Don’t bail out Greece, part 2: markets unite, politics divides

In the 1960s, thousands of industrious Greek gastarbeiter came to work in West Germany. Immigration from Greece has been a success story of rapid integration and mutual economic benefit. With little capital, many of the incoming guest workers started their own businesses such as Greek restaurants and delicatessen stores, bringing Gyros, Souvlaki and Ouzo to the remotest village. Today, there is no such thing as a “Greek-German”. The child or grandchild of a Greek gastarbeiter is simply a German with black hair and an unusual surname.

One wonders what these people are making of the ridiculous mud fight currently taking place between Greek and German tabloids over the possibility of a Greek bailout. For parts of the Greek media, the debated austerity measures represent an imposition by foreign countries, motivated by sheer sadism. For them, export-intensive European countries owe them a bailout, because Greece has supported their economies for years by running up a huge trade deficit. For parts of the German media, this represents a brazen lack of gratitude from people who have received substantial EU-subsidies.

Taking the logic of the Greek media serious, one could argue that every regular consumer of Kalamata olives is entitled to a personal bailout by the Greek taxpayer, for supporting Greek exports. The flaw is, obviously, that these consumers have already received their due consideration from the transaction: the olives.

There is also a serious flaw in the reasoning of the German media. They are projecting a logic which would make perfect sense in relationships between individuals into the political sphere. They are confusing a forced transfer of taxpayers’ money with “solidarity”. The differences could not be greater.

In the personal sphere, when we receive help from somebody, we feel gratitude, and a desire to give something back. In the political sphere, when we receive an “entitlement”, we quickly get used to it and take it for granted. When it is threatened, we feel robbed.

This is not a conflict between two nations. Nothing of this kind has ever played a role in the relationship between native Germans and Greek immigrants. Meanwhile, the foreign minister’s mere mentioning of the fact that the money on which domestic welfare recipients live has to be paid by somebody has caused a political earthquake. It is politically fuelled tug-of-wars, domestically and internationally, which cause conflicts between people who would otherwise get along.

One of the speakers at the State of the Economy conference presented an interesting graph showing that wages in Greece, Spain and Portugal had risen by about 50% relative to German wages over the last ten years. In the context of the euro, this suggests there is going to have to be an extremely painful adjustment process in order for the PIGS to regain their competitiveness.

“In the personal sphere, when we receive help from somebody, we feel gratitude, and a desire to give something back. In the political sphere, when we receive an “entitlement”, we quickly get used to it and take it for granted. ”This is a theme I regularly touch on – the disconnect between the giver and the receiver. If something is taken by coercion and handed over, it is not charity. No merit is gained by the funder, no human feeling is felt by the receiver. Compare that with someone in need receiving in the knowledge it was given willingly and precisely for them to receive it. Entitlements make good people feel bad and bad people feel good. How can that be right?

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