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I think what has happened with the Greek debt is becoming clearer:

The Greek government spent around the EU average and received 5% of GDP less than the EU average for two decades at least. This sustained a debt which was bearable as long as the economy was perceived as expanding. Greek national debt was at 20% of GDP in the 1980s, and expanded to 80% in 1990 and 120% in 1993 (this was partly due to developing a social welfare system, a socially productive debt). It has remained at these levels more or less ever since.

So it has to do with not gathering the revenue required. Not collecting enough taxes however is not due to corruption as a flaw of the system. Its a feature not a bug. The way a corrupt political and economic elite and the whole two-party system could create the social alliances it needed to legitimize itself (and undertax itself BTW), was to
a. bribe the professional classes and the government bureaucracy through gaping tax loopholes and associated corruption,
b. develop a clientilist system in which public employment was some sort of prize for the party faithful and their families
c. control the media, as thoroughly as money can

This was a very inefficient system as far as creating  decent social services is concerned, it debauched social relations and was not sustainable in the long run. This 45% of GDP spent, bought few and inefficient social services and a lot of illegal private gains.

This system might be dissolving at this moment (for quite external reasons mostly), but it seems to be preparing some even more oligarchical solution in its place. An impoverished and broken population is not conducive to a democracy. This is why it is important for a progressive alternative to appear if not to dominate in the short-term, at least to create a pole around which future hope can be organized. This BTW is not and cannot be simply a Greek project, it has to be part of a similar paneuropean movement.

The road of excess leads to the palace of wisdom - William Blake

by talos (mihalis at gmail dot com) on Tue May 25th, 2010 at 06:40:20 PM EST
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