The Real Greek Problem

“There is no Greece problem; there is a European problem.”

For the past five years Greece has been facing a financial downturn. With Prime Minister Alexis

Tsipras’ assertion regarding conflicts in his administration’s negotiations with the European

Union over Greece’s financial situation in mind, Athens needs to remember that domestic

political and social issues need to be addressed just as urgently as the debt issue. Therefore,

there is in fact a “Greece problem”.

Firstly, there needs to be a change to domestic politics in Greece. Greece’s domestic problems

may inhibit its ability to resolves its economic issues. As Pavlos Eleftheriadis of Foreign Affairs

stated, Greece has a top-down system:

The fundamental problem facing Greece is not economic growth but political inequality.

To the benefit of a favored few, cumbersome regulations and dysfunctional institutions

remain largely unchanged, even as the country’s infrastructure crumbles, poverty

increases, and corruption persists.

Theodore Pelagidis of the Brookings Institute breaks down these issues further:

The current government will possibly pay the price for lacking any sense of meritocracy,

not because it (partly) implemented the cursed memorandum of the creditors. … The

political system bears structural and architectonic institutional defects such as the

supermajority the parliament needs to elect a president with no power whatsoever, and

the laughable electoral law that gives to the party that comes first in the elections—even

if just by one vote—a bonus of 50 seats in the 300-seat parliament.

Greece’s current political system still serves the interests of the wealthy, political incumbents,

and special interests. Over the long run, such a system cannot produce consistent performance.

Political instability and an inability to produce legislation increase economic stagnation. More

importantly, a system that serves the interests of the elites does not help the Greeks citizenry

improve their financial situations, find jobs, and live healthy lives. The standard of living will

not change. If each citizen does not have a chance to succeed, then the economy as a whole will

not either. While the debt talks with the EU are important, Greece must remember that

reforming its political institutions can be invaluable for its citizens.

As a result of this loaded system, public trust in the political process has plummeted since the

beginning of this crisis. A lack of belief in the political system leads to a lack of credibility for

the administration. While the new administration has been a breath of fresh air and polls in late

March indicated a 70% approval rate, tangible results are necessary to maintain this good faith.

Otherwise, distrust will rise again and legitimacy will be undermined.

In addition to these political changes, social change is necessary. Though social problems are

more difficult to quantify, there are some that undeniably stand out, such as tax evasion and

education inefficiency.

Tax evasion continues to hurt Greece, as its current infrastructure still allows people to cheat.

As The Guardian explains, the online system for taxes cannot deal with questions or charges,

which requires citizens to schedule an in-person visit. In January 2015, Greece fell 23 percent

below its tax goal of 4.5 billion euros according to the Wall Street Journal. Without the money

from these taxes, Greece cannot adequately provide other important social services.

Additionally the aforementioned lack of credibility would further enhance tax evasion if

taxpayers do not believe that the government will use their money in an efficient manner. Thus,

fixing tax evasion would restore confidence in the government.

Another social problem that requires immediate attention is the inefficiency of the educational

system. An OECD report notes that among Greece’s priorities for 2015 should be improving the

quality and efficiency of the education system. A burdensome secondary education restricts

students in a number of ways. It is a well-established reality in Greece that students in the 11th

and 12th grade rely on tutors to prepare for their college entry examinations. This takes up time,

money, energy. Raising children who are not exposed to opportunities beyond the classroom is

not just a waste of talent; it is dangerous as the system fails to motivate students and spur

creativity. Improving secondary education would foster innovation which is something that

Greece needs urgently.

Furthermore, the Greek government makes the recognition of foreign university degrees a

cumbersome process. There is a number of Greeks studying abroad that have a difficult time

finding a job or furthering their academic interests in Greece. Easing this process would

incentivize these students to return to Greece with the comfort that their degrees will be

recognized, which will allow them to apply their acquired skills to jobs domestically and

contribute to the economy.

So, Tsipras’ “there is no Greece problem” comment is not true in reality. This administration is

young and it needs to learn quickly that Greece has numerous political and social issues that

must be resolved now. The reality is that frustration mounts not only due to financial hardships

but also due to sentiments of suspicion, distrust, and lack of faith. These proposals may seem

simplistic and altogether of smaller importance compared to the financial problems Greece

faces, but at least from a domestic standpoint, these seemingly small steps can work to restore

trust in Greece’s political, economic, and social systems.