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A Poor Country

When Greece joined the European Union, it did so as the poorest country of the original members. One might have wondered why the EU was so interested in adopting such a step-child. Certainly, Greece’s economy was heavy baggage upon the backs of the union’s wealthier countries. But I suppose the answer is more political than economic. After all, Greece sits on Asia’s doorstep. Travel south and east from Greece, and one enters the Middle East, and we all know what trouble and strife exists today in that region of the world. Or perhaps the economic ministers in Brussels knew something about the Greek economy that was not quite so obvious from the figures the country was required to submit, that being that Greece was not nearly as poor as it appeared to be.

Coming to live in Greece from the United States, the country did appear to me to be economically challenged, though admittedly my perspective came from the most surface of observations: whether or not a homeowner painted his house, or owned a clothes dryer, or kept a chicken coop behind his house. In the country I’d recently left, such things would certainly have been telling; in Greece they seemed to be the natural landscape. I’ve since learned a bit more about how the Greek economy operates, and about how wealth (and the lack of it) expresses itself in this country.

My first experiences with the Greek economy came before the euro replaced the drachma as the official currency. I must say that before the decimal-based Euro came into use, it was something of a challenge dealing with those ten thousand drachmae notes. I was forever doing conversions, even as I bought a pack of cigarettes or a chocolate bar. As I coped with the google-like banknotes, I had little idea what significance they had on a more macro-economic level. What did seem apparent was that in comparison with the States, or with other countries in Europe, life in Greece seemed to come at a reduced cost. The rent I paid, and the food I bought, were half what I was accustomed to paying in the States, and the disparity caused me to question the ‘real’ worth of a tomato or a loaf of bread. When the euro replaced the drachma in February of 2002, I got a big lesson in real worth, and about the true nature of the Greek economy.

One of the first things I noticed when the Greeks traded their venerable currency for the new euro notes, was that there suddenly seemed to be an unusual number of brand new automobiles on the road. Besides all the new cars, it was apparent that they were buying new refrigerators, new TV’s, new clothes, and much more. I later learned that much of the money that Greeks saved was in cash, and that the reason it was never deposited in bank accounts was that it was ‘black’ money in the first place. Rather than declare the money by exchanging it for euros, they spent it on big-ticket items.

In a discussion with a Greek businessman, I was told by him that Greece was a poor country full of very wealthy people. No doubt, his bold assessment came from a lifetime’s experience in Greek economics. Not long ago, I read an article in the Kathimarini newspaper claiming that an estimated sixty-seven percent of all transactions conducted in Greece were done so out of the scrutiny of the taxman. Whatever figures were originally submitted to the EU prior to Greece’s acceptance into the economic union were surely inaccurate, and certainly portrayed the country as much less economically developed than it actually was. Of course, this misrepresentation played well to Greece’s advantage, as more funds from the EU for development were allocated, needed or not.

These days I am far more savvy as to how things really work, economically speaking. Truth is that one can’t always judge a book by its cover. Sit in any cafe and watch as the locals pass and I guarantee you will never know who is rich and who is poor. Here wealth is simply not expressed in an ostentatious show of goods. If you really want to know one’s economic status, find out how much land he owns, not how many Armani shirts he has in his clothes closet. Chances are still good, even after the euro, that a Greek has more money in his wallet than he has in his bank account. Here cash is king, and most of it is still exchanged, as the French say, ‘au noir’.

There are many reasons for the origin and perpetuation of this cash-based, underground economy, the principle one being that the business community here was always, and is still, centred on ‘mom & pop’ style businesses. It’s easy to barter one’s services in such an economic climate, and it’s easy to hide income. Certainly, the ‘black’ economy is not unique to Greece; it is practiced in varying degrees in every country in the world. The Greeks, however, would seem to have elevated it to an art form. I must confess that I find this ad hoc tax revolt to be audacious and somewhat noble. Of course the practice compromises social systems, even as it asserts the right of the individual to keep for himself that which he has earned. Right or wrong, this highly evolved system of trading underneath the taxman’s radar screen renders the economic statistics of the country on whole to be less than accurate, making Greece appear to be a much poorer country than it actually is. As we all know, appearances can often be deceiving, even to an entity like the EU. One must peel an onion to reveal its many layers, and just what one finds at the centre of that onion might well be surprising indeed: “a poor country full of very wealthy people.”

About the Author

David Ross is an author and publisher.

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