Greece's financial folly

As the Greek financial crisis races on like a runaway train, there are three people who have made a deep impression on me. I've met two of them. I've only heard about the third.

Let's start with Fotios, a teacher of infomatics at a state school. I worry about how he and his family will manage now that the Greek government has announced its third raft of austerity measures. These include a rise in sales tax, increases in the price of petrol, and the introduction of duty on luxury items such as yachts and high priced cars. But the part of the package, demanded by the European Union, which will really hurt Fotios is a substantial cut in the holiday bonuses given to civil servants.

A public employee like Fotios, who is on about a thousand euros a month, will lose about 900 euros a year. As Fotios' wife is also a school teacher, the family will have its income cut by almost 2,000 euros, this, in one of the most expensive cities in Europe. Fotios and his wife have five children. His union has called a 24 hour strike for the middle of the month to protest against the measures. I asked Fotios if he joined the last strike two weeks ago. "No," he replied, "I couldn't afford to lose a day's pay."

Not everyone's feeling the pinch

Which brings me to the second Greek, a tax inspector, whom I haven't met. A nurse I know told me that the inspector was a guest of some doctors at a party at a beachside taverna. She was fuming. She said her husband, also a doctor, always paid his taxes. The others, she said, had offices in the smartest part of town, had holiday villas and yachts, but only declared an income of about ten or fifteen thousand euros a year. They got away with it, she claimed, by bribing government officials with a fraction of the money that was due to the state. "Guess what the tax inspector was driving?" she asked. "A bright red Ferrari."

It's that kind of story which has infuriated Germany, which is expected to provide the bulk of the money if Greece defaults on its debts and has to be bailed out. The German media has been full of stories accusing the Greeks of being cheats. Which leads me to the third person in this story, Greece's Deputy Prime Minister, Theodore Pangalos, who told me, in one of the most undiplomatic interviews I have ever carried out, that his country's economy would have been in far better shape if it had not been for the Nazi occupation seventy years ago.

Those comments have, not surprisingly, made Germans even more reluctant to bail out the Greeks. Will the country survive? Mr Pangalos says Greece survived the German occupation. Fotios shrugs his shoulders and says he is a man of faith. At least the inspector will contribute through the luxury tax if he upgrades his Ferrari.

Author: Malcolm Brabant
Editor: Helen Seeney