Corruption and bonuses behind the Greek financial crisis
I have chosen to write about the Greek financial crisis that constantly colors my day and the net capital inflow into the stock market.
Lack of transparency and a state appartus dominated by generous bonuses and services has opened a corruption culture that has made Greece dangerously dependent on debt. An international study shows that the Greek financial crisis can partly be explained by corruption, since it only in 2009, disappeared around 790 millions euros in bribes. In particular hospitals, municipal adminstration and tax offices are steeped in corruption.
The corruption has been going on since the 80th century. The 80-and 90-century was marked by a series of scandals involving the use of agricultural subsidies from the EU to buy luxury cars and refurbishment of houses and employment of relativs. For several years, it was revealed that many public institutions are really hollow edifices that cost taxpayers millions. But it is not only illegal bribes that swallows money in Greece. Greece has also developed a comprehensive set of generous bonuses and services that provide public employees with generous payroll checks. All public employees get a halv mont extra salary paid in easter, one in the summer and a lot of extra wages in July. Totallys the public Greeks employees gets a yearly salary that equals 14 months. Public employees enjoy a strict protection against dismissal, but they can retire in 40 years of age. Consider this facts, it is not a surprise that this land can`t pay their own bills.
As a condition for getting emergency help and avoid bancruptcy Greece has finally been forced to promise EU and the IMF a cleanup of all the generous programs, so that the budget deficit may eventually be reduced to EU standards (below 3 % of GDP). But Greece is not alone. At the same time we have larger economics as Spain and Great Britain that have have large deficits, huge unemployment and a very low growth in GDP. The financial crisis is not over and we will see other countries that will get a lower credit rating from Standard Poors and create disturbance in the financial market.
Prenumerera på:
Kommentarer till inlägget (Atom)
Greece seems like a nice country to work in, at least before the crisis. Great writing from you Håkan and I had no idea it was so bad. The last thing I read about Greece and the crisis was that it was an great opportunity for turists to save money on their vacction. So maybe you should take a week of from the busy stockmarket and take a nice vaccation in Greece.
SvaraRaderaInteresting writing! I have heard about most of the facts that you’re mentioning but I wasn’t aware of the Greek scandals from the 80’s. But I would lie if I said I was surprised. Greece feels like a LDC and it’s a disgrace that we and other countries have to pay to rescue them from their completely unsustainable situation. Hopefully it eventually benefits us if we want to visit Greece by lower prices even though it feels like we’ll never get our money worth, at least not in this lifetime. And how crazy is it to retire at the age of 40 just because you can? Some national economy courses would be appropriate I believe.
SvaraRaderaHi Håkan,
SvaraRaderaOften we hear how corrupt African states are, which is true, but we forget easily or we want to forget that corruption exists everywhere. Sometimes I look at Transparency International website and read about corruption, they have a lot of reports about many countries. Something that is interesting is due to corruption it is difficult to measure countries GDP growth and is difficult to rank countries. For example, Italy is poorer than many other OECD countries if you look at the ranking lists for economic wealth but I read somewhere that there is much that is not made publicly available because of taxes in the country, so the unofficial figures of wealth might be higher. On the other hand maybe Italian government and others like the Greece government shows higher figures for state based economic wealth than the reality. The question is if it works in the long run??
Hi there,
SvaraRaderaYou picked an interesting topic to write about and it seemes like you know a lot about the situation in Greece. I think it's sad when these things happends, it will probably take a long time before Greece is on its feet again. Beside this crisis, it's a beautiful country and I wouldn't mind spending my vacation there. Have a great summer!
//isabell