A Message to Remember: Don't Mess With the Greek People

October 28^th is a major holiday in Greece, called Oxi Day (pronounced o-hee and meaning “no”).  It commemorates the day in 1940 when Greece responded to Italy’s demand for its surrender to the Axis powers with the single word, “Oxi.”  What the Italians thought would be a three-day war had them tossed back on their heels for more than five months, forcing the Germans to invade Greece on April 6, 1941, an effort that took the Nazis an additional five weeks and dealt a disastrous blow to their planned invasion of Russia before winter.  Greece suffered horrifically during the war years for their defiance but left no doubt in anyone’s mind how tough and determined Greeks can be when their backs are against the wall.

So what does all this have to do with the few days I just spent in Athens?  Let’s begin with the good news.  Well-informed rumor has it that big spending foreign tourists sent the high-end food, drink, hotel, and private yacht tourism sector off the charts, and ultra-luxury foreign name brands did extraordinarily well among foreign tourists.  As for how much of that is attributable to there being few daring enough to venture further east in the Mediterranean during these unsettled days I have no way of knowing.  I’m sure, though, that the Greek government is thankful for those six weeks of blissful revenue generation. Or was it eight weeks?

But summer is over folks and it’s back to reality.  Here’s the reality: IT’S NOT GREEKS SPENDING.   They simply don’t have it.  Basically, Greece’s only serious revenue generating engine operates a couple of months a year, and even then not at all times on all cylinders.  On the other hand, the government has a huge public sector work force that it refuses to pare, and so it must pay.  So, where does the government get what it needs to pay all the people it employs?  Yep, you got it, by raising taxes.  And raising taxes. And raising taxes.

Imagine yourself as one who’s worked hard and honestly all your life.  You have a pension of $2000 a month for which you paid every working day of your life.  You live in a house that you paid for in a nice neighborhood.  Imagine now, that over a five year period the government increased your real estate taxes five-fold (from $5000 to $25,000 per year) based on a fair market value for your property at least twice its actual worth, cut your paid-for pension to $800 per month, converted “temporary taxes” into permanent, and raised your income tax rates while cutting down on deductions.

How would you react? Back in the U.S. I bet the Tea Party would be selling one hell of a lot of tee-shirts.  And Occupy Wall Street might even find game.

But wait, there’s more.  In Greece you can’t just ignore the tax bills, because your electricity is shut off if you don’t pay real estate taxes, forcing many into making triage like decisions on what to cut:  heating, petrol, food, medical, children’s education?   And if you’re lucky enough to have a business (obviously not my retiree example) you’ll likely have little choice than to fire employees, expanding the depth of their problems.

If you have an ancestral home in your family’s village, or a summer place you bought in the good times, you’re likely trying to sell it if not rent it.  But there are no takers.  Except, it seems, foreigners—or Greeks who somehow have money available to take advantage of fire-sale opportunities.

All the while you’re hoping there is light at the end of the tunnel, and that all your suffering is part of a grander government plan to save your country’s way of life.  But it’s hard to keep the faith when your only first-hand interactions with your government are far too often with bureaucratic employees surly, resentful and unhelpful; as if you, personally, are responsible for expense cutting measures threatening their public employee way of life, rather than as a fellow citizens asked to sacrifice much of what you’ve acquired in life to pay their salaries. 

Resentment now builds on both sides, and paired with a loss of faith in their government to lead, drives a suffering, hopeless electorate to extremes. In Greece those extremes are represented by an amalgam of parties on the far left promising nirvana (SYRIZA), and Chrysi Avgi (Golden Dawn) promising a right-wing Greek Reich.

Thankfully, the government has taken bold steps against Chrysi Avgi to label it a criminal enterprise, and prosecute its leadership for complicity in a host of crimes, including murder.  One can only pray the prosecutions will prove successful, but that alone will not end the extremist rhetoric or limit the appeal of demagogues.  Not as long as the Greek people believe—as virtually any Greek you ask will admit—that their government is either unwilling or unable or to go after the corrupt and the tax cheats, and has no thoughtful plan for resurrecting the Greek economy beyond making the honest already paying taxes pay more.

The government is not seen as listening to its people.  The middle class is screaming.  The poor are devastated.  The public sector is demonstrating.  The private sector is disheartened and on the run. 

So where’s it all headed, toward a resounding bang or a muffled whimper?  In revolution or an inexorable slide toward a third world economic existence that relies upon the spending whims of foreign vacationers coming here to enjoy their holidays oblivious to everything but the sweet song of summer—akin to a crew of well-meaning Neros fiddling on while someone else’s Rome burns.

Or something in between…like a massive taxpayer boycott.   

But if the government does not get the message and act, something will happen.

For this is the land of men and women who know how to shout, “OXI,” and back up their words with determined resistance.

Jeff—Saturday