Fundamentally Transforming Greece Into An Economic Ruin

This excerpt from a recent article in the New York Times reminds us  that Greece is still there - but the economic situation is still rapidly deteriorating. Just when you would think that it can't get any worse - it does.  By many indicators, Greece is devolving into something unprecedented in modern Western experience. A quarter of all Greek companies have gone out of business since 2009, and half of all small businesses in the country say they are unable to meet payroll. The suicide rate increased by 40 percent in the first half of 2011. A barter economy has sprung up, as people try to work around a broken financial system. Nearly half the population under
25 is unemployed. Last September, organizers of a government-sponsored seminar on emigrating to Australia, an event that drew 42 people a year earlier, were overwhelmed when 12,000 people signed up. Greek bankers told me that people had taken about one-third of their money out of their accounts; many, it seems, were keeping what savings they had under their beds or buried in their backyards. One banker, part of whose job these days is persuading people to keep their money in the bank, said to me, “Who would trust a Greek bank?”

The situation at the macro level is, if anything, even more transformational. The Chinese have largely taken over Piraeus, Greece’s main port, with an eye to make it a conduit for shipping goods into Europe. Qatar is looking to invest $5 billion in various projects in Greece, including tourism infrastructure. Other, relatively flush Europeans are trying to make “Greece the Florida of Europe,” Theodore Pelagidis, a Greek economist at the University of Piraeus, told me, referring in particular to plans to turn islands into expensive retirement homes for wealthy people from other parts of the continent. Whether or not the country pays its debts, he went on, other nations and foreign companies “now understand the Greek government is powerless, so in the future they will take over viable assets and run parts of the country by themselves.”

For months, Greece has sat at the epicenter of an economic crisis that is threatening the foundations of Europe and that has the potential to bring new waves of economic upset to America. The latest austerity plan meant to satisfy Greece’s creditors and allow for new infusions of financial aid may have averted involuntary default — and a global economic downturn — but will nonetheless make life for ordinary Greeks even more difficult. The plan reduces the minimum wage by more than 20 percent, mandates thousands of layoffs and reduces some pensions, probably ensuring that strikes and demonstrations will continue to be a feature of the Greek landscape.

Yet spending time in Greece presents a complicated picture of what is going on. There is certainly anger and belt-tightening and dark clouds of depression. It’s not uncommon to see decently dressed Greeks discreetly rummaging through garbage bins for food. A new book about how the country survived the Nazi occupation — “Starvation Recipes” — has become a surprise hit. But there are also success stories that fly fully in the face of the turmoil. Most surprising, there is a pervasive sense of relief over the crisis that is upon them, as if a long, strange dream is at last over.


By RUSSELL SHORTO
Published: February 13, 2012
New York times