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Authors: James Angelos

The Full Catastrophe

BOOK: The Full Catastrophe
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Copyright © 2015 by James Angelos

All rights reserved.

Published in the United States by Crown Publishers, an imprint of the Crown Publishing Group, a division of Penguin Random House LLC, New York.

www.crownpublishing.com

CROWN is a registered trademark and the Crown colophon is a trademark of Random House LLC.

Library of Congress Cataloging-in-Publication Data:
Angelos, James (Journalist)
   The full catastrophe : travels among the new Greek ruins / James Angelos
             pages cm
        Includes bibliographical references and index.
   ISBN 978-0-385-34648-1 (hardback)
1.   Greece—Politics and government—21st century.  2.   Greece—Economic conditions—21st century.  3.   Global Financial Crisis, 2008-2009—Greece.
4.   Greece—Civilization—21st century.   I. Title.
     DF854.A55 2015
     949.507′6—dc23
     2015009420

ISBN 9780385346481

eBook ISBN 9780385346498

Map by Mapping Specialists

Cover design: Na Kim

Cover photographs: Henrik Sorensen/Getty Images; Zoran Kolundzija/Getty Images

v4.1_r1

a

For my parents and grandfather, who have known xeniteia

Introduction

We are all Greeks.

—Percy Bysshe Shelley, 1821

O
n March 25, 2014, Greeks marked the 193rd anniversary of the start of their war of independence against the Ottoman Empire. Young boys across the country dressed like klephts, the rebel highland bandits who fought the revolution, in white, pleated skirts called
fustanellas,
white stockings, red fezzes, and clogs topped with pom-poms. Girls wore traditional garb, tasseled headscarves and long colorful dresses embroidered with angular patterns distinctive to their region of Greece. In school auditoriums on the eve of the holiday, children performed plays about centuries of suffering under Ottoman rule. In a small valley town in the region of Messenia, the southwestern tip of the Peloponnese, a teenage boy dressed like a revolutionary bandit entered stage right and professed a yearning to fight for freedom: “What can I do? I can’t go on! My chest is heavy. The slavery of the Turk.” His mother, played by a girl in a yellow headscarf, urged him to stick to shepherding and to raising a family instead, but the young man was defiant. “Mother, bring the sword and the heavy rifle.” In a preschool on the Aegean island of Santorini, children young enough to still be wobbly on their feet tentatively circle-danced in front of their parents to “Dance of Zalongo,” a folk song about a mass
suicide on a mountain in Greece’s rugged northwestern region of Epirus, where local women are said to have thrown their infants and themselves off a precipice rather than fall under the yoke of an Ottoman pasha. The preschool children in Santorini nearly fell over one another as the mournful song played over the speakers: “Farewell poor world, farewell sweet life, and you, my poor country, farewell forever.”

Such Independence Day rites are repeated annually with little variance, and though this was the first time I experienced the commemoration in Greece, I recognized a lot of these customs from my childhood on Long Island, where my Greek immigrant parents obligated me to attend Greek language and Sunday school classes at the local Greek Orthodox church. The church served as an outpost of cultural programming from the old country, and so the pom-pom shoes, the circle dances, and the indoctrination regarding Turkish tyranny were therefore already familiar to me. Still, this year in Greece, it was clear the usual rituals had taken on far greater significance. About four years earlier, Greece had begun hurtling toward bankruptcy, a situation that, owing to the nation’s eurozone membership, presented a potentially catastrophic threat to the global financial system. In order to prevent immediate ruin, a trifecta of institutions known as “the Troika”—the European Commission, the International Monetary Fund, and the European Central Bank—agreed, despite deep reservations in Germany and other northern European countries, that it would be a good idea to sustain Greece, in particular its ability to keep servicing its vast debts, by pledging it tens of billions of euros in loans to be paid out in dribbles over a few years. The European leaders and IMF officials who committed the funds considered their intervention a “rescue,” though it didn’t seem that way to a lot of Greeks. The financial assistance was contingent upon wage and pension cuts, among many other profoundly unpopular conditions outlined in a memorandum of understanding—the
mnimonio,
as the Greeks called it. Control of the domestic policy was ceded almost entirely to the Troika, which used the threat of imminent bankruptcy as leverage to get Greece to obey its recipe for improving the country’s finances. But the recipe did not work out very well, and Greece’s economic collapse would begin to deepen to Great Depression–like levels, necessitating, less than two years after the first bailout, a second one. In total, Greece received 245 billion euros in loan pledges and the largest debt restructuring in history, which reduced its outstanding debt by 107 billion euros at the expense of private holders of its bonds. Moreover, the European Central Bank sustained damaged Greek banks with a constant flow of cheap short-term loans. In exchange for the bailout, Greek politicians promised profound changes to nearly every aspect of their governance, from the country’s deficient tax-collection practices to its regulations on the shelf life of pasteurized milk. The specificity of the required measures—the simplification of customs procedures for feta cheese exports, or the creation of a nationwide system of cadastral offices—underscored the Troika’s lack of faith that Greece could reform itself without strict oversight. In order to ensure compliance, Troika experts visited quarterly to check up on Greece’s progress. Failure to comply resulted in the withholding of scheduled payments. The Greeks, in short, would be forced to change under sustained duress. To a lot of Greek citizens, therefore, the rescue seemed more like a new foreign occupation. Independence Day seemed as good a time as any to reflect on this.

Much of the national musing on this day took place in church. Greek Independence Day falls, not entirely by coincidence, on the Feast of the Annunciation, the day Christians believe the Archangel Gabriel announced to the Virgin Mary that the Son of God would arrive in the world through her womb. The country’s founders saw it as fitting that the advent of the modern Hellenes’ struggle to conceive a national heir to Ancient Greece should fall
on the day the Savior was also conceived. The Christian symbolism woven into the country’s founding did not end there. Greece’s identity since its inception has been closely tied to Orthodox Christianity. The Greek word for revolution,
epanastasis,
closely resembles the word for resurrection,
anastasis,
and the independence struggle was also couched in resurrectional language—Classical Greece had arisen. And so on Independence Day, formally dressed Greeks, among them solemn-faced politicians and military officers festooned with medals, filed into churches around the country to hear the nation’s full-bearded clerics deliver sermons on the dual incarnations—of Christ and nation. In a small church in the town of Spata, east of Athens, a portly priest stood before the altar in a blue and white vestment that matched the colors of the Greek flag that congregants held stretched out before him. The priest brought the congregation to tears with stories of Greeks’ slaughter at the hands of the Turks, and then read out the names of the revolutionary heroes. Theodoros Kolokotronis, the most esteemed bandit warrior of the revolution. “Present!” yelled a male congregant. Markos Botsaris, another heroic fighter, killed in battle. “Present!” Laskarina Bouboulina, a widow from a wealthy maritime family who financed a fleet of ships for the fight, shot dead, not in battle but in an argument with a neighbor. “Present!” a woman replied. The revolutionary martyrs had painted the soil red with their sacrifice so that Greece, a nation of true and holy faith, should be free, the priest said. And now, he added, what had today’s Greeks made of this sacred inheritance? “We received a free nation and we subjected it to another slavery,” he said, his voice quivering as if he might begin sobbing. “We speak of freedom? What freedom, my brothers. When you can’t claim what you’re entitled to. When they snatch your life. When they snatch what you’ve worked for. We’re talking about the kind of freedom that enslaves nations,” he said. “And because we have reached this point, the soil of Greece moans.”

The sentiment was similar at the day’s main ceremony in Athens, where Greece’s president, Karolos Papoulias—an octogenarian who as a teenager had fought in the World War II resistance—sat under a small canopy in front of the country’s spare, neoclassical parliamentary building watching a procession of rows and rows of soldiers, tanks, mobile missile systems, and artillery guns. It was the kind of militaristic display one might think of as more fitting for Pyongyang than a European capital, but Greece, long an avid weapons buyer in comparison to its European peers, had a tradition of parading its military procurements on patriotic holidays. The purchases were justified on the grounds of enduring hostilities with Turkey, but they also contributed significantly to the nation’s fiscal problems. The peculiarity of the scene was amplified by the fact that there were very few people around to watch it. The government had largely closed off the city center to spectators, citing security reasons, though most people saw it as an effort to prevent the large anti-austerity protests that had tarnished such events in previous years. When the procession was over, Papoulias, his thin, gray hairs fluttering in the breeze, approached a cluster of microphones and spoke to the nation watching on television. “One hundred and ninety-three years ago, a small people with big hearts, with great souls and extraordinary bravery, unfolded their virtues and clashed with an empire, the Ottoman, for their freedom and won. Today, our people are battling and struggling to break the stranglehold of the creditors. Our history guarantees that we will also be victorious in this fight.”

Papoulias’s comments did not reflect the kind of gratitude Greece’s European and IMF creditors may have expected in return for their assistance. Nor was this sentiment indicative of the brotherly affinity between European nations the euro was supposed to engender when it was conceived, little more than two decades earlier, in the treaty that officially created the European Union. The euro was thought of as the capstone of the decades-long
project of forging an ever-closer political and economic union in order to forestall the habitual bouts of tremendous continental bloodletting that had characterized Europe’s past. For a while, it seemed to be working out well for everybody, particularly for the Greeks. Greece officially adopted the euro on New Year’s Day 2001, two years after the currency’s birth, though it didn’t start using euro notes and coins until a year later. To accommodate the Greek alphabet, euro bills were printed with the Greek for “euro”—
EYPΩ
; and a Greek version of the two-euro coin depicted the mythological scene of Zeus, in bull form, abducting the bare-breasted maiden Europa. For years after Greece joined the currency, investors deemed lending money to its government to be only marginally more risky than lending to Germany, a far wealthier and more fiscally prudent nation considered one of the safer places in the world to put your money. With the new ease with which it could borrow, Greece’s government doled out big raises to its workforce, raised pension benefits, and spent several billion euros on the 2004 Olympic Games in Athens. Greeks freely spent their newly acquired money, which benefited other eurozone economies (they bought nice German cars, for instance) and Greece, too (spending at local restaurants and shops, and a construction boom). From the time of its euro entry until the crisis began to take its toll at the end of 2008, Greece’s GDP grew by an average of nearly 4 percent a year, faster than all other eurozone countries with the exception of Ireland.

To some degree, I had witnessed some of this rise in fortune. When I was a boy growing up in the 1980s, I often visited my grandmother in Greece during the summers. She lived across the road from the ruins of Ancient Corinth, and from the front yard, you could see the seven remaining columns of an Apollo temple standing against the deep blue backdrop of the Corinthian Gulf. The village, which surrounded the ruins of the ancient city, was humble and largely agrarian and quite different from what I was used to on suburban Long Island. The latest technology in my
grandmother’s house was an electric water heater for the shower, so you did not have to boil water on the propane stove to take a warm bath. A very poor old lady lived near us in a crumbling stone house, which seemed to have no running water at all. I used to go swimming in the gulf, and I remember sometimes seeing her in the water with a shower cap and a bar of soap, using the sea as her bathtub. The old woman’s situation was rather exceptional, but still, her presence seemed to attest that even as Greece was becoming more prosperous, times of hardship belonged not to some very distant past. Over the course of a decade of intermittent visits, I observed a change. Greece, which had long benefited from remittances sent by Greeks living abroad, found a new funding source when it joined the European Community—the precursor to the European Union—in 1981. Admitted despite its relative underdevelopment and economic backwardness, Greece began benefiting from a flow of European agricultural subsidies and infrastructure funds. Additionally, the new government at the time—led by Andreas Papandreou, a messianic, free-spending socialist and former Berkeley economist who had founded the center-left PASOK party in the previous decade—began borrowing a lot of money and finding ways to dispense it to the population, raising wages but also stoking inflation and the national debt. Families started buying nicer cars and renovating their homes, often buying real estate to protect themselves from the drachma’s steep devaluation. Living standards continued to rise and after one summer visit, I remember thinking that lifestyles in Greece were no longer utterly incomparable with those of American suburbia. “It must not be that hard to become a modern country,” I thought at the time. After my grandmother died, I stopped visiting the village as often, but the trend seemed only to accelerate. By the time I returned for a visit several years after Greece joined the eurozone, the village had a few villas, sleek cafés, and more Mercedes and BMWs on its roads.

The cheap, post-euro-entry borrowing that fueled part of this
boom was not so much a reflection of the country’s economic fundamentals as a display of faith: investors’ faith that eurozone membership would act as a guarantee of the nation’s fiscal stability. This faith began to unravel after the failure of Lehman Brothers, which caused investors to rethink the safety of their worldwide investments. When that happened—a worrying divergence began to appear in the eurozone. Borrowing costs in Greece, and in other eurozone countries perceived to be vulnerable, began to rise, while Germany’s began to fall as investors looked for a safe place to keep their money, even if that meant not making any more of it.

The event that sparked much bigger problems in Greece, however, came in October 2009, when it announced a big accounting revision. The government’s projected budget deficit for that year would not be 3.7 percent of gross domestic product, as initially forecast, but 12.5 percent. The deficit was revised again, repeatedly, ultimately reaching beyond 15 percent. On one hand, the 2009 revision was partly understandable based on the fact the global financial crisis had set in, causing hits to government budgets everywhere. Yet the magnitude of Greece’s revision, and the fact that it had made often-sizable upward revisions every year since it had joined the eurozone, confirmed for Eurostat, the statistical office of the European Union, that the Greek government had engaged in “widespread misreporting” of its deficit and debt figures. Big accounting revisions had become a custom in Greece, particularly following elections. In 2004, the new party in power, the center-right New Democracy, said that the previous ruling party, center-left PASOK, had badly messed up the statistics, revealing that Greece’s eurozone entry—which was based on meeting “convergence criteria” like keeping an annual deficit no greater than 3 percent of GDP—had been based on false numbers. Then, in 2009, when PASOK regained power, it said the big revision at the time was due to New Democracy’s massive concealment of its true spending. To the rest of the world, which didn’t particularly
care about Greek political wrangling, the essence of the matter was that Greek statistical practice was more art than science, and that the country’s finances seemed to be dangling from a rapidly deflating helium balloon. Two days after Greece announced the initial revision, it received its first credit-rating downgrade. Further downgrades quickly followed. Greece soon wouldn’t be able to borrow any more money on the market at all, at least without paying loan-shark rates.

BOOK: The Full Catastrophe
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