Greece has had to bear the brunt of not only economic hardship but also relentless international criticism that the nation has a bloated public sector and an unsustainable social welfare system and is also beset by rampant systematic corruption and tax evasion.

To varying degrees these accusations contain some truth, but they create a problem of stereotypes and are far from giving a complete picture of the Greeks' response to their national quandary, according to Harvard economist Richard Parker – who has worked extensively in Athens in recent months with Greek officials and international investors trying to surmount the crisis. Allowing for the fact that this consultant, who is a Kennedy School of Government lecturer, has had long friendships with top Greek officials, his hands-on experience provides a personal account that affords a more nuanced picture of Greek behavior in a very dire situation.

Parker reports that in the course of his Athens consulting he encountered plenty of “fools, time-servers and pettifoggers” in the bureaucracy. But he also found many dedicated public servants hard at work trying to implement much-needed reforms. Moreover, he found that the “moralizing clichés” depicting Greeks as lazy, anti-business, and tax-evaders often do not fit with the facts. In reality, he says, Greece is not vastly different from many Europe-wide averages in many key metrics -- including the amount of national revenue from taxes as a percentage of gross national product (roughly 30 percent), the size of government (about one-fifth of the workforce) or entrepreneurial spirit in the population at large. Greece's problem, he says, does not arise from behavior singled out in clichés. 

Instead, the nation finds itself in a structural bind with little scope to move forward toward the economic growth Greece needs to sustain modernization. Tourism and international shipping -- Greek specialties -- have limited potential. The core problem is that Greece’s multitude of small businesses consists of "micro enterprises" ill-equipped to compete in the EU’s more open single market. What is needed -- a structural shift for the nation's economy – is clear but hard to attain. Greece, he says, must “find a niche between the hyper-efficient Germans and the low-cost Chinese.”

It is bound to be, at best, "a long, dark path,” Parker says. His hope is that a short-term solution emerges now and allows time for Greece to work its way to this difficult transformation.


By Aaron Brinckerhoff

European Affairs