Hanging in quiet desperation is (becoming) the Greek way

This blog has a tendency to worship the large picture and to focus on the great issues of the day, with the Euro Crisis as its usual focus. There are times, however, when the small, miniscule picture, some snapshot of one person’s world, offers a stupendously large perspective from which to gather the greater scheme of things. One such snapshot attracted my horrified gaze the other day. It was the image of a disabled 60-year, his corpse dangling from a rocky cliff face in Northern Greece, at an advanced stage of decomposition, suspended by the belt which the deceased had used to hang himself.

The man had been missing since August. His last sighting was at the Social Security Offices (IKA) in a small town called Siatista, where he was told that his small monthly disability allowance of 280 euros was suspended, as a result of the latest austerity measures. Eyewitnesses said, according  to Athens daily ‘Ta Nea’, that they saw him leave upset and speechless. Soon after he placed a call to his family telling them that “he feels useless” and adding that he “has nothing to offer them anymore”. Naturally, they were alarmed, and soon after called the police. It was only the other day that the Police located his hanging body in a remote wooded area, suspended by the neck from the cliff which was to be his last resort.

This was, of course, not the first suicide to have come out of the Great Greek Depression of our times. But the fact that it was not meant as a political gesture (unlike the very public suicide of the pharmacist that shook the world), does not make it less poignant. Quiet desperation has a power, a tender despondency, that can pierce the denials of even the most callous of austerians. There is no guarantee of course. At the very least, however, it is incumbent upon us to ensure that they are not shielded from it. 

70 thoughts on “Hanging in quiet desperation is (becoming) the Greek way

  1. Pingback: Links 11/12/12 « naked capitalism

  2. I recently found out about this website and have been reading from the most current post backwards, so excuse the tardiness of this comment. I am really enjoying Yanis Varoufakis’ perspective and it has been enlightening to say the least.

    I appreciate the Pink Floyd “Time” reference in the title (“Hanging on in quiet desperation is the English way”). It’s not directly from Henry David Thoreau, as mentioned above (how Americentric of you).

    The relayed story is a very concrete example of the consequences of the power given the Bankruptocracy at the expense of the common citizenry.

  3. Today I went to the seamstress, a young woman in the neighbourhood (Maroussi), to pick up my shirt.
    – How are you?
    – Hanging on, like everyone else.
    – Me too, but I try to keep my chin up. No matter what happens, I said, no matter what we read or see, we must not give up.
    – Easy to say …
    – I can’t understand how on earth young people can commit suicide, I said, as I had in mind the gruesome picture of two recent suicides, two young women who were fired from their work.
    – I think about it every night, she answered back, looking at me straight in the eyes. Every evening when I go home I try to figure out how to do it but eventually I fall asleep …and I cry, I cry a lot.

    This is true and happened today, November 16th, 2012. And I presume there a hundreds like her. This is the reality of NOW.
    I promised myself to check up on her every now and then.

  4. Pingback: newsrackblog.com » Blog Archive » Elend, Wut wachsen in Südeuropa (Misery, rage grow in Southern Europe)

  5. Greece needs to restore its monetary sovereignty, which it lost when it joined the Euro. It is on a de facto gold standard now with no counter cyclical flexibility. The drachma should freely float and all debt needs to be within its own currency. Then, solvency would no longer be an issue. Bill Mitchell discusses a Greek exit from the Euro zone on his blog at: http://bilbo.economicoutlook.net/blog/?p=21418

    • Tom – The Euro has exposed the unsustainability of the Greek economy. It has exposed the theft through inflation that occured with the Drachma. The Euro is a golden opportunity for Greece to become sustainable if they will only take it. The problem is you have central bankers resisting the reforms because they make their money from government debt and currency inflation.

    • That is absolutely incorrect. The Euro is putting an unnecessary constraint on the Greek economy. I encourage you to read the article I linked to (and many others like it written by fellow MMT’ers). It will help you to understand the concept of monetary sovereignty and why giving it up has been so devastating to the countries within the Euro zone. Spending equals income!

    • This is abject nonsense, Richard. The inflationary period of the drachma had its own problems, of course, but they were nothing in comparison with the collapse of an economy. Participation in the eurozone has led to the downfall of the Greek economy — with the active connivance of Germany and France to exploit the peripheral economies to their own advantage. The only opportunity that euro membership ever presented Greece was for political and social elites to embezzle money in larger quantities, while consumption dragged Greece into ever-increasing debt.

    • Hello Tom – If its the Euro at fault then the effect would be the same in Germany. If not then the problem is not the Euro. re”The Euro is putting an unnecessary constraint on the Greek economy”

      If you mean the Euro as constrained inflation, then yes. Surely that has to be welcomed?

      If spending equals income the Greek government would not have a problem. Savings and investment equals income. Savings first, then investment, then production then consumption/sales, then income. Apologies if I am stating the obvious.

    • Richard,

      I have encouraged you to read various articles, which will answer your questions. Your assumptions are generally incorrect.

    • Hi Tom – I skimmed the link you sent. It was talking about “macroeconomics” so I stopped. (I assume it was talking about macroeconomics in a frank and serious way and not saying how it was rubbish. I apologize if I jumped to the wrong conclusion but I have had enough of listening to professionals like Bernanke, Krugman and King).

    • Hello Tom – In case you think macroeconomics/Keynesian theory is something to be taken seriously.

    • ” If its the Euro at fault then the effect would be the same in Germany. If not then the problem is not the Euro. re”The Euro is putting an unnecessary constraint on the Greek economy”

      Thats totally wrong and simplistic.What is at fault is the decision to let Greece use a currency that doesnt reflect the strength of its economy.Similarly it doesnt reflect the strength of the German economy either.German goods would be way more expensive if Germany sticked to the mark.

      Try to wear the pants of a man that weighs 400lbs and walk properly.If you fail is it because you cant walk or because these pants werent made for you???

  6. Pingback: Dehumanization before/during punishment | The Cross Pollinator

  7. US elites are hellbent on implementing austerity here, and with the aid of Obama, will in all likelihood succeed. US austerians relentless invoke the specter of Greece, warning that if we don’t adopt austerity measures, its fate awaits us. Mind boggling propaganda, since the converse is the case: cutting government spending and raising taxes (it will be regressive, never fear) will ensure our suffering a version of the Greek experience.

    No person should have to die so that bondholders’ and bankers’ interests are protected, above all else. But Peterson, Bowles, Simpson and their acolytes are salivating over the prospect of the lifeless bodies of desperate Americans.

    • leeharlos – You have been brainwashed. You have been brainwashed by the people who want to grow government.

      There is no austerity in Greece. The cost of living in Greece has gone through the roof and the government spends more than they did at the start of the crisis. http://independence4wales.com/2012/there-is-no-austerity-in-greece-documented-evidence

      The government has not cut back at all. Instead they have cut pensions and benefits. This is not austerity. Austerity would be the government cutting back or eliminating departments while keeping pensions and benefits at current levels.

      No Austrian, let me repeat, no Austrian would condone cutting benefits to people who have already paid in ie pensioners.

      Romney and Ryan are not Austrians.

      The “austerity” the media talks about for Greece is socialism run amok. What you are seeing in Greece is a socialist regime hanging on by its finger nails and trying to distort the reality by blaming capitalism. And it seems they have accomplished their mission when it comes to your opinion.

    • You continue to spout neoliberal nonsense, here. Richard. I suggest that you leave economics to people who actually understand it, as opposed to those who think that simplistic ideologies with no relation to reality will solve everything.

    • Richard, your post is nonsensical. You cite an article whose title is “There is no austerity in Greece – Documented Evidence”, which mentions exactly nothing about austerity in Greece, and goes very easy on the “documented evidence”. It’s government-phobic ranting from someone who seems to believe that taxing the wealthy will bring about the end of the world.

      You also seem to be confused over a couple of terms, “austerians” and “Austrians” among them. What concerns me more is your mischaracterization of socialism. Like many Americans these days – who have somehow convinced themselves that Obama is making America “socialist” – you seem to use the word as a synonym for “I don’t like it”.

      You say: “The government has not cut back at all. Instead they have cut pensions and benefits. This is not austerity… The ‘austerity’ the media talks about for Greece is socialism run amok.” Actual socialism, across its variety of definitions, tends to concern itself with the redistribution of wealth, social welfare, and social safety nets. I’d be obliged if you could explain, exactly, how the dismantling of social welfare in Greece is the result of “socialism run amok”?

      Your own opinion seems a bit indefensible here.

    • Davydd – Okay, try this http://youtu.be/vQu7V9pMK48

      “Actual socialism, across its variety of definitions, tends to concern itself with the redistribution of wealth, social welfare, and social safety nets.” – Please, spare me the line that socialist politicians have the interests of the people at heart. The president of the international socialist movement was the one that first attacked the Greek workers, pensioners, citizens and the disabled. http://en.wikipedia.org/wiki/Socialist_International http://en.wikipedia.org/wiki/George_Papandreou .http://independence4wales.com/2011/8-ways-papandreou-sabotaged-the-greek-economy Also socialism is built on the foundation that people cant be trusted to look after each other and that the government must have the ability to force people to do things against their will. Again, spare me the fluffy image of socialism.

      ” I’d be obliged if you could explain, exactly, how the dismantling of social welfare in Greece is the result of “socialism run amok”?” The Greek socialist regime doesn’t give a stuff about the people (see above paragraph). They care about keeping control. Everything they have done up to this point has made more people depend on the state and made people who depend on the state poorer. And to add insult to injury they have increased the taxes on the poor as opposed to the rich. And the whole time they have been threatening Greeks with “chaos” and “catastrophe” (and I am quoting directly) if they dare question their motives.

  8. http://blogs.wsj.com/brussels/2012/11/12/where-spain-is-worse-than-greece/

    By most measures, Greece’s economy is in worse shape than Spain’s. Greece has been largely shut off from financial markets for more than two years; yields on its bonds are still sky high. Gross domestic product has fallen nearly 20% over the previous three years. Spain can still borrow from private investors, and its GDP has fallen around 5% during the crisis.

    But if you take forecasts from the European Commission seriously, Greece enjoys one formidable advantage over Spain: Its economy is running well below capacity, while the Spanish economy, despite an unemployment rate around 25%, is operating relatively close to full steam.

    Why is that an advantage? According to the commission, it means that the Greek unemployment rate should fall sharply if the economy starts to recover again, without causing inflation. Spain faces a much more difficult situation. If the structure of its labor market doesn’t change, the commission’s analysis suggests that a nascent economic recovery in Spain could be hampered by labor shortages that would spark wage inflation.

    Seems like a strange thing to believe for a country with 25% of its workforce sitting idle. How can this be?

    The reason is the commission’s view of the Spanish labor market. During the previous decade, the Spanish unemployment rate dropped sharply as millions of Spaniards found work in the booming Spanish real estate sector.

    But the bubble has burst, probably for good. This means, according to the commission’s analysis, that millions of Spaniards need to be retrained to do non-real-estate-bubble-related jobs. In the meantime, their labor won’t be available to do the new jobs that will drive Spanish growth in the future.

    Greece faces similar problems, but they are less serious, according to the commission’s analysis. Yes, the “government-borrows-money-and funds-consumption” model of growth won’t be available to Greece anymore. But it didn’t endure the same private-sector credit bubble that hit Spain during the previous decade.

    The differences between Greece and Spain can be seen in several economic metrics published by the commission. There is the output gap, or the difference between actual GDP and potential GDP (as a percentage of potential GDP). The figure is a whopping 13% for Greece but just 4.6% for Spain.

    Then take a look at the commission’s estimates of the so-called non-accelerating wage rate of unemployment (NAWRU) in Greece and Spain. This is the unemployment rate below which the commission believes the inflation rate starts to rise. It’s also known as the “natural rate” of unemployment. The natural unemployment rate for Greece is around 14.8%; it is 21.5% for Spain. This despite unemployment rates around 25% in both countries.

    These numbers speak to the depth of the structural transformation that the commission believes Spain must endure before it can return to sustainable, non-inflationary growth.

    Of course, neither the “natural” unemployment rate nor the output gap are directly observable figures. They are estimates made by economists to help central bankers and finance ministry officials figure out whether economies are close to becoming inflationary. So maybe the commission’s estimates are incorrect.

    In fact, there is considerable disagreement over the commission’s view of the U.S. economy: It sees the natural U.S. unemployment rate at 7.8%. Not even the most hawkish members of the Federal Reserve’s Board of Governors believe the natural rate is much over 6%.

    The problem is that European policymakers are now relying on these estimates more than ever before to draft national budgets. They are giving more weight to the “structural balance” – that’s the actual government balance accounting for the size of the output gap, the “natural unemployment rate” and the general strength of the economy.

    Spain’s structural budget deficit is somewhat smaller than its actual deficit (6.3% of GDP vs. 8%), because of the country’s weak economy. But most of the deficit is still “structural,” according to the commission, a disturbing thought in a country where 25% of the workforce is unemployed.

    And because the euro zone’s new “Fiscal Pact” requires countries to bring their structural deficits under 0.5% of GDP, Spain still has a lot of government austerity to endure before the cutting is done.

  9. Been reading all the comments, and I really have nothing clever or intellectual or political to say, like everyone else. All I have to say is this – what is the value of human life? 280 euro? 150 euro? 0 euro? Which group in society has the right to degrade our existence to the point that a handful of ‘shekels’ or the lack of them is the make-or-break-point of life and death? To die alone, in shame and desperation is a truly terrible thing. None of our childhood hopes and dreams ever looked like this.

    • joanna – “Which group in society has the right to degrade our existence to the point that a handful of ‘shekels’ or the lack of them is the make-or-break-point of life and death? ” – Maybe that was a rhetorical question but let me answer it anyway. –

      The government has the right and people who vote have given the government legitimacy. –

      Voters give their approval for the government to force people to do things against their will. Voters wouldn’t accept any other entity (a business, family member, friend, neighbour, stranger in the street) having this “right”, why is it moral for the government to have slaves?

    • That’s a great comment, Joanna. And it makes my head shake if I compare Yanis’s story about the man silently dying on one side – and the absurd comments I am used to read in many media on the other.

      A little addition (had no time to read all comments, so sorry if it was already mentioned). A group of people now published, from Portugal, a letter to Mrs. Merkel to contradict her as she visits Portugal, like she dared to visit Greece a short while ago.

      This letter can’t help this poor man here any more. But what can we do, we have to persuade more people. German leftist paper “Junge Welt” published the letter on page 1 today, for example.
      You can read it in various languages, including greek, if you search –> carachancelermerkel.

      I quote the last phrases here:

      – – –

      “Your entourage may try and ignore us. The European Commission, the International Monetary Fund and the European Central Bank may try to ignore the streets. But we are more and more, Mme. Merkel. Here and in all countries. Our protests will be stronger and stronger. We become more aware of reality every day. The stories you have all told us were always awkward and now we know they were full-out lies.

      We have awaken, Mme. Merkel. You are an unwelcome guest.”

      – – –

      Now, thanks to blogs like this one here, people will, like for example I do since months here, gain a lot of knowledge. Which is desperately needed.
      The feeling that what Merkel, Troika and more do are wrong is fine – but there must be more information and knowledge against all this one-sidedness.

      It is strange how so many people tend to think some great “Mother or Father” would set things right – without us doing anything…

      There was a very friendly man, a greek owner of a restaurant in Germany. He collected money for Greece this way: he suggested people should come to eat in greek restaurants (one day last August). A lot of the money would be sent to Greece then.
      I wrote to this man, asking for ways to help spread the word in my town (Hamburg). I mentioned only a very few political things, and his reaction was one that many of us are used to.

      He answered something like this (not exactly so, i don’t want to quote his mail in any way):
      Germany was great. One should think Merkel and all were brothers and sisters, and now accidentally Greece was in trouble. Politics were not important, it would be wrong to think so. (He clearly was a fan of the greek conservative parties). I should not worry about shamelessly imbecile (my words, he didn’t think so) reports in our german media (Bild, Focus, hundreds). This time we’d help Greece, next time Germany… It sounded like “Bild is allright”.

      I don’t – not in the least – want to criticise this man, who resembles millions but does much more good things. He tried to help his way, avoiding to see the whole picture with a reason known to himself.

      Yet – letters (like this one above) from Portugal should not have 4050 who sign it – like right now – but 1 000 000. And he wouldn’t have signed. For the fine man it was “some accident”. Next year it could be the USA, sort of thinking.

      I think, concerning the media, we have mainly 2 kinds of ennemies. Yes, ennemies by now.
      First those people who from their heart favour Merkel’s politics. Secondly, and even more dangerous, those bunch of so-called “ironic”, “sarcastic” “cool” and “funny” guys of indifferent yet intelligent people, who – if they’d be honest for a minute – had to admit they don’t care if someone dies like this poor man died. Don’t underestimate the second “type”. They are not that small a group at least in a lot of media. And in journals or internet areas for younger people.they are more like 80%… Indifference is not as easy to beat as rotten half-truths coming from lobbyists, for example, would be. That’s a problem…

    • Richard, my question was not only rhetorical, it was stated in anger. I don’t personally know any voter who condones the kind of barbarism we are seeing these days. Voters however are strangely naive in their choices. They also have a tendency to think about their own back yard instead of the greater good.

      Lack of morality and social conscience are not the exclusive privilege of government. Rather they are promoted by persons, organizations and corporations behind the government. These said entities blitz us day and night with sales pitch, propaganda, disinformation and distortion of the truth.

      We are all slaves, whether we like to admit or not. The question is: do we still care? or have we lost our humanity?

    • joanna – We are only slaves to the government, no other entity no matter how large can force us to do something against our will.

      Do we care that we are slaves? I would say most people don’t even realise it or can’t admit it, like you say. They have too much emotional capital tied up in the government being an angel.

      About voters condoning babarism, there was an election only this year in Greece and I think the majority of Greeks support the measures due to government propaganda of “catastrophe” without them.

      “They also have a tendency to think about their own back yard instead of the greater good.” – I think you underestimate people. It is the Greek people working together that is keeping the government afloat. If people were selfish they would take their money out of the banks. They don;t because they know if they do it will collapse the banking system. They are acting in the greater good by keeping money in Greek banks. This is an example.

      About people thinking about their backyard. I would argue I am better off if my neighbour looks after his backyard rather than worrying about the community as a whole. If everyone looks after their patch the community will better for everyone. In short, people acting in their own interest benefit everyone. I mean it would make no sense for people to neglect their own back yard and look after public space instead would it?

  10. “Hanging in quiet desperation is (becoming) the Greek way”

    Hi Yanis.

    Hanging in. Indeed.
    But not in quiet desperation. Never.

    Yes there will be those of us that will not be able to look outside our own little boxes we call life and this may lead to personal problems ,but others will have a paradigm shift. Hopefully the majority and for the better.

    That ofcourse does not mean we accept the death of our own people caused by inane policies.

    I think we endure too much and this is certainly seen as stupidity more than courage from the rulers.

    “can pierce the denials of even the most callous of austerians”

    They couldn’t get care less.

  11. Thank you for focussing on this one story that in its despair and quietude says so much.

    Austerity has been hardest for the most honest and responsible in our societies, especially in the older age groups whose options and strength are limited. And not only through suicide [depression through despair]. In the last 10 months I have gone to 3 funerals of men in their late 60s, early 70s, 2 dead from thrombosis, one a sudden acute worsening of a chronic condition. All 3 families have no doubt that Austerity induced stress was the cause – seeing what they had worked for personally and in the country turn to ashes, obsessed with their failure to save companies, the plight of ex-employees and their families. In other words, the stress generated by their sense of responsibility, and inability to prevent events, proved too much.

    There must be an enormous silent toll across the Austerity countries, robbing us of the decent older generation.

    I would like to add about Siatista –

    Many months before Archbishop Ieronomos finally spoke, the Metropolitan of Siatista Pavlos issued a statement about Golden Dawn saying:

    “It is sad that some ‘Christian fighters’ have identified with Golden Dawn to defend Jesus. Jesus who is persecuted by Golden Dawn, offended and humiliated daily in the persons of refugees, immigrants, even children”.

    For this he received threats on his life by Golden Dawn.

  12. I fully agree with your quiet desperation title. It is amazing that people are experiencing the tragedies that followed the bankruptcy and still stay essentially quiet. I do not know why that is. Do they feel shame, fear, a sense of helplessness? Tragedies like the one you described are becoming slowly known in every neighborhood, in every town. Many do not make the news, since they are not “spectacular” enough like the public suicide that you mentioned. Apart from the suicides there are also the thousand families that are struggling to make ends meet, hanging on by a thread. I cannot fathom why people basically stay quiet. I do not mean to take to the street, that is no longer a valid option due to the constant fighting that erupts, but they should reach out. Share their trouble, try to find support and form connections within their small communities and friends. This does not happen. It is a tragedy but we face this situation alone, each of us is fighting a personal battle against the world. I think that is one big difference from the Great Depression of the 30s, and all the other times Greece had found itself in trouble be it from war or economic downturn. This time is indeed different. This time each of us is all alone.

    • Tasos – You should start something along the lines you are describing. Somewhere where people can go and share their situation anonymously. Like you say, I think it is important for people to share their circumstances so they realise they are not alone. Again, like you say, I think that is one of the biggest problems in Greece that people think their situation in unique, if people realised that the majority were in the same position you might start to see some mass peaceful resistance.

  13. Dear Yanis,

    My father is a psychiatrist with over 40 years clinical experience. In every country, 10% of the population suffers from depression. It’s not austerity that leads people to commit suicide but serious depression and lack of resources to help them. Whether it’s this poor disabled man or that lady in Spain who jumped off her balcony, all suicides are tragic and unfortunately there is an ignorance in our society about mental illness. It’s even worse in Greece because they stigmatize the disabled and mentally ill.

    One thing is for sure, while mindless austerity is destroying the social fabric of Greece, it’s a boon for hedge funds and private equity:


    Best regards,

    Leo Kolivakis

    • Leo – Your saying that government cutting funding to the most vulnerable is not leading to some of these people committing suicide?

    • @Leo Kolivakis: It’s even worse in Greece because they stigmatize the disabled and mentally ill.

      Thank you very much for speaking about this, because indeed this is a taboo in Greece and what I know is that the religious people (and which Greek does NOT believe, according to even the fact that the Greek politicians have to make a vow on the “holy” book, held by the biggest of the hierarchy of the Greek orthodox church?) it is God who punishes the family because of it does not matter whát. It is also true that the suicide in April has been hailed as an act of a martyr…….
      This is madness and asking for more `martyrs`.
      Not any God will welcome them on the other side. It is a curse to life, and a disgrace of the father and the mother, the family. It is a cowerdish act and needs ondeed the full attention.

      I am very happy with all what stops errors in thinking, so thank you, and your father.

    • When a disease reaches epidemic or even pandemic levels, I was under the impression that the environmental factors contributing to its spread are to be studied and addressed…

    • @Richard What i am saying is that there were NO serious programs in Greece to help the mentally ill or disabled. Austerity only exposes how vulnerable the weakest in society are. Also, read my comment carefully. Depression isn’t unique to Greece or austerity laden countries. it exists in all countries where 10% of the population suffers from depression. Thankfully, only a small minority of these people commit suicide. We need to be careful when stating that “austerity” causes a rise in “quiet” or loud suicides. This is false. Quiet suicides happen every day all around the world and nobody ever hears about it. These people need treatment and help. Sadly, Greece never took mental illness seriously and too many Greeks suffering from depression are too ashamed to seek medical help.

    • Leo – You have to ask why private companies are not entering into this market. Or are they? Remember, government involvement in people’s lives is what led Greece to today’s situation. In short, asking the government to get involved is a recipe for citizens to get ripped off and sub standard service

  14. I think you should acknowledge your sources even with a well known quote. Henry David Thoreau’s great oxymoron, in full, is: “The mass of men lead lives of quiet desperation” from ‘Walden.’

  15. The Economic Shock Therapy imposed by Frau Merkel.is as predicted a total disaster. The human cost is beyond comphrension.
    Chile went through the same shock therapy in the 70’s and with the same results.

    • Since I lived in Chile during the time of that economic adjustment, I want to comment on it.

      First, because I could witness the adjustment in Chile, I have argued from the beginning that this would not work for Greece because no democracy would survive such an adjustment. I was proven wrong because Greece is still a democracy.

      Let me add, though, that the Chilean adjustment was a bit of a different kind. A hopelessly overdimensioned state said basically “We will overnight bring state expenses into balance with state revenues; full stop!” There is only one word to describe this: brutal!

      Now to the good news. The brutal time of the economic adjustment was used to essentially reform the country’s economy from A-Z. Within 5 years, one could see the first positive results.

      In the end, the ‘Chicago-Boys’ (that was the name of the economic team) failed in the ‘first round’. Why? They fixed the Peso to the USD; this created the perception of financial stability; foreign loans started flowing into the country like there was no tomorrow; the money was spent on consumption; wages, prices and asset values increased to unrealistic levels; and when the foreign funds flow stopped for international reasons, the party came to an abrupt halt. Sounds familiar?

      What made the difference is that Chileans recognized that the failure was not due to the wrong system but, instead, due to the fact that the users had misused the system and that the state had not intervened. Thus, they kept the system but made sure that it would not be misused again.

      20 years later, a formerly defunct, planned economy which could no longer feed its people had turned into probably the most successful and stable economy in Latin America. Greece is today much better off than Chile was in the 1970’s. Greece has an extremely wealthy upper class (albeit much of their wealth is outside the country) and Chile did not. Greece is a member of a political union and a monetary union, and Chile was not. Chile was and is in an extremely remote location and really had to search what its international competitive advantages would/could be. Greece’s competitive advantages are quite obvious (at least to me).

      The principal reason why I as a foreigner write so much about Greece is that I then had these experiences in Chile. I could then witness that it is quite possible to turn around even a failed state in a reasonably short time if the economic leadership is on the right track. And after Chile, I could witness in Argentina what happens when the economic leadership is on the wrong track. Argentina survives, though, because the country is so rich in natural resources (which Greece is not).

      I once summarized my Chilean experiences in the below blogpost.


    • @Kleingut: Quoting: “First, because I could witness the adjustment in Chile, I have argued from the beginning that this would not work for Greece because no democracy would survive such an adjustment. I was proven wrong because Greece is still a democracy.”
      Apparently you do not leave in Greece currently. Greece is not a democracy in any since. Every single one of the main democratic values has being either broken either violated either suspended due to state of emergency!

    • @Revolted Tzeny

      Correct me if I am wrong, but my understanding is that Greece only this year had two full-blown elections with full-blown election campaigns and I am not aware of any limitations put on the campaigning parties to express their opinions freely. In fact, one politician went from basically nowhere to about 27% within a few months which seems to me that people could express their strong feelings. Let me assure you, that did not happen in Chile during that time!

  16. Greece is being sold out by its politicians and I am afraid, the inevitable result will not be about economics it will be about civil war. Afterwards, the Greek people will have to sit down draw up a proper constitution, a proper parliament, a proper taxation and legal system. In other words the Greek people have to go back to the start. Greece is facing inevitable collapse and it is the duty of those elected to stop pretending and stop trying to live from one tranche of debt to the next. They take various postures to maximise their political gains but it has gone way beyond party political games. The only comfort Greece can take is that they will not be alone. The next minotaur will be the one that recycles failed political systems.

    • Why are you using the present? Greece was sold out beginning in the decade of ’80’s when it started the vicious cycle of borrowing more than it could pay, giving the impression of a paternalistic government that could find a job in the civil service for all its children and educate them too, even those with grades 4 and 5 in the exam, with excellent the 20. When the system gave the impression that money was coming from a money tree and all increases demanded by the various civil service and other groups were granted for political expediency.

      The politicians now who take the burden to land us softly at the bottom of a default are not gaining anything by their service. They are losing followers rapidly. They believe in what they are doing and I am with them.

      Yes, this is an unfortunate incident and there are many more that have not hit the news ( about 4000 suicides due to desperation from economic difficulties). Do you think if the politicians followed the advice of the SYRIZA opposition and recanted the memorandum and its obligations the suicides would be less? When we would be pushed to the drachma and will end up paying millions of drachmas, if not billions, for an egg? ( as happened during WWII, and Kaklamanis reminded the parliament yesterday. I remember it too, I was 6 in 1946 and payed 1000 drachmas for a piece of bubblegum , and that was after partial restoration of sovereignty).

      We are falling down an incline and do not know when we will hit bottom. It is better though, as in all falls, to have a controlled fall, then one has a chance to arrive at the bottom with only bruises and all the faculties intact. An uncontrolled fall results in broken limbs and heads, to say the least. Much more difficult to recover from than from bruises. We now have enormous economic bruises, with salaries and pensions practically cut in half and reduction of social benefits, but the case will be much worse in an uncontrolled default. There will be no pensions and hospitals to benefit from.

      Advocates of “default now” have the illusion and are gambling that the real threat of a Greek default will force a change in the way the euro-zone views the economic system, and it will not allow a default.. Maybe some economists do not even care what happens to Greece as long as there is a change in the economic direction, because even if a Greek default triggers a beneficial change for the rest of the euro-zone it will probably be too late to avoid Greece crashing anomalously.

      Most Greeks faced with this gamble would not take it, and that is what the result of the parliament vote means.

    • Anna – The only thing a default will mean is that the government will have to stop spending more than it takes in immediately. Nothing more, nothing will collapse, the government will still take in revenue like they do now.

      The problem is if the government starts cutting its obligations to people who are the most vulnerable rather than cutting the government payroll. If the gov chooses to stop paying pensions rather than stop paying a 30 year old public sector worker then … well Ill leave you draw your own conclusions.

      About bank deposits. I am pretty sure Germany will step in to reimburse savers.

    • @ Anna v

      Yes maybe now is too late for other actions. But it was not 2 years ago. Even 1 year ago.

      As for the fact that many focus only on the overinflation effect of a default that is only half the truth ,since there are many ways this can be avoided if we finally default.

      Peg drachma to the dollar at first as a protection from the markets ,halt overconsumption that might come as a result of the peg with new money coming in and get a real Marshall plan while ABSOLUTELY continuing the reforms that are for the benefit of the country.

      Mind you , i do not choose default now. As time passes ,situations change ,so do solutions.

      When i chose Tsipras i voted for a potential change of everything ,having stated that i am not a slave of any ideology. At least i think i am not.

      Noone seems to be capable. Everybody ,Tsipras ,Samaras want to keep certain aspects of the old system that suits their own people. Unacceptable.

      I do not care about any drachma lobby or who is going to lose what among different elites.
      I care about the whole of society.
      Whatever happens there will be people that will lose something. Money ,well being ,health.

      But what should not continue to happen is have the same parasites again on our backs.

      I am not with any one of them.

      Not with any that as you say try to land us softly ,because they serve others first and foremost and NOT US.

      They brought us to the state we are in today and now they use that state as an excuse ,albeit a good one to vote for more inane measures so that we do not get into an even worst position.
      Yes maybe now there is no other choice but Anna v do me a favour and do not use ,not you too ,the state we are in as a cheap argument to choose political sides because of ideology and say that it was the same a few years ago.

      Yes most Greeks wouldn’t take that gamble ,because it is a gamble today but it wasn’t a few years ago.
      We have said that this would happen. Now Samaras may start playing the nice guy and as people see positive results will accept the same parasites again.

      I trust noone.

      I am with myself and my personal alternatives.

    • @Demetre

      I was also of the opinion and have stated it here that we should have defaulted end of 2009. People had some “cushions”, savings for a bad day, to wait out the intermediate process of going back to the drachma and the upheaval that will inevitably follow. Had we defaulted then people would have been shocked to awareness that the state of “daddy give me give me” had finished, and striking to keep privileges would be pointless. No money from the money tree.

      I am also talking from the present state, not supporting politicians but the society as a whole. After two years of blood letting in the form of extra taxes and a million and a half unemployed being supported by the pensioner parents, there is no resilience left in society,and uncontrolled default now will be disastrous on all fronts..

    • anna – “I was also of the opinion and have stated it here that we should have defaulted end of 2009. People had some “cushions”, savings for a bad day, ” – quite right. But if the gov defaulted in 2009 they would have had no leverage. They had to draw it out.

    • “hanging-in” is the name of the game, for the bigger or smaller picture. And Art, it (truly) is to …hang-in. Following, to see the change happen, by those who see it first and are hanging in.

    • Crossover – If austerity means the government cutting back and living within *its* means then the change has been minimal. What the Greek government has done has attacked the most vulnerable in society rather than attacking the number of people on government payroll. But its not just Greece that does it, all governments threaten the weakest first, its the government’s way of saying its immoral for it to get smaller. Its lies, self interest and propaganda of the worst kind.

    • @ Crossover

      What? Austerity? Is that a country?

      I think they use a different word now. “Merkelity”.

    • Of course there has been austerity (starting from a very high level, so it is sort of back to realistic levels). But unfotunately, austerity was not imposed by the Greek government on all groups. The cleptocratic ‘elites’ took good care of themselves.

    • @Crossover

      I suppose the different views on austerity have to do with the fact that there has been tremendous austerity affecting major parts of society but there really hasn’t been what is normally considered as ‘national austerity’.

      Greece is still spending almost 2.000 Euros on imports for every 1.000 Euros which it exports. Revenues from services (i. e. tourism) cover part of that hole, but really only part of it.

      Note that sales of mobile handsets are projected by industry reports to increase to 3,4 million units in 2013!

      So, in the eyes of people outside Greece, the country is still overspending heavily. Those people understand by national austerity that a country’s imports are limited to the amount of revenues which it generates from abroad.

    • @Klaus

      “I suppose the different views on austerity have to do with the fact that there has been tremendous austerity affecting major parts of society but there really hasn’t been what is normally considered as ‘national austerity’.”

      What part of the globe ever experienced “national austerity” at peace time and not even the elites got away with it?This is not going to happen if nothing extraordinary happens.Not in this world, not with this government.This doesnt mean that there hasnt been any austerity.

      “If austerity means the government cutting back and living within *its* means then the change has been minimal. ”
      Im really curious why are you having such a hard time understanding the meaning of the primary budget balance.The primary budget balance is what the government has total control over and this has definitely shrunk.Debt servicing is a wholy different matter and the government definitely has no control over it right now.

      Now if you expect the government or any other government that would happen to have similar figures to “live within its means” by way of servicing such a huge debt burden along with having a balanced primary budget, then im sorry but this isnt going to happen.Everybody knows that the current debt structure is unservicable and this isnt only Greece’s fault.

    • Crossover – Lets not fight, we’ve been getting on well the last few days 😉

      I dont why you are having such a huge problem understanding why the primary deficit is meaningless. The Greek government is in trouble because of interest payments. To say the yields on Greek government debt are irrelevant is a bizarre position. It is the reason for the current problems, not the size of the debt.

      “Debt servicing is a wholly different matter and the government definitely has no control over it right now.” – Shake off your pre conceived notions. This is going to sound like I am contradicting myself here but I am not. If the Greek government balanced its books in a sustainable way ie without tax increases and pension and wage cuts the yield on Greek government debt would come down. In short, the ONLY party that has control of the yield on Greek government bonds is the Greek government.

      Yields are based on the actions of the government not the other way round.

      The Greek government must look at the bond yields to determine if their course of action is correct. Instead they are ignoring the signals.

      I agree it is important to balance the books. But you must look at the bond yield as this will tell you if what you are doing is sustainable. Common sense and the markets are telling the Greek government that you cannot cut benefits, cut pensions, cut wages, increase taxes and not cut the payroll. This will only lead to bankruptcy and that is what the increasing yields are reflecting. The markets wants a Greek default, they want lower taxes, they want rid of mega public sector pensions and bonuses, they want a small government and low regulation. They want people to be free so they can be productive.

      This is the exact opposite of what the socialist regime in the EU and Greece wants which is why you are seeing the anti capitalist measures being called capitalist. They are trying to manipulate public opinion in favour of socialism, the cancer that caused the current mess.

      What we are seeing with yields going through the roof is the markets saying what the Greek government is doing is completely unsustainable. The Greek government should take this advice and change their strategy. The fact that they are doing more of the same shows that their mission is to blackmail the Troika into giving cash.

      It shows the Greek government is a fundamentally socialist entity who is hanging onto to life by its finger nails and it prepared to grab onto anyone that will keep it from falling even it if it means pulling that person to their death.

      The Greek government are a cancer, they are fighting for survival and they will do anything and say anything to manipulate people into thinking the host is the problem. Even if this means cutting pensions and benefits rather than the government payroll.

      The host, the Greek people, are trying to kill the cancer but cutting off its money supply but foreigners are intravenously feeding the tumour directly and it is killing the patient.

    • @Crossover

      I can only speak from my practical experience in Chile/Argentina in the 1980s. First, those who have black money, particularly when it is outside the country, always get away with it to a large extent. That’s a fact of life, albeit it a very sad one (in Argentina, the rule of thumb was that private black money offshore was always at least as high as public foreign debt. If you extrapolate that to Greece, private black money offshore would be about 250 BEUR these days).

      How did ‘national austerity’ evidence itself in Chile/Argentina? The prices of imports went sky-high and bank deposits had to be frozen. When that happens, every resident in the country who does not have black money feels that there is national austerity.

      If you have 20 minutes, look at this video where a former Chilean Finance Minister tells a European audience that “you really haven’t seen a financial crisis yet”: youtube.com/watch?v=56BGJ5wtVhk

    • @Richard

      “I dont why you are having such a huge problem understanding why the primary deficit is meaningless. The Greek government is in trouble because of interest payments. ”
      The second phrase precisely highlights that the primary balance is anything but meaningless.If Greece was allowed/decided to default this would mean that its books would be balanced (for the greatest part) indeed.Thats exactly what the primary balance shows.

      “To say the yields on Greek government debt are irrelevant is a bizarre position. It is the reason for the current problems, not the size of the debt.”
      Although thats correct,please remember why the yields started to rise in the first place: Because the deficit was supposedly out of control and the debt at 110% of gdp was considered unsustainable.

    • @Klaus

      If the argument is whether we are in a similar situation to that Argentina or Chile experienced,then we’re not there yet.But i dont understand how or why Chile or Argentina are used as “austerity-meters”.Thats totally pointless.Just because we’re not there YET doesnt mean we didnt have austerity.Thats exactly my point.

      About the “you really haven’t seen a financial crisis yet”.Thats as ridiculous as saying that just because you killed 5 people and i killed 10 im “more of a murderer” than you.If 20% loss of gdp at peace time is not financial crisis then tell me what is it.

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