Earlier this week Henry Farrell posted a link to Charlemagne’s discussion of Greek social spending commitments. Long story short, it’s not simply a question of the Greek people being lazy or the Greek state being profligate; the high degree of public sector spending was designed to paper over serious rifts in the Greek political community:
Real, live Germans are not heartless ants, and the Greeks are not broke because they are giddy crickets who sing their summers away. Greece is a grown-up country with grown-up problems: rough, tough politics, and a lot of recent history, not all of it very nice. And it is precisely that recent history, and rough politics, that are at the core of Greece’s fiscal woes today. Take the painful question of the huge public sector, and all those civil servants with jobs for life, and unusually generous retirement packages. The existence of those jobs for life is not a cultural quirk, in which Greek officials simply like coffee and backgammon too much to do any work. It is the end result of a brutal, multi-decade power struggle between the left and the right: a struggle that got people killed within living memory.
Read the whole thing, etc. Another cause with Greek deficits, however, appears to be Greece’s high level of defense spending:
Greece’s serious financial troubles are going to affect their military spending. Yhe highest in the European Union and second in NATO only to the United States, the Greeks spend 2.8% of their GDP on defense, compared to an average 1.7% in the other European NATO countries. Defense personnel account for 2.9% of the active population against an average 1.1% in other NATO member states.
Deputy defense minister Panos Beglitis was asked earlier this week by my colleagues at Le Monde about the defense budget. “We have lived totally surealistically,” he conceded, adding that the 2010 defense budget would amount to €6 billion, a 6.6% cut on the 2009 one. “We are the ministry which is the most engaged in the joint effort to reduce our deficit,” he said. But he was careful to add that “we are rationalizing our spending but not at the expense of our military capacity.”
The historic reason behind Greece’s massive arms spending lies with neighbor Turkey with whom it entertains, shall we say, difficult relations. Beglitis noted “Turkish provocations” from the Turkish army’s occupation of the northern part of the island of Cyprus in 1974 to the “continued violations of Greek air space”.
Jean-Paul Hébert, a defense analyst, notes that “when one of the two countries buys 50 tanks the other orders 60.” The two nations ranked amongst the world’s top arms importers in 2008 with Saudi Arabia, the United Arab Emirates and India.
The defense commitments will be easier to shed in the short term than the social commitments, as I’m guessing that competition with Turkey is all fine and well until it’s contrasted with jobs, benefits, etc. Nevertheless, it’s worth remembering that it’s extremely important to investigate the internal logic of apparently irrational behavior; both the defense and the social spending mean something different to Greeks than they do to outside observers.