Determined to go whatever lengths necessary to discover the truth for my faithful readers, I’ve come to get a first hand look at the Euro Crisis.
Let me tell you, it’s ugly. The beaches are crowded, the harbour’s so full of 100 million dollar boats you can practically walk across it, and the clubs and the bars are so pumping, that last night I had to wait a full 45 minutes for a Mai Tai.
Ok, so perhaps coming to the Greek island of Mykonos – one of the most popular tourist destinations in Europe – wasn’t the best way to get a representative sample.
Because there’s certainly no sign of the Euro Crisis here. The place is pumping. The locals I talk to say it’s the best season they’ve seen in years. They’re even using the word ‘optomistic’!
So what’s the deal? Have our media misled us again?
You’d have to think there’s a fair chance of that. But I think the mayhem in Mykonos hides two separate phenomena.
The first is that Mykonos has always been a favourite cubby house for the rich and famous. Jacqui Onassis Kennedy made put it on the radar back in the 60s, and since then it’s been a favourite summer stop-over for every billionaire with a yacht.
Down in “Little Venice”, where the white-washed houses sit literally on the sea, with nary a care in the world for global warming and rising sea levels, apparently Madonna has a little hide away for when the pressures of being rich and awesome all the time get too much. (Tour guides will take you to the street, but they can’t tell you which house is hers…)
And last month, so my cabbie told me, the Kardashians were here, film crew in tow, just doing what they do…
…which is sod all as far as I can tell.
But this is the first rule of economics. When the crisis hits, it’s the poor who go to the wall first. The rich have their riches to protect them.
And in an economic collapse, when prices and wages are falling like they are in Greece, the wealthy actually find their wealth stretches a lot further than it used to. “Another Mai Tai, James? They’re practically giving them away.”
And if you own assets, especially property, when everything else is going to ruin – when everything is unwinding in a reverse economic miracle – then you’ve got something you can bank on. Something real.
So our small statistical sample of life in Mykonos only tells us that the rot hasn’t reached as far as the top end of Europe-town.
The other story playing out in Mykonos is the pulling power of deflating prices in post (mid?) crisis Greece. A Greek holiday doesn’t cost as many euros as it used to, and savvy Germans and French, and a growing mix of affluent Hungarians and eastern Europeans are turning it to their advantage.
Apparently foreign tourist arrivals were up 24 percent in the year to May, and as the locals keep telling me, it’s looking like one of the best summers on record.
Tourist revenue is already up a massive 38.5 percent over the year. But then you’ve got to remember that a year ago, the streets were filled with protests and Greek society looked like it was on the brink of collapse. Hardly a strong pull for a retired German couple.
“I went to Greece and all I got was this lousy t-shirt and a rubber-bullet wound.”
But with GDP still falling (output has now fallen a devastating 22 percent since 2008) prices are heading south too. In large part this is driven by falling wages. The waitress who brought me my breakfast Mai Tai said that they had taken a 50%+ pay cut at that particular café.
With unemployment up at a staggering 27 percent nationally, with youth unemployment up at an inconceivable 65 percent, a job is a precious thing to have – even on half pay.
And so with falling prices, a Greek holiday is not the extravagant luxury it used to be, and cashed up Europeans are looking to take advantage.
You might hope that this tourism boom might lead Greece out of its crisis. That soaring spending might boost the taxation revenue take, and help bring down Greece’s crippling public debt.
But Greece’s problems run deeper than that.
A recent survey here on Mykonos found that 56 percent of cafes, restaurants and hoteliers were committing some kind of tax fraud.
On some islands it was up as high as 85 percent!
Scandolous! In Australia, that kind of behaviour, in the middle of a debt crisis, would end up on Today Tonight so we could all have an good, entertaining judge. But in Greece, no one thinks much of it. It’s just what you do.
And it highlights just how difficult the Greek problem is. No one feels like they caused the crisis – and in a way that’s true. Greece’s problems emerged from generations of poor public policy and governance. And so no one feels that they should bear the brunt of the burden.
Which, again, you can understand. But everyone with a Greek passport finds themselves in a sinking ship. And so the situation requires a new sense of collective and national identity – a willingness to take the problem on together.
But when you don’t have that kind of national identity and responsibility, it’s not something you can easily engineer.
And so the buck-passing, tax-dodging, and do-what-you-can-to-get-by continues. Of course it does. Can you expect little Maria in her souvenir stall in Mykonos to go out of her way to pay full tax, when there are sports-stars and entertainers who haven’t paid tax in years?
It’s a very curly problem. Almost intractable.
But Greek history is full of challenge and tragedy, and they’re still here. I think they’ve got themselves out of worse jams than this ones.
And so for my part, I’ll be doing what I can, in my own small way, to give the economy a push.
“I think I’ll have another Mai Tai please, Olympia.”