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Oligarchs And Thieves Bring Greece Crashing Down

Misha Glenny has an important piece in the FT that puts the Greek mess in more of a historical context and assigns much of the blame for Greece’s financial problems on oligarchs, business conglomerates, cheats, and criminals.  A handful of wealthy families control the commanding heights of the Greek economy, he argues, and many of the distortions in the Greek economy result from their entrenched power.  Now, Glenny claims, these families hope that forced sales of public assets at fire sale prices will help them consolidate their hold on the troubled Balkan country.

A pan-Balkan smuggling ring that outgoing Prime Minister Papandreou and others believe costs Greece about €3 billion a year illustrates another dimension of the problem Glenny identifies: large organized crime syndicates have sunk their claws deep into Greek politics and into the economy.  Glenny’s analysis goes much deeper than the conventional journo-speak short takes on Greek unions, pensions and tax problems to get at some of the structures that make Greece what it is.  More, his analysis of the Greek political scene takes us deeper and helps us see more.

Glenny goes on to chastise his fellow Europeans for their hypocrisy: on one side they endorse good governance, transparency, and fiscal responsibility but on the other turn a blind or or actively engage with crooked businessmen and politicians. The Greek oligarchs who helped ruin their country can use the European banking system to transfer their money out of Greece and into the London property market.

People can and will argue with some details of Glenny’s analysis, but it is infinitely meatier and more focused than the conventional wisdom that permeates this article in the NYT. The failure of most newspaper coverage to look under the hood in countries like Italy and Greece has been an ongoing problem.  The crisis has gone on so long, and so much is at stake, that the press should by now have found richer and more meaningful lines of analysis than the simple, endlessly recycled story lines that mostly fill the pages even of the elite publications.

More insight, please.  And Misha: keep writing.

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  • Luke Lea

    For those who put stock in the principles of population genetics, it is hypothesized that inclusive fitness in highly consanguineous societies, such as Greece, leads to high endemic rates of nepotism and corruption. Here are some links to the data.

  • J R Yankovic

    WHAT? Ties of legitimate, progessive, EUROPEAN-minded Europeans with organized crime? You folks are obviously reading far too much of John Laughland, Daniel Hannan and other Europhobe troglodytes. Stick to the MSM for all the news that’s (corporately) fit to print.

    “Under the hood.” Great metaphor – and nowhere more urgently applicable than to this part of the world at this time. But do you think it may also be time for similar journalistic performance in a few other places? For starters, say, Serbia and Albania?

  • SC Mike

    Greece’s thieves are of many sorts and in some cases appear to be supported by the government. For several years the Wall Street Journal has pointed out that Greece is the largest per capita beneficiary of EU agricultural policy. (Note: these subsidies represent 48% of the EU’s budget, €49.8 billion in 2006, France was a net beneficiary until 2005, and these subsidies are gradually decreasing.)

    As the The Daily Telegraph’s Ian Cowie puts it: “Something can’t be right when the modest city of Larisa, capital of the agricultural region of Thessaly with 250,000 inhabitants, has more Porsches per head of the population than New York or London.” It seems that there are more Porsches in Greece than taxpayers declaring 50,000 euro incomes. As my dear departed dad, a CPA in Chicago might put it, frugality is its own reward, no?

    Details and further links here:

  • dearieme

    The key criminals are the people who let Greece enter the EU, never mind the eurorozone.

    I recommend my own rule of thumb: an EU that includes Greece and excludes Norway must be bollocks.

    In other words, once the eurozone has broken up, the EU should divest itself of Greece (and Bulgaria, Romania, Latvia, Lithuania?), and then modify itself until Norway would find it to its advantage to join. Fat chance!

  • Eurydice

    I think what people don’t get is that Greece’s government is an organized crime syndicate. Crime is is in the fabric of the country because the government takes a piece of it. There isn’t a single encounter with the government that doesn’t involve some kind of extortion or kick-back, and there is no recourse because the money is shared among the government officials. Recently, Pangalos (the VP) stated that he has 50 homes and had no intention of paying the increased property tax on any of them. How did he get 50 homes? It seems every member of parliament has married a rich wife.

    If wealthy Greek families become more wealthy, the members of government get a piece of the action – if corruption escapes punishment, it’s because the governement passes special laws to exempt the perpetrators. And trying to buy public assets at bargain basement prices isn’t a new thing – back in 2002, the only thing that prevented Kokkalis from buying the phone company was the revelation that he’d been a Stasi agent for 30 years, and even that only prompted a special law to protect him with a statute of limitations.

    Yes, Europe has been complicit – the phonyness of European socialism has masked many sins. But the Greek people must also share in the blame. The aspects of Greek character, fatalism and admiration for the trickster, have been lamented ever since Solon. You’d think we would have grown out of it in almost 3,000 years.

  • Richard Treitel

    In the end, what *is* the difference between a government and a crime syndicate? No, I’m not asking a rhetorical question.

    In the beginning, a king was a mildly reformed bandit, who found it made more sense to live in one village and keep other bandits out of it than to raid ten villages each of which had already been raided by nine other bandits. The king’s son may have thought of himself as different from bandits, but the difference was simply that his people were resigned to being robbed by his father and grateful for knowing whom to fear.

    Since then, more reforms have happened, at different paces in different parts of the world, but governments show their descent from that reformed bandit. Note the fraction of MPs and state chief ministers in India who would be in prison, or at least in court, if they weren’t in their present jobs. And yes, India is a democracy. Then note the fraction of American politicians who pass laws that collect money from most of us and give it to the politicians’ friends. Now try to answer the above question.

    Yes, definitely, America is better than India is better than Greece. But the difference is one of degree, and of spin, and of calling a spade a long-handled funerary implement.

  • Richard Treitel

    I apologise to any Greeks who may have read my earlier comment. I should not compare India to Greece, since I know so little of either country.

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