FinancialGuy Writes!

While Greece may be the birthplace of mathematics and all those symbols used by financiers to build models, I am starting to wonder whether the ability to count is a lost art in Greece. This has been forming in my mind for a while, but recent evidence has pushed my thinking over the line.

Recently this story was sent to me. It is in German, and I claim no skill with the language, but if you scroll down the page there is a graph that tells enough of the story. Essentially, it seems that Greeks seem to believe that they work longer hours than the Dutch, Spanish, Italians, Brits, Germans, and almost everyone else in Europe, each year.

This would seem to be in stark contrast to the actual problems being faced by the country. You don’t need to be an economist in good standing to be able to see that the real problem Greece faces in the euro crisis is one of competitiveness. The German economy is clearly much more competitive and productive than many others and when tied together by a currency, this difference becomes obvious over time. Bailouts for Greece now only roll the problem over to another day, and between now and whenever that other day may be, the German economy will be rolling along at a faster pace than the Greek economy, compounding the problem.

This leads to a rather obvious question. Is the average Greek worker really working more hours per worker per year than the average German worker?

Since I have not made any studies of this of my own, I shall refrain from answering that one, but I think we can all have a guess in private.

On top of this, the idea that the Greek’s didn’t pay enough tax has gone from being slanderous to a widely accepted fact in the last two years or so. Whether this is because of avoidance, evasion or corruption I have no idea. Perhaps it is systemic? Or maybe cultural? Whatever the reason may be, if it is true that paying tax is more of a lifestyle choice than a requirement for many in Greece, how come most people in Greece aren’t super-rich? After all, they are working more hours and paying less tax…

I fear that the answer is that actually, many in Greece live in a kind of financial fantasy land. Since the economic crisis began there has just been problem after problem. It must be embarrassing to be a Greek diplomat these days.

There was the scandal involving Goldman Sachs where debts were being moved ‘off balance sheet’… There were the multiple restatements of debt by the government… There was the Troika leaving in September over disagreements about numbers… There was the Troika leaving in December without any agreements… There have been arguments about deficit reduction and now – after umpteen days of negotiating with private creditors to take a very substantial loss, it seems that they are still 325 million short.

Suddenly, Greece changing leader for an unelected former central banker seems like a good idea!

The tough negotiating stance of the eurozone finance ministers yesterday seems completely rational. They clearly do not trust the Greek government any more and while on the one hand they need to be seen to help, on the other, they seem to be trying to cut them loose. Since it is almost impossible to repossess a country upon failure to repay a loan, the finance ministers are taking the next toughest line possible – verbal and written guarantees that their demands are adhered to.

Perhaps the European Commission can find a way to fund a few thousand extra Greek speaking maths teachers? It would seem like a good long term investment.

Author :


  1. Well, yes, punishment, aha! There is also the borrowers punishment, aka default. Try and sue a sovereign then. Truth is, the Greeks will leech off the French and the Germans – la “Grande Nation” – and their teutonic payment servants can’t let their Millenium Project, the Euro, falter. The question I am asking myself is where the breaking point will be? Bailing out Greece and Ireland is potentially feasible, add in Spain, Italy and Portugal for a good measure and methinks not. The PIIGS sinking Europe? Any thoughts as to the quantification of what the breaking point is would be very welcome.

Comments are closed.