The funny thing is that I went to Greece precisely in the last moments of their Euro-backed temporary prosperity – in August of 2009. By the end of that year, the Greek government had no choice but to come clean and admit that they "slightly" understated their national deficit, by like… 112%. After that it all went down the hill and now we know where Greece really is – in deep shit.
It's a beautiful country! Very beautiful and very proud of its history and culture, its ancient glory. Sometimes to a fault, but that's another story. Meanwhile, in this one I must say that, while our own Greek experience was nothing short of fantastic, we just knew that the shit will hit the fan pretty soon. There were signs, both metaphorical and tangible.
Towards the end of our trip, massive wildfires broke out in several areas. On the morning of our drive to the Athens International Airport for the flight home, the vile smell of the scorched earth was already clinging to everything in the capital and its suburbs. It felt as if we were escaping a cinematic doom, with the burning forests chasing us away. Greeks and their theatrics!
My fiscally attuned mind picked on far less dramatic, more subtle hints. Small, but significant things; especially peculiar for a country that has an official status of "developed" and boasts "a high-income economy, a high quality of life, and a very high standard of living."
For example, practically every person we've met there had relatives in the US; and not second or third generation immigrants, but people who left in a past decade or so. Since Greece has been a stable democracy for at least 35 years and it is pretty homogeneous racially, these people are obviously not political refugees. Like for the majority of immigrants, their underlying reason for leaving the homeland is economic.
Also, there were scores people in their 50s and 60s who have already retired. That actually could've been considered a sign of wealth, indicating significant personal savings. Except that was not the case – all these people were relying on substantial government pensions. Speaking of wealth, quite a few of more or less prosperous Greeks have businesses locally but reside in the US, Canada, Australia, and Germany, pulling substantial chunks of their capital out of their home country (Greece readily allows dual citizenship).
The brand new (opened only two months before our arrival) Acropolis Museum, standing right next to the undergoing massive restorations Parthenon, simply blew my mind. It is extraordinarily impressive! With data from several sources I was able to estimate that, between the museum and the archeological site, their owner, the Ministry of Culture, had spent $320 million (at the Euro/USD conversion rate of the time). I wondered how a country of 11 million people with 2008 GDP smaller than Exxon Mobil's annual revenues could possibly afford such undertaking! Well, it couldn't - the Greek government dipped into Eurozone lending pool to finance these projects. And that brings us to the current stalemate.
God! There are so many economic, political, and social reviews out there on the subject of the Greek disaster, it would be just a waste of time to try to stick another two cents into the cacophony of bullshit prediction and "analytical" speculations. Moreover, most commentators seem to be focused on the problem I've noticed back in 2009 and already pointed out above – the youngish pensioners. So, what else there is to say? Yet, I know a thing or two about countries that de facto belong to the third-world realm, but delude themselves into believing that they are big international players! Hence, I may offer some additional insights.
You see, average citizens don't get ideas of grandeur and prosperity out of thin air. Every Emerald City has its own Wizard of Oz. And those are always people of power with national (and international) reach; invariably they are all liars.
With some nations (e.g. Russia) it's enough to bluntly smack green glasses of absolutely empty, never-ever fulfilled promises straight onto the noses of the countrymen and they will believe that they are surrounded by jewels. In other countries, like Greece, the illusions must be more finessed – you actually have to give something tangible to people to make them believe that their lives can be no different than, let's say, in the Netherlands, or Sweden.
As I said, it gets tricky: In Scandinavian countries, citizens themselves are charged with an obligation to fund their state benefits through heavy income taxes. But Greek politicians who rode to power on social programs have no resources like that – there is not enough domestic income to tax. The national wealth is not real, it's just pretend. What to do then? Not to worry – it's all thought through: If your country is a Eurozone member, you have a shortcut – you can qualify for member loans (Acropolis, pensions, welfare – everything from the same Euro pot).
The Prestige of this magic trick is this: in order to qualify the Greek government lied to everyone internally and externally – they falsified data, facts, statements and whatnot, obscuring the fact that the national wealth is not really there. And no matter what people who benefited from thusly financed cushy social programs think, these opportunists had only their own personal interests and political aspirations in mind.
Of course now it is difficult to take any benefits away! Greeks don't want to give them up. Oh the luxurious arrogance of the poor! They want to keep all their benefits and their pride intact at the same time – get their debts forgiven, receive more money. They feel entitled! They are one of the oldest members of the Eurozone! If their European comrades want to keep the Union intact, they will bite their tongues and save their Greek brother, no matter what! Plus, no terms and conditions!
This attitude manifested itself on 07/05, when 60% of the country voted in support of saying "No" to the bailout package that was on the table at the time. The CNN Breaking News I've received that day said that Prime Minister Alexis Tsipras hoped that
"this will force Europe to hand over more money with less austerity attached, and cancel some of Greece's enormous debt."
For a hot second there it seemed that pride will become the top priority; that they'd rather starve standing up then eat kneeling. Greeks were celebrating in the streets of Athens. Where is all that pride coming from amidst all the lying and data falsification? And who can afford to be proud when your national economy is in a state commonly known as a "free fall" and your banking system is in a virtual shut down due to empty vaults? I don't know.
But then, only four days later, they retracted and accepted the original offer: zero old debt forgiveness; the bailout in the conventional form of loans; compulsory pension cuts and tax increases to make sure that the Greek government can serve this new debt and the old debt, i.e. pay interest to the lending Euro-brothers. And now Mr. Tsipras says "YES, PLEASE" and is willing to battle his own MPs to ratify the requirements into laws!
Doesn't it all sound like some sort of a kindergarten (aka political) game of delusional children? But hold up! The conditional bailout is not a guarantee. Will Greece pass all those mandatory economic reforms as laws? Will the PM be able to pull through? The 6 million Spartans may still have a chance to keep their grand stance instead.
The unspoken truth is – if that what happens tomorrow, it will be the best possible outcome for the European Union. I mean, none of the members can really afford this bailout (Remember? France wants to sell Mona Lisa to cover exactly 0.1% of its own national debt). It would be a much better fiscal option for other countries to let Greece follow that Exit sign straight out of the Eurozone.
The Frustrated CFO 