Jason Manolopoulos: You can blame the Greeks – but they have been betrayed by their leaders

Shocking examples of kleptocracy by the political elite explain the ferocity of the reaction. And it is this which has repercussions for the rest of Europe

Share
Related Topics

Thieves! Thieves!" cry the protesters outside the Greek parliament in Syntagma Square, although thief is not the most colourful allegation being levelled at the Greek ruling class.

The scenes are now familiar to TV viewers across the world: the angry banners, the scuffles or sometimes more serious violence, the petrol bombs and tear gas, the world's media, including battle-tested war reporters, descending.

The latest wave of Hellenic protesters call itself Aganaktismenoi, in the spirit of the Spanish indignados, a broad-based and non-party-political movement. The silent majority is, at last, finding a voice. Around me, in Athens, the fear, outrage, despair are palpable. But there is also a profound sense of bewilderment at a situation from which there appears no escape, and to which the only response is a call for more economic pain made by some of the same people who created the fiasco.

How did it come to this? How fair is this charge of "Thieves"? Did Greek politicians simply loot their own country, and EU taxpayers, for personal gain? There is truth in this tale, but like any Greek tragedy, there are multiple narratives, none of them pretty. The protesters' cry of "We don't owe anything, we won't pay" doesn't impress German taxpayers, who feel they are bailing out the country, but for some sections of Greek society, it's an understandable reaction.

It helps to recognise that Greece is very different from other Western European societies. There are, in fact, more similarities to states run by political oligarchies than anyone in the EU hierarchy would like to admit. Shocking examples of kleptocracy by the political elite certainly form part of the explanation for the ferocity of the reaction we are now seeing on the streets of Athens. And it is this ferocity which has intensified the risk of a default, the repercussions of which would reverberate throughout Europe and threaten the existence of the euro as we know it.

Greece is not a mature democracy, nor does it have a flexible economy. Up to 1974 it was either a colony or a dictatorship. Greece has had a clan-based rather than a class-based structure, and a public sector accustomed to giving favours to family or other interest groups. Its politics is characterised by cronyism, restrictive practices, bureaucracy and corruption. In researching my new book, I found that joining the EU and the single currency, and gaining access to huge inflows of global capital, actually exacerbated these unhealthy dynamics, rather than bolstered Greek democracy.

The Siemens bribery scandal was the most notorious. Investigators found that the company's Greek branch had an annual slush fund of some €15m to pay "commissions" for politicians who helped secure contracts. There have been arrests and prosecutions – but by authorities in the US, Switzerland and Germany, not in Greece.

The political class, meanwhile, benefits from Article 62 of the constitution, which means parliamentarians accused of crimes have to be tried by fellow parliamentarians. Payment of taxes is erratic, with some individuals hit hard with demands, while others escape almost entirely. Domestic Greek interest groups are not without blame. From 2001 to 2009, trade unions seized their opportunity for annual pay rises without links to productivity. With easy access to borrowing hard currency, and a big incentive to buy votes, both the left-wing Pasok and its right-wing counterpart New Democracy duly indulged. As long as they had access to easy loans, they could buy enough social peace to deflect attention from scandals and mismanagement. Now the money has run out.

Cronyism has meant that much government wealth stayed within ministerial families. The assiduous Leandros Rakintzis, head of a public spending watchdog trying to rein in the excesses, has uncovered shocking cases. In one example, a retired former culture ministry employee was found to have had €9m in his bank account that he was unable to justify according to his income.

Ordinary private sector workers, on the other hand, benefited from none of this orgy of borrowing or debt; they have lost most and are being asked to pick up the bill. They have some of the lowest wages and longest hours in Europe; they pay high taxes yet they receive limited public services. A recent study by Patrick Artus, chief economist of French bank Natixis, showed that they worked much longer hours than workers in Germany, countering a recently expressed view by German Chancellor Angela Merkel.

Living standards for most Greeks have collapsed. Regulated and controlled markets with no competition combined now with higher taxes have led to some of the highest petrol and supermarket prices in the continent. Greece has the third highest prices at the pump, behind only Denmark and the Netherlands. Lack of full competition in supermarkets mean that the typical shopping basket is about 25 per cent more than the European average.

This all adds to the sense of betrayal. The misconduct of the elite means that, just as the pain of IMF-dictated austerity is intensifying, there is little or no sense of social solidarity. As in Spain, youth unemployment is high, further eroding a sense of hope. Violent crime, once rare in Athens, is on the rise.

Yet my country's politicians and senior officials are not the only villains. Europe's leaders may well lament that chaos in Greece is putting the very peace and stability of the EU at risk. But it was they who refused to learn the lessons of Argentina's currency peg or the European exchange rate mechanism, and proceeded with monetary union before economic convergence. Goldman Sachs colluded with Greek politicians to make the deficit in 2001 appear smaller than it was, in a manoeuvre that simply passed the debt into the future – and made it more expensive.

At the same time, a wave of deregulated capital came in search of easy gains. With eurozone interest rates kept low to prevent overheating in Germany, vast amounts were loaned to property developers, especially in Ireland and Spain. And searching for a bit of extra yield on government bonds, much went to the Greek government. Investors were reassured by official statements that the euro could not be allowed to fail, so the belief grew that the loans were as safe as Germany's, only with a higher yield. This is how a small, semi-developed economy came to borrow an unsupportable €300bn. As recently as 2009 and even early 2010, serious voices in Brussels were denying the unsustainability of the ballooning sovereign debt in the eurozone's periphery. In early 2009, the then economics commissioner Joaquin Almunia claimed the Greek economy was "the strongest" in the EU. There is still a refusal by EU officials to admit that economic convergence was never achieved, and that the euro was mis-sold to its citizens. It was a good idea, not done badly, done very badly. So the demonstrators venting their outrage at the Greek parliament tell a part of the story, but not the whole story. Some are innocent victims; others have had a hand in creating this economic, social and political catastrophe.

But their voices will have to be acknowledged, because the high-decibel volume reflects the scale of the crisis that confronts us all. As Thucydides observed, justice will not come to Athens until those who are not injured are as indignant as those who are.

'Greece's Odious Debt', by Jason Manolopoulos, is published by Anthem Press

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Project Coordinator

£28000 - £30000 per annum: Recruitment Genius: A Project Coordinator is requir...

Recruitment Genius: Area Sales Manager - Midlands

£20000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: PHP Developer - 3-4 Month Fixed Contract - £30-£35k pro rata

£30000 - £35000 per annum: Recruitment Genius: This is a 3-4 month pro rata fi...

Recruitment Genius: Telesales Executive - OTE £26,000+

£16000 - £26000 per annum: Recruitment Genius: A Telesales Executive is requir...

Day In a Page

Read Next
 

Don’t pity me for eating alone, just give me a better table

Rosie Millard
Aerial view of planned third runway at Heathrow  

Heathrow expansion: This final 'conclusion' has simply fanned the airport flames

Chris Blackhurst
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most
Katy Perry prevented from buying California convent for $14.5m after nuns sell to local businesswoman instead

No grace of God for Katy Perry as sisters act to stop her buying convent

Archdiocese sues nuns who turned down star’s $14.5m because they don’t approve of her
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

Something wicked?

Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin
10 best sun creams for body

10 best sun creams for body

Make sure you’re protected from head to toe in the heatwave
Wimbledon 2015: Nick Bollettieri - Milos Raonic has ability to get to the top but he must learn to handle pressure in big games

Nick Bollettieri's Wimbledon files

Milos Raonic has ability to get to the top but he must learn to handle pressure in big games
Women's World Cup 2015: How England's semi-final success could do wonders for both sexes

There is more than a shiny trophy to be won by England’s World Cup women

The success of the decidedly non-famous females wearing the Three Lions could do wonders for a ‘man’s game’ riddled with cynicism and greed
How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map