The Greek debt crisis and subsequent near-bankruptcy led to lots of finger-pointing. But where did the Greek Public Debt come from? Here’s what I think:
- military spending: Greece has a disproportionately large military for its size. But the issue is not only the number of soldiers (which -until recently- was purely conscripts), but also the purchasing of weapons systems (planes, boats, submarines, armoured vehicles). It’s ridiculous that not a single journalist has taken the time to sit down and record all the purchases of the last 35 years (that Greece has been a democracy).
- public servants: Greece has a disproportionately large public sector. Steps have been taken during the last decade to privatise sectors such as banks, telecommunications, transportation. Nonetheless, the number of public servants during the last 6 years (with a Conservative government!!!) has grown by 60.000. What’s more, the quality of service they provide is very low. Many of them work hard, but many others don’t. Most systems are not computerised, for two reasons: a) doing things by hand keeps many people employed, and b) computerised systems make it easier to detect fraud.
- public works: we award contracts to the company offering the lowest price, and then the final cost is 6-7 times higher than the contract. What’s the point in this? And who approves the cost increases? Why can’t we just say «You agreed to deliver this project for this amount of money, now do it, I don’t care how, I don’t care if you go bankrupt!». There’s also the issue of bribing public servants, which is without doubt despicable, but I think it’s minor compared to the over-invoicing going on.
- tax evasion: Right now, employees are asked to pay an unjust proportion of the public budget. Large companies (like in most of the world) create offshore headquarters to avoid taxes, and the small enterprise (which otherwise is a huge part of the Greek economy) just don’t declare their income. Maybe it’s time we all paid our portion of our tax burden?