I lived and worked in Spain for four years. It was a fascinating experience being on the margins of a culture, so different in many ways to my own, watching and observing another way of life. Living in Spain, I learned three things, well more than that, but three things that I think are relevant to the current crisis in Greece, a country that shares many similarities with Spain. Corruption, the residual effect of the war and the Germans.
The first point is that Spain and Greece share the same Mediterranean culture. Both populations have a laid back attitude to life in general, and an astonishing laid back attitude to corruption. We were involved in the property market and I can relate a personal experience of corruption in Spain, tax evasion to which the state turned a blind eye. What happened was that a property had, not only an Actual Value, but also a Declared Value. The Actual Value was the price paid to the builder, the Declared Value, the property value written into the deeds, or escritura, was a sum as much as a third lower than the Actual Value. Tax was only paid on the lower Declared Value. If you have followed this, you will have realised that the builder has collected about one third of the property value in undeclared cash. I have read enough to suspect it is similar in Greece.
Say, a villa is bought for 150,000 euros. That means that the builder or developer has collected, give or take, a few thousand, 50,000 euros which is completely off the taxman’s radar. You may now be thinking: what does the builder do with this cash mountain. The company simply launders the undeclared money, the ‘Black Money’, by paying their employees and buying materials partly in cash. A friend of ours worked for one of the major, respected, developers. He was paid with a taxable pay cheque plus a brown envelope containing untaxed cash. This works fine, as long as the country has total control of their currency. Once the country relinquishes it sovereignty and shares a common currency, then these dodgy transactions become every else’s business. In the case of the Greeks, the Germans.
We once sold an apartment. The completion of the sale was conducted in the offices of a Notario, a government appointed official who, among other legal duties, checks that the conveyancing documentation is all in correct legal order. All the interested parties sat in front of the Notario, children in front of the headmaster, we, the sellers and our solicitor, the buyers and their solicitor, the agents (making sure they collected their commission) and a bank representative (making sure the outstanding mortgage was collected). We collectively held our breath as the Notario pored through the documentation, flicked the pages, tut tutted a few times, muttered something in Spanish, then signalled his approval. We all exhale, shook the Notario’s soft hand and were then led, by his secretary, to a small windowless room off the reception area, lit by a flickering fluorescent tube. In this room cheques for the taxable portion of the sale were place on a table, alongside piles of the ‘Black Money’, the cash the tax man would never, ever, know about, never collect.
This Mediterranean relaxed attitude to economics was well known to the Germans, the largest Greek creditor. After all, the Germans, along with the Irish arrived in droves to launder their respective currencies when the Euro was introduced. The trick was to use the cash that they had hoarded, in their Mother or Fatherland, as the ‘Black Money’ deposit for a villa, in the sun, by the Med. I was told by one disgruntled Irishman in a bar that he was being investigated by the Inland Revenue, so I imagine the German government would chasing their Expats too.
The second thing I became aware of is a collective memory of war. It surprised me that the Spanish Civil War still cast a dark shadow, memories of atrocities, carried out by both sides, lurk in dark recesses of many minds. There is even a Historical Memory Commission which attempts to address these issues. One of the property developments we were promoting was built near the site of one of the most notorious concentration camps at San Isdro, including a number of mass graves; something omitted from the glossy property brochures. And, of course, the Germans took part in this Spanish spat, a sort of training tour, in preparation for the Second World War, famously, or, more accurately, infamously bombing Guernica.
Europe has similar problem: a collective memory of war. The wars of the last century, principally the Second World War, are still vivid in the living memory of the peoples of each country. Most countries suffered invasion, occupation, reprisals and industrial scale looting of financial and cultural treasure. The Germans were undeniably the chief culprits, in fact the instigators of both wars, and Greece undeniably one of the victims. By and large we Brits don’t harbour the same feelings about the Germans. After all we won and the buggers didn’t invade us.
But the Germans were lucky. After their war, the debts, moral and financial were largely written off. The West needed a strong West Germany on the fringe of the Iron Curtain.
The Marshall Plan, which West Germany joined in 1949 financed the reconstruction of the Europe that they had wrecked. In a speech, George C Marshall said “Europe’s requirements are so much greater than her present ability to pay that she must have substantial additional help or face economic, social, and political deterioration of a very grave character.” The good old USA were the main contributors. The same speech could apply today to Greece. “Greece’s requirements are so much greater than her present ability to …………..”
Some Greeks argue that the Germans owe them €162 billion in war reparations. They are probably not far from the truth. How on this Earth do you compensate a country for invasion, massacres, transportation of Greek Jews and other atrocities?
My third observation is of the Germans themselves. This is a purely personal opinion about them collectivly as a nation and will, of course, inevitably sound like racial stereotyping.
In the late 1970s I went to Rhodes on holiday. It was an adults only holiday and we were part of a British group.
Within half an hour of entering the hotel bar, our group had gleaned the barman’s name, bought him a drink, found out that his brother was a sort of amateur musician and bought tapes of his amateur music. We had completely bonded, were the best of friends with Andreas, who then dispensed with the drinks measures. We all sat watching the first German that followed us in, march up to the bar, dispensed with any social interaction and demanded, ordered, Andreas to provide him with a drink. Andreas smiled thinly and dusted off the spirit measure cup, partially stuck his thumb in it while he poured a less than exact amount of gin.
During our time in Spain we lived among a lot of Germans, and I noticed this tendency to standoffish antisocial behaviour and wonderedAre the Germans naturally disposed to be off hand and humourless or, is it because they assume that we all probably think they are absolute bastards, because of the war and stuff, that they don’t bother to put in the effort to be nice?
So back to the Greek crisis. The one currency fits all, the Euro, clearly doesn’t work. The Germans clearly thought it would be to their advantage, making it easier to export their goods and dominate Europe; create a fourth Reich without a troublesome war. They weren’t thinking straight. They seem to have overlooked the inconvenience of democratic elections and referendums. If it had been a war they could have invaded Greece and carried out some random reprisals to bend and shape the will of the people.
But what were they thinking in the first place, lending the Greeks all that money, then lending some more. It’s like the Deutsche Bank, taking leave of their senses, and lending a hippy commune a shed load of money, and then, a few years later, lending more. Then saying if they become more sensible, mend their ways, that they will give them more money so that they can repay some of the loan.
I am no economist, but I have come to the conclusion that the Germans deserve to lose their money and the Greeks do not deserve the absence of hope for two generations. I also think, come the United Kingdom Referendum, that I will vote to leave the EU.