Crews have come from as far as the US, Hong Kong and France, but most of them hail from down under.

The race begins in Sydney Harbor the day after Christmas.

A cannon is fired at 1 o’clock to signal the start of the race and the yachts set off for the Tasman Sea.

It is a 600-plus nautical mile dash through the wind and waters off the southeast coast of Australia.

And for the Geo Quiz we are looking for the historic port city of Tasmania where the yachts are heading.

The Tasmanian port city of Hobart is the answer to the Geo Quiz.

Race organizers say the eurozone crisis is making it hard for several international teams to find sponsors.

This year only six foreign-owned yachts are competing making it the lowest foreign contingent ever.

Phil Mercer reports.

It’s a grueling race; in 1998, six sailors died when wild storms battered the fleet.

Still, it’s one of the most anticipated events on Australia’s sporting calendar.

This year’s race may be diminished, though. It’s taking a hit from the European economic crisis.

Garry Linacre, commodore of the Cruising Yacht Club of Australia, which organizes the annual event, said the financial uncertainty has forced several international teams to pull out.

“We don’t have nearly as many European visitors as we would normally have,” Linacre said. “I think people are just looking at the moment at their expenditure and not possibly committing as much.”

Organizers have tried to attract more boats from Asia, but most of this year’s entrants are Australian. That includes Jessica Watson. A year and a half ago, the Australian teenager became the youngest person to sail solo around the world.

Watson is now 18 and she’s set to captain the youngest crew ever to compete in the blue water classic, with the help of a lot of sponsors.

“Sailing is a rather expensive thing to be doing,” Watson said. “So we have been incredibly lucky. We have an amazing team of sponsors on board.”

Applications for this year’s race closed at the end of November, but more than a dozen of the 100 entrants have withdrawn since then, many because of financial problems.

Garry Linacre said this year, there will only be one competitor from the US.

“Rives Potts the Rear Commodore of the Newark Yacht Club has brought his own boat,” Linacre said. “His son and his nephew sailed it here with a group of friends from America and they are the only American boat we’ve got this year, which is unusual. We have a much smaller international contingent and I think that is to do with this infamous global financial situation.”

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That’s the first thing Yanis Varoufakis says to me as we sit down for an interview at his apartment in Athens, and it sets the tone of the half-hour conversation that follows.

As a professor of economics at Athens University, Varoufakis has been on the front lines, literally, of Greece’s economic turmoil. His own salary has been slashed nearly in half. He mentions that he just came back from a corner shop where he was photocopying exam papers for his students. The departments own machine broke a while back, he tells me, and there’s no money to fix it, let alone buy paper or toner for it.

Like many journalists, I’ve interviewed Varoufakis about the crisis a couple of times before. But those chats were on the phone or via Skype. This is the first time I’ve met him in person. I come in on the heels of a television crew who has been filming in the apartment. Twenty minutes later a Swedish radio journalist is waiting for me to finish up.

“It’s been a revolving door for months now,” Varoufakis laughs. Still, he makes coffee for me and my fixer.

I semi-joke that it must be interesting teaching economics right now in Greece, considering that the situation provides an amazing case study in how badly things can go wrong.

“Yeah,” he tells me, “It’s like studying vulcanology and being so close to the volcano that you get badly burned by the lava.”

The night before our interview, Varoufakis tells me, he attended a farewell party for a newly minted department Ph.D who managed to get a job … in Britain, not Greece. Varoufakis says he’s urging all his students to look outside of the country for employment right now. “This is the human cost of the crisis,” he tells me. “That Ph.D student was a product of the Greek government, the Greek government spent a lot of money to educate that person. And now that person’s skills are gone, possibly forever.”

But, he notes, that student’s departure will be seen as a plus in the accountant’s books – the state won’t have to pay the student a teacher’s assistant salary any more.

And then Varoufakis admits that he too is thinking about leaving Greece. In the past, he’s taught in Britain, Belgium and Australia.

When I’ve talked to him before, he seemed to retain a bit of optimism about Greece’s future, a thread of hope that somehow the country can avoid default and possibly even keep using the euro.

But now, I can definitely sense that most of that optimism is gone.

“Greece reminds me of an airplane where you walk into the cockpit and there’s no one there, and even if start pulling the levers nothing happens. We don’t have monetary policy levers, fiscal policy, tax policy. Greece doesn’t exist any more as a functioning state. It’s all being done by fiat, in faxes and emails that are being sent from Frankfurt and from Brussels.”

And it’s not just Greece, he says. European leaders seem to be too scared to do what needs to be done to ensure that Greece’s economic problems don’t spread to Italy, Spain and beyond.

“Let’s remember that Europe is quite skilled at bringing the whole planet down. It’s done it twice in the last 100 years, and it’s about to do it for a third time.”

That’s when Varoufakis notes another historical irony, this time a Greek one.

“Twice in the last 70 years or so, Greece has played the role of the snowflake that started an avalanche. It’s not responsible for the avalanche, but it was the snowflake that started it.”

“The Cold War,” he says, “was the first avalanche. It started here, not in Berlin. It started in Athens in December 1944 with the beginnings of the Greek Civil War. ” That war pitted the military branch of the Greek Communist Party, backed by Soviets, against the Greek Army, backed by the United States and Britain.

“And now here we are again, at the center of the beginning of a new Great Depression. The irony of history.”

I ask whether Greece should try to stay in the eurozone, or opt out and go back the Drachma.

“Some great big default is looming, an implosion of the economy, which may or may not help Greece turn the page and start afresh, after a lot of suffering. Hopefully it will.”

Staying in the eurozone, Varoufakis says, would require a fundamental restructuring of the way the entire single currency system works. Going back to the Drachma, he notes, would require a very difficult currency devaluation that could see a huge percentage of Greece’s GDP slashed in a single stroke.

Either way, Varoufakis is tired of waiting. “It’s the worst of the worst,” he tells me.

Politicians both inside and outside of Greece need to make their decisions, he says, so that the Greeks can get on with trying to put their economy and their country back together.

When people talk about the current global economic crisis, one thing you often hear them say is, “The banks got us into this.” Investment banks, that is. Starting with Lehman Brothers and spreading to Europe to banks such UBS that had to be bailed out in 2008 by the Swiss govt. Now one of its traders, Kweku Adoboli, has been arrested for rogue trades that could cost the bank some 2 billion dollars. Swiss citizens on the streets are furious.

An unidentified man on the street says the banks shouldn’t be given the possibility to make transfers of this kind. “It’s just unthinkable. One should have several people overseeing it, checking things,” he says. “It’s too easy to take money – or to simply throw it away like that.”

The unauthorized trades of which UBS employee Adoboli is accused involve what are called Exchange Traded Funds. They are funds closely linked to stocks or commodities and only available to big banks. The trades are perfectly legal, but UBS contends Adoboli didn’t tell them he was making them. That’s not legal.

A Swiss woman expresses her anger saying that while there are people who are dying of hunger and who don’t have work, there are traders who receive super bonuses and they just do anything.

In theory, traders cannot do just anything. Oversight is supposed to have increased in recent years, following other high profile rogue operations. Most notably in 2008, when trader Jerome Kerviel lost $6.7 billion for French bank Societe Generale. But Louise Cooper, from the global brokerage house BGC says in the world of split-second computerized trading, catching a rogue is always difficult.

“Given how many trades there are in the world, you know this looks like only one trader, I think probably what’s happened is that the markets have been hugely volatile over the last two months,” he saus. “ And I think it’s so easy to lose massive amounts of money. Literally in seconds.”

In other words, Adoboli’s big losses got lost in the shuffle. What will likely remain is this latest stain on UBS’s reputation. So says David Jones, the chief market strategist at IG.

“Banks of course are so big now that $2 billion isn’t the end of the world,” he says. “This only will affect their third quarter profits. But it does, once again, shine a light on what may be somewhat lax approaches to internal controls and that don’t do the reputation of any financial institution any good whatsoever.”

By coincidence, the Swiss Parliament began debating tougher banking regulations Thursday. Thursday is also the third anniversary of the fall of Lehman Brothers.

Europe entered 2010 with no end in sight to the economic crisis. Iceland was among the worst off countries. Its banks had collapsed in 2008 and people were still losing their homes.

One Rekyavik resident sat in the kitchen of his rental home one snowy day recalling how he’d lost his house and his wife when the Icelandic Krona lost half its value.

“Just imagine all the sleepless nights over this. We are separated now. It’s just the stress of the whole thing. It is really hard to. You can’t plan for anything. The whole family life just goes to pieces.”

Elsewhere on Europe’s periphery things didn’t go much better this year when the Greek government finally admitted in April it didn’t have the cash to pay its bond-holders. The International Monetary Fund and the European Union offered Greece an unprecedented $60 billion bail-out.

All the member nations approved, including Europe’s healthiest economy, Germany. German Chancellor Angela Merkel hesitated but eventually came around.

She said, “this is an important decision that shows that we protect the euro’s value in the name of European citizens. But it will only work in combination with austerity measures.”

Those measures included cuts to Greek pensions and salaries and hikes in taxes.

Each new austerity measure provoked huge, sometimes violent protests. And Greeks aren’t just angry over the belt- tightening. They say corruption adds insult to injury. In fact, Greece became so indebted in part because an earlier government hid the country’s true finances from the world. The current Greek government is trying to crack down on corruption and tax cheats.

In May, a cab driver in Athens complained to me that the government was now making him document his earnings. Before, he lamented, no one checked.

Indeed 2010 saw tolerance for corruption run thin across Europe as citizens were asked to sacrifice more and more.

Consider the mayhem that ensued after Italian leader Silvio Berlusconi won a no-confidence vote this month. The scandal-plagued Prime Minister allegedly bought votes to stay in power.

This past fall brought more bad economic news to Europe when the 16 countries that use the euro had a second bailout. This one will prop up Ireland to the tune of 40 billion dollars. European leaders argued that, as with Greece, that they couldn’t afford to let a euro-member fail. If bond- holders get spooked again, Portugal, or even Spain, might face soaring interest rates on its debts. And bailouts can’t go on forever.

But 2010 is ending on at least one optimistic note. Remember Iceland which entered the year with a bad limp?

The man who lost his house said, “I am against the state taking on private debt.” He was a leader in a massive protest against a government bailout for failed, private banks.

And guess what? Iceland did not rescue its banks… It let them fail. Thus the govt avoided that huge debt and the sort of austerity measures seen other European had to take.

Meanwhile, Iceland’s devalued currency has helped boost exports. The European Commission now predicts that Iceland will run a budget surplus by the end of 2011. Download MP3

On a snowy night in Dublin, a downtown shopping center is a warm and cheery refuge for those fed up with the weather and the bad economic news.

Santa is doing his part with the children.

Santa – who’s also happy to be called Chris – is well aware of what Ireland has been through, and even though he knows the country’s minimum wage is about to be cut, that property and other taxes are about to be hiked, that there is real pain on the way for many people, he said he can’t support hiking the corporate tax rate – a tax that affects hundreds of U.S. multinationals that are based here.

He said, “America gave us a lot of business here over the years, and I think in fairness, we shouldn’t be upping it now.”

Those sentiments reflect a widely held view in Ireland – leave the multinational companies alone.

In Ireland, the corporate tax rate is 12.5 percent. It’s among the lowest corporate tax rates in Europe. In the United States, the corporate tax rate is up to 35 percent.

At the Pfizer plant in Newbridge, southwest of Dublin, an automated assembly machine is spitting little pink pills onto a conveyor belt.

They’re antidepressants, but not for the Irish – this shipment is on its way to Turkey.
There are about a thousand people working at this Pfizer plant.
In all multinationals – most of them American – employ more than a quarter of a million people in Ireland.
Pfizer vice president Paul Duffy says the corporate tax rate – at 12.5 percent is one reason among several – but a key one.

“We are English speaking, the time zone is good and we have a corporate tax rate that is competitive,” Duffy said. “These are all pillars upon which industry builds itself. From my point of view I cannot see why we would change to a different corporate tax rate and damage the one part of the sector that’s actually doing well.”

But countries like Germany and France have long complained that Ireland’s tax structure is unfair and distorts competition.

Still, the Irish government rebuffed their demands to raise the corporate tax as part of the bailout negotiations.
Paul Duffy said if those countries want to compete, they know what to do. “Why not lower your rate instead of forcing Ireland to increase its rate?”

In the middle of the debate sit the workers and their unions.
Paul Sweeney, an economic advisor at the Irish Congress of Trade Unions, said Ireland has always been an innovator when it comes to taxes, precisely because it’s been a poor nation.

“It was in Ireland in Shannon Airport that there was the first tax free zone,” he said, adding, “We invented that, the same as Irish coffee was invented in Shannon Airport as well.”

Sweeney supported the low corporate tax rate too, but now worries about the future of Ireland’s workers. He believes they’ve been cowed into supporting a hands off policy for big business. “Our own members working for a multinational have been told we’ll pull out if we have to pay an extra few percent on corporation tax,” he said.

Companies with long histories in Ireland, like Pfizer and Merck, don’t talk about pulling out if the rate is eventually hiked.

But Neil Boyle of Merck said it could hurt the chances for new investment.
“I think that if there were changes to that,” he said, “all companies would want to reassess.”

In the shopping center in Dublin, Stephen O’Flaherty is trying to attract some business of his own.
He owns a kiosk that scans photographs onto coffee mugs, T-shirts, just about anything. Business is slow, and O’Flaherty worries it won’t get better anytime soon. He’s mad at the government, and not too happy with the banks, but he also defends the multinationals and their low tax rate.

“We’ve had huge inward investment from the likes of Google, Microsoft, Intel and they’ve all been attracted here with the lower corporation tax rate,” he said. “When it’s providing jobs for people, people understand that and can make the connection.”

It’s true that manufacturing and exports are two of the few bright spots in the bleak Irish economy.
Both are still growing.
Boosting the tax that corporations pay by even two percent would mean a lot more revenue for a beleaguered government.
But no major political party – not the one in power, nor those in opposition – wants to mess with the tax that keeps people employed through what will be a tough Christmas season.
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• Video: Ireland bail-out: Calls for election intensify
• Ireland finances
• On The World: Ireland’s financial crisis

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This text below is a phonetic transcript of a radio story broadcast by PRI’s THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI’s THE WORLD is the program audio.

Lisa Mullins: As we just heard in that story, those in need don’t always want handouts. Well, you could put Ireland in that category now too. The Irish government may be in line for an international bailout to save its banking system from collapse. The European Union and next-door neighbor Britain say they want to help, but Ireland today replied it doesn’t need a bailout, thank you. Well, given the flagging state of the Irish economy and the looming debt crisis there, the Irish may have to take the handout just the same. Laura Noonan is a financial reporter for the Irish Independent newspaper. You are in the eye of the storm in Dublin right now. What are the signs that the banking system in Ireland is on the brink, and what are you seeing and hearing in terms of the spin out for people there?

Laura Noonan: Well, I guess in terms of the banking system being on the brink, the main thing that we’re seeing is that Irish banks now owe about 124 billion Euros to both the European Central Bank and the Irish Center Bank, and they owe that cash because they can’t borrow money from other banks. Other banks don’t believe that the Irish banks will be able to pay back the money, and that’s the real stress. In terms of how this is being felt on the streets in Ireland now, I mean, people are concerned about their own savings, because people would obviously have savings in banks. Now there isn’t any immediate reason to be concerned about that. But it’s just that people hear all of this bad news. They think about their own life savings sitting in banks and they get concerned.

Mullins: Well, what has put Ireland in the position of being such a risk right now? I mean, one of the things that brought this on we know was the big real estate bubble that burst there, as it did here. But what’s causing this latest trouble?

Noonan: The latest trouble, I guess, is just things going to a head from a number of fronts. The Irish banks owed a lot of cash to other international banks, which had to be paid in September. They then weren’t able to actually borrow that cash again from other banks, because banks won’t lend to Irish banks anymore. So they have to go to borrow from the European Central Bank. European Central Bank now appears to be saying that they don’t want to have that amount of their money tied up within the Irish banking system, which has then brought this crisis on again. But I mean, the Irish crisis is part of a bigger European picture. There’s a number of other European countries like Portugal, Greece, Italy, who are also finding it hard to get the better off European countries to lend money to them and to their banks.

Mullins: Well, when we talk about providing help for Ireland as we mentioned, there is a bailout very likely in the offing, but it seems as if, while the EU is pushing for the bailout, the government of Ireland is pushing against it. Why is it saying, at least for now, no?

Noonan: A lot of it depends on the form that the bailout actually takes. In terms of what the European Commission would like to do, they would like to see Ireland, the overall country, accept money, rather than the Irish banks. Now that could have a very big implication on the way Ireland can actually run its own affairs, and the way Ireland can make its own choices. People over here are very concerned that if we were to take money from any of these big international bailout funds, then we could be forced to do things which we do not want to do. We could be forced to cut the number of people working in the public service, to have big pay cuts across the public service. So people are very concerned about those kinds of choices being effectively forced on us. And you also have to remember in all of this that Ireland is a country which has fought a very long struggle for its independence, to be in control of its own destiny. So if we were to go down the bailout route, and actually hand over some of that control, that would be a very big issue for some people to deal with.

Mullins: How is the Irish public then taking the news that the government doesn’t want a bailout?

Noonan: There’s a lot of the people in the Irish public who think that we should just take the cash because the country is in such dire need of cash. People look at this, and I guess it can be very hard to understand why we have to cut health services, we have to cut schools, we have to cut all these things that ordinary people need. And at the same time you have the bailout fund dangling a big wad of cash, saying, ‘Take it,’ and we’re saying, ‘No.’ From that point of view, a lot of ordinary people who aren’t able to pay their own bills think we should take the cash, and they can’t understand why we actually won’t.

Mullins: All right. Thank you very much for speaking with us. Laura Noonan, financial reporter for the Irish Independent newspaper, talking to us from Dublin. Thank you.

Noonan: Thanks, Lisa.

Copyright ©2009 PRI’s THE WORLD. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to PRI’s THE WORLD. This transcript may not be reproduced, in whole or in part, without prior written permission. For further information, please email The World’s Permissions Coordinator at theworld@pri.org.

• BBC video: protesters clashed with police in Spain
• In pictures: Europe’s mass protest

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This text below is a phonetic transcript of a radio story broadcast by PRI’s THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI’s THE WORLD is the program audio.

LISA MULLINS: Many European cities had their routine disrupted today. Thankfully it wasn’t because of terrorism, but because of demonstrations. Workers voiced their opposition to planned spending cuts by governments all over Europe. The governments, in turn, are under pressure from the European Union to rein in public debt. One focus of the protests was Brussels, the EU capital. Another was Spain, where a general strike was called for today. The World’s Gerry Hadden has more from Barcelona.

GERRY HADDEN:  At dawn this morning in Madrid picketers were already blocking buses. They’re angry over salary cuts in the public sector, a plan to reduce pensions and to make labor laws more flexible. In cities across Spain, crowds were out showing their discontent with Prime Minister Jose Luis Rodriguez Zapatero’s austerity package. At a small rally in downtown Barcelona, a 19-year-old college student named Max Fallardo said he came to protest a law that makes it easier for employers to fire workers. In Fallardo’s age bracket, unemployment is at 40%.

SPEAKING SPANISH

HADDEN: He says, even though I’m not yet working I figure I’ve got a lot of years of work ahead of me during which I might get easily fired. So now’s the time to protest. The Spanish government says it must loosen labor laws, so that hiring will also be easier. It also defends spending cuts to reign in a rising deficit. Schoolteacher Ala Morello doesn’t buy that.

SPEAKING SPANISH

HADDEN: This isn’t just Zapatero but the entire European Union, she says. Europe used millions of euros of public funds to save the banks after the financial crisis. And to compensate for that, governments want to cut public worker salaries. For workers like Morello what’s at stake today isn’t just wages or unemployment benefits, but an entire way of life. The European social welfare-state. Europeans have had strong benefits and protections for more than half a century. And those are slipping away, as leaders try to make Europe more competitive globally. Unions have been quick to focus on this point.

SPEAKING SPANISH

HADDEN: This union leader in the southern Spanish region of Andalucia called on grandparents to strike today too, by not looking after their grandkids. In Spain more than half of grandparents baby sit at least part time because both the children’s parents must work to make ends meet. The pressure on working parents was underscored last week in Strausbourg. An Italian member of the European Parliament, Licia Ronzulli, brought her 7-week-old baby, Vittoria, to work, casting a vote with the infant strapped to her chest in a sling.

SPEAKING ITALIAN

LICIA RONZULLI: It wasn’t really a political gesture. It was a choice, because of several factors, mainly maternal reasons. But it was also a logistical issue, a necessity. I have a very strong attachment to my daughter. I breast feed Vittoria and I do that six times a day.

HADDEN: Though Ronzulli’s gesture might not have been politically motivated, it made a point. That Europe needs to strengthen family protections, not weaken them. But despite protests across Europe this month to maintain generous benefits, there’s no sign that governments are backing away from austerity measures. The pressures from the financial markets to tighten belts has been strong. The Spanish government says it will wait until tomorrow to assess the impact of today’s strike. On the street that impact appeared minimal. Here in Barcelona many shops stayed open. Isa Repintor owns a candy store just a block from the union rally site. She, like a majority of Spaniards, said she was against the strike.

SPEAKING SPANISH

HADDEN: A lot of money is lost when people don’t work. And besides, the unions didn’t really give good reasons for protesting. Look, she says, the workers are always the ones to pay when there’s a crisis, strike or no strike. For The World, I’m Gerry Hadden in Barcelona.

Copyright ©2009 PRI’s THE WORLD. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to PRI’s THE WORLD. This transcript may not be reproduced, in whole or in part, without prior written permission. For further information, please email The World’s Permissions Coordinator at theworld@pri.org.

Mc Yinka

May 14th, 2010
A sense of malaise and uncertainty has settled over Greece as the country tries to climb out of debt. But The World’s Gerry Hadden found one local musician who’s trying lift people’s spirits.
Download MP3

Ways to revive the Greek economy

May 12th, 2010
What will it take to revive the Greek economy? The government can cut spending and catch tax cheats, but it will also need to jump start the economy.
Download MP3

Photo gallery

Soul searching in Greece

May 11th, 2010
Greece owes lenders hundreds of billions of dollars, its deficit is over 13 percent and the economy is in recession. As Greeks come to terms with the the future they’re also reflecting on just how they got to this point.
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Photo gallery

Greece’s unofficial economy

May 10th, 2010
Gerry Hadden explores Greece unofficial economy and what the government is doing to put an end to it.
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Germany votes to bail out Greece

May 7th, 2010
Germany’s Lower House of Parliament approved a controversial 38 billion dollar bailout loan to Greece. The bailout is deeply unpopular among Germans, but today’s vote brings the European Union one step closer to providing a massive rescue package to Greece before the May 19th deadline.
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• Photo gallery: Greek Americans on the crisis
• Global economy podcast: The Greece problem
• How did Greece get there?

Read the Transcript
This text below is a phonetic transcript of a radio story broadcast by PRI’s THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI’s THE WORLD is the program audio.

MARCO WERMAN:  Greeks around the world have strong opinions about the financial crisis.  One of the largest concentrations of Greeks outside of Greece is in Queens, New York.  Specifically, in Astoria.  The World’s Alex Gallafent filed this report.

ALEX GALLAFENT:  I spent a day wandering around the neighborhood, just asking people how they saw the Greek crisis.  First up, Doros Evangelides.  He makes animations for commercials.  I catch him midway through his lunch, bought from a food cart called “The King Souvlaki of Astoria”.  Above a train rumbles through Queens on elevated tracks.

DOROS EVANGELIDES:  For us it’s an issue of national pride.  But I think it’s unfair that Greece has been singled out that it’s going to bring the world economy down.  For some reason they like to trample Greece.  Remember the Olympics?  You know, they’re not going to make it, you know.

GALLAFENT: Evangelides brandishes a skewer of meat and criticizes the countries that blame Greece for Europe’s woes.

EVANGELIDES: You know and the world crisis wasn’t created by Greece.  It was created by like here.

GALLAFENT: Here meaning the United States.  It’s long been home to another Greek American, George Stavrolakis.

GEORGE STAVROLAKIS:  And I’m very happy.  I like it very much here.

GALLAFENT: Stavrolakis has lived and worked in Astoria for more than 40 years.  He says Greek Americans like him are disappointed in their country and their people.

STAVROLAKIS: It’s very embarrassing and very shame.  It’s a beautiful country, but now the big mess.  It’s not supposed to be like that.

GALLAFENT: Stavrolakis is a realtor.  Actually, he’s a retired realtor, but he keeps coming back into the office on 31st Street.  Stavrolakis wonders what’s happened to a work ethic that energized immigrants like him, people who came to the States and put in the time for their rewards.

STAVROLAKIS: In Greece they get as much as they want and they get very early and very young people are retired.  So the Greek people, they have to understand to get together to help their country.

GALLAFENT: One way Greek Americans say people back home can help their country is by paying their taxes.  In addition to other woes, recent reports suggest that many Greeks, especially the wealthy, don’t declare anything near their full income.  Doros Evangelides says even though that’s a recipe for fiscal disaster, he can still kind of understand why people do it.

EVANGELIDES: The idea of paying taxes to a government that is corrupt, it doesn’t work.  You cannot pay taxes to a government and then see your money get wasted.

GALLAFENT: Or, to say it in a different way, not taxation without competent, honest representation.  But that argument lets Greek voters off the hook too easily, says Jimmy Zafiris, a general contractor also getting his lunch at the souvlaki stand.

JIMMY ZAFIRIS:  We always accuse politicians.  It’s not only their fault, we allow them to do that.  Okay?  So I don’t know if we should always have them as the black sheep.

GALLAFENT: Ultimately, there’s not a lot these Greek Americans can do, apart from watch at a distance.

ZAFIRIS: We’re concerned.  We love our country.  We like to know what’s going on there.  But beyond that, we live here.

GALLAFENT: And so Greek Americans cheer for Greece from the sidelines.  Again, Doros Evangelides.

EVANGELIDES: Greece going to survive. Greeks live very well, high standard of living.  Now they have to get a little bit more organized.

GALLAFENT: And from Efthichios Kalfakis, another contractor, a final dose of defiance befitting a man wearing a Yankees jacket.

EFTHICHIOS KALFAKIS:  Greece is going to make it because Greece is Greece.  We are the top civilization.  You guys got to understand that.  Thank you very much.

GALLAFENT: For The World, I’m Alex Gallafent in Queens, New York.

WERMAN: Come to our website to see some of Alex’s Greek American friends including that man in the Yankees jacket.  We don’t have much interest in that photo here in Boston, but that’s another story.  The pictures along with a new batch of political cartoons about the debt crisis are all at the world dot org.

Copyright ©2009 PRI’s THE WORLD. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to PRI’s THE WORLD. This transcript may not be reproduced, in whole or in part, without prior written permission. For further information, please email The World’s Permissions Coordinator at theworld@pri.org.

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This text below is a phonetic transcript of a radio story broadcast by PRI’s THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI’s THE WORLD is the program audio.

MARCO WERMAN:  The other big news from Europe is, of course, the trillion dollar bail out for Greece and it seems the markets aren’t quite sure what to make of it.  Stock markets around the globe rallied when the bail out package was announced yesterday.  Today it was more of a mixed day for Wall Street and other stock exchanges.  The bail out’s goal is to provide Greece with cash to service its debt and reign in its budget.  It’s also supposed to shore up global confidence in the Euro.  Sounds a lot like our financial crisis here in the U.S. and our bail outs and that’s not a coincidence.  Kristin Forbes is a professor of International Economics at MIT’s Sloan School of Management.  She says the two crises are related.

KRISTIN FORBES:  This is the next chapter in the global recession, and unfortunately not the end of the book.  This all began with the housing collapse in the United States and then spread to financial institutions in the United States and then the financial crisis spread to Main Street around the world.  And then there was a period of hyperactive governments, where governments tried to stop this financial crisis by enacting huge spending packages to try to stabilize economies.  That worked for a period, but now this is the next chapter in that we are realizing we have to pay for all those steps that we took to stabilize the economy.  And Greece is the first country where people realized that the massive spending that went on to help get us out of this crisis has to be paid back and people are looking at the numbers and realizing Greece doesn’t have the money to pay things back under its current programs and its current path.  So this is the next chapter and unfortunately I think other countries in the next couple years are going to face similar challenges where people look at all the money that was spent to try to stabilize things after the crisis and raise concerns about whether governments will be able to repay that debt.

WERMAN: And now we’ve got another series of governments in the EU and the IMF bailing out Greece to the tune of one trillion dollars.  Does this bail out address any of those underlying problems that got Europe to this point in the first place or does it address preventing another Greece in Europe or somewhere around the world?

FORBES: I think the current package unfortunately will not solve the problem for Greece.  At this point Greece has simply borrowed too much.  It’s taken on too much debt and the package just announced is basically giving Greece more loans.  And we all know if an individual has borrowed too much, giving them more debt is not going to solve the problem.  So unfortunately I think in Greece’s situation it is too late.  Greece is going to have to take some tough medicine and this package isn’t going to be able to solve that problem.  But the good news is that I think that this package is aimed not just at Greece, a big aim of this package was to stabilize things in other countries, such as Ireland, Italy, Portugal and Spain. And those countries do have enough time.

WERMAN: Let me ask you briefly about the stabilization of the Euro, which is one of the two goals of this rescue package.  Are there many people in Europe who have long been skeptical of the concept of this common currency, the Euro, and what impact will the bail out have on deepening any mistrust of the Euro?

FORBES: That’s a great question.  Some countries, such as in Greece or some of the countries that are now going to have to make spending cuts and deal with higher taxes will probably be very critical of the Euro and blame the Euro for having to take these tough steps.  But they also will hopefully appreciate that it’s because of the bail out from the Eurozone that the situation will avoid being much worse.  But the countries that I worry about the most are countries such as Germany.  It’s the German tax payers who will be writing the checks to pay for this bail out and how long will tax payers in these countries be willing to continue to write these checks?  So I think this is going to raise some very fundamental questions for countries in Europe.

WERMAN: Ultimately do you think Europe’s problems are American’s problems?

FORBES: I think what is going on in Europe should be a wake up call for the U.S.  The U.S. is also running huge budget deficits and it’s on a completely unsustainable fiscal path and if we don’t reign in our deficit spending, we are going to be in a situation such as Greece in the not too distant future, in five to ten years.  So I think how this is resolved in Europe is very relevant to the United States.

WERMAN: You think the United States could be facing a situation like Greece in five years?

FORBES: Five to ten if we do not start to reduce our deficits.  When you look at, say the U.S. debt dynamics, for example, our total debt to GDP is close to 90% now.  Greece is at about 110%.  We will be on a path to have debt numbers similar to Greece’s in just a few years if we don’t cut down on our spending and reduce our deficits.  So I think that’s where there’s a very strong lesson for the United States.

WERMAN: Kristin Forbes, professor of Economics and MIT, thanks very much.

FORBES: Thank you.

Copyright ©2009 PRI’s THE WORLD. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to PRI’s THE WORLD. This transcript may not be reproduced, in whole or in part, without prior written permission. For further information, please email The World’s Permissions Coordinator at theworld@pri.org.

• BBC coverage
• Market data
• Germany votes to bail out Greece
• Global Economy podcast: the Greece problem

Read the Transcript
This text below is a phonetic transcript of a radio story broadcast by PRI’s THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI’s THE WORLD is the program audio.

MARCO WERMAN:  Now we return to that unprecedented one trillion dollar European emergency package.  The funds and loan guarantees are designed to achieve two goals; one is to defend the European single currency, the Euro; the other is to stop the debt crisis in Greece from spreading.  Wall Street seems to like the idea.  The Dow Jones Industrial Average climbed 405 points to close at 10,785.  Ken Rogoff is a former chief economist for the international monetary fund.  He says the European plan is ambitious.

KEN ROGOFF:  The package is unprecedented in its size and it is intended to provide a backstop, not just for Greece, which is immediately in trouble and it’s already had a bail out, but for Portugal, Spain and Ireland.  They’re trying to send a message to markets that we’re going to stand by all government debt in Europe.  It’s not just the trillion dollar package, in fact that might not even be the most important part.  The European Central Bank, Europe’s Central Bank, has agreed to start taking on all kinds of government debt, bank debt that it wouldn’t have dreamed of and at a scale that it wouldn’t have dreamed of earlier given this political backing.  Last, but not least, the Europeans are telling financial firms you bet against us, and we’ll regulate you into the Stone Age.

WERMAN: So will one trillion dollars send the message that the EU and the IMF won’t let the same thing happen to Portugal, Spain and Ireland that happened to Greece?  Or is it just kind of economic suicide?

ROGOFF: Well it’s a very risky move, both for Europe and the European Central Bank.  I would say they clearly kicked the can down the road a year or two, but they haven’t solved the fundamental problems.  They haven’t got the rod out of the system.  The governments in Europe are running big deficits, there’s very slow growth in the southern countries recession, and they need to solve their problems.

WERMAN: How do you get at those fundamental problems that rot at the heart of these European governments as you call it?

ROGOFF: Frankly, I think the ideal package would have been to allow a couple countries to default, to discipline others, put them on sabbatical from the Euro and then draw this ring fence around the rest.  Instead, they’re trying to prevent anyone from going down, feeling that’s essential for political unity.  But it’s tough.  The scale of how much Greece has to cut back on its deficit is staggering.  Frankly, even if they didn’t have to pay their old debts, they’re having trouble living within their means and not borrowing new money.  That’s really the problem.  That’s a problem across Europe.  So it’s a huge challenge.  Is it impossible?  No.  I’d make an analogy to an overweight person who needed to lose 80 pounds and instead of having to do it in a year, this bail out lets them do it in four years, but it’s still very, very tough.

WERMAN: Was that really ever an option, though, to let Greece default on its debt to kind of teach other countries a lesson?

ROGOFF: Not only was it ever really and option, I suspect it’s still more likely than not that it’s going to happen.  They want to postpone it to where their economies are growing more quickly.  The governments say we’re not going to allow it, but they always say that.  It’s in a very difficult bind.

WERMAN: Now the United States is still the chief IMF paymaster.  How exposed does this loan leave the American tax payers?

ROGOFF: You know, there’ll be complaints about it in Congress, but it’s small potatoes.  It’s about a 300 billion dollar loan.  Maybe at the outside, we hold a third of that.  Technically it’s even less.  So compared to having Europe collapse and going into a recession, it’s a good investment.  Politically, we have no choice.  We can’t walk away from Europe.  We can’t protest.  And frankly, Germany is tougher than we are.  Germany is the central country in Europe.  We don’t really need to crack down when they are already being so tough.

WERMAN: Ken Rogoff, a professor of Economics at Harvard University and a former IMF Chief Economist, Ken thank you very much.

ROGOFF: My pleasure.

Copyright ©2009 PRI’s THE WORLD. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to PRI’s THE WORLD. This transcript may not be reproduced, in whole or in part, without prior written permission. For further information, please email The World’s Permissions Coordinator at theworld@pri.org.

• BBC coverage
• Global Economy podcast: The Greece problem

Read the Transcript
This text below is a phonetic transcript of a radio story broadcast by PRI’s THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI’s THE WORLD is the program audio.

MARCO WERMAN:  I’m Marco Werman and this is The World, a co-production of the BBC World Service, PRI and WGBH Boston.  Protests over taxes and spending cuts turned deadly today in Greece.  Three bank workers died in Athens after demonstrators set their building on fire.  Tens of thousands of Greeks took to the streets of the capital to protest as part of a general strike.  They threatened to storm Parliament and clash with security forces who fired canisters of tear gas into the crowd.  The riots come after weeks of political and financial turmoil in Greece.  The President of the European commission, Jose Manuel Barroso, spoke out against the violence.

JOSE MANUEL BARROSO:  Protest is a right of citizens in our democratic societies, but nothing can justify recourse to violence.

WERMAN: One of the protestors out on the streets of Athens today was Despina Koutsoumba.  She is an elected official with the Greek Civil Servants’ Trade Union.  Koutsoumba remains undeterred despite today’s violence.

DESPINA KOUTSOUMBA:  We were striking today again.  We are – - the measures that our government is introducing to Parliament.  And we will be on strike until these measure and these politics are taken back.

WERMAN: We’ll get to the politics in a moment, but first, as for those three people who died in the bank, why did that happen, as you understand it?

KOUTSOUMBA: As I understand it, that happened because some people that we condemned threw a Molotov bomb and you know that protestors and employees do not use these methods of violence.

WERMAN: So you seem to draw a distinction between your protest, as a member of the Greek Civil Servant’s Trade Union, and the people who threw the Molotov cocktail.

KOUTSOUMBA: Just a moment please.  Just a moment.  Just a moment.  Sorry, we’ve had so much gas from the police today that it’s annoying me even now, hours after.

WERMAN: Are you okay to talk?

KOUTSOUMBA: Yes, yes I am.

WERMAN: It sounds like you are drawing a distinction between your protest and the protestors who threw this Molotov cocktail.

KOUTSOUMBA: They were not protestors.  We don’t even know who they were because I think they wore masks, full face masks.  I will wait until I blame.  I will wait to see the photograph and everything from the scene.

WERMAN: Ms. Koutsoumba, regardless of how that happened, the fact remains that three bank workers did die related to the drama around these protests.  Do you think it will deal some kind of blow to your cause, the cause of the protestors out in the streets?

KOUTSOUMBA: No, I think that these incidents being separated from the demonstrations and even though we are really, really shocked by what happened, that doesn’t mean that all the other things about government’s politics will change in our mind.  There is so much anger.  If these measures go on, I don’t know what will happen in two or three months.  I really don’t know.  And maybe we’ll have more dead people either because they won’t have anything to eat, or because we’ll go on the streets and I don’t know, fight with each other.  There is a social problem here.  It’s not economical, it’s social.

WERMAN: I understand that there is a social component to this Ms. Koutsoumba, but the fact is Greece is heavily in debt, on the verge of defaulting on billions of dollars of loans.  What choice does your country have other than this drastic package of austerity measures?

KOUTSOUMBA: They want us to – - .  Our public deficit is it dried?  It dried.  But public deficit wasn’t caused by our – - .  There are so many other ways to decree public deficit.  You know that in 1996 we had 45% taxes for the big companies and now we have 20%.  That’s a huge amount of money that the public, that the state loses.  I told you before there is so much anger in Greek society.  I saw people 50 and 60 years old shouting to the police officers.

WERMAN: Why is everybody so angry?

KOUTSOUMBA: Because all of these people who became rich for the previous year never pay for anything.  And they want us to pay.  This is not, we are proposing that’s not living, surviving and we don’t want to survive, we want to live.

WERMAN: Ms. Koutsoumba will you be protesting tomorrow and for the near future?

KOUTSOUMBA: Yes.  We’re going to protest tomorrow and we will have a general strike next week.  And we are going to the end.  Because either they will hear the demonstrators, or this society will be so, I don’t know, it will be like a bomb.

WERMAN: Despina Koutsoumba with the Greek Civil Servants’ Trade Union in Athens, thank you very much for your time.

KOUTSOUMBA: Thank you.

Copyright ©2009 PRI’s THE WORLD. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to PRI’s THE WORLD. This transcript may not be reproduced, in whole or in part, without prior written permission. For further information, please email The World’s Permissions Coordinator at theworld@pri.org.