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Type ‘is the next Greece…’ into Google and a plethora of suggested autocomplete options appears. There is, however, a common theme: ‘is France the next Greece, is America the next Greece, is Spain the next Greece, is Ontario the next Greece’, and so on.
Pressing the return key throws up an even more diverse choice of candidates for the title of the next Greece. From Portugal to India, Malaysia to Ecuador, it seems there is no country too unlikely to be to be tarred with the Greek brush.
One UK newspaper even asked: ‘Is Australia the next Greece?’ – a reminder of the old adage that the answer to any question posed in a headline is invariably ‘No’.
Croatia is one of the latest countries to be admitted to the ever-growing ‘next Greece’ club. Superficially, this is less absurd than for some of its fellow members – as, for example, the country that prints the world’s reserve currency. Croatia has a bloated public sector, little industry beyond tourism, and a high and rising debt-to-GDP ratio, although at around 80%, it is barely half of what Greece’s was in 2010. If reforms are not pushed through, it is conceivable that it could suffer a funding crisis in the next few years.
Futile exercise
Yet, even if investors were to suffer a change of heart, Croatia would still not be the next Greece. The Greek crisis, like most crises, was born out of a unique concatenation of circumstances, of which a high debt burden was only one. Political dysfunction, membership of a single currency area and a misguided response by European authorities all played a part in creating the disaster that was Greece.
The hunt for a second one is therefore a futile exercise. Of course, in most cases it hardly matters if commentators choose to use the ‘next Greece’ tag as lazy shorthand for ‘high public spending’. Of all the challenges facing India, being likened to Greece by sensationalist commentators comes fairly low down the list. For smaller economies such as Croatia that are dependent on foreign funding, however, it is alarmist and potentially damaging.
In short, it is time to end this tired trope. Perhaps this could be achieved, appropriately, by taking a note out of Greece’s own book.
In the aftermath of the break-up of Yugoslavia, phone cards in Athens used to come emblazoned with the slogan: ‘There is only one Macedonia and it is Greek.’
Phone cards have largely passed into history – but at the next international jamboree (the IMF Annual Meeting would do nicely), perhaps some public-spirited organization could take it upon themselves to supply delegates with a pen or other useful freebie with the slogan: ‘There is only one Greece and it is Greek.’