The Guest Blog

Michael: Did Religion Contribute to Greece's Economic Decline?

Michalis A. Michael|CEO Digital MR and CNBC-YPO Chief Executive Network Member

Are today’s Greeks made of the same fiber as the people who invented democracy, philosophy, the Olympic Games, Tragedy, coins in ancient Ionia and, yes, banking?

It would be unfair to claim that it was a continuous decline from 2,500 years ago to date.

A European Union flag, left, hangs beside a Greek national flag beneath the Parthenon temple on Acropolis hill in Athens, Greece.
Simon Dawson | Bloomberg | Getty Images

What happened to the ancient Greeks has been a question that I have asked myself from a very young age growing up in Cyprus and reading about how great our ancestors were. The more I read about the ancient Greeks, the more I became determined to find out if today’s Greeks have any resemblance to Socrates, Plato, Leonidas and his 300 Spartans, Pericles, Pythagoras and others.

I tried to find the reasons for the decline of Greece as a country and as an economy. I started my search with:

  • 400 years under Turkish occupation after the fall of Byzantium 1453 until 1821 when the Greeks revolted. There were some periods before the occupation — like the Roman and Byzantine — whereby the Greek spirit continued to flourish.
  • No raw materials in Greece when the industrial revolution happened in the 19th century
  • Small country compared to giants in commerce such as U.S., U.K., and Germany

Even though these reasons sound plausible, they don’t explain why the Greeks stopped philosophizing and inventing. They do not explain why Greece could not develop, explore the seas and conduct commerce, like the Dutch, the Portuguese and the Spaniards. There has to be something else.

I think I discovered what really happened to the Greeks at an executive seminar organized by the Young Presidents’ Organization in the Czech Republic about "Values Based Leadership." The seminar was based on philosophical writings of Greeks and others.

Two Pakistani fellow YPOers and an Indonesian had more hours of Greek philosophy at school than the two Greeks in the room, which has led me to this conclusion: there appears to be a serious deficiency in the curriculum of Greek schools. The Greek Church, afraid of how the “morals” of the ancient Greeks would influence the youth, reduced the reading of philosophers in schools. Instead of being proud of the philosophers, we behave as if we are ashamed. On top of this, if you compare the Greek schools with those of other developed countries, another important difference may appear. Instead of being taught judgment, how to think, how to ask questions and how to find knowledge, Greeks have been learning dry information/facts. Our scores awarded in Greek schools reflect our ability to learn by rote.

The bottom line is religion has no place interfering with political systems. This non-separation of church and state may be one of the fundamental issues that has been holding Greece back.

Today many Greeks are confused. While the pro-bailout, pro-euro zone New Democracy party has won the Greek election, there is still talk that the country could exit the euro. According to a May 2012 report from the Bank of Greece and prominent Greek economist Pavlos Mylonas, if Greece exits the euro here’s what could happen:

  • A reduction of the per capita income by 55 percent
  • Inflation will spike above 30 percent
  • The new Greek currency (Drachma) will devalue by 40 percent to 65 percent
  • GDP will drop by 15percent to 22 percent 
  • Unemployment will soar to 30 percent to34 percent

Saxo Bank’s Chief Economist Steen Jakobsen is talking about these possible scenarios when it comes to a Greece exit (“Grexit”):

  • Extend and Pretend Light (extend the issue and do as if we are heading towards an improvement – in this scenario cash is king, in addition to CFDs on Indices and corporate bonds)
  • Extend and Pretend to Japanization (inflation-deflation, real assets fall in price – invest in Gold and tangible assets, commodity ETFs and cash, high yielding global stocks)
  • Germany to the Rescue (no need to explain this one - invest in stocks in peripheral countries, corporate credit and Spanish and Italian Bonds)
  • Revolution and War (also self-explanatory - buy physical gold, silver and other tangible assets, possibility to descend to a barter economy)

It would be the ultimate Greek tragedy if the country that introduced currency 25 centuries ago was to lead civilization back into a barter economy again.


Michalis A. Michael is the Founder and CEO of DigitalMR, a holistic digital market research company. Michael has lived and worked in Cyprus, Saudi Arabia, Germany, Hungary, Poland, the U.S and the U.K.. He is an aerospace engineer by academic background.

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