Greek Economic Crisis

It is always interesting to hear from locals what they believe about events in their area.  Naturally, how the Greeks see their economic crisis was something we wanted to hear about. And it wasn't exactly what we heard back in the US.  The people we talked to were resilient and looked to the long history of Greece as proof that they could and would survive this crisis. These are the primary economic problems from their point of view.

Problem #1 - the aging population and low birth rate.  This is a big part of the issue with the high number of retirees compared to current workers.  This problem was seen as so detrimental to their society that they started incentivizing change.  One of the steps they had taken was to grant some women who were still raising children an early retirement. In the short term, this adds to the burden on the economy. But it was seen as a step towards solving that problem in the long run.

Problem #2 - a disproportionate number of people working in the government instead of in the private sector.  The all so familiar problem of elected politicians giving their supporters jobs in the government.  In the US Federal Government, we call those "political appointees," and their job with the government is not permanent, but temporary.  So every election we have the opportunity to bring in new appointees and send home the old ones.  In Greece, these political appointees are given permanent government jobs.  Some have real work to do, and some do not -- but all can keep their jobs until retirement.  So the relative size of the government to the working population is unsustainable.  Non-government workers complain that some of these people have no work to do other than collect a paycheck.  What politician in power is going to willingly remove this perk?

Problem #3 - massive debt.  The government had been living beyond its means for years.

Distorted News - Not Just in the US

One of the things we have become acutely aware of from our travels is that the news we get in the USA about other countries may have very little in common with what is really happening.  It has been shaped and formed by accident in the form of bias and misunderstanding. Still, it is also re-formed intentionally to protect a narrative that has financial or political clout.

On our recent trip to Greece, we heard about the same problem but the other direction.  Greece had distorted US news to protect a mortgage program in Greece.

According to our tour guide, Greece has instituted a relatively new concept in Greece - mortgages.  The banks and mortgage companies were telling their customer how much of a mortgage they could afford, and that amount was higher than most people could pay.  Too much of their salaries were dedicated just to the mortgage payment.  No wiggle room in the family budget for other emergencies, loss of one job, or a decrease in pay.  The US financial disaster with mortgages hit the news all over the world, but the Greek press assured all that their mortgage program was nothing like the US program that failed.  And Greeks were encouraged to take on more and more debt.

Would accurate reporting of the US mortgage crisis have prevented the Greek economic crisis?  Surely not, as this was only one small piece of the Greek crisis. But it might have given some individuals enough information for personal caution.