Greek Prime Minister George Papandreou seemed to grasp what others in Europe are missing: finances are only a symptom of Greece's broken society
In August 1992, a man named Stefanos Manos landed a job as the finance minister of Greece. He had been in and out of Greek politics since 1977, but Manos finally had the job he wanted and the platform to pursue something he'd evangelized for a decade: privatization. The Greek public sector was enormous and growing ever-larger, beyond what Manos believed was sustainable. But the problem, as the journalist Michael Lewis reported for his new book Boomerang, turned out to be worse than probably even he had imagined. After looking into Greek finances, he announced that he'd discovered, among other things, that the Greek national railway was so poorly run and its public employees so overpaid that it would be cheaper for the state to shut down the railway entirely and give every customer taxi fare to their destination. The situation is not much better today: the Greek railway has 700 million euros in annual expenses, 400 million euro of which go to pay its employees, against 100 million euros in income. Manos warned them, but Greeks didn't want to listen, and 15 months after he took office he was forced to resign.
This weekend, Greek Prime Minister George Papandreou announced that he will resign once he and the Greek Parliament can finalize details on an emergency election and interim government to lead the country through the tumult of severe austerity and an increasingly certain default on the country's massive debts. Papandreou has been pelted by criticism from Greeks for accepting European-imposed austerity measures and from Europeans for scheduling (and then cancelling) a Greek referendum on whether to accept the austerity measures. The Prime Minister has two constituencies right now -- Greek citizens and European Central Bankers -- and he's not pleasing either.