In just the past decade the wage bill of the Greek public sector has doubled, in real termsâand that number doesnât take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year. Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greeceâs rail passengers into taxicabs: itâs still true. âWe have a railroad company which is bankrupt beyond comprehension,â Manos put it to me. âAnd yet there isnât a single private company in Greece with that kind of average pay.â The Greek public-school system is the site of breathtaking inefficiency: one of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest-ranked, Finlandâs. Greeks who send their children to public schools simply assume that they will need to hire private tutors to make sure they actually learn something. There are three government-owned defense companies: together they have billions of euros in debts, and mounting losses. The retirement age for Greek jobs classified as âarduousâ is as early as 55 for men and 50 for women. As this is also the moment when the state begins to shovel out generous pensions, more than 600 Greek professions somehow managed to get themselves classified as arduous: hairdressers, radio announcers, waiters, musicians, and on and on and on. The Greek public health-care system spends far more on supplies than the European averageâand it is not uncommon, several Greeks tell me, to see nurses and doctors leaving the job with their arms filled with paper towels and diapers and whatever else they can plunder from the supply closets.
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A handful of the tax collectors, however, were outraged by the systematic corruption of their business; it further emerged that two of them were willing to meet with me. The problem was that, for reasons neither wished to discuss, they couldnât stand the sight of each other. This, Iâd be told many times by other Greeks, was very Greek.
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Tax Collector No. 1âearly 60s, business suit, tightly wound but not obviously nervousâarrived with a notebook filled with ideas for fixing the Greek tax-collection agency. He just took it for granted that I knew that the only Greeks who paid their taxes were the ones who could not avoid doing soâthe salaried employees of corporations, who had their taxes withheld from their paychecks. The vast economy of self-employed workersâeveryone from doctors to the guys who ran the kiosks that sold the International Herald Tribuneâcheated (one big reason why Greece has the highest percentage of self-employed workers of any European country). âItâs become a cultural trait,â he said. âThe Greek people never learned to pay their taxes. And they never did because no one is punished. No one has ever been punished. Itâs a cavalier offenseâlike a gentleman not opening a door for a lady.â
The scale of Greek tax cheating was at least as incredible as its scope: an estimated two-thirds of Greek doctors reported incomes under 12,000 euros a yearâwhich meant, because incomes below that amount werenât taxable, that even plastic surgeons making millions a year paid no tax at all. The problem wasnât the lawâthere was a law on the books that made it a jailable offense to cheat the government out of more than 150,000 eurosâbut its enforcement. âIf the law was enforced,â the tax collector said, âevery doctor in Greece would be in jail.â I laughed, and he gave me a stare. âI am completely serious.â One reason no one is ever prosecutedâapart from the fact that prosecution would seem arbitrary, as everyone is doing itâis that the Greek courts take up to 15 years to resolve tax cases. âThe one who does not want to pay, and who gets caught, just goes to court,â he says. Somewhere between 30 and 40 percent of the activity in the Greek economy that might be subject to the income tax goes officially unrecorded, he says, compared with an average of about 18 percent in the rest of Europe.
The easiest way to cheat on oneâs taxes was to insist on being paid in cash, and fail to provide a receipt for services. The easiest way to launder cash was to buy real estate. Conveniently for the black marketâand alone among European countriesâGreece has no working national land registry. âYou have to know where the guy bought the landâthe addressâto trace it back to him,â says the collector. âAnd even then itâs all handwritten and hard to decipher.â
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On he went, describing a system that was, in its way, a thing of beauty. It mimicked the tax-collecting systems of an advanced economyâand employed a huge number of tax collectorsâwhile it was in fact rigged to enable an entire society to cheat on their taxes.
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Tax Collector No. 2âcasual in manner and dress, beer-drinking, but terrified that others might discover he had spoken to meâalso arrived with a binder full of papers, only his was stuffed with real-world examples not of Greek people but Greek companies that had cheated on their taxes. He then started to rattle off examples (âonly the ones I personally witnessedâ). The first was an Athenian construction company that had built seven giant apartment buildings and sold off nearly 1,000 condominiums in the heart of the city. Its corporate tax bill honestly computed came to 15 million euros, but the company had paid nothing at all. Zero. To evade taxes it had done several things. First, it never declared itself a corporation; second, it employed one of the dozens of companies that do nothing but create fraudulent receipts for expenses never incurred and then, when the tax collector stumbled upon the situation, offered him a bribe. The tax collector blew the whistle and referred the case to his bossesâwhereupon he found himself being tailed by a private investigator, and his phones tapped. In the end the case was resolved, with the construction company paying 2,000 euros. âAfter that I was taken off all tax investigations,â said the tax collector, âbecause I was good at it.â
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The Greek state was not just corrupt but also corrupting. Once you saw how it worked you could understand a phenomenon which otherwise made no sense at all: the difficulty Greek people have saying a kind word about one another. Individual Greeks are delightful: funny, warm, smart, and good company. I left two dozen interviews saying to myself, âWhat great people!â They do not share the sentiment about one another: the hardest thing to do in Greece is to get one Greek to compliment another behind his back. No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible; the collapse of civic life only encourages more lying, cheating, and stealing. Lacking faith in one another, they fall back on themselves and their families.
The structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective. Its real structure is every man for himself. Into this system investors had poured hundreds of billions of dollars. And the credit boom had pushed the country over the edge, into total moral collapse.
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The Vatopaidi monastery, along with 19 others, was built in the 10th century on a 37-mile-long-by-6-mile-wide peninsula in northeast Greece, called Mount Athos. Mount Athos now is severed from the mainland by a long fence, and so the only way onto it is by boat, which gives the peninsula the flavor of an island. And on this island no women are allowedâno female animals of any kind, in fact, except for cats. The official history ascribes the ban to the desire of the church to honor the Virgin; the unofficial one to the problem of monks hitting on female visitors. The ban has stood for 1,000 years.
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The ferry chugs for three hours along a rocky, wooded, but otherwise barren coastline, stopping along the way to drop monks and pilgrims and guest workers at other monasteries. The sight of the first one just takes my breath away. Itâs not a building but a spectacle: itâs as if someone had taken Assisi or Todi or one of the other old central-Italian hill towns and plopped it down on the beach, in the middle of nowhere. Unless you know what to expect on Mount Athosâit has been regarded by the Eastern Orthodox Church for more than a millennium as the holiest place on earth, and it enjoyed for much of that time a symbiotic relationship with Byzantine emperorsâthese places come as a shock. Thereâs nothing modest about them; they are grand and complicated and ornate and obviously in some sort of competition with one another. In the old days, pirates routinely plundered them, and you can see why: it would be almost shameful not to, for a pirate.
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Otherwise the experience was sensational, to be recommended to anyone looking for a taste of 10th-century life. Beneath titanic polished golden chandeliers, and surrounded by freshly cleaned icons, the monks sang; the monks chanted; the monks vanished behind screens to utter strange incantations; the monks shook what sounded like sleigh bells; the monks floated by waving thuribles, leaving in their wake smoke and the ancient odor of incense. Every word that was said and sung and chanted was Biblical Greek (it seemed to have something to do with Jesus Christ), but I nodded right along anyway. I stood when they stood, and sat when they sat: up and down we went like pogos, for hours. The effect of the whole thing was heightened by the monksâ magnificently wild beards. Even when left to nature, beards do not all grow in the same way. There are types: the hopelessly porous mass of fuzz; the Osama bin Laden/Assyrian-king trowel; the Karl Marx birdâs nest. A surprising number of the monks resembled the Most Interesting Man in the World from the Dos Equis commercial. (âHis beard alone has experienced more than a lesser manâs entire body.â)
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For most of the 1980s and 1990s, Greek interest rates had run a full 10 percent higher than German ones, as Greeks were regarded as far less likely to repay a loan. There was no consumer credit in Greece: Greeks didnât have credit cards. Greeks didnât usually have mortgage loans either.
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But this question of whether Greece will repay its debts is really a question of whether Greece will change its culture, and that will happen only if Greeks want to change. I am told 50 times if I am told once that what Greeks care about is âjusticeâ and what really boils the Greek blood is the feeling of unfairness. Obviously this distinguishes them from no human being on the planet, and ignores whatâs interesting: exactly what a Greek finds unfair. Itâs clearly not the corruption of their political system. Itâs not cheating on their taxes, or taking small bribes in their service to the state. No: what bothers them is when some outside partyâsomeone clearly different from themselves, with motives apart from narrow and easily understood self-interestâcomes in and exploits the corruption of their system.
