Myths about Greek’s economic crash

I ran into a heated discussion at a friend’s place last week where the subject of the failed Greek’s economy was the issue. From the contributions of some of the speakers who are no doubt highly educated individuals in their various disciplines, it was clear to me that in spite of their very high education and extensive exposures in the business and managerial worlds, most of what they had to say about Greece and her predicament were based on myths and lingering misperceptions.

The first impression given was that the Greeks are inherently lazy, fun-seeking and freaks of early retirements. Nothing can be farther from the truth. Truth is that they actually log in more working hours but get less in returns than, say, the Germans. They are merely victims of a dysfunctional ideology encased in the cannibalistic Western-type capitalism.

A position as simplistic as that is akin to the divergent situations of two kids, one, whose father is rich and, the other, whose father is poor. The one whose father is rich thinks it is because his father works very hard while the other’s father is evidently a lazy man when indeed the truth is that the rich father is a lazy armed robber who steals at night and do philanthropy during the day whereas the other’s father who is “poor” is actually one of the victims of the robbery activities of the supposed rich man. To then conclude that the varied economic situations in which the two families have now found themselves is the result of their respective levels of productivity, competence, prudence and resourcefulness is to miss the point about how the capitalist economy works.

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In Nigeria, there was a time when the naira enjoyed parity with the US dollars. During that time the value of an effort exerted in Nigeria to perform an economic activity was the same in the US. For example, the Nigerian worker who earns a naira to perform a function per hour in his workplace was valued the same with his American counterparts who earns the same amount. But when the exchange rate is altered at the expense of the Naira to, say, 200 units for just one dollar, it would mean that for the Nigerian worker to achieve the same level of economic reward like his American counterpart, he would have to put in 200 more hours to achieve some economic parity. Does that mean that the Nigerian worker has gone 200 times less productive than his US colleague?

The case of the Greeks is not exactly the same but to the extent that some comparison is now being made about their work ethic and general productive disposition against their fellow Europeans, it has become necessary to point out that the problems of Greece may have indeed been made worse by corruption and a weakened domestic socio-political situation occasioned by their past aberrational military dictatorship at a time when the rest of Europe was consolidating on their democracies. But the real cause of their present predicament is clearly external. In an incisive piece in the New Statesman of 18 May 2012, Alex Androu argued that “Yes — there is rampant corruption, bad management, systemic problems, a black market. All this has been explored ad nauseam. There are other factors, too; rarely mentioned. The crisis came at particularly bad time for Greece — four years after this tiny economy overextended in order to put on a giant Olympics and prove to the world it had ‘arrived’. When the crisis came, the country lacked the monetary and fiscal mechanisms to deal with it, because of its membership of the single currency.”

The serious economic crisis that visited the Eurozone economy in 2008 was like a volcano whose epic centre is located in Greece. The greedy European financial sector, like vultures, descended on the affected economies with loans and other bailout measures that can only be rationalised in the context of usury — very exploitative. Rather than solve the problems, they compounded them with their typical IMF-type one-size-fits-all speculative solution. One borrowed Euro suddenly metamorphosed into thousands of accumulated Euro debts and because the Greek economy was integrated with the rest of Europe, it has to follow the same prescriptions as applied to others whether appropriate or not.

It was like asking the rich, the not so rich and the very poor during an emergency to take refuge in the same hotel. The hotel serves the same menu and at the same cost to all its guests, including the rich, the poor and those in between. You don’t need a soothsayer to tell that some “guests” will default on their bills at the end of the day. That was the kind of intervention that the banks made for Greece in the wake of the economic meltdown of the last decade. That much was hinted at by Angela Merkel in 2010 when she said: “The debt that had to be accumulated, when it was going badly, is now becoming the object of speculation by precisely those institutions that we saved a year-and-a-half ago. That’s very difficult to explain to people in a democracy who should trust us.”Well, I think this is the right time to explain that paradox to the people of Europe who are now baying for Greek’s blood.

In any case, the Greeks have in a sovereign referendum dared the creditors to do their worst which, in the calculation of some people, will be a forced exit, Grexit, from the Eurozone. Everybody knows that such is not going to happen without the entire European structure coming down too because the debts wahala is interconnected: the various banks that had speculated and, indeed profited, on the Greek debts, have their threatened assets across Europe and America, a Greek default will have a domino effect and shall be felt much farther away from Athens. The bailout, if at all, is really for the banks in trouble and not for Greece. That was the basis of the audacity of last week’s “no” vote which has now put the whole of Europe in a quandary.

Back home in Nigeria, we were once told that there is no alternative to IMF/World Bank Structural Adjustment prescriptions. While we cannot immediately tell where it will end, the Greek situation has at least,proved that when pushed to the wall, a sovereign nation has a choice. The present global economic order is patently unfair to many weak nations, Nigeria inclusive. The lessons from Greece is that loans from some of the international agencies are ultimately destructive to the receiving economies. Banks that facilitated them are simply speculators, not better than the operators of kalo-kalo gaming machines -gamblers.

All said, our argument today is for us to avoid the misleading Western myth being deployed as cover-up to a very serious ideological crisis: capitalism without a human face is doomed to end up with one side devouring the other in “deals” conducted in the so-called free market, a euphemism for economic cannibalism.

Finally, the Greeks are not solely to blame. They are no less hardworking than the rest of Europe. It’s just that their past corrupt and incompetent leaders provided a landing stage for an economic tsunami that was set in motion outside of their shores way back in 2008. That is why I am still pleading that the Nigerian economy should be promptly re-orientated to look more and more inwards especially in the direction of local agriculture revival as against the present export-minded gaze on just oil. It is a short-cut to Greece