Blogs & Comment

Are southern Europeans really lazy?

German leader Angela Merkel thinks so. But well-being indicators paint a more complicated picture.

(Photo: Newton Daly)

Last week, German Chancellor Angela Merkel raised eyebrows by making some uncharitable observations about fellow Europeans. At an event hosted by her Christian Democratic Union party she took aim at residents of countries her government is effectively bailing out. She basically accused Spaniards, Portuguese and Greeks of being lazy. “We can’t have a common currency where some get lots of vacation time and others very little,” she said, according to the news magazine Spiegel. “That won’t work in the long term.” She cited early retirement ages as further evidence Southerners just don’t pull their weight.

Different societies collectively make different choices about the relative value of work and leisure. These differences matter less while nations remain sovereign and independent. But things become more complicated the moment one society becomes financially dependent on another. Greece and Portugal have already received massive bailouts from their neighbors, in large part due to irresponsible fiscal management on the parts of their governments. There are widespread concerns that Spain, a much larger economy, will eventually follow suit. Merkel’s comments were almost certainly intended for German consumption; they reflect mounting resentment among northern Europeans at the growing burden sovereign defaults are taking on solvent members of the European Union.

But is there any evidence to support Merkel’s broadsides? Few dispute that many nations now receiving bailouts overspent and perhaps underproduced on a massive scale. But some political opponents accused Merkel of misrepresenting other things. The press was equally skeptical. “Greece, Spain and Portugal all have the same legal retirement age as we do here in Germany–65,” wrote a Financial Times commentator. “The actual age of retirement is also similar between the Germans and those in the southern countries, though these numbers say nothing about economic power.”

Spiegel said Merkel’s assertion that southern Europeans take more vacation is also a myth, citing figures from the EU’s European Foundation for the Improvement of Living and Working Conditions. “The agency’s figures state that the Spanish and Portuguese are given an annual average of 22 vacation days, with Greeks receiving one more day. Germans, however, with their average of 30 vacation days, are European leaders in that regard. If you also factor in legal holidays, then they clearly have more vacation days than other European countries.”

New information released this week by the Organization for Economic Cooperation and Development sheds more light on the matter. The OECD has just introduced a slew of new well-being Indicators that provide some insights into European lifestyles. Merkel may be surprised to learn that the Greeks aren’t so lazy after all. According to the OECD’s figures, they work 2119 hours on average each year, much higher than the OECD average of 1739. That’s more than the famously industrious Germans, too. (Somehow Greeks manage to devote 15.9 hours a day to personal care, leisure and sleep, which is also above the OECD average.) In other research, the OECD has found the Greeks take 6.7 weeks of vacation and holidays a year, compared to 7.5 in Germany. The numbers for Spain and Portugal are similar to Greece’s.

Greece’s pension system, though, is heading for disaster. In his book Bust, Bloomberg financial commentator Matthew Lynn notes: “Greek pensioners on average live on 96% of their salary they had when they worked, more than twice the proportion of earnings as German pensioners…the retirement age was a mere 58, way below the average of the European Union, and again much lower than the German retirement age.” (Lynn’s book is recommended should you want to understand the sovereign debt crisis.)

Greece’s biggest problem, unmentioned by Merkel, is corruption. It was only through grossly misleading its neighbors that the country was able to join the common currency in the first place. It continued to misrepresent its fiscal affairs until it became impossible to do so. Tax evasion is rampant, the black market reportedly accounts for as much as 40% of the total economy. Greece’s real problem isn’t that its people are lazy, it’s that they can’t trust one another or work together toward a collective goal.

One should also contemplate how far Germany is prepared to go to protect the euro. Lynn devotes an entire chapter to explaining how the country’s postwar history has influenced German attitudes toward fiscal and monetary policy at home and within the European Union. “In Germany, debates about fiscal policy aren’t really about accountancy or economics the way they are in most countries,” he wrote. “They are fundamentally about character. And they are about moral choices.” Moreover, Lynn argues that after a lengthy period of reticence, Germany is once again becoming increasingly assertive with its neighbors.

The salient point is that Merkel’s comments find a ready audience, regardless of their accuracy or relevance. Throughout Greece’s troubles, Bild (a tabloid daily) has stoked German resentment. Notes Lynn: “To put it mildly, the editors of Bild didn’t quite understand why its hardworking German readers, who made lots of things that were exported around the world, should have to pay to bail out the feckless Greeks who didn’t really make very much of anything. And they weren’t shy about saying so.” Keep an eye on this kind of rhetoric—these resentments will go a long way in determining how long European solidarity can hold. Particularly since Germany is by far the EU’s largest supplier of funds.