I have just watched a documentary regarding Greece 's financial and am appalled. These are the why's and how's this historic and beautiful country came to grieve.
Bureaucracy: Greece's bureaucracy is famous in the whole of Europe. To open a cafe or pub there are 25 processes to go through. This is a country of rules and regulations.
Bloated civil service: There are 1.05 million civil servants (excluding police and armed forces). The population of Greece is only 10 million. More than 10% are government servants. Salary increases every year and benefit for civil servants in Greece are one of the best in Europe.
More and more money is needed to upkeep this bloated civil service. The retirement age is 62 years old.
Corruption: Greece is the most corrupted nation in the Eurozone. Citizens pay 'under the table money to:
- be admitted into a public hospital
- pass a driving license
- to enter the public service
- to renovate your business premises or your home
- to avoid income tax
Every government project is awarded to political cronies and at hugely inflated prices. Transparency International compared the prices of the construction costs of stadiums built for the Athens Olympics recently with similar structures in China - they 500% more expensive than the Chinese and when compared to Los Angeles and Sydney - 50% more expensive. All this with tax payers' money and borrowings.
Tax evasion: Officially 80% of its citizens are supposed to pay tax but only 37% are doing so. Big businessmen and corporations have refined tax evasion to a fine art (or have the tax men take some coffee money?)
No transparency in governance: The politicians and bureaucrats falsify economic data and painted a rosy and manageable picture while the economy was rotting away .
Unabated borrowings: Meanwhile, the politicians and bureaucrats continue to issue government bonds to keep afloat, series after series. They tried to cover up the financial mess they had created, creating one big hole to cover up the previous.
Lacking political will power to reform: To keep a hold onto political power, politicians are prepared to lie and commit economic and political fraud. If reforms were taken some five years ago, the country need not go bankrupt and its citizens need not suffer so much.
Political expediency and greed for political power overrode everything else and hence Greece is now a bankrupt country. Luckily, it is part of the European Union and its currency is Euro, otherwise the Greeks would have to eat grass to survive.
Laid back attitude: Tourism is the only industry in Greece and over the years the Greeks have had an easy time. Many flocked to see the historical sites and enjoy summer vacation on the islands. But they forgot that not many tourists will return after visiting the sites - there are so many other tourists attractions in the world, some maybe more exotic and perhaps cheaper.
So once tourism waned coupled with the higher cost of living, the Greeks could not and refused to adapt and transform. Greece has no natural resources, no electronics industry, no R&D - no anything. And even now, the civil servants refuse to take a pay cut.
The producer of the documentary had hired a taxi driver to go around while doing this documentary. The taxi driver had studied economics for four years in the US and this was his parting words:
'My biggest mistake was returning 15 years ago. I should have stayed back in US. My nationalist instinct made me returned. The politicians screwed me. I loved my country but my country did not love me.
Friends, I can see a lot of similarity with Malaysia. I need not go into boring details, it is there for all to realise. Unless we transform politically and economically, sadly this day will surely come . It is not a matter of 'if' but only a matter of 'when'.