ATHENS - Thanks to the glut in coverage of the Greek financial crisis, everyone knows that the country is in tough shape - 21% unemployment, GDP declining 5% a year, €350 billion in debt to the rest of the world, and a future that looks even worse.
But how did Greece get into this state? Why is Greece, a Mediterranean country with 11 million inhabitants and a flourishing tourism sector, in a recession worse than the one that hit the United States in 1929?
Or to put more directly - who's to blame, and could such a situation develop in other countries, namely a certain nearby country that's similar in size, population, climate and mentality?
After speaking with journalists, businessmen, diplomats and people on the street, we concluded that there isn't a single answer to who's to blame. Several parties are to blame, and here's the list, which includes the unions, politicians, the 20 to 30 families that control the economy, and surprisingly, Germany and the euro zone.
What are your thoughts on this issue? Follow Haaretz.com on Facebook and share your views.
Distorted public sector
The most outrageous distortion in the Greek economy is by far the public sector, which has enjoyed salaries and conditions that no country could permit itself, certainly not a country based on services as opposed to manufacturing or exports. For example, since the crisis began, private-sector companies have fired around 500,000 people, sending unemployment soaring. How many in the public sector? None. In fact, new employees are still being hired.
While the stereotypical Israeli mother dreams of her son becoming a doctor, lawyer or engineer, a Greek mother dreams that her son will find a public-sector job. Once there, he can't be fired, and if he advances, he'll earn a handsome salary, much more than in the private sector. And if he has good instincts and people skills, he'll receive the ultimate bonus: bribes.
The ultimate job in Greece is approving construction permits, a field considered particularly corrupt. These regulators receive high salaries, and until recently were also eligible for attractive bank loans. Plus, they can take in millions more in bribes. It recently emerged that many have foreign bank accounts containing millions of euros, as well as expensive German cars such as BMWs or Porsches.
Politicians with union ties
The plush public-sector terms continue after retirement, into people's pensions. Many retirees receive pensions of €4,000 to €6,000 a month. The official retirement age is 65, but many workers such as pilots retire in their early 40s. Basically, imagine that everyone in Israel worked for the ports or the Israel Electric Corporation.
But who agreed to grant these terms? Politicians, of course. To get elected, the politicians are entirely dependent on the unions - kind of like the way Likud MKs are dependent on the Likud Central Committee. Thus, every new politician bloats the public sector by a few thousand jobs to give his supporters comfortable employment. Sometimes they don't even work for the money. And politicians who refuse to go this route lose their seats.
Tycoons who don't pay taxes
The third side to this triangle is the tycoons. Greece has two types of rich - old-money families and the nouveaux riches who made their bucks when the country joined the euro zone and its stock market skyrocketed.
As in Israel, this boils down to 20 to 30 families. They own media outlets and influence politicians. In a country where politicians and the rule of law are weak, this isn't surprising.
Greek tycoons are good at evading taxes, maybe even more so than their Israeli peers. In Greece, tax evasion is a national sport, and the government doesn't put too much effort into collecting. A major collection bid began over the past year, urged on by European leaders, except now people can't pay. Take for example a man who took out a large loan to buy a beautiful house several years ago. Now the authorities want him to pay property and income back taxes, but he's been fired and has no money. And even if he wants to sell his house, there's no one to buy it.
Europeans at fault
The Greeks point their fingers at one more party: the European authorities. "Twenty years ago, Greece was in decent shape. People didn't know what consumer credit was, interest was 20%," a financial journalist told me. "The country had strong local industries - agriculture, tourism, manufacturing. And then, Europe pressured Greece to join its free market."
First, prices jumped when the country switched from the drachma to the euro. Greeks don't like leaving coins as tips at restaurants, so it became customary to leave five-euro bills - since that's the smallest bill that exists. Germany refused Greece's request that it print one-euro bills, says the journalist.
And suddenly, interest was 3%. Banks easily raised money to give out credit, and the government did the same to fund its bloated public sector. People began abandoning the countryside to find service jobs in the city, which paid better, says the journalist.
Others agree that Europe knew exactly what was going on in Greece but didn't respond, or pretended to believe Greece's promises to reform. Now, European leaders reportedly want to see more concrete action from Greece before they transfer money, such as the bills now working their way through parliament. This is what lies behind the recent protests - Greeks' feeling that Europe, namely Germany, is the true party setting rules in their country.
The Greeks are also angry that after European banks erred in granting cheap credit to Greece and its citizens, they're pressuring their governments to push through a bailout. This isn't just a conspiracy theory - some of the European bailout money will pass through Greek government accounts on its way to major banks in Germany and France. "Who's really being bailed out here?" ask many Greeks rhetorically, before responding, "The European Banks."
More violence coming
So how will it end? The most amazing aspect is that no one has any forecasts. No one believes the official statistics about the Greek economy, but no one knows the real ones. People seem to believe that accepting the European bailout, with the cuts and austerity that it entails, is the lesser evil.
They believe that leaving the euro zone and returning to the drachma seems like a disaster scenario and would mean economic isolation. Things are already bad, and a return to the drachma might bring total anarchy, say some.
Ask them to elaborate, and this is what some Greeks forecast: The next several years will be difficult. Young people will leave, others will return to villages and agriculture. Many people will live austerely, with help from families. Eventually, things will stabilize.
"We weren't always in the euro zone and we weren't always rich. The mood in Greece is as if you've been told you have a fatal disease," said the journalist. At first, people didn't believe it, but slowly they'll return to their pre-euro lifestyles.
Even now, exports have increased slightly, and imports are dropping, because people don't have the money to buy. No one is buying luxury cars anymore. Next year's tourist season will be strong thanks to the low prices, says the journalist.
Meanwhile, the business sector is struggling - some 20% of publicly traded companies are in bankruptcy proceedings, says a businessman. The real estate sector is frozen, although prices haven't gone down yet due to a lack of buyers. Once, it was impossible to buy a store or home in Athens' good neighborhoods; now boarded-up windows and sale signs are all over the place, he says.
Half the country's population lives in Athens, and things are tougher there than in other parts of Greece, he says.
We can conclude that despite the protests and the politicians' objections, the Greek parliament will accept the bailout package and the cuts it entails. The government will renege on 50% to 70% of its debt. Things will be difficult, but Greece will stay in the euro zone.
But that's a short-term prediction. Within several months, it will once again become clear that Greece needs more money, and the wave of protests, agreements and political maneuvering will repeat. And there's no saying how the next round will end.
Meanwhile, what's happening in Greece right now offers a clear picture of how Israel will look if its government lets unions, weak politicians, banks and tycoons make decisions that suit them in the short term but destroy the nation in the long term.
