The Full Catastrophe Book Summary - The Full Catastrophe Book explained in key points

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The Full Catastrophe summary

Name: The Full Catastrophe
Author: James Angelos

James Angelos

Travels Among the New Greek Ruins

(9 ratings)

21 mins

Table of Contents

The Full Catastrophe
summarized in 12 key ideas

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What’s in it for me? Learn how Greece’s debt burden nearly tore the eurozone apart.

The birthplace of democracy, the host of the ancient Olympic Games, the cradle of civilization: Greece both as a country and as a symbol has for generations inspired world culture.

Yet today the images we see from the streets in Athens are anything but inspiring. Rioters burning cars amid chaotic protests; queues of despondent pensioners outside banks closed for weeks; neo-Nazi groups boldly marching to preserve the “purity” of Hellenistic society.

How did it come to this? In 2009, the Greek government came clean and admitted that its economy was in shambles and that it was in far more debt than it could ever repay. This shock rocked not just Greek society but exposed cracks in the very foundation of the European Union.

These blinks tell the tragic story of corrupt government, cruel austerity policies and a suffering population just trying to get by – often through fraud and graft. Importantly, you’ll learn how Greece’s terrible past of foreign occupation and passion for nationalism still haunts its actions today, and potentially will continue to do so in the future.

In these blinks, you’ll also discover

why so many investors were convinced Greece was stable before 2009;
why thousands of island residents told the government they were blind; and
how far-right parties and the church are connected through Greek nationalism.

When Greece entered the eurozone, its economy was booming; but the boom was a bubble.

To understand the current Greek crisis and Greece’s fraught relationship with the euro, let’s first take a look at the country’s economic situation when it first entered the eurozone in 2001.

When Greece joined the eurozone, its economy was booming. Foreign investment flowed into the country; cheap credit was available and easy to obtain.

As a result, Greek citizens began consuming more, with fancy cars on the road and busy retail shops a common sight in even the smallest of Greek towns. In fact, Greece’s gross domestic product (GDP) grew by an impressive 4 percent each year.

Yet this boom was based on a credit bubble, meaning Greece’s strong growth wasn’t sustainable.

At the time, the Greek industrial sector was less developed than in other European countries. Instead of investing borrowed money to improve industry, train workers and develop new technologies, Greece’s government used it mostly to increase wages, pensions and benefits.

As a result, the economy failed to produce or export enough goods to cover its growing debts.

Yet crucially, the trust creditors had in Greece’s economic health was based on a lie.

As a member of the eurozone, Greece was by default considered creditworthy. Membership signalled financial stability, as countries were required to meet certain criteria before joining. A country’s annual deficit, for example, had to be less than 3 percent of GDP.

Yet it was realized too late that Greece from the very beginning didn’t meet the criteria, and had actually faked its numbers to join the eurozone.

In 2009, the government through a large accounting revision revealed that Greece had a projected budget deficit of 12.5 percent of GDP, instead of a previous estimate of 3.7 percent – a discrepancy so large that it couldn’t just be blamed on the global economic crisis alone.

What’s more, the EU statistical office also found evidence of previous “widespread misreporting” on behalf of the government.

When the Greek credit bubble finally burst, the entire eurozone went into a tailspin.

The headlines screamed: Greece has deceived the European Union! The scandal shocked not just the eurozone but all of Europe; yet it was only the beginning.

As soon as Greece’s fraud was discovered, its credit bubble burst. With its newly revised budget deficit, the country faced a series of downgrades from credit rating agencies. As the situation worsened, more downgrades were to follow.

Creditors wanted tough reforms in exchange for debt relief, but Greeks fought against austerity.

As events in the eurozone came to a head in 2009, international groups realized that Greece wasn’t going to fix its problems on its own, and decided to step in.

The so-called troika of the European Central Bank, the International Monetary Fund (IMF) and the European Commission came together to assemble a package of debt relief and loans in exchange for political and social reforms.

The debt crisis altered Greece’s political landscape, bringing the far left to power.

The debt crisis didn’t just create problems between the international troika and the Greek government, it also sparked power struggles among Greece’s political parties.

Greece’s social democratic party, PASOK, held power when the crisis began.

Bribing officials to make fraudulent disability claims was one way Greeks topped up thin incomes.

The island of Zakynthos is the site of one of the most audacious health scams in Greek history. Hundreds of people there claimed, in cahoots with local doctors, that they were blind in order to receive monthly disability checks from the government.

According to official records, some 1.8 percent of people on the island were reported to be blind – a rate of “blindness” some nine times higher than in other European countries – and these people collected over €9 million in state benefits.

Despite pressure, the Greek government still fails to make its rich citizens pay taxes.

As Greece’s economy continued to crumble, it was ordinary people who were bearing the burden. Part of the problem had to do with tax evasion, in particular by Greece’s wealthiest citizens.

Greeks across the country have historically and systematically avoided paying taxes. Even before the crisis, it was clear that wealthy Greeks in particular should carry a larger tax burden, but many didn’t even declare their income to the government – and they also didn’t face any consequences for doing so.

Greece’s public sector is bloated, and the government has a mixed record of setting it to rights.

Public sector jobs can be appealing, as they’re often well-respected, stable positions and come with a secure pension plan. Many people seek such jobs, but there aren’t enough to go around.

That is, unless you live in Greece. As of 2009, one in five Greek citizens worked in the public sector.

Greece’s weakest rungs of society have borne the brunt of austerity and the debt crisis.

News on the Greek crisis is full of tales of misery and desperation. Greek children are reported to be fainting from hunger during lessons; elderly pensioners line up for days at banks trying to collect their pittance of a pension.

While politicians argue, daily life for the average Greek citizen has become a struggle.

Today Greece is overwhelmed by immigrants and often treats refugees poorly.

Imagine that you have to flee your war-torn country. You walk for weeks; food is scarce; your safety is in question. You finally make it across the Mediterranean and land on a Greek beach.

Are you finally safe? Sadly, the Greeks might not give you a warm welcome. The country is overwhelmed with refugees, and the European Union isn’t doing enough to help.

The far-right Golden Dawn has used anti-immigrant sentiment to gain votes during the crisis.

In any country, extremist parties often gain popularity in times of crisis. In Greece, the far-right party Golden Dawn is experiencing its own renaissance.

With its anti-immigration stance and nationalist ideology, Golden Dawn offers Greeks a false sense of Hellenistic pride to counterbalance the humiliation of austerity and poverty.

Greeks struggle with their historical identity, and many conflicts have arisen because of this.

Throughout its history, Greece has come in contact with many cultural influences and has lived often under foreign rule.

The Ottoman Empire ruled over Greek lands for centuries, and many Greeks have lived in Turkey. There are also many Turkish communities in Greece, some that date even before the country’s fight for independence in 1821.

Many Greeks see Germany’s actions and attitude as reminiscent of its Nazi past in World War II.

In May 1941, two young Greeks in Athens climbed the Acropolis at night to tear down a swastika flag put there by the German occupying army.

One of these men was Manolis Glezos, a hero of the Greek resistance during World War II. Today, Glezos is a leading member of the left-wing Syriza party. He compares Germany’s austerity politics during the crisis to the policies of the Nazi occupation.

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What is The Full Catastrophe about?

The Full Catastrophe (2015) takes you beyond the headlines on the Greek debt crisis to discover how citizens in Greece and beyond have survived it. Through real-life interviews with people in mountain villages, tourist resorts and in the capital city of Athens, the author lays bare the effects of government budget cuts, austerity policies and endemic corruption.

Best quote from The Full Catastrophe

Greece had been rescued, but by this point, it was perishing by a thousand cuts.

—James Angelos

Who should read The Full Catastrophe?

People interested in international politics or European policy
Anyone who wants to understand the Greek debt crisis
Economists or students of economics examining the effects of austerity

About the Author

James Angelos is a journalist and former correspondent for the Wall Street Journal, and has also written for the New York Times.

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