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Citizen Culpability and the Crisis in Greece

Kalliope Kokolis's picture

Greeks and Greek-Americans in the U.S. Diaspora, like myself, have been watching the strikes, demonstrations and tragic deaths that have brought our country to a standstill with mixed emotions.  The images of Athens burning, tear gas rising and riot police clashing with citizens sharply contrast with images of white sandy beaches, beautiful islands, historic landmarks and mouthwatering cuisine that usually come to mind.  Despite feelings of shock, sadness and even anger, to those who know Greek public political culture in its entirety, it is not surprising to most that this day would eventually come.  Greek citizens, immigrants and those with strong ties to the country, admit the role that societal norms, mainly tax evasion, nepotism, clientelism and bribery (all very persistent in Greek public political culture) are in part responsible for bringing the country to the brink of collapse.  For the past decade, Greek citizens did not heed warning their culture of corruption and the shadow economy could not sustain the system.   
 

Reality set in the past few weeks, with Greece at “the edge of the abyss” (Greek President).  An estimated 100,000 citizens participated in a nationwide strike that closed all services, left hospitals with emergency staff only, grounded flights and public transportation as well as pulled news broadcasters off the air.  The riots were sparked over the announcement of strict austerity measures, along with a $150 billion EU and IMF bailout, aiming to prevent Greece’s collapse, which would likely take other EU countries down with it.  These measures have ignited rioting and social unrest that have not been seen in Greece since the restoration of democracy in 1974.
 

The crisis can be partly attributed to corrupt customs so pervasive in Greek public political culture, it is considered a normal way of life.  A study by Transparency International concluded that Greece is the most corrupt in the Eurozone, of the 16 countries that use the Euro.  Due to the daily corruption and inefficiencies in the system, it is estimated that $30 billion each year, or 20% of Greece’s Gross National Product is lost to its shadow economy.  Transparency International claims that private households paid more than €780 million in bribes in 2009.  An average of €1,355 in bribes was paid per household for public services and €1,671 on average for private sector services such as lawyers, doctors or banks.  You do the math.
 

Although there are many forms of corruption that pervade Greece, I will focus on the three most detrimental.  First, is the commission paid for illicit services.  This includes widespread tax evasion.  It is widely understood that Greeks will present a “fakelaki” or “envelope” of cash as bribery to tax officials in order to avoid claiming all income earned.  Taxes were dealt with “in a three way split: You pay a third of what you owe to the government, a third to the collector and a third remains in your pocket”  (CNBC).   Citizens become accustomed to claiming only a portion of their income and some of their assets.  This past year, only 324 residents claimed to owning pools even though satellite surveys of the land counted 16,974.  Other petty corruption includes paying to have your car pass inspection and to obtain permits for construction that would otherwise be illegal.  This has led land developers to frequently ignite forest fires to acres of land every summer, the worst being in 2007 and 2009, in order to bypass laws disallowing development on farm land; in the process ruining homes, the livelihoods of many farmers, killing trees that would take generations to replace and draining public funds. 
 

Second, it has become a social norm to pay unwarranted fees for public services. This is most notable in the public health care system.  The “fakelaki” is handed over to public doctors to ensure you are provided the best care.  It also relieves the burden of long hospital waits.  This cash-only system has greatly contributed to the shadow economy.  Thirdly, pulling strings and nepotism became a common way for people to do certain things, such as obtain jobs.  This has been detrimental to the state by stifling competition by keeping people in jobs that they are not necessarily qualified or entitled to. Companies also commonly pay to keep competitors out.  Adding to the problem is the “brain drain,” created by the fact that professional Greeks are better off leaving the country if they do not have good enough connections for a decent job.  Corruption in this sense has prevented innovation, growth and competitiveness that are imperative for a healthy and profitable state. 
 

There is a huge threat to society when the status quo is to participate in everyday corruption.  Refusal to participate in these practices is seen as deviating from the norm if “everyone else is doing it.”  The ruling class sets the precedent that everyone else follows.  Thus, it is also considered foolish to abide by certain laws when many in society do not.  Many Greeks have the mentality of “why should I pay for taxes when my neighbors are not?” There is a sense of entitlement, of not owing the state anything, especially in a country where it is very easy to get away with it. 
 

Greece is not the only country where this is customary.  Studies in “Everyday Corruption and The State,” by G. Blundo & J-P Olivier de Sardan show that this type of public political culture is also prevalent in certain developing countries in Africa.  Corruption is often justified by citizens as a preventative measure or as a means of survival.  It serves to compensate for high taxes that do not necessarily provide for high-quality public services.  Corruption is legitimized because it is prevalent and widely accepted in society.  Thus, corruption in Greece has become a never-ending cycle. 
 

Nonetheless, the system cannot sustain itself.  In order for the state to survive, it is imperative that citizens contribute to good governance and give back to public funds.  The future of not only the country, but generations to come, heavily depends on the ability of citizens to change their mentality, behaviors and social norms.  Sadly, they have resulted in belt-tightening measures that will greatly impact hard-working individuals with modest incomes.   

 

Photo Credit: Stratos Safioleas

Comments

Submitted by ZINA Varelas on
THIS IS ON POINT, HONEST AND SINCERE. YOU CAPTURED THE SEVERITY OF THE PROBLEM AND HIGHLIGHTED A LIKELY SOLUTION. TRUTHFULLY, "the system cannot sustain itself. In order for the state to survive, it is imperative that citizens contribute to good governance and give back to public funds." I HOPE GREEKS READ THIS, SEE THE TRUTH, REALIZE THE PREDICAMENT THEY ARE IN, AND LIKE ANCIENT GREEKS OVERCOME THIS CATASTROPHE WITH CLASS. THANK YOU MISS KOKOLIS.

Submitted by Jayna Athas on
Ms. Kokolis' analysis is convincing and strong. Her focus on the 3 forms of corruption are accurate and clearly lay the foundation for a better understanding of what has created the rise and fall of a political system gone array. The sense of entitlement is extremely to read about in further detail since, as Americans, we often times do not understand the cultural difference and influence this has on Greek society. Thank you for writing honestly on this topic and for explaining what is necessary for the state to survive. Well done.

Submitted by Miu on
When i was reading thought i was having a deja vue with what happens in my country Portugal, we have other words that don't mean fakelaki but belong to the same family. Nepotism is probably the most famous practice and is commonly designated as "cunha". Nevertheless the Portuguese are much less reinvindicative than the greeks, accepting sadly but quietly the austerity measures faith! I remembered, this is for you, please pay attention to the last two paragraphs: http://www.reuters.com/article/idUSTRE63R41V20100428 Great job, kalliope!

Submitted by Lefteris Hazapis on
Congratulations, Kalliope. I really enjoyed reading your first blog and I am very pleased that you have written a piece that can help change Greece for the better. I'll be sure to look for your future blogs as issues that inhibit the democratic, political and commercial processes and media methods to reduce these drawbacks continue to interest me even though I work in higher education administration where ethical and civic behavior is taught and expected.

Submitted by Maria D on
Great entry Kalliope! An honest account of the underlying culture and "social norm" that have contributed to the current economic crisis in Greece. Although I do sympathize with the hard-working individual, who will now feel the effects of the austerity measures going into play, I definitely agree that the cut backs, along with a change in the cultural mentality as you pegged, are critical not only to meet the requirements of the EU/IMF bailout, but for Greece to come out of this, hopefully stronger and wiser.

Submitted by Anonymous on
Citizen culpability? How many of the main variables you are presenting are really under citizen control? Perhaps only the first one, limited to the amount of taxes that are indeed reported and paid by the citizenry. If the system validates and sustains such an evasion, is it reasonable to "kindly request" the citizenry to abide by a law that is never enforced, and that puts the law-abiding citizen in the worst position vis-a-vis the rest? As you say, why should we pay taxes if nobody else does? The other two forms of corruption described (and a long list of other variables not mentioned here) are also outside the control of the citizen. Is it plausible and/or reasonable to ask the citizen not to bribe a public health facility in order to get the best doctor for his sick family? It's the system itself that feeds the problem while a powerless citizen suffers and copes to adapt to it. In this sense I believe that "citizen culpability" works only in an ideal world where the term "citizenry" can be treated as a unit. In reality, in Greece as in many other countries, "citizenry" is way too fragmented and weak to be able to prevent any of these practices.

Submitted by Kalliope on
Thank you for your note. My intent is to illustrate only one facet of the problem in Greece’s crisis, to explain why it occurred and to highlight how the country can potentially move forward. I state various ways that citizens may justify their behavior, given that “everyone else is doing it”. However, my main point is that these mentalities and behaviors, that have become the norm, can no longer sustain a country and government. In a system without check-and-balances, complacency is detrimental. And, with strict measures on the way, many things (economically, socially, etc) will inevitably have to have to change. Public health care, for instance, is a free service that no one should have to pay extra for (tax payer dollars already go towards it). The ability of citizens to strongly mobilize is clear through the protests held in the past few weeks against austerity measures.

Submitted by Michael Nordstrom on
Now I understand more about what is happening in the land of my forefather. This article really gets to the heart of the problem. The writing is on the wall for Greece. Pay up or shut up. The 100k strikers, whom I'm guessing are most likely the tax payers, will have to start paying more taxes. Thanks for explaining it better than CNN.

Submitted by Liz on
Wonderful! The culture of corruption in Greece must change if Greece is to succeed. While one Greek citizen cannot change the current culture of corruption--many Greeks united in this cause, can achieve positive social change. Thank you Kalliope for speaking up and leading the way forward.

Submitted by Anonymous on
This is a good article indeed! From the experience in other countries suffering from accountability issues, it's a bit unfair to just say that what happened in Greece is 'just' a cultural issue. Corruption is a system and it was allowed to grow for a reason (i.e. democratic institutions not working, etc...). Some people have been profiting from the lack of accountability for a while and it's not because the country defaulted that those people will develop some 'morals' or their good conscience will finally start talking to them overnight. Definitely the solutions will come from the Greek people; it's one thing to demonstrate in the streets but they now have to redraw their democracy with systems to fight corruption. This is a lesson to all countries really, about what happens when corruption is not reigned in soon enough.

Submitted by Boris Mudrak (SLOVAKIA, EU) on
I cannot agree more! Excellent article! Boris

Submitted by Owen H on
Excellent report and well written, but systemic problems need systemic solutions. Countries are populated by groups who behave on mass. Citizen or not, an individual's will is irrelevant when dealing with a crisis like this. It is a Western cultural norm, specifically an American one, to look to the individual when dealing with a collective issue. And on a slightly separate note, I wonder which is worse, to live in a cosmopolitan country that knows how to live well but has a poor, corrupt economy, as in Greece, or to live in a country with a strong economy whose culture is generally politically and historically apathetic and quite ethnocentric, as in the US? Neither is good enough. Αλλα η καρδιά μου είναι στην Ελλάδα. So we all have our biases. ;-) Φιλακια

Submitted by George Makrinos on
Thanks so much for sharing your blog post. It is insightful, with strong references and gets right to the point. On occasion, tragedies like this give us the sense of purpose to communicate the facts. I think you’re the first Greek I personally know who has made the effort to write on behalf of the unfolding of these events. In the case of this tragedy, anyone with a basic understanding of the situation should have had a sense that this was coming. But we did nothing to act. The question now is how to begin to peal away the layers of corruption to uncover the ‘fakelakia’ and other unlawful actions so that we are not tempted to stray down this path again. Keep up the good work- we are all responsible to do our share.

Submitted by Shaun on
Great article that can apply to many countries in the Mediterranean and MENA region. Good job!

Submitted by Chris Y on
Very good article! However, in my opinion the government is at fault with the current state of the Greek economy. Since the reestablishment of democracy in Greece the ruling governments (the “Hereditary Democracy” courtesy of the Papandreou and Karamanlis families) have provided inconsistent support for the growth of the economy. They have built a foundation on corruption and connections. Hopefully, Papandreou version 3.0 (with the assistance of the IMF) can provide the progressive thinking to make the appropriate changes. I truly believe that the resolution of this crisis must be implemented with a top-down strategy. Operating in the Greek economy is similar to playing Basketball with no referees. You hope that everyone will be fair, but unfortunately that is not always the case. The rules exist but there is no one to enforce them correctly or consistently, potentially causing a state of chaos. One of my favorite jokes is: “Greeks should create a law to enforce existing laws”. That is how bad enforcement currently is… and this applies to ALL government agencies! In order to make a change in the right direction the PM needs to set an overall strategy of enforcement and to place good managers in the government agencies to ensure that the rules are enforced correctly and consistently! This would have a profound effect on the economy by raising the much needed funds for government, by creating a level playing field for everyone in the economy, and by weeding out corrupt players. Greece is currently hurting financially due to the high number of government employees. In 2008 Greece had a total of 1,022,021 draining government funds. Roughly one in ten people works for the government! This over expansion is primarily due to election campaign promises that were actually fulfilled… This causes many young people to lose their faith in meritocracy and in the workforce system. I like to add that I can’t blame anyone for taking a job but I can blame someone for creating a useless position to hire someone to fulfill their personal interests. If you have ever been to a government agency for any service you can see that they could go through a simple Business Process Redesign to make it seem that they are overstaffed! The Greek government needs to set the tone by trimming the number of employees, setting strict hiring policies, and redesigning the business process of the individual agencies. I believe that these steps would bring positive results to Greek economy and to their people. I support the “Broken Windows” theory proposed by Dr. James Wilson and George Kelling, which generally states that when a neighborhood looks rundown and disordered crimes are more likely to occur. This is currently the situation in the Greek economy. Because there is no enforcement of laws people do not respect or obey them. This has led Greece to its current state of corruption and a referee is always required to put a corrupt game back on the right track.

Submitted by wendy k on
This blog was given to me by a co-worker. I am glad to have taken the time to read as this was so helpful in explaining the reasons behind the downfall of the Greece economic system. I had no idea Fakelaki existed but it does not surprise me. I hope the Greek people can overcome this. It is a wonderful country full of historical importance. The Greeks should remember King Leonidas and say this to corruption,"Molon Labe"- "come and take them" or as one might say in the U.S., "over my dead body!" Also, being from the U.S. I am very concerned, too, about the direction our President is taking our country. I am terribly worried for my children and their children. WE are headed towards an economic mess.

Submitted by Anonymous on
A close relative of mine is being given the run-around for state provided health care. The doctors/hospitals seem to drag their feet with respect to treatment. Since my relative has not had experience with State Hospitals before, she is unaware of the fakelaki but she just found out and she is not to keen about participating in this Greek custom.

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