July 14, 2010
Greece is a "Basket Case"
But apparently a great place for brass music players
Gary Shilling at Money Show has a list of reasons why Greece is a 'basket case.' The reverse on some of these points gives you a good look at what the Greeks had going for them in a system that had been warped to better benefit at least some Greeks (especially, apparently, tuba players):
"In the Club Med set, tax avoidance is a honed skill, labor rigidity is legendary, and public and private labor unions exert immense economic power.
The European Commission estimates that bureaucracy in Greece—the cost of work devoted to dealing with government officials—equals 7% of [gross domestic product], twice the [European Union’s] average.
Permanent government employees have lifetime jobs. Bribery, patronage, and other forms of corruption also reduce GDP by 8% in Greece, according to a Brookings Institution study, [which] also finds a close correlation between corruption and government deficits.
The World Bank ranks Greece the most corrupt among the 16 eurozone countries, and also the worst among the EU 27, along with Bulgaria and Romania, according to Transparency International. Estimates are that one-fourth of all taxes in Greece aren’t paid, a third of that due to bribes. Greeks also retire much earlier than most, at 58, even though they live as long as the Germans.
Furthermore, in Greece, brass instrument players, masseurs in steam baths, pastry chefs, and hairdressers who use hair dyes can [retire] at age 50 because their working environments may cause breathing problems later."
Probably Shilling's main point is the scary one:
"Financially, [even though in terms of economic size, Greece is a pigmy, accounting for 2.6% of euro zone GDP,] Greece is important to the eurozone and, indeed, the world. If she defaults on her government debt or restructures it, the effects will spread quickly and painfully. "
Greece's Golden Visa program
