Athens Goes Detroit’s Way

Greece’s Government Announces It Is (Very) Short of Cash

Having gone to college near Detroit, Greece and Detroit have been in linked in my mind for two reasons.  One is that I was introduced to calamari in the district now known officially as Greek town Historic District in downtown Detroit.  The other comes from a tale that a college friend, who grew up in a commuting suburb of Detroit, told me.

He and his best friend were backpacking one summer through Greece.  They ended up stranded in the remote mountains one evening.  Somehow they found their way to a village.  The leader of the village happened to speak English.  After offering lodging, he asked them where they were from.  Now, these adventurous young men were in an isolated village, and this was decades ago.  Remote then was more remote than it is now.  They had no idea what this man knew of the outside world.  So they answered:  America.  Where in America, the elder wanted to know?  They figured most people had heard of NYC and L.A.  So they answered, a city between New York and Los Angeles.  The man wanted more information.  What city, he wanted to know.  A city called Detroit, they answered.  The man lit up:

-Detroit?  Do you know the Star deli?

It turned “everyone” knew the Star deli in downtown Detroit.  It was an unofficial landmark.

-My brother, he owns the Star deli.

That was then.  Movin’ on up, or so it appeared when, years later, Greece “qualified” to join the euro-zone.  They have this situation now, as reported by Ekathemerini:

A combination of a drop in bookings, increased expenses due to taxation and the ongoing decline of the quality of life in downtown Athens has led to the closure of 18 hotels in the area in 2011, according to data revealed by the Hellenic Chamber of Hotels (HCH) on Monday.

Meanwhile, at a joint press conference with Athens Mayor Giorgos Kaminis, HCH president Giorgos Tsakiris warned that unless the rising crime rate in central Athens is brought under control, more hotels will be forced to close down in 2012 as well.

Tsakiris attributed the decline in activity from domestic and foreign tourists to the «oversight and indifference» of the Citizens’ Protection Ministry in regards to burgeoning crime such as robberies, prostitution and drug dealing, saying that the authorities have allowed Athens to «fall prey to crime and transgressions of the law.”

Responding to concerns about the decline of the city center, Kaminis said that following his meeting with Prime Minister Lucas Papademos last Friday, the municipality is drafting a law «for the salvation of Athens,» stressing the need for better coordination between central government, and regional and local authorities, as «the municipality has the structures and the others have the funds» to rein in crime and improve conditions.

 Nothing to add except this if you think Greeks like to play by their own rules, from the same e-newpaper:

No Greek parliamentarian has assets in Swiss banks, according to a preliminary probe into the origin of wealth declarations submitted by 572 politicians for 2009 and posted online on Tuesday.

The so-called «pothen esches» forms — in which specific professional sectors are required to list the provenance of all of their assets so that the Finance Ministry can crosscheck depositors’ details with their earnings — were submitted by 300 active members of Parliament, 22 Euro MPs, 189 former MPs, eight extra-parliamentary ministers, 13 former Euro MPs, 27 finance managers for political parties and 13 former party economists. The details of the forms were also posted on the Greek Parliament’s website in a drive to bring more transparency to state finances.

The head of committee overseeing the inspection process, Vangelis Argyris said that none of the MPs declared assets in Swiss or any other foreign-based banks, adding that their declarations will be looked into in more detail and that «if anyone is found to have even 100 euros in a Swiss bank that is undeclared, they will be in breach of the law.”

“There is a process being carried out and we are expecting information from the Finance Ministry on whether there are MPs that have deposits in Swiss banks. Every ‘pothen esches’ remains open for the inspection committee and none will be closed until all the information has been crosschecked,» Argyris added. He also said that he has sent a letter to Finance Minister Evangelos Venizelos requesting information on any cash transfers that may have been made to Swiss banks by Greek politicians since 2009.

The preliminary investigation also found that 15 MPs declared a reduction in assets of 100,000 euros and above on average. Four of these justified the reduction by declaring real estate purchases, while the other 11 will be required to explain where the money went so that the committee can ascertain whether they have made cash transfers abroad.

As Greece continues to fail to meet expectations regarding its finances, this scenario is reminiscent of Lehman’s agonizing last days.  Its real estate assets were clearly overvalued on its books, and the company went from pillar to post trying to sell off assets or get more financial support from far-flung places. 

Not all is tragedy.  There is low comedy.  Here is a headline from the same day’s newspaper:  SDOE (Financial Crimes Squad) finds 100 mln euros of evasion; arrests same man twice.

But it gets better.  Here is the “best” headline “ever”, also from kathimerini:  Gov’t stops tax returns to everyone.

Let’s see The Onion top that one.

Currency devaluations must always be sprung as a surprise.