With the world still in a shaky state, between the American economy stressing out and the European Union busily shifting deck chairs around on their floundering ship of debt, people fear there may be another world recession coming. And in hindsight it seems that little country, Greece, was the tip of the iceberg that started it. Just how did the Greeks get into this fantastic mess that now threatens the E.U. with financial disaster and political disintegration? Let me elucidate.
In just the past decade the wage bill of the Greek public sector has doubled, in real terms--and that number doesn't take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million in other expenses! The average state railroad employee earns 65,000 euros a year. Twenty years ago the Minister of Finance pointed out that it would be cheaper to put Greece's rail passengers into taxicabs: it's still true today!
The Greek public school system is the site of breathtaking inefficiency: one of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest-ranked; Finland.
Get this! The retirement age for Greek jobs classified as "arduous" is as early 55 for men and 50 for women. With a generous pension, more than 600 Greek professions somehow managed to get themselves classified as arduous: hairdressers, radio announcers, waiters, musicians and on and on. The Greek public health-care system spends far more on supplies than the European average. It is not uncommon to see nurses and doctors leaving the job with their arms filled with paper towels, diapers and whatever else they can plunder from supply closets!
In 2001, when Greece entered the European Monetary Union it found that they could now borrow long-terms funds at 5% not the 18% they were used to. To remain in the Euro Zone, they were meant to maintain budget deficits below 3% of G.D.P.. In practice, all they had to do was cook the books to show they were hitting the targets and keep enjoying their Moussaka. When a new, serious, Finance Minister arrived last October, he was greeted with a government estimated budget deficit of 3.7%. Two weeks later he revised that number upward to 12.5% and soon after it actually turned out to be nearly 14%! That's when the Sh*t-Hit-the-Fan!
The Way I See It....even "blind Freddie" couldn't help noticing that the Greek people were living the Moussaka Lifestyle. By that I mean, just as that rich, cheesy Greek national dish is a symbol of their ultimate Comfort Food, the Greeks have been getting away with demands on their government for more creature comforts and handouts over many years. While they were greedily gouging their economy with fat wages, 60% of them were cheating on their tax obligations and even bragging about it.. Even plastic surgeons making millions a year paid no tax at all! Thereby screwing their country both ways...taking and no giving back!
So we see these hypocrites rioting in the streets against a government that gave them their over inflated lifestyle demanding that there should not be any form of austerity measures. Reforming the retirement age limits, go after tax-avoiders and cutting back on over generous wages is just the start Greece needs to get its house in order. The Greeks will have to take their fiscal medicine for some time to come.