The Greek Tragedy continues, even if we're not watching

Unless a credible means of collecting tax is found, alongside real political will and a solution from the EU to help ease the sovereign debt, it looks as though Greece will be in real trouble for decades to come

The perils of the other Mediterranean countries has lessened our focus on Greece
Anthony Pickles
On 28 November 2011 10:09

Since the overthrow of Berlusconi in Italy and rising bond yields in Spain and France, Greece has been overlooked in recent weeks.

On a recent visit to Athens, I was expecting to be met by huge riots and a country in crisis; I couldn’t have got it more wrong. Although protests are almost a daily occurrence, as one Greek MP told me, far more damage was done in London over the summer than has been in Athens since the eurozone crisis began.

The Greeks almost seem fatigued by the crisis. Economically, they have declined at huge rates. It is estimated that the Greeks are 20 percent worse off now than they were when they joined the Euro.

Since the summer, it is estimated that €50 billion has been withdrawn from Greek banks and put into overseas accounts. Apparently even in the middle classes it is accepted that money is kept in bank accounts overseas. It is hard to imagine in Britain that most people would even know how to do that.

Geographically, Greeks feel more vulnerable perhaps.

Greece has always seen itself as the most European of all countries. After all, the name Europa comes from ancient Greece. Although they have never been involved in institutional building and creating treaties like France and Germany, the Greeks believe that the essence of Europe comes from them.

At a time when many of their neighbours in the Balkans are attempting to join the EU and Turkey is growing into a huge powerhouse economy, the Greeks feel that if they left the EU they would be isolated with nowhere to go.

They don’t have the best of relationships with their neighbours. And it’s not difficult to see why there’s tension with the Joneses. In the first quarter of 2011, Turkey outpaced China in economic growth and keeps on growing. Currently the 15th economy of the world, some estimates have them growing to become the 8th before too long.

This nervousness is backed up by the many mixed messages that EU leaders are sending out. Each time a statement is contradicted, they wonder whether they will eventually be forced to leave the EU.

Domestically, EU withdrawal isn't discussed by any political party, and as far as I’m aware it’s off the agenda for the people too. The only people seriously discussing EU withdrawal are the Communists.

Greeks are committed to the project, even if they are not to the austerity that is required to keep them in. Listening to some British press, you would imagine that it is heavily discussed in Greece that returning to the Drachma would be a less painful solution. It isn't.

Although the picture I paint of Greece is one of relative stability at a time of economic hardship, the economics will be their downfall. The Hellenic Republic is a country in huge decline without reasonable means of collecting taxes or the political will to see through the austerity. Nobody will lend to them, only Honduras and Ecuador have a worse credit rating in the world, and they have a huge amount of money to pay back to French and Belgian banks and neither of those two countries can afford to allow them to default. Today, Greek 10 year bond yields have risen to 30.01%.

Unless a credible means of collecting tax is found, alongside real political will and a solution from the EU to help ease yet further the huge amount of sovereign debt, it looks as though Greece will be in real trouble for years if not decades to come.

The Greek tragedy continues, even if Europe (temporarily) isn’t watching.

Anthony Pickles is a Parliamentary Researcher and Conservative activist

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