Political ideology and the profligate Greeks…

A recent article on the Guardian newspaper makes the case that the disparate group of political forces that comprise Syriza is aiming for a non-ideological reformation of Greek and global politics.  The claim is that “identity and integrity” determine both voter choices and elected officials actions.  I beg to differ.

First of all, the politicians that have gained power with Syriza are not political novices.  They are seasoned activists with some of the youngest, like Tsipras & Konstantopoulou, professional agitators since their student days.  Others have been prominent in parties of the left since the days of the junta in the 1970s.  They are deeply ideological, in the old fashioned use of the word, in that their ideology is more important than the collective interest.

Secondly, although it is evident to all that Syriza lacks the policy coherence of a traditional party its leadership does not take decisions based on some exalted notions of integrity.  To gain power they went into coalition with a nationalist party of the extreme right.  Their political communication is unashamedly populist.  Their interaction with the country’s EU partners opportunistic.  And they consistently sacrifice long term national goals on the back of their ideological conviction that Greece has got a raw deal since the beginning of the crisis.  And although, I cannot discount the strength of some of Varoufakis’ arguments, they strike me as academic rather than pragmatic evaluations of what is feasible.  So in the best case they pose arguments that lack political feasibility and in the worst they are driven by ideological blinders.  I fail to see integrity in either case.

And finally, a word on debt and profligacy.  The Greeks are not indebted!  The Greek state is.  This constant barrage of references to the Greeks not paying taxes, the black economy, early retirements and so on is based on lazy journalism and errors of omission.  In Greece, taxes are now pre-collected for the following tax year, while individuals are not only taxed on income but also via the so called “objective criteria”.  This means, income is also assessed on the back of assets assumed to indicate consumption, i.e. the size of a car or a house.  A prudent tax payer investing in real estate for their children is therefore penalised.  And while the country languishes at the bottom of world rankings of judicial effectiveness, it remains neigh impossible to challenge the judgement of tax authorities. It was recently reported that on average it will take 1580 days for a court to declare on a civil case!  I suggest that the standard deviation on that number is large and it is often a decade before a civil case can be considered settled on appeal.

I can offer dozens of anecdotal examples of how this byzantine bureaucracy leads to convoluted behaviour of economic agents who attempt to circumvent an illogical state.  In such conditions transacting under the radar is not a vice but a necessity.  And although I cannot condone tax evasion, tax avoidance is not an exclusive sport of the Greeks.  The most unfair reference to Greek debt is alluding to high household indebtedness.  This was not true at the beginning of the crisis – although current data are not available in eurostat.  Greek households have been some of the most prudent in Europe, while Greek business traditionally lacked access to finance and have therefore maintained low levels of indebtedness. So, Greek households are squeezed by a bloated and inefficient state; are lied to by populists of the left and right; are used as a scapegoat of the financial crisis instead of its perpetrators, i.e. international banks; are maligned in the international press for their lack of prudence.  While Greek politicians on the other hand are seen to not just want power but to seek integrity!  Really?

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