The Aussies Tell It Like It Is

An amazing editorial on the Greek financial crisis from the Sydney Morning Herald:

Greece may be far away, it may be a small economy, but it is dragging down the value of your pension because its problems are a drag on the global market. The root cause of the problem is simple. The national sport of Greece is cheating. Cheating across every tier of society.

Greece needs to be thrown out of the euro zone. The crisis is coming to a head, as it must, but we will all pay. It is merely the most extreme manifestation of a failure of democracy by the European Union.  The Greeks are being forced into a humiliating and unsustainable austerity program, which is contracting their economy into a depression. Feel no sympathy for Greece. The Greek government lied its way into the Economic and Monetary Union in 2001, presenting false data, and ever since Greece has been a cancer in the euro zone.

Ostensibly, the national sport of Greece is football, but even football is compromised by the real national sport of cheating. Two years ago, the governing body of European football, UEFA, sent the Hellenic Football Federation dossiers detailing a pattern of illegal betting and match-fixing involving dozens of games. Some of the biggest clubs in Greece were involved.  The Hellenic Football Federation, like so much of the rest of Greek society, preferred the path of delusion, delay and denial. It did not respond. It did nothing. After 18 months, UEFA officials went to the Greek criminal justice system. News of the meeting broke in the media. The Greek government had to begin a criminal investigation.

It was a metaphor for the nation which Transparency International rates as the most corrupt in Europe. Greece has the highest rate of tax evasion in Europe. So pervasive is this problem that the nation is bankrupt. Confronted with a need to cut spending and raise revenue, the government has been crippled by an inability to raise taxes because the tax system is so rotten and the culture of evasion is so ingrained across everyday life.

Almost every element of society shares in this inglorious achievement. Successive governments piled up debt to pay for social services and pensions. The courts have a backlog of 300,000 tax cases. The tax-collection system is riddled with a culture of bribery.  The black economy in Greece, where tax is avoided altogether, is estimated at 27.5 per cent of GDP, about double the scale of the black economy in Australia, and does not include the underground economy of crime.

Ever since the high point for modern Greece, the 2004 Olympics in Athens, it has become increasingly clear that the country was living on borrowed time and borrowed money, a state of collective delusion. Even Greece's two biggest Olympic stars, two medal-winning sprinters, turned out to be drug cheats. They even staged a fake accident to avoid a doping test.

The whole country is heading into a crash now and it is not fake.