So. The problem it seems with greece is not its unsustainable 150% debt to GDP ratio, or the habit many of its wealthier citizens have of being creative with tax. No …. its that they are lazy olive botherers who simply dont work hard enough. That lazy stereotype, a trope of the crisis, comes round every while. The greeks are simply lazy.This we know to be true (sic) as the germans, sorry, the Troika, demand that they work harder, perhaps six days a week 13h per day. No, really.
Well, no, not really.
First, lets see where the money went – it didnt go to keep the average greek in the lap of luxury.
So. Maybe they should work harder, after all, as we in ireland know , bondholders must be paid off. It sounds better in Finnish….
Well, they do kinda work hard. Harder than, ooh, say, Germany. Or Ireland. (data from http://stats.oecd.org/
Well, maybe its because its too hard to fire people in Greece . After all, the Troika have suggested that greece deregulate its labour market and are especially worried about unemployment becoming structural (because perhaps in addition to greek workers being unifireable they are more comfortable on the dole). Hmm.. higher numbers = more restrictive in the chart below..
As for the incentive to say on the dole once you have gotten there…lets see. A very recent (german) research study published just a few months ago (Pfeifer, 2012 International Journal of Social Welfare , V21) says this about Greece
Depicting European UB and SA systems with indicators of expenditure, generosity, problem pressure and social rights yielded a classiﬁcation that partly corresponds to earlier typologies. We found Scandinavian type welfare states with very generous provision and relatively high spending in both areas (Denmark and The Netherlands), and we also identiﬁed a core group of two southern European countries with scarce beneﬁts and extremely low spending (Italy and Greece).
Well, if its not the lazyness, what is it (apart from the tax…)
Greece is simply not terribly productive. Its about half as productive as Ireland and 2/3 as productive as Germany.
Now, there are reasons to why that is the case but thats for another blogpost. Lets just note that productivity is a function of capital and labour. Clearly the problem in greece is not so much that they work too little, its that they are not somehow transmuting that via interactions with capital (which can be physical, social, human etc) into output.
Back to debt. Greek debt is unrepayable. Everybody knows that and the present posturing is only delaying the inevitable. Countries default, and get debt written off. Germany, amongst the Eurozone members, has been proportionally the largest beneficiary of debt write-off, with debts close to 400% of GDP being written off one way and another, allowing it to reenter the economic and political life of europe after WW2 with an effective clean slate. Eaten bread is soon forgotten it seems.