Greece

A Nobel Economist Fears for the Poorest Greeks


A Nobel Economist Fears for the Poorest Greeks

Photograph by SeongJoon Cho/Bloomberg

Christopher Pissarides won a Nobel Prize in economics in 2010, but he hasn’t forgotten his roots in a modest, Greek-speaking village on the island nation of Cyprus. He was born in 1948. Although his father had a successful business selling materials for making clothes and other items for the home, Pissarides lived among people who scratched out a meager living as farmers. “Work on the fields would begin at dawn with mules and donkeys and end at sunset,” he recalled in his Nobel autobiography.

That sensitivity to the lives of the poor shines through in an interview that Pissarides gave today to Jennifer Ryan of Bloomberg News. He is talking about capital flight—the movement of euros out of Greece into bank accounts abroad. Capital flight increases the chance that Greece will be forced to abandon the euro. People who move their euros abroad are betting that if Greece does return to the drachma, they will be able to buy big piles of them with their euro stash.

“It’s the wealthy who will benefit because that’s who’s able to move their money abroad,” Pissarides tells Ryan. “Wealthy Greeks have already done it, whereas the small saver is not going to do it.”

Even the middle class is at a disadvantage to the rich, says Pissarides, who is a professor at the London School of Economics.

“Foreign banks do not always accept small deposits from non-residents even though they’re part of the euro system,” he says. “If you’re a small shop owner in Athens or one of the smaller towns, how do you find a foreign bank to open a foreign account, do you take your cash in hand and fly off to Italy or Switzerland or wherever? It’s not that easy.”

Read Pissarides’s Nobel autobiography and you sense where his concern for the poor comes from. Here’s an excerpt:

We were a happy family and I had a good upbringing. I have particularly fond memories of our family evenings at home before television, and our summers on the coast of Kyrenia and the mountains and valleys of Agros. I used to spend the time with my cousins, fishing in Kyrenia (mostly unsuccessfully) or playing in the riverbeds and springs of Agros. Cultivation in the village was still at subsistence level, in small plots, and occasionally we would stray into some vegetable patch or tomato bed, to be chased away by hard-working men and women in their traditional village clothes. Work on the fields would begin at dawn with mules and donkeys and end at sunset. On Sunday everything changed, as the whole village gathered at the church to pray, gossip and hold memorial services for their dead, distributing to everyone the traditional home made “kolliva” (boiled wheat with dried fruit, almonds and pomegranate seeds). Service in the Greek Orthodox Church was in the original Byzantine Greek of the bible, so I doubt whether anyone in the village, except perhaps the priest and the teacher, understood much. But it was certainly a great social occasion that I enjoyed very much. Watching how my relations who stayed behind in the village worked and how generous they were with their crops when we visited taught me a lot about family and inner well-being.

Coy_190
Coy is Bloomberg Businessweek's economics editor. His Twitter handle is @petercoy.

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