Plundered from within“Greece’s ‘Odious’ Debt” is a candid portrayal of Greece’s economic struggle for the third rescue package after two previous bailouts. The author is Jason Manolopoulos, a co-founder of the emerging market hedge fund Dromeus Capital. He wrote the book based on his experiences in the global finance system.
The main idea of the book is the unreasonable citizenship privileges in Greece. The privileges are handed down from generation to generation, and connections last a lifetime. Most of the civil servants are children, relatives and friends of ministers. There is no open recruitment for public jobs. They make three times more than those in the private sector. The annual revenue of the national railroad is 100 million euros ($108 million), while its payroll adds up to 700 million euros.
A government agency was established in the 1950s to prevent a lake from going dry. The lake dried up completely a few years later, but those employed by the agency are still being paid. A public servant may collect receipts dumped at highway tollgates and get reimbursement as business trip expenses. The retirement age for the civil servants is 55 for men and 50 for women. Upon retirement, they are paid a pension handsome enough to continue living a comfortable life. What motivation do they have to work?
Companies in Greece are closed shops, which only hire unionized workers. Regulations are so strict that companies cannot fire anyone unless they shut down. Tax evasion is a natural way of life. Even when anyone is caught for tax evasion, the court process takes an average of 15 years. It is an offense that is not considered a crime.
All these irrationalities are customary practice in Greece. Greek citizenship is a cure-all for openly committing the irrational practices. However, different rules apply to foreign companies. Not many can last more than a year. Employees would go on a strike and stop the plant if things don’t go their way. So Greece is left with only two industries: tourism and agriculture.
Sparta used to dominate the Mediterranean Sea, but it fell because of exclusive and corrupt citizenship practicies. Upon conquering a region, only those with Spartan citizenship could enjoy affluent lives. The conquered people could not get citizenship, so it was only natural that they sided with other countries. A country is bound to fall when it does not have the citizens to defend it. While Sparta built an empire through pillage, it was plundered from the inside without realizing it.
In contrast, Rome gave citizenship to those in the conquered regions. The conquered tribes produced emperors and consuls. It means that they were allowed the rights of citizenship without discrimination. They had true freedom. When Rome was attacked, even the immigrants came together to defend it. Hannibal could not bring down Rome even with the most exceptional strategies and tactics.
The story might sound too farfetched, but there are elements that are not so completely different from Korea’s situation. The world of exclusive citizenship is similar in politics, the public sector and labor unions. Some say that Ancient Greece fell because of democracy. It can also be said that their democracy of exclusive citizenship caused the fall.
In a closed society, individual competency is not counted. No matter how capable one may be, he cannot penetrate into the formidable fortress built on established rights. Even Socrates was expelled. The regular employees of conglomerates enjoy vested rights. The fortresses of unions build high walls. Politicians are trying to please them and focus on seizing power. We cannot expect them to come up with rational policies.
In the public sector, appointments are made through connections and arrangements. And those appointed through connections will give high positions to their friends. Only they have full citizenship, and those who do the actual work are not treated as citizens.
In fact, good employment is something that fits the abilities of the individual. We should have the liberty to be treated according to our competency. And freedom will motivate people and boost the economy. Such citizenship should be allowed for all. Labor reform and other reformist measures may be the process of giving back the exclusive citizenship to all.
JoongAng Ilbo, Nov. 9, Page 32
*The author is an editorial writer and senior reporter on labor affairs for the JoongAng Ilbo.
by Kim Ki-chan