The Sad End of Greece’s Better Tomorrow (FT 18/5/10)
Almost six years ago I returned to Greece to find a changed country. Athens, where I had started out as a journalist in the early 1980s, had a new airport, a sparkling metro and renovated, pedestrianised boulevards. With its endless drab apartment blocks, Athens would never be beautiful, but it seemed to have acquired a stylish swagger.
There was still some uncertainty in the air. Greece was about to host the 2004 Olympics and many feared it would embarrass itself. I wasn’t worried. Leaving things to the last minute was the Greek way. It turned out fine. The Olympics provided the world with a picture of a competent, newly-confident country.
It was the young who impressed me most. Their parents and grandparents had lived through modern Greece’s searing traumas: Nazi occupation, civil war, the colonels’ dictatorship, the Turkish invasion of northern Cyprus. Young people seemed unmarked by comparison: better-off, open-minded, at ease with Europe and the world.
In the article I wrote for FT Weekend, I described a cartoon from a Greek newspaper. It showed a young man lazing in bed, while his father, sporting the ageing hippy look of those who had risen up against the colonels, yelled at him to get up. “Why don’t you take after your father who fought for a better tomorrow?” he demanded. “Because,” the son said, “I am the better tomorrow.”
With three bank workers killed in demonstrations this month and Greeks facing years of austerity, what happened to that better tomorrow? And why did I so misread the country’s progress?
I had company. In 2007, the Organisation for Economic Co-operation and Development said of Greece: “Contrary to expectations of a post-Olympics slump, the economy has continued to grow briskly in 2005 and 2006 during a period of substantial fiscal consolidation.” The government deficit had fallen from a peak of 7.75 per cent of gross domestic product in 2004 to an estimated 2.5 per cent in 2006.
There were a few caveats, the OECD noted. Greece needed to tackle weaknesses in its labour markets and reform its pensions. And that calculation of the government deficit was based on “unrevised GDP data”.
We now know just how much revision Greek government data needed, but that should not have stopped me asking some hard questions about how rosy the country’s future really was. I think there were three reasons I did not.
First, when you return to somewhere familiar, what has changed is more striking than what has not. To anyone who had sat, half-asphyxiated, in an Athenian traffic jam, the new metro was revelatory. So was the improvement in the capital’s air quality.
But I should have looked harder at what had stayed the same. Did many of the wealthy still evade tax? Did it remain common for public sector workers to retire on generous pensions in their early fifties? Did you still need political connections to get a job? (The answers would have been yes, yes and often.)
A more recent OECD document outlines how much Greece’s pensions weigh on its economic life. In Germany, a typical retired person receives a public pension equivalent to 40.5 per cent of average earnings. In the UK, the figure is 28.9 per cent. In Greece, it is 93.6 per cent.
Second, I paid too much attention to the Olympics. We ascribe great significance to sporting extravaganzas. So, next month’s football World Cup is trumpeted as a great moment for South Africa, while the 2014 World Cup and the 2016 Olympics are proof of Brazil’s emerging economic power.
Running these events successfully is no easy task. They are an opportunity to renew a city or country’s infrastructure. But they often leave debts and white-elephant facilities, and they tell us little about a country’s underlying problems and prospects.
Finally, I wanted Greece to succeed. It was where I got my professional start, learnt my trade and immersed myself in a country that was vivid, loud, prickly, hospitable and engaging. As I wrote in that optimistic article, Greece would always be with me, “filled with all the fondness and fury, the hope and the hurt of first love”. And love can blind.
Greece now faces its biggest test since the restoration of democracy in 1974. Its people will need to reshape their expectations of how long they have to work, how secure their jobs are and how much money they will have when they retire.
Greeks do not lack talent or initiative. You only have to look at how many succeed abroad, once they escape their country’s dysfunctional, influence-peddling institutions. The desperate need to reform those institutions has finally been laid bare. There can be no more illusions, for Greece or its friends.