Greece – Whatever Happened to “Thank You”?

Published on 2012/06/26

The countries of Europe along with private creditors involved – most notably Germany – saved Greece several times from looming bankruptcy, waiving billions and billions in debt. I am not aware of any sign of gratitude from Greece, though.

What, pray, keeps the Greeks from admitting just once: “We realise that our admission into the Eurozone was accomplished by an irresponsible government that cooked the books. We would like to apologize for the fact. Now that we are an integral part of the Eurozone community, we should like to say thank you for the billions in aid that other taxpayers in Europe have given, and continue to give, to us. We have also understood that there is a great deal to reform in our country, for instance the excessive number of civil servants. We will push ahead with the reform in order to become a respected member of the community again, and to stand on our own feet with pride, and without having to rely on outside help.”

Sad to say, nothing of the sort is coming from Greece, even though the willingness of other countries to lend a helping hand would be enhanced by some token gratitude more than by the steady stream of diatribes, broken promises, and ever new demands. Germany and Angela Merkel are called the worst kind of names, and labelled as “Nazis” in the Greek media. The first thing that the incoming Greek Government did was to request that the agreed austerity measures be extended by two years, which is nothing short of a plea for another handout.

This might be explained by the fact that people in Greece simply have a different attitude vis-à-vis debt. An analysis conducted by the renowned economist Kenneth S. Rogoff on the number and durations of national bankruptcies since the year 1800 shows: Half of the time since (50.6%), Greece was either subject to debt rescheduling or in default.

As far as the number of national bankruptcies goes, however, Spain holds the absolute record with no less than 13 bankruptcies during this time, and I would not be surprised at all if this record figures was soon to climb to 14. At the other end of the scale you find countries that have never defaulted, such as the United States, Canada, the United Kingdom, Australia, New Zealand, or the Nordic countries of Sweden, Norway, Finland or Denmark. Conversely, there is not a single country in South America that has not been bankrupt several times – a case in point being Venezuela, which underwent no less than 10 (!) national bankruptcies during these years.

But to get back to Greece: The history of recent years represents a chronicle of broken promises. The Greek Prime Minister Papandreou promised as recently as last March (!) in an interview with the German news magazine STERN ahead of a euro bailout summit. “We will pay back every cent. Germany will get its money back – and will get it back with high interest.”

Not just the Greek are to blame for the present situation, but all other European countries that completely misread the situation from the start. “I am firmly convinced that Greece will never have to draw on this aid, because the Greek consolidation program is extremely credible” – these are the words Jean-Claude Juncker, Head of the Euro Group, articulated on 25 March 2010.

The worst of it all, though, is that the same mistake that was made in the case of Greece will soon be repeated with other countries. Except that Spain’s economy is much too big to be bailed out without pulling the rescuers down into the abyss with it.

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