Last modified: Wednesday, September 28, 2011
IU expert available to discuss developments in Greece relating to EU bailout
FOR IMMEDIATE RELEASE
Sept. 28, 2011
BLOOMINGTON, Ind. -- Amid another wave of strikes and protests, the Greek government is speeding up its debt strategy to meet the terms of an International Monetary Fund and European Union rescue deal so it can receive a new loan next month and avoid bankruptcy. Germany has suggested that a new bailout may have to be renegotiated. An expert from the College of Arts and Sciences at Indiana University Bloomington can offer his perspectives and is available to speak with reporters.
Franklin L. Hess, coordinator of the Modern Greek Program and a lecturer of West European studies at IU Bloomington, says that "mistaken assumptions about Greek economic behavior have resulted in a poorly designed initial austerity package that has pushed economic activity underground and failed to generate the desired tax revenue."
He continues that "Greek economic behavior revolves around preserving and expanding family wealth, and any economic plan that fails to take this into account is doomed to failure."
Hess, who recently returned from an extended visit to Greece, objects to mainstream media accounts of the Greek economic crisis that turn complex macroeconomic events and behaviors into a narrative of collective responsibility (i.e., northern Europe and Germany) and irresponsibility (i.e., southern Europe and Greece). He argues that there are several myths that are currently circulating about Greece and Greeks.
"The first myth is the myth of the lazy Greek. This is a stereotype that's given wide credence in Europe and the United States, and, to a surprising extent, in Greece as well. It is also largely inaccurate," Hess said. "Statistics gathered by the Organisation for Economic Co-operation and Development (OECD) for 2010 reveal a much more complex picture.
"While it is true that Greece's GDP per hour worked, one of the most common measures of productivity, is low by Western European standards, Greeks also worked far more hours than the average," he said. Greece's GDP per hour worked was $32.40 compared to $53.40 for Germany and $54.80 for France. But Greeks worked 2,104 hours annually vs. 1,419 hours for Germans and 1,500 hours for the French.
"The picture that emerges is one of a workforce that is eager to work, but is forced to work in retail and public sector jobs, as opposed to manufacturing and information technology jobs, which add little value to the economy," Hess said. "Productivity statistics, in other words, reflect the extent to which an economy itself is advanced, and the truth is that Greece possesses a workforce that, if given the right opportunities and incentives, is capable of being much more productive."
The second myth is the myth of financial irresponsibility. Here, he says, the truth is more complex. "While there is no doubt that political patronage and the underpayment of taxes have contributed extensively to the current debt crisis, Greece's citizenry, as private economic actors, have been extremely responsible," he said. Home ownership rates, at approximately 85 percent, are among the highest in Europe, and personal debt levels have generally been low.
The third myth is perhaps stronger inside than outside of Greece -- that Greece and its people can't change. "This myth is combined with a tendency to see Greece as a historical victim, either of itself or of others, as opposed to a present actor that is capable of shaping its own destiny," Hess said. "This myth is belied by the success that Greek emigrants have had in their adopted countries. It's also belied by the success that Greece itself has had since World War II: high levels of economic development, dramatically improved standards of living and membership in the European Union, an organization that, despite its flaws, is still the largest and most powerful economy in the world."
Hess believes that with enlightened, informed restructuring of both European Union fiscal policy and the Greek economy, Greece and the European Union can emerge more vital than before.
Hess can be reached at 812-339-2152 or flhess@indiana.edu.
