The Tribune

By LARRY SMITH

Greece, as we all know from high school days, was one of the major civilising forces of antiquity. Its modern political history began in the 19th century, when the country was a reluctant province of the Ottoman Empire.

After a bloody rebellion, the Greeks established their own independent state in 1832. More than a century of political instability followed, with the country swerving between a republic, a dictatorship and a monarchy.

In 1967, a military junta kicked out the King and ran the country until 1974, when civilian rule was restored. And since then, electoral politics has alternated between fairly mainstream centre-left and centre-right parties.

Greece joined the European Union in 1981 and later adopted the euro as its currency. But the 2008 financial crisis changed everything. Today, Greece is the sickest man in Europe and subject to heavy manners from the Germans, who are the top dogs.

Here’s how the BBC summarised the current predicament: “Greece was living beyond its means even before it joined the euro. After it adopted the single currency, public spending soared. Public sector wages, for example, rose 50 per cent between 1999 and 2007 – far faster than in most other eurozone countries.

“And while money flowed out of the government’s coffers, its income was hit by widespread tax evasion. So, after years of overspending, its budget deficit – the difference between spending and income – spiralled out of control. Moreover, much of the borrowing was concealed.”

Debt levels reached the point where the country was no longer able to repay its loans, and was forced to ask for help from its European partners and the International Monetary Fund (IMF) in the form of a massive bailout. In return, Greece had to embark on a major austerity drive involving drastic spending cuts, tax rises and labour market and pension reforms.

Since the financial crisis, economic output has dropped by over a quarter, while unemployment stands above 27 per cent, and youth unemployment is around 60 per cent. Over a third of the population is at risk of poverty or social exclusion. These are unprecedented levels for any developed economy since the time of the Great Depression.

So a few weeks ago, the despondent Greeks gave 36 per cent of their votes to a radical left-wing anti-austerity party called Syriza, led by Alexis Tsipras, a former student activist. Only two seats short of a majority, Syriza then formed a coalition government with a radical right-wing minority party.

The new government favours the jobless and poor over international creditors, who have lent Greece more than $300 billion. Negotiations are underway to square the circle, but more and more analysts foresee a Greek exit from the eurozone and significant collateral damage to the European project.

Greece had made half-hearted attempts at economic and social reform since the 1990s. But, like The Bahamas, taking the hard decisions and avoiding political expediency proved difficult. Today’s tax hikes and other painful adjustments are a consequence of this reform procrastination.

In Greece, the lack of accountability and a non-transparent system of accounts allowed policy makers to reconcile the irreconcilable and avoid meaningful debate over decades. We share the same experience here.

Yet according to Prime Minister Perry Christie in his recent mid-year budget address, The Bahamas has “come through this time of testing just fine” because “we made the tough decisions when we had to, tightened our belts when we had to, and took our medicine when we had to”.

I don’t quite see it that way. Like the Greeks, we were forced by international pressure to seek big tax rises. But this “tough decision” was taken in the face of ongoing and unpunished massive tax evasion. There is no accountability for delinquent Bahamian taxpayers and very little government transparency on anything these days.

Meanwhile, unemployment in The Bahamas is at its highest point ever in recent times, and the number of Bahamians living below the poverty line has increased to just over 11 per cent of the population.