Envying Greece

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Envying Greece

Two months ago, I wrote that we’ll hear a lot about “Hellenization,” or the prospect of Korea becoming another Greece. It is unfortunate that bad predictions are the ones that tend to come true. The hype about “Japanization” last year - the warning that Korea could be headed for decades of stagnation like Japan - was sanguine compared to the Greek comparison.

Marking his first year in office earlier this week, Choi Kyung-hwan, deputy prime minister for the economy, grimly said Japan is now becoming a country to be envied. Things are turning murkier and more complicated for Korea and yet the country is at a loss as to how to address its myriad of dysfunctions and problems. Japan on the other hand has overcome its decades-old funk through Abenomics, political unity and resolution, Choi noted.

We are now envying the poor Greeks. Although they have brought a chaotic mess on themselves and are truly in deep trouble, the Greeks were bold enough to stand up to Europe’s heavy hitters, Germany and France, and even the United States. European leaders are stupefied by Greeks’ overwhelming “No” vote to a European bailout - and possibly the European Union - in Sunday’s referendum. They worry their hard-won eurozone unity could be in danger. Uncle Sam may be silently worrying that Greece may turn to Russia or China for help and further complicate the global order.

European leaders may be grumbling about a bad apple in the barrel. But this puny apple has got the tough bunch in a cold sweat. For us, the scene is somewhat surreal, especially with the International Monetary Fund (IMF) watching Greece default on its debt, the first case among developed countries. We vividly remember what IMF Managing Director Michel Camdessus did to us in 1997, when Korea ran into a serious liquidity crisis. He dictated harsh austerity and reform measures to Korea in return for an international bailout, condescendingly saying the pain could be “disguised blessing” for Korea.

Interest rates shot up to 25 percent, and banks and companies were shut down or sold off to foreigners at fire-sale prices. People were without jobs, homes and businesses. The public lined up to donate their jewels and gold to help the country fight the crisis. International creditors were ruthless and made sure the stringent terms were met. They got back their loans with monstrously high interest rates. The fearsome IMF has turned all gooey towards Greece. Having gone through an IMF program, we cannot help but be appalled by its change of attitude.

Greece has behaved badly for a long time. It cooked its books when it joined the eurozone in 2001. It concealed piles of fiscal deficits. Then, the country went on enjoying inflated wealth from a stronger euro. It splurged on cheap and easy bank loans to hold a spectacular Olympic Games in 2004 that turned out to be the biggest deficit-ridden Olympiad since the 90s.

The country, however, did not bother to pay anything back. Greeks have grown accustomed to dodging taxes. According to the local media, about 30 billion euros ($33.2 billion) - or 10 percent of its gross domestic product - of taxes went uncollected every year. Even small clinics do not accept credit cards. In a tax probe by Greek authorities, of 150 doctors who owned yachts, luxury homes and cars, more than half reported that their annual income was less than 30,000 euros. About 30 of them were audacious enough to claim their earnings amounted to just 10,000 euros. Greeks sure know how to save on their tax bills.

It was not the first time Greeks defied international lenders. Back in 2011, European leaders agreed to write off a debt worth 100 billion euros after marathon talks and extended new loans of an equal amount. At the time, Greece’s prime minister expressed confidence that Greece would now be able to handle its debt. But four years later, its debt was no smaller. The country had not endeavored to pay it back through savings and belt-tightening. But Greeks weren’t ready to lose the comforts they enjoyed. Politicians joined the bandwagon. Their current prime minister held creditors accountable for the Greek crisis and held a referendum on whether to accept their call for austerity measures.

The essential problem is not in Greece’s excessive welfare programs or greedy creditors. It all comes down to Greek greed and corruption. Everything has a price, and the Greeks are refusing to pay it. The state of the people must not be pitied or envied. What we must fear is “Hellenization,” growing immune and confused about what’s right. I am fearful for this country as we have general elections coming up next year.

JoongAng Ilbo, July 9, Page 34

*The author is an editorial writer of the JoongAng Ilbo.

by Yi Jung-jae

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