"But this question of whether Greece will repay its debts is really a question of whether Greece will change its culture, and that will happen only if Greeks want to change. I am told 50 times if I am told once that what Greeks care about is “justice” and what really boils the Greek blood is the feeling of unfairness. Obviously this distinguishes them from no human being on the planet, and ignores what’s interesting: exactly what a Greek finds unfair. It’s clearly not the corruption of their political system. It’s not cheating on their taxes, or taking small bribes in their service to the state. No: what bothers them is when some outside party—someone clearly different from themselves, with motives apart from narrow and easily understood self-interest—comes in and exploits the corruption of their system. Enter the monks."
According to Lewis, the Greeks are people who act on self interest and blame the Monks for their problems. From this article it was apparent to me that the Greek citizens including the monks all have a drive for self interest seen from tax evasion from nearly everyone to the monk property tycoons. From the reading I am a little unclear on the morality or legality of the monk's actions. I gathered feeling that the people of Greece may simply blame the monks because they despise their success. I also found the last paragraph to be interesting when Lewis hit on the possibility of Greece being doomed because they do not have a desire to govern themselves and lack the "monk's instints". This situation reminds me of the comparison of cotton industries where the US industry has been so successful due to a innovation driven culture. It seems that regardless of lack of law and enforcement in Greece's finances, what may have actually been worse is the countries lack of ambition to work as a unit.
b. Although the Greek economy is very small, it has ties to the success of the rest of Europe. Lewis writes, "if Greece walks away from $400 billion in debt, then the European banks that lent the money will go down, and other countries now flirting with bankruptcy (Spain, Portugal) might easily follow." Although the Greek economy has remained relatively isolated as one of its downfalls, it is still part of a larger European economy and a world economy. Other countries have invested money to help Greece when they believed that Greece's situation was not nearly as bad as it was. So if Greece fails, there is no prospect of repayment and the banks will lose credibility.
c. GDP = C + I + G + NX
If taxes are increased, the public has less money to spend and consumption goes down. Cuts in government spending as well as a decrease in consumption spending will act to decrease the Greek GDP in the short run.
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