Saturday, July 17, 2010

Greece - looking beyond the statistics

As Greeece sinks more and more deeply into economic recession one of the most frustrating aspects of the crisis is the lack of quality coverage from the foreign press. Whilst most Greeks have little of no confidence in the veracity of local media reporting, they do not expect the same kind of low grade journalism from organisations such as the BBC or the Economist.

On Thursday Gavin Hewitt, the BBC's European editor wrote about the current situation in Greece in his blog and while reflecting the widely held belief amongst economists the the current "rescue package" is doomed to failure seemed happy to simply regurgitate Athens's line on how the situation is all under control and that things are going to plan. Hewitt even went as far as to say that;

"It was expected that austerity would persuade Greeks to keep their wallets shut. Private consumption is actually up by 1.5%."

No source is given for this surprising factoid and it flies in the face of virtually every piece of economic and anecdotal evidence I know of. Since the massive hikes in VAT and tax on petrol have lead nearly everyone I know to cut back on spending on everything from holidays to food. According to the national daily Imerisia sales of petrol have fallen 30% since the beginning of the year leading to the closure of over 1000 petrol stations nationwide. In addition foreign retail chains such as FNAC and Aldi have recently announced that they are pulling out of the Greek market and local supermarket chain Atlantik is set to close its doors as well with the loss of 4000 jobs.

These events hardly point to a bouyant retail sector nor do they seem to show that private consumption is on the rise. This is another example of foreign commentators with little in the way of real life experience of the countries they are covering relay on official statistics and second hand accounts. If Hewitt had asked anyone outside the hermetically closed worlds in which foreign journalist often operate he would have seen a different picture from that shown in the officially sanctioned Greek state media which drifts ever further from the shores of reality in its quest to prop up the government's line.

However, the BBC is not alone in swallowing the half truths and full-on misconceptions that often surround Greece's role in the present economic crisis. A hardy perennial in that category is the idea that the country has, in the words of the Economist, "a lavish social security system" and that uncontrolled public spending on the old and poor has bankrupted the country.

Yet what the Economist either do not care to know or did not bother to find out is that while lavsh payments are to be found in the sytem they are limited to the members of the country's state and party nomenclature and that for every 50 year old living high on the hog on their state pension there are hundreds of other OAPs eeking out a living on less than 400 euros a month in a country where the cost of living is only shade lower than in countries such as Germany and the UK.

With the highest rate of poverty in the EU and the largest number of working poor Greece is hardly the worker's paradise that publications such as the Economist would have us believe. Life for those without the right party and personal connections is a hard struggle for survival which is daily getting becoming more difficult as the IMF/EU/ECB measures eat away at the nation's economic foundations so bringing little more than poverty and despair in the name of an economic orthodoxy which failed so spectacularly in 1929.

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