aside from being made the scapegoat for every market and currency fluctuation across the globe.

Read Parts 2 and 3 here:

Greeks Beware of Pressure Sales Tactics
The Speech Papandreou Should Be Giving