Thursday, 6 October 2011

Greece’s problems analysed and solved in five minutes, by Aristos Doxiadis

If you want to figure out and find solutions for Greece’s problems, it’s a distraction to go on about capitalism, the banks, the troika, neo-liberalism and so on; or to attribute the country’s failings to some genetic predisposition Greeks have to corruption, laziness and conflict. Establishing and overcoming Greece’s woes has always been much simpler and well within the capabilities of contemporary Greeks. Thus, I believe the most lucid commentator I’ve so far encountered on Greece’s crisis has been Aristos Doxiadis, interviewed above. The interview is in Greek and I’ve translated extracts in English below. A long piece by Doxiadis on how Greece got itself into such a mess and how it can extricate itself from its predicament is here, in English.
‘One million people need to change employment. They need to leave from those inward-looking professions and go into industry, agriculture, tourism, technology and shipping. When these jobs are created, with investments and so on, then the economy will move forward.

‘We had a “bubble” different to those they had elsewhere. In Iceland, it was a bank bubble; it Ireland it was a property bubble; but in Greece we had a bubble of parasitical professions. That’s to say, people in the public sector being appointed even though there was no work for them to do; but also professions, such as doctors, chemists, lawyers, whose numbers are excessive. For example, we have 70,000 doctors, even though we could get by with 30,000 just as well.

‘Let’s not delude ourselves that we will be able to crack down on tax evasion quickly or easily, because the problem isn’t tax inspectors who don't have the will or means to do their job. The real problem is that we have large numbers of self-employed – 35% of the population in Greece, 4% in Germany. The self-employed throughout the world – in Germany and in the US – will try to avoid paying taxes. It’s very difficult to catch them.

‘[Returning to] the drachma is dangerous for us. Not just because of the problem of how we get from the euro to the drachma, but also because of what might happen when we have the possibility of printing money. We don’t have the political system that will handle such a scenario responsibly. I fear that once Greece regains its own currency, the money will be syphoned off to parasitic activities and the productive sector will once again be pushed to the margins.

‘[For Greece to reform] the current political parties are inadequate. There is a large section of society that is not represented today, that didn't feed off the state, that is involved in exporting, that insures its workers, that is healthy. No political party currently supports this section of society, which must find a way to express its views.

‘The people to reform Greece can’t be the ones from the current political system, “the pensioners”. They have to be young and daring, take responsibility for the unpopular but necessary measures and the parties must give them time. Change won’t come about in three months, but two, three years. And these new faces should be supplemented by people already in the political system, the two, three ministers from PASOK capable of carrying out reforms and similar personalities from New Democracy and the Left.


Anonymous said...

WELCOME BACK and many thanks for this most interesting analysis of the problems in Greece. Without "adequate' political parties I cannot see how Greece will ever get its house in order. It seems those that might be able to make some contribution to the economic disasters of the country are mostly interested in themselves. With inadequate politicians and self serving citizens we have a catastrophic disaster that only 'deus ex machina' can solve.

lastgreek said...

[Returning to] the drachma is dangerous for us.

You think, Aristo? It's a fair bet there won't be a euro for Greece to belong to in a few years. Then what? It's a serious question because, let me tell you, the Germans have pretty much had it with this eurozone business. No Germany, no euro.

In any case, the way the euro was conceived it was doomed to failure.

hotcargirl said...

Great to see you posting again, John.

Thanks for the link in English.

There is no clear cut resolution to be reached until responsible leadership (that will place both the interests and success of Greece before anything else) is in control. It could happen sooner rather than later.

lastgreek said...

An interesting article on the Euro crisis (and a modest proposal out of the current mess) by Athenian economist Yanis Varoufakis:

1. Introduction

When Gandhi was asked what he thought of Western civilisation, he famously replied that: “…it would be a very good idea”.

If asked what we think of the European Union today, we could do worse than remarking: “What a splendid idea! If only we could pull it off!”

United only in name, Europe is in a process of slow burning disintegration. The Euro Crisis is operating with the vicious determination of a termite colony eating into the foundations until nothing but an empty shell will be left of what, until recently, was hailed as the lofty ideal of a United Europe.

Limk to rest of article:

Now, how are the current death meausres -- Oops, I meant "austerity measures" -- working for the Greeks?

From the online Guardian:

Greeks pay for economic crisis with their health

Rising demand and cost-cutting put services at breaking point, while drug addiction, HIV and suicide rates increase.

You see, the banksters refuse to take a "haircut." They don't care how Greece collects the money; they just want to get paid. It appears that the pathetic Greek government is obliging ....

John Akritas said...

Varoufakis, who I follow and quite like, despite his Marxism, has got it the wrong way round.

Personally, I don't have a problem with the Germans running our economy; but I wouldn't want them anywhere near Greece and Cyprus' foreign and defence policy. I'm sure you noticed V. advocating a European army and a common European foreign policy.

The point being that what's so clever about Greeks being in control of their economy again, if all they're going to do, as Doxiadis says, is carry on with the hopeless economic model that got them into this mess in the first place. What makes you think that, liberated from the troika, Greeks will be able to do the things they're not doing now and haven't done previously? If Greeks are degenerate as you say they are, why should defaulting, etc, act as an epiphany that will lead to the revitalisation of Greek economy and society?

Also, Varoufakis misquotes Gandhi: what Gandhi was asked was what he thought of 'English' civilisation, not 'Western' civilisation, to which he replied, 'it would be a good idea'. There's a big difference.

John Akritas said...

Just to add that Doxiadis has written about Varoufakis' Modest Proposal

It doesn't seem that D has much time for V. In another article on his website (, Doxiadis damns Varoufakis with faint praise, referring to him as a 'competent academic economist'.

Hermes said...

Although Varoufakis is intelligent he is not serious. In fact, he is made of the same stuff of the people that got us to where we are today. Doxiadis is a little better but he is only telling us to get to B from A but he provides very little on how to get from A to B. And John, you do not seriously think that a foreign power can control Greece and Cyprus's economies but will leave their foreign policy untouched? For example, one of the instruments of foreign policy is a nation's military capabilities as a projection of power. If Germany was to control Greece's economy, for let's say 10 years, do you think they would assess the Turkish threat the same way we do, and would then spend the same levels on military hardware? Another instrument of foreign policy is diplomacy and diplomacy is an expensive exercise. Do you think Germany would gladly fund Greek and Cypriot diplomatic initiatives the same way we do?

More than likely, the Europeans are recapitalising their banks and will continue to develop a program to buy Spanish and Italian sovereign debt until such time that they feel comfortable that Greece, and perhaps even Portugal, is ring-fenced and then they will let them default. I doubt this would would mean an exit from the euro but then again a default within the euro would mean the French and Germans will own most of Greece and it is probably not something they want. If Greece exits from the euro, then what? It will only make sense if they carry out the structural reforms the Europeans have asked of them, because otherwise, they will only print money to pay their debts in drachmas which will mean the savings of Greeks will be meaningless within a few months. Given the incompentance of Greek officials, do you feel comfortable that these clowns will have their hands on the currency printing press?

John Akritas said...

Economic sovereignty is, of course, a prerequisite; I was just exaggerating about wanting the Germans to run the Greek economy to make the point that having Greeks run the economy is only worthwhile if they don't use default as a device to maintain the status quo. Doxiadis thinks this is precisely what will happen; that default, the ejection of the troika, return of the drachma and so on, will not herald the start of a new economy but entrench the old one; in other words, what would be the advantages of repatriating economic powers to Greece if Greeks are just going to carry on as before?

I very much agree with the view that what the Europeans are up to is keeping Greece afloat just long enough to save their banks, after which they'll let Greece go. It's intolerable that Papandreou can't see that this is what Merkel and Sarkozy are about and that he's going along with it all, in the name of European solidarity. Greece showing solidarity with its undertakers.

lastgreek said...

If Greeks are degenerate as you say they are ...

Well, John, I have called the Greeks of Greece hopeless and cowardly, or something along those lines. But I don't think I have ever referred to them as "degenerate," though. But now that you mentioned it ... :-)

Too bad the Greeks took up soccer instead of a tough, manly sport such as rugby.

lastgreek said...

More than likely, the Europeans are recapitalising their banks ...

Yes, in the last 24 hours or so, three Euro banks have been nationalized (first comes nationalization, then recapitalization): Dexia (Belgium/France), Max Bank (Denmark) ... and that Greek money laundering bank Proton. The deositiors were lucky here. With more Euro banks to follow, I'd like to know where they will find the funds.

lastgreek said...

... they will only print money to pay their debts in drachmas which will mean the savings of Greeks will be meaningless...

What debt are you referring to here. Once Greece exist the euro insane assylum and defaults, all unsecured debt (about 90% of it) becomes null and void. Greece should be in the driver's seat here bargaining hard instead of waiting for the Merkels and Sarkozys to decide their fate. How does that old adage go? If you owe the bank $100, it's your problem. If you owe the bank $1,000,000, it's THERE problem ... or something like that :-)

Given the incompentance of Greek officials, do you feel comfortable that these clowns will have their hands on the currency printing press?

Clowns they may be, but it is even worse now where money -- the euro -- is created as debt and you have to pay interest on it.

The essence of national sovereignty is the ability of a nation to not only control its own money supply, but to also issue it debt free ... not the banksters as the current monetary system is set up.

Hermes said...

LastGreek, it is this sort of populist narrow minded thinking that got us where we are. If Greece defaults on its debts it still has to pay pensions and other expenditures from revenues collected. As the government budget is in deficit that means that it does not have the revenues to cover those expenditures. When it defaults it will be shut out of the markets and it will be unable to raise the necessary debt from its own citizens. Therefore, it will probably be forced to print drachma to make up the shortfall until such time that growth resumes and revenues exceed expenditures. Of course, you do know the consequences of this. Also, when it defaults, the banks will also have a very serious problem on their hands unless the Europeans recapitalise them as a lot of the Greek government debt is held by Greek banks.

The essence of national sovereignty is also the ability to manage your finances RESPONSIBLY within whatever framework a nation has signed up to, so a nation does not have to borrow to the level where it endangers that national sovereignty.

lastgreek said...


The real Greek debt is well over a trillion dollars (once the unfunded liabilities are factored in), somewhere between 1,200,000,000,000 and 1,500,000,000,000.


To put that freaky number in perspective, it's approx. 15% of America's current M2 money supply.

Has it sunk in yet? Good. Because it is GAME OVER for Greece. There is no other rational, logical choice than to start over, othersise you are perpetuating this fraud of a ponzi scheme known as the Hellenic Republic. Whom do I blame? I blame the degenerate Greek of Greece. All of them!

Now, how Greece starts over will depend on the Greek themselves. Will it be the same old same old, or will they get it right this time and put their freakin nation ahead of their own individual selfish interests? Btw, if you ask me, in the new Greece, tax evasion should be a capital offense.

In came the I.M.F. to examine the Greek books more closely; out went whatever tiny shred of credibility the Greeks had left. “How in the hell is it possible for a member of the euro area to say the deficit was 3 percent of G.D.P. when it was really 15 percent?” a senior I.M.F. official asks. “How could you possibly do something like that?” --excerpt from Michael Lewis's Vanity Fair article, "Beware of Greeks Bearing Bonds," Oct. 2010

Yes, how in hell.


Anonymous said...

Doxiadis is an " apparachik" of the system. Hes has the same banrupt ideology and mind set of the scrofolous political vermis that has ruled Greece for decades. There is no solution from this crisis unless sovereignty is regained and the countrys economic, social and political life is in Greek hands, not on political kleptocrats and parasitic political parties singing and dancing to foreign tunes. " The Germans running our economy ? It is obvious that a person making such a statement is an ignoramus of German and german things. No one must run our economy but ourselves. The Euro was foisted on us Greeks by crooked pestiferous proditor class bankrolled by foreign financial scavengers. There is no solution to the condition prevailing with the bandits and their generation that brought us to this pass. As to a new generation with ideas, Greek ideas for the Greek economy, not Friedman or goldamned sacks economic vultures and heir collaborators in Greece. Doxiadis is a foreign agenta, a satrap, the crisis does not affect him. Hi ruminates and philosophizes banalities, his formula for " resolving the crisis " is the same bankrupt formula of the Eurocrat kleftes. Doxiadis is a " pensioner himself, he belonges to the pensioned generation of Greek political cancerous bacteria. There is no exit with foreign formulas. The euro was a calamity for Greece, get out of the euro and get out of multicutural, multyhibrid cesspool of europe. Otherwise keep quiet and bear it with fortitude and stoicism and hope that the sick Papandreu will rescue us with his catatonic paroxysms. In Ukraine, the foremr PM timoshenko ?? has been jailed for dubious transactions. Papandreu and his sclerotic gang of kleptocrats should not be jail;ed but hanged. The entire parliament and the bandits inside to the gallows.

lastgreek said...

Look ... the Greeks must decide their own fate, and not wait for others to decide it for them. Because, as we all know quite well, the foreigners will put their own interests ahead of Greece's. Nothing surprising in that, it is to be expected.

Btw, who are these 300 or so honest Athenians who had the "audacity" to declare their swimming pools for tax purposes, unlike the other 16,000 or so who did not? It is these kind of Greeks that Greece needs, god dammit.

John Akritas said...

The last thing Greece needs right now, LG, is Greeks deciding their own fate. That would be tantamount to allowing the lunatics to take over the asylum – or complete the take over, since the crazies seem to be in control of much of the madhouse at the moment.

Paul Zagoridis said...

Thanks John for bringing these links to my attention.

The saddest part of these discussion is when I read Greeks of Greece blaming foreigners, bankers and "class enemies" for the results of 40+ years of corruption, cronyism and nepotism. That is when I know the Greeks of Greece cannot responsibly manage their own affairs. They will print all the drachmas they can.

However, they must be allowed to destroy their nation and wealth themselves. It is only by hitting the bottom can they choose to get up, take responsibility for their past and bravely build their future.

Calling them degenerate is harsh but true. Like degenerate gamblers they are addicted to the promise of an easy score, a paycheck for just showing up, an unearned pension, a small bit of work for a life of leisure.

I often wonder how the exodus of risk-taking Greeks to opportunities abroad over the last 200 years has affected those who remained (genetically and philosophically).