Wednesday, 12 September 2012

Too much Money (Πάρα πολύ Χρήμα)

Here's a brief explanation of how Money departed from Greece:

"In the not too distant past, Money came to Greece. And that was a good idea over there because Money was safe and the profits were high. The idea caught on, and so more and more extra Money started coming to Greece. The people there began buying many things which were all very beautiful but useless. Fat cars for example and modern kitchens. Then Money thought: 'Hang on a minute: if people here are buying a load of rubbish, and nothing that they actually need, how will the fat profits come about?' So Money stopped coming to Greece with pleasure, choosing to go elsewhere instead. And because Money follows Money wherever it goes, suddenly all the Money in Greece had gone. Thus very many people in Greece stopped having money. They had beautiful cars but no money for petrol. And they stood in their modern kitchens, but their fridges were empty. Money had already found another place to go."

Of course, this is a simplistic view of the Greek economic crisis. I wouldn't class myself as an owner of a fat car or a modern kitchen. We certainly don't buy useless things all the time, but I believe that since I have been writing this blog, I've tracked plenty of consumer futility around me. There were times in this country when there was too much money, so much that people were using it as toilet paper (What do you do with toilet paper? You throw it away, of course). And it happened in all sectors by all age groups and all income groups, even the poor. For most people, money was disposable because there was so much of it, even for the pockets of the poor, like my relatives, one of whom lives in the most undeveloped suburb of Athens in an industrial zone.

halips paralia aspropirgou athens
A whole suburb sprung up out of this factory and the neighbouring ones.

My aunt recently came to Crete on her annual trip to visit family here. She loves me very much, often speaking to me like a sister rather than an niece. Despite her 75 years, she still has a lot of strength, reminding me of all my aunts and uncles from that side of the family. Being a private employee, she had no choice to retire until she was 60. She began picking up her IKA pension after working as a cleaner for more than 30 years in a factory that produces concrete. It seemed a handsome amount, coupled with a supplementary widow's pension that she receives as the wife of a former public servant. Although it has been slightly reduced now since the cuts were introduced, it is still a decent amount of money to survive on since she's on her own and she owns her own home.

What people do with their money is their own business, but it is helpful when people don't spend their money wastefully, becaus it means that they will continue to have money and they won't get into debt. But when there is too much money, even poor people will spend wastefully. It sounds like a paradox, but in the case of some poor people, there can in fact be too much money. The welfare system sometimes makes people with limited means feel that the money they receive comes from a bottomless pit.

Every year, with her frugal economising of her modest pension, my aunt would bring me a present of a luridly coloured blouse from the λαϊκή. I'd thank her and I'd wear it once or twice while she was here, and then I'd put it in a charity bag; the blouses were badly made from material that stank even after being washed - they all had "Made in Italy" labels, while they were clearly all κινέζικα. This year, she didn't bring me one. Nor did she ask me to help her choose some presents to take back to her grandchildren. Not that they really needed what she bought them (they were quite lurid items too), but she just wanted to do what she felt was the done thing as a grandmother.

Greek grandparents are probably the same kind of grandparents as other grandparents all over the world. But they also exhibit some significant differences. For instance, it is rarely the case that the average Greek will look into taking a once-in-a-lifetime holiday around the world once they retire. Their travels will be based on looal church groups that offer cheap coach day-trips or mini-breaks over 2-3 days visiting sacred sites and attending divine liturgies. Nor will Greek grandparents think about changing the course of their life, eg selling up their home and buying a yacht, or changing countries, or moving into a smaller home, or moving far away from their family. Their family will form the basis of their life from now on. If their children are working, they will be the ones that drop off and pick up the grandchildren to/from school. They may also provide a communal meal for various family members. At feast periods, they are the ones that buy their grandchildren new clothes. This is where Greek pensioners' income often goes - apart form paying their bills, they also invest it in their children's children. The only problem is that this kind of investment doesn't bring in any profits. It doesn't make money. It just makes people more comfortable.

My aunt has always been very frugal and I know how hard it was for her to get through life money-wise because her husband was an alcoholic. If she didn't work, there would have been very little money in the house for basics. She had a hard time raising her children. Sometimes, when things were really really bad, she'd seek refuge in Crete, where she was always made to feel very welcome by her family. No one gave her money - there was none down there where she visited - but they kept her and her children safe and fed. Eventually her husband was laid off from his work (because he was a drunk) - but as he was a public servant, he was entitled to a pension, and since he was a drunkard and was not always in a position to stand on his own two feet to go to the καφενείο to pick up his pay (as was done in the not-so-recent past in Greece - so someone else would pick it up for him and of course the family never saw it themselves), his wife was eventually made recipient of his pension payments by power of attorney.
My aunt used to sleep in this room before her children left the family home - they used to sleep in another room, while her husband slept in a smaller room. There were no other rooms in the house (eg living room, etc), just a storage shed on the property and an outhouse, bordered by a small patch of earth where she grows onions, garlic and herbs.
With her combined income from her job and her husband's pension, she managed to buy the house she now lives in. It's actually more of a hovel, but a very clean and tidy one. It must have started its life off as a shack or some kind of shed, built without a permit, for the workers of the growing industrial zone where she also worked. She rented out similar properties to house her family until she landed this house. The bathroom is the one room she never bothered to fix up - for many years, it has had just a shower fixture and a toilet whose flushing system never flushed. (I think it still doesn't.) Once she began picking up her husband's pension, she told me her troubles were over. She was now in control of all the income in the house. She'd mete out 300 drachmas every morning to her husband and another 300 in the afternoon, so that he could go to the καφενείο to have his daily tipple, without her fear of losing all his money on booze. He never put up a fight about it, one thing she was very thankful for, as she never felt in any danger around him. He was just a drunkard, and not a wife abuser.

After all the bills had been paid, she would save the rest of their combined income, eventually helping her children to build a small but cosy house (one box on top of the other, as is common in Greece) on a tiny plot of land that she had bought when she sold her olive grove in Crete, which was given to her as a dowry payment (the dowry law was abolished in 1983). Her children did not get past high school, nor did they leave the area where they grew up. They had reached a plateau in their learning, a situation which was encouraged by their parents' stagnant outlook on life: it could be said that in their situation, it was a case of poverty breeding poverty.

Of course, her little present to me was her way of showing that she's thinking about me. I was always upset that she did this, because I knew it was a complete waste of money, no matter how cheap these things were ("it only cost €5 Maria, I should have bought you two!"). She bought similar things for her own children and their children. She never spent in this way until only relatively recently, perhaps in the last decade, when she thought she had fulfilled her responsibilities, ie to raise her children, help them to build a home for themselves, see them through to marriage, and finally renovate her hole of a house (all in that order). I think she enjoyed believing that she had won that freedom we all want, after years of scrimping and saving to get by - the right to an easier and more comfortable life.

Even for the very poor and frugal, in Greece, there was a time when there was too much money. If you're lucky to have extra money, you usually try to keep it in a safe place. Your purse is not safe enough; you need to put it in some place where it won't get lost or spent too quickly. If you know how to invest it, you can make money from your extra money. But if you don't know how the financial world works, you choose other simpler solutions, like property. Greeks in my aunt's predicament often invest in property - but they rarely invest in property that will make money for them: they usually invest in roofs over everyone's heads, and property that can be passed on to the next generation, not property that can be resold for a profit. Now, all her family has a house to live in. But houses need maintenance: fuel for heating, electricity for switching on a light, food to fill up the fridge, money for municipal services like water and sewerage bills.
cretan breakfast in athens
I haven't visited my aunt in a while because I don't go to Athens often these days; this is the kind of breakfast she prepared for me when I stayed overnight at her place a few years ago.

When you have been brought up poor and frugal, that is how you will remain throughout your life, even when you catch a windfall. So in my aunt's case, there was always more than enough, because she was very frugal. When the crisis broke out, she saw unemployment take a firm grip of all her offspring and their spouses. It was devastating for her to watch this scene playing out, having always been very hard-working herself. Now, everyone in her family is unemployed or working part-time. My cousins' fancy kitchens are more modern than mine, but filling them with food is getting increasingly difficult, as is the fuel tank for their heating. My aunt told me that last year, she bought everyone's olive oil needs and paid everyone's heating bills because she could see that they weren't going to make ends meet if she didn't: she spent more than €3,000 on heating fuel, which of course meant that she was using her own savings to do this. But savings don't last forever - eventually they run out.  

Education might have saved my cousins from the doom of poverty, in the sense that they would be able to put their minds to work by thinking of alternative solutions to their plight. But they had reached a plateau in their learning and had no interest in continuing their education or experiencing anything beyond what they had already experienced. They had always been constrained by place - they have not been much further afield than the area where they were born, and perhaps a few visits to Crete, but that was pretty much it. I believe they also went to the island of Tinos where they held their children's christenings; that involved a quick day-trip and not much else. Their present constraint is ownership of a home which they can't afford to maintain. They have no garden space, as every bit of land was covered when they built their homes. They have no alternative fuel solution, except to curl up in a blanket and go to bed early. They have very little money to pay their bills; eventually, they will be sitting in a house without electricity or heating. Apart form a lemon tree that remained on the property after the houses were built, they have nothing else to fall back on. They may have a secure roof over their head, but they are unable to survive in a world where the only survival method is to have money to pay for everything, especially now that Money has gone elsewhere. Urban dwellers are in a very bad way, as their whole world revolves around having money. If Money has gone elsewhere, then there is no way to replenish the coffers.

My aunt (and a few other urban relatives - she is not an isolated case) could be regarded as a very noble person to have remained so frugal all her life, putting her family first, looking after her needs without borrowing, never spending more than she earned, never 'throwing away' her money on consumable luxuries but always investing it into her family. In Western countries, we are all allowed to choose where to spend our money. But most people in the Western world also be wondering how on earth a woman on a single income married to a drunk could manage to purchase/construct three homes, by keeping on the straight and narrow, without ever taking out loans. Bizarrely, she managed to achieve what my parents achieved as uneducated immigrants in a Western country by running their own business and working 12-hour days! It will also sound strange to the average Westerner that the state will continue to keep a drunkard in government employment (and how on earth a drunk even managed to secure a position of authority in the first place) without considering firing him for inability to perform his duties; when he was eventually discharged due to incompetence, the state continued to support him (and his family) for life. This kind of privileged lifestyle was clearly provided at the expense of the general population; such inconsistencies form just a small part of how the state led the country into a debilitating economic crisis. At one point, the state had too much money, but instead of investing it to make more money, it gave it away.

The fact that my aunt didn't buy any of the throwaways of the type she used to buy up until last year tells us a lot about how money has now been revalued in Greek society. There is now just enough money rather than too much money. Poor people are the first strata of society to suffer the fate of there being just enough money; the rest will follow, sooner or later, eventually reaching the point where there will be not enough money.

The Greek state (not the IMF/ECB/EU troika) really knows how to hit Greeks where it hurts - they tax their properties, knowing that this is what most Greeks invest in, a roof over their (and their children's) head. Greeks supposedly have one of the highest home ownership rates in the EU, without the accompanying high standard of living. Property taxes are being levied on all property owners in Greece, not just those with a second home; this sounds unfair, but I have a feeling that it is actually fairer than what would have happened if it were levied only on a second property: most Greeks would simply find a way to change the ownership documents - and then no one would be paying any tax.   

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