Wednesday, July 15, 2015

The Greek economy - in a shambles since World War II?

I'm cynically amused to find that the present conflict between Germany and Greece over bailout conditions, economic reforms, etc. has an echo in history - during World War II, as a matter of fact.

Incredibly, and despite a number of distinct periods between 1940 and 1945 that could only be characterized by severe or even violent and sudden changes in policy, government, political status, occupation, liberation, military or civilian administration and the presence or absence of outright civil war, Greek monetary and fiscal policy enjoyed a disarmingly consistent state of absolutely peerless incompetence.

In fact, the reform of Greece's financial administration was so hopeless a task that war with the Italians, the invasion of Greece by the German Army, the flight of the King, the occupation of Greece by the Germans, three puppet governments in quick succession, a German program introducing a new and independent currency (military script – this was abandoned in three months), an occupation levy, the establishment of special occupation accounts at the Bank of Greece, gold sales, foreign exchange sales, the rise of Greek resistance groups and partisans, German reprisals, the turning of the tide of World War II, the liberation of Greece by the Allies, Greek Civil war and the (mostly effective) pacification of Greece by the British were unable to restore even a trace of voluntary fiscal discipline to Greece.

So hopeless was the state of Greek finances that, even as they routinely hung with piano wire prominent citizens and officials on the thinnest of provocations, and even given three years to do it, the Nazi's were somehow unable to compel what amounted to a totally subservient collaborator government to put its fiscal house in order.

. . .

Fortunately for Germany, by the time the matter came to a head ... Greece was Britain's problem. It wasn't just partisans the British would end up having to fight.

. . .

What followed could only be described as a comic progression of populist pandering, the spread to the national economy of a series of parasitic labor unions and cabals, and a confidence on the part of the Allies in their own fiscal administration abilities that was as enduring as it was inflated.

There's much more at the link.  Entertaining reading.



Francis Turner said...

That link is hilarious and has taught me much about the 2nd world war that I did not have any idea about. Oddly enough the more popular history books concentrate on, say, Yugoslavia for soem reason

Rev. Paul said...

I spent 18 months on a destroyer homeported in Elefsis, Greece - about 16 miles west of Athens, from '73 to '75.

There were three political coups while I was there, including a military overthrow in December '73. Nothing like going out for morning coffee to find tanks in the street, and half-tracks blocking traffic on the King George Highway.

To say that Greece is unstable is to say that Italy's had a few elections.