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Why Greece isn’t recovering: the view from a cruise ship

This column comes to you from the cruise ship Minerva in the Greek port of Piraeus. Why I’m aboard is a story for another day — and let me admit up front that, as financial-crisis reportage goes, observations provoked by a Homeric vista of islands and cocktails on the poop deck are unlikely to match Newsnight’s Paul Mason choking through tear gas outside a burning Athens bank. But still there are parables to be trawled from the placid Aegean waters.

As the anti-austerity bandwagon gathers momentum, the Greeks seem to be in deep denial about the other element of the recovery equation. Even if you sincerely believe that fiscal pain will make matters worse, you surely have to admit that a reinvigorated economy can only be built by working harder, exploiting competitive advantage, paying taxes, and not whingeing.

Tourism contributed 16 per cent of Greek national income last year, and that proportion will rise as the finance and property sectors shrink and the culling of state employees (15,000 lost their jobs this week) continues apace. So you’d think the nation would be pulling together like ancient oarsmen to attract and delight the world’s holidaymakers. ‘Greece expects record tourist year as strikes recede,’ was indeed the headline on a report of a speech by the president of the Athens-Attica Hotels Association. But it sat alongside news of a stoppage by the Pan–Hellenic Seamen’s Federation to celebrate International Workers’ Day — forcing Minerva to dash for the Corinth Canal before pilots form a picket line — and disruption of trains and ferries.

Meanwhile, members of the union of tax workers walked out in protest at the stress of administering tax surcharges that have been added to electricity bills — and the union of chartered accountants came out in sympathy. As for trickledown from the bailout, ‘All EU money go in pocket of top people,’ is the widely held view as expressed by one Cretan tour guide — and perhaps a reason why even the souvenir sellers seem so lethargic. As for keeping tourists happy, Minerva had to miss one Aegean highlight entirely — denied access to the isle of Delos, birthplace of Apollo but now an outpost of the public sector, because ‘a new law clarifying overtime agreements is awaiting ratification’.


Yet classical Delos was a model of cosmopolitan free enterprise: 10,000 slaves were once auctioned there in a single day. Perversely, the ruinous culture of entitlement that pervades the southern eurozone has brought the Greeks into a new form of slavery; to escape, they must rediscover their ancestors’ mercantile spirit.

Boom town

We embarked at Istanbul — and I took the opportunity to catch up with expat Spectator readers led by the Anglican chaplain Ian Sherwood and the tomato-processing -entrepreneur Duncan Blake. Lunching at La Brise Brasserie in the fashionable district of Nisantasi, we could have been in any of the world’s most sophisticated cities. This is a boom town in every aspect: vast real estate development, terrible traffic and a birth rate for the greater Istanbul area of a million babies a year. And it has civic pride, too: every verge exquisitely planted with tulips under the Judas trees.

Turkey’s GDP growth rate dropped back to a respectable 2.2 per cent in 2012 after two years of Chinese-style expansion at closer to 9 per cent that had begun to look like overheating. While Greek unemployment has risen to 27 per cent, Turkey has created 5 million new jobs since the onset of Europe’s crisis. Do Turks still aspire to EU membership, as they did when I was last here despite the cold shoulder they were being shown by the Germans and Austrians? ‘No one even talks about it any more,’ I’m told. ‘Why would we?’ Or as economy minister Zafer Caglayan put it in a recent speech in Brussels: ‘Turkey doesn’t need the EU, but the EU needs Turkey.’ And Greece could take a lesson from a Grand Bazaar trader whose pitch to one of my fellow passengers began: ‘Do you want to buy something you don’t need?’

Entitlement

The phrase ‘culture of entitlement’ cropped up in another context, in remarks by the new Archbishop of Canterbury, Justin Welby, about the variance between what City people think they’re worth and what ‘others think reasonable’. Illustrating his point came a Court of Appeal ruling that Commerzbank of Germany is obliged to pay £40 million of bonuses promised in August 2008 to 104 employees of the London-based investment firm Dresdner Kleinwort — whose owner Dresdner Bank had to be absorbed shortly afterwards by its rival Commerzbank, the whole crippled combo then requiring a German taxpayer bailout to cope with €6 billion of losses. According to the judge, that catastrophic chain of events did not constitute the sort of ‘material adverse change’ that might allow an employer to sacrifice employees’ entitlements ‘on the altar of public perception’ by welshing on a bonus promise.

Stung by the ‘altar’ reference, Dr Welby — had the case been in the sort of court where he could have been sitting as a juror — might have sent a scribbled note to the bench asking for a definition of ‘material’ and an exposition of the balance of moral rights between employees, shareholders and taxpayers. But he would probably have been dismissed like the jurors at the first trial of Vicky Pryce, for failing to grasp the rules of the game. More retrospective bonus demands are expected in the aftermath of the Commerzbank ruling, generating a new fountain of fees for the legal fraternity and a new wave of public -disgust.

Not for the first time, I’m reminded of a sentence from my Spectator debut article in 1992 about a ‘phantom share option’ pay-out (piffling by today’s standards, I assure you) that came my way just before my own banking career ended and long after business conditions had changed dramatically, if not materially, for the worse: it was, I said, ‘like coming out of your bunker after the bomb to find the banknotes of some obliterated state wafting in the nuclear wind’.


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