Blog: How Greece got into this mess, and how it will get out of it

Blog: The problems are still with us.

GREECE Economy

Blog: The problems are still with us, writes former Shropshire man Colin Dodd from his home in crisis-stricken Greece.

The biggest issue seems to be the privatisation of the public sector. There are too many people in too few jobs, and these are the ones who protest the loudest. Go to any government run office and the staff are falling over themselves. I recently had to go and see the IKA (the Greek health authority) doctor to get authorisation for an operation. He examined me and gave me a paper to take to a clerk in the next office. She read it, wrote two lines in her ledger then gave me the paper to give to another clerk sitting at the next desk. She rubber stamped it, and gave it back to me to give to the first clerk, who signed it and sent me on my bewildered way.

That was the sum total of their workload for the day, two jobs that could have been done by one person. No wonder they complain, and no wonder Greece is in the state it is. Both girls were on a decent wage with pension rights.

This is just one example, and it is the norm in any public sector facility. When you take into account the number of government-run offices there are just on Kefalonia, the waste of money is plain for all to see, hence Germany, who is the principal lender,  calling for foreigners to oversee the privatisation process. Leave it to the Greeks and the "jobs for the boys" would remain one way or another.

I spoke in depth to a local restaurant owner who told me that under normal circumstances, the tax increases introduced by Pasok would be passed on to the consumer. He said that were they all to do that, Greece would be priced out of the market as a destination. He was selling a full English breakfast four years ago for five euros and fifty cents. This year he is selling them for - five euros and fifty cents. Had he passed on the tax increase the cost would be between six and seven euros. It may not sound much, but over six months it adds up to a tidy sum.

For the last few years, he was giving regular customers a free bottle of vodka, whiskey etc at the end of their stay. Last year a bottle of vodka was 11 to 12 euros. This year the same bottle costs 17 to 18 euros, so he can no longer afford to give it away. Instead he buys them a drink on their last night. This is not a situation he enjoys, but circumstances dictate that he must. He says he is a socialist at heart, he likes to see everyone get a slice of the cake, but he believes that they should do something to earn it. Public sector workers get the whole cake with minimum contribution, hence their very passionate protests.

What is the general feeling about the current situation?

We have two camps in this. The ex-pats can see it for what it is, unavoidable. The current crisis is like a house fire. The fire service  (the government) have to throw water (austerity measures) on the flames to put them out. This will ruin some furniture and wallpaper (the Greek tax avoidance culture) but left to burn there will be no house left.

Some of the Greeks can appreciate this, but a lot see their "nice little earner" going down the drain, and after many years of virtually tax free living this is not going down at all well.

Tax dodging has been taking place for very many years here, yet strangely, while we were still using the Drachma, things rolled along nicely. The introduction of the Euro seems to have been the catalyst for the mess we are in at the moment. Greece is suddenly accountable.

They will have to instate non-Greeks to oversee the privatisation plans and various other requirements - again, not a popular move with those currently in high places, but, TOUGH. The poor old Government is damned if it does and damned if it doesn't at the moment.

How things will pan out is anybody's guess. I am just thankful that I live on Kefalonia, away from all the riots they have on the mainland. It's almost like another world.

Best wishes to all,

Colin

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Comments for: "Blog: How Greece got into this mess, and how it will get out of it"

Sean Fernyhough

Don't forget it's not Greece that is being bailed out but the European commercial banks that hold Greek Sovereign and private debt and those banks (mostly American)that have, in turn, accepted to insure those European banks through credit default swaps. The exposure of American banks is underwritten by the American public sector.

The finances of a government cannot be compared to the finances of a household. Greater austerity will make Greece poorer.

What is actually required is a default. If some European governments are concerned about the exposure of their commercial banks then those countries need to leave the euro. Their new currencies would appreciate against the euro and reduce the burden of the Greek default in domestic currency terms.