After I published my reflections on the economic austerity regime imposed on Greece by the EU (see ‘Helen’s Story’ and ‘What Does Austerity Look Like (Part Two)‘) I received a couple of thoughtful and very interesting emails from an old friend from high school days. (When you start a blog like this one, this is exactly the result you dream of!)
My friend, now retired, had a long career in international diplomacy and inter-governmental organizations. She understands how countries operate, how they compete and how (and why) they cooperate.
Coincidentally, she and her husband have also had many years of experience in Greece and have seen the country from close-up since well before it joined the EU. It was from that perspective that she addressed my posts.
My friend’s take on the Greek disaster generally places less blame on the EU and more on the Greeks themselves. Whereas I tend to let my ideological perspective lead my conclusions more – always a tricky proposition, at best.
That said, her description of the situation faced by friends on the islands is sadly similar to what I encountered in Athens:
…First of all, we were in Patmos soon after Greece began using the euro, and the immediate reaction there was dismay that frappes, cigarettes, and all sorts of small, everyday items had skyrocketed in price. We had the same reaction, a kind of shock. We used to take taxis frequently to go out to distant villages at night for dinner, but when the price went up to about 8 euros each way, we had to give that up. The EU built a new harbor for yachts, which was great for the super-rich tourists who moored there and only left their boats to eat in a fancy restaurant once in a while but otherwise contributed little to the local economy.…And then there were all the new regulations that weren’t suited to a small island with such a small economy. So a lot of Patmians expressed right away that joining the euro, and probably even the EU, was a mistake for Greece.…(And) “our Patmos family,” who owns the small hotel, are very open with us about their problems. Dad has lost a lot of his pension, the ever-increasing taxes on the hotel business combined with the EU requirements such as lighting on the outside stairways, railings, all sorts of little regulations, customers who insist on paying with credit cards even though our family there can’t get cash from the bank and need it desperately, Mom has serious health problems and they have to take the boat to Athens whenever she gets sick and the hospitals are in disarray…. The saddest thing is that we have been going there since 1993 and saw them work their tails off to make a decent and secure life for the whole family and to be generous with their customers at the same time and then to see it all gone. If you are older, how do you look back at your life and come up with a meaning for what you put into it?
I’ve cherry-picked from her emails her descriptions of the situation on the island of Patmos, where her family has been going for decades. From a purely descriptive point of view, her observations resemble very closely what I saw in Athens last month.
The more complicated question is ‘why’? And, if any finger-pointing is to be done, who should get the blame? There, we encountered some differences of opinion, although more of emphasis than of substance.
My tendency is to blame the EU, and, behind it, the neo-liberal order for which it functions as the enforcement agent. In this scenario, Greece was simply collateral damage in the battle to enforce the hegemony of the great financial interests of Europe and the US. For more on this point of view (and if you have some time to devote), I recommend the following interviews with Yanis Varoufakis, Greece’s former Finance Minister and the person who carried out negotiations with the EU for the first year of the Syriza government:
Varoufakis on EFN (I’m not responsible for the overheated titling by the reposter)
Varoufakis and Noam Chomsky at New York Public Library
Varoufakis on the Rubin Report
Varoufakis and Noam Chomsky at New York Public Library
Varoufakis on the Rubin Report
Boiled down to its most essential single point, my argument was that the Greek worker, pensioner and small businessperson are being reduced to penury in order to make German (and other) bankers whole. Most of Greece’s debt was originally private – i.e., Greece could have renegotiated those debts individually with its private creditors. The EU recapitalization of the Greek debt paid off all those creditors and pitted Greek taxpayers directly against German taxpayers, while leaving the bankers and the big financial houses untouched by what were often scandalously irresponsible loan policies.
This resembles – and was closely related to – what happened in the crash of the US economy of 2008. A huge deal was made of small mortgage holders who may have taken out loans they couldn’t repay. A concept of ‘moral hazard’ was trotted out to explain why no mercy should be given to these people. Meanwhile, the moral responsibility of the institutions and individuals who knowingly offered these junk loans was rarely mentioned – and then usually in ‘left-wing’ media.
My friend’s response to all this was not to absolve the EU, but to point out properly that Greece had played an important role in its own demise. Primarily, she faulted a traditionally corrupt and overly bureaucratic regime:
At the same time, I reiterate what I wrote before. It isn’t all the EU’s fault and the Greeks know it. It was always incredibly difficult to start a new business in Greece with the intricate bureaucratic regulations, and the corruption, in the government especially, was rampant.
She also urged us to continue to focus on the human stories, rather than on political and economic analysis:
It’s better to do what you are doing and get away from the blame game and focus on the human plight that we are all in and what we can do about it.
At the time, I completely agreed with this approach. Since then, however, I’ve come back to the idea that there’s a larger story to be told, that the politics and the economics matter precisely because that’s where we come to understand what we can (or can’t) do about it. From that point of view, it matters crucially whether Greece dug its own hole or whether it’s been the victim of an EU mugging – or in what proportion the two are true. The stories we’re telling are the result of these questions, and to not look further is to ignore that fact and to deprive ourselves of a way to understand the bigger game that’s being played with all our lives.
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