We still lived in Munich at the time and, consequently, I was comparing everything to Munich prices (Munich is one of the more expensive places in Germany). I asked the relatives/friends of my Greek wife: “How in the world can Greeks afford these prices?”
Lehman had gone under a few months ago. Eastern Europe was feared to fall and rescue plans were being talked about. Nobody talked about Greece and the Southern Periphery. Except one person.
Dr. Michael Huether, Head of the respected Institut der deutschen Wirtschaft in Cologne, gave a talk at a private gathering of bankers and businessmen. His focus was on Eastern Europe and how the risks emanating from there could/should be contained. And, sort of in passing, he made the following comment:
“And, make no mistake, once we have a rescue program for Eastern Europe, we will definitely also need a rescue program for the Southern Periphery”.
What? A rescue program for the Southern Periphery? Does this man know how well things are going in, say, Greece? Most banking systems were struggling with the consequenes of bubbles; sub-prime, real estate or otherwise. The Greek banking system did not seem to be involved in any of those bubbles.
And yet – every time we returned to Greece that year, I was simply shocked by the high price level there. When, towards the end of 2009, it became clear that Greece was headed for trouble, too, I kept repeating the same phrase over and over again to everyone who wanted to hear it or not, namely:
“Greece will only have a chance again when she becomes cheap!”
My Greek wife, of course, thought otherwise. She was certain that Greeks had discovered the perfect way of living. Until one day when we were having lunch at a small sea-side taverna in Chalkidiki.
The owner, a Greek born and raised in Germany, had quickly classified us as cheap tourists because my wife studied the prices in the menu. When she saw that a tomato salad went for 8 Euros, she – still politely – criticized the owner for charging such a price. I guess she was expecting him to apologize for that and that he would make a special price for her as a Greek. Instead, he told her – in German and in rather arrogant fashion – that this was the price he charged; period. My wife’s emotions rose but she was still controlled when she said that she would pay half that price in Munich. The owner pointed to the beach and the blue sea and asked arrogantly, again in German, whether she would get that view in Munich. And if she wanted that view, then she would have to pay for it or else go back to Munich.
At that point my wife started shouting at him in Greek…