Germany is currently being portrayed as a hard-nosed disciplinarian unbending in its resolve to make the Greek people pay handsomely for Greece’s financial profligacy. Much of the European media criticise this inflexibility as a barrier to finding a long-term solution to the benefit of all parties, even if this means a little forgiveness needs to be forthcoming.

Yet, in most respects, the on-going economic problems facing the Greek people is not the membership of the euro or the conditions laid down by the troika (International Monetary Fund, European Central Bank and the European Commission) but a direct result of the utter dysfunctionalism of governance allied with fiscal policy over many years. For too long Greece was run by a self-interested duopoly mainly based on family ties and backed by oligarchs.

The entire body politic and civil service (from governmental level down to the lowest local level) was completely based on a system of clientism and patronage. As governments changed from Pasok to New Democracy and back again, whole swathes of civil servants and senior political appointments rotated between Government posts and specific quango posts that had few responsibilities but paid adequate compensation. Allied to this was a culture of tax evasion and avoidance in the private sector that infected all parts of society.

Even today, the Greek administration is incapable of collecting most taxes that are due. For the elites of Greek society, their tax burden is little changed with the administration targeting the ‘low-hanging fruit’ of income tax paid by public officials and low-paid employees of large firms. Clientism infected all levels of society, from knowing the local mayor to contacts with government ministers, everybody jockeyed for favours out of the public purse or where able to make money by governmental fiat that favoured certain individuals or firms.

Yet, as regards Hellenic tax morality little seems to have changed. As http://greece.greekreporter.com highlighted late last year “Even in the current climate of economic reform overtaking Athens, tax evasion rates remain startlingly high in Greece, with an estimated one in four economic transactions going unrecorded. In fact, a recent report conducted by Stephen Hall, an adviser to the Bank of Greece, finds that two out of three Greek employees are declaring figures less than their actual incomes – and, in some instances, aren’t declaring anything at all.”

The website went on to report “This is not a new or peculiarly Greek phenomenon. In Europe generally, about 19% of all economic activity goes unrecorded. But based on research dating back to the 1990s, “tax morality” among Greeks is particularly low – the 22nd lowest among 26 European countries. Furthermore, Transparency International finds that the Greek public sector is more corrupt than that of any other European Union member state. Unsurprisingly, Greeks are reluctant to blindly fulfill their tax obligations.”

Greece is therefore in a triple-blind. Firstly people won’t pay their taxes partly because they see rampant waste and corruption in the public sector. Secondly, the public sector cannot reform itself because it is utterly dysfunctional at nearly all levels. Thirdly, the Greek government cannot rely on an efficient tax take or good public administration to deliver policies that will protect the poorest in society.

The weight of the bureaucracy in Greece is all-pervading, discouraging private (and public) economic initiatives, yet also producing a very poor service to the Greek people. In many ways, viewed from Berlin, forgiving Greek debt is akin to throwing good money after bad. At present, a Greek government cannot make good on its promises because of the triple-blind it finds itself in.

Structural reform, especially in the public administration, is a necessity for Greece, no matter what its future is (in or out of the Euro or even in or out of the EU). A culture of excessive consumption, and external and internal public borrowing for over 40 years cannot be overturned in a few days or even months. Syriza may find that Angela Merkel and others may well be receptive to helping Greece out of its present predicament if it first looked internally for a partial solution.

Rapid reformation of the public sector is necessary, Syriza needs to quickly formulate a plan that will deliver efficient public services and a moral attitude to tax-paying before looking outward for much-needed assistance. At present any foreign assistance to Greece would be better delivered directly by international NGOs than through the Greek state.

Yet the status quo cannot be allowed to continue. The poorest in greek society are paying the heaviest price.