Herakles Polemarchakis, Warwick professor and economic adviser to the Greek government, examines what he has
learned in confronting the financial crisis in Greece.
Larissa, with about 250,000 inhabitants, is the capital
of the agricultural region of Thessaly in central
Greece. A rather faceless locale, but it is the talk
of the town in Stuttgart, the cradle of the German
automobile industry, and, particularly, in the Porsche
headquarters there. The reason? Larissa tops the list,
world-wide, for the per-capita ownership of
Porsche Cayennes, the pricey SUV. The
proliferation of Cayennes is a curiosity, given
that farming is not a flourishing sector in
Greece, where agricultural output generates a
mere 3.2 percent of GNP in 2009 (down from 6.65
percent in 2000) and transfers and subsidies from
the European Commission provide roughly half of the
nationβs agricultural income. A couple of years ago,
there were more Cayennes circulating in Greece
than individuals who declared and paid taxes on
an annual income of more than β¬50,000, a figure
only slightly above the vehicleβs list price.
The surreal situation in Larissa offers an apt
metaphor for the predicament of Greece itself.
By the end of 2009, Greek public debt stood at
127 percent, the deficit at 15.5 percent and the
current account deficit at 11 percent of GDP. In
addition, the outgoing conservative government
had failed to address these long standing problems
and had succeeded in driving the country to the
brink of bankruptcy. At the same time, it had
consistently misreported statistics to European
authorities, compromising the credibility of the
count ry at a t ime when i t needed it most.
The whole artikel :
http://www2.warwick.ac.uk/fac/soc/econo ... evised.pdf
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