Thursday, August 12, 2010

Long Live The Greeks ... But Will They Prosper?

Today's guest blogger is Archelle Georgiou, MD.  Her blog, "Archelle on Health" is a fabulous resource for all things health-related.  In this post, she shares with us a recent trip to Greece with her family ... and the lessons she learned there.

Celebrity chef, Andrew Zimmern, said it well in a recent article, "Headlines be damned. Greece is still open for business."

Well, sort of. . .

My family and I recently returned from a month long trip to Greece. Indeed, it was glorious, and it would be fun to write about the exquisite meals, the inspiring history, and the experience of "moving in" to Lahania, the small village (population: 50) where my father was born. But, that's not what I'm writing about because, frankly, I expected that we would have a wonderful vacation. What I wasn't expecting is that I would get an insider's view of the Greek economic crisis.

It started the moment we arrived. The plan for our first full day in Athens was to visit the New Acropolis Museum that opened to rave reviews in 2009. It cost $200 million and sits near the base of the Acropolis with a direct view of the Parthenon. BUT....we were promptly informed that the museum was closed. In fact, all of the historical sites were closed due to a 1-day national strike.

Two and half million public and private sector workers in Greece were on strike in Athens and other major cities protesting the European Union-International Monetary Fund austerity measures. This particular strike was scheduled on the same day that the Parliament was voting on a bill to increase the retirement age to 65 and decrease early pensions for workers. FYI...the Greek government has policies that promise early retirement (age 50 for women and 55 for men) to 700,000 people. Warning: Don't get in between a Greek and their "syntaxi" -- their retirement check.

No problem...we decided to spend the day in Varkiza, one of the lovely beaches just outside of the city.

Interestingly, despite the palpable anger and frustration (with their own government, not the EU or IMF), we didn't see any picket lines or strikers. The beach, however, was packed with locals who were thrilled to have a day off. Little did we know that this was the 5th national strike since February with the sixth strike scheduled for July 25.

Over the course of the next four weeks, we had many conversations about the financial crisis, and there were two consistent themes regarding the root cause: overspending and fraud.


There are many reports that suggest that the 2004 Olympic Games put the country into a downward spiral, and this issue came up frequently in our discussions. Costing $11 billion dollars, in addition to infrastructure costs, this was 50% over budget and clearly more than the country could afford. In our conversations, however, the prevailing perspective was that it was the government's fault.

Maybe so, but there is a long history of overspending, in the form of entitlements, that the country cannot afford to continue but, yet, the people don't want to give up. Did you know:
  • As a way to stimulate population growth, women who have three or more more children are given a lifetime stipend. One family that we were with has four sons. All are adults, and the mother continues to receives 200 euros per month...forever.
  • As a way to stimulate tourism, the government established incentives for entrepreneurs to build hotels and open restaurants. And, what a deal! The government gifted--yes, paid for...60% of the development costs for new projects. This helps explains why the islands are lined with large, luxurious hotels with a 57% average hotel occupancy rate.
  • All employees receive two bonuses a year: a Christmas bonus equal to one month of salary and an Easter bonus equal to two weeks of salary. So, employers are obligated to pay 13.5 months of wages for 12 months of work. Can anyone say pay for performance? Management discretion? Nah.

The common enemy among those we spoke to is the 2004-2009 government led by Kostas Karamanlis. "They stole our money! Why should we suffer as a result of those criminals?"

Agree. Many articles describe Karamanlis' reign as corrupt and scandalous with fraudulent financial practices. But, fraud is not limited to the government. Greece has a well-known, long history of tax evasion that costs the country $20.5 billion per year.

While I was well aware of the tax evasion, I didn't realize how much fraud is woven into the country's culture. Defrauding "the system" is not considered unethical, it's how they win. They don't hide it. Rather they brag about it -- because it's the norm. We heard several examples that simply made us cringe:

  • In casual conversation, one gentleman was telling us about his fifteen day hospital stay; the doctor submitted a bill for thirty. One of long time friends, a US citizen, didn't have insurance in Greece but needed Lovenox, an expensive medication to prevent blood clots. She had a doctor write the prescription for her mother, a Greek citizen, who was insured by the national plan. An economist and health care broker estimated that 10% of health care costs are fraudulent.
  • Business going under? Set it on fire and start over. Arson drives about 20% of fire insurance claims.
  • It was recently discovered that on top of the 2.6 million people getting a retirement check, there are an additional 160,000 people are on the pension rolls. Here's the problem: they are dead and their families are still cashing the checks.
As a Greek, I deeply disappointed. As a US citizen, I am deeply concerned because it seems that the EU-IMF's rescue loan will only have a sustainable impact if the country's values are re-wired to include personal accountability and integrity. However, in my opinion, the prognosis is dim and, according to Alberto Alesina, a professor of political economy at Harvard, "...what matters is (the) family....there is less of a sense of duty towards the state." (WSJ, 2/10/1010). In other words, less money in the government's pocket means more money in the family's pocket. And, that's what matters most.

The Greeks' unflappable commitment to their families is both their greatest strength and their greatest weakness. Extended families frequently live within steps of each other and eat two meals together...every day. Young adults enjoy spending time with their parents and live at home until they are married. The elderly are included as an important member of the family, and placement of seniors in nursing homes is the exception rather than the rule. It is well known that family connectivity, meaningful conversation, and interacting with people who make us feel loved and appreciated is a key component of longevity. The life expectancy in Greece is 79.8 years versus 78.2 years in the US.

So, what's the bottom line? Take a trip to Greece. Eat a Mediterranean diet. Get up and dance on the tables. Drink ouzo. Take a nap. Watch very carefully how families interact.

Then, come home to the good 'ol USA and incorporate the good that you've learned into your life.

Create Health,

For more information, visit Army Well-Being: Health Information.


Army Well-Being said...

Thank you for this glimpse into your trip ... and for sharing the lessons you learned there!

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