ROBERT SMITH, HOST:
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Here's what it's like in Athens, Greece these days. You come to the country expecting desolation. You come expecting ruin. And then, you find that the cafes are full. The streets are filled with people wandering around, talking, chatting, smiling. People are buying things. The stores are open. There are these big sales on. It kind of looks like any other European city in July. And then, as you're getting comfortable, in the distance, you hear the chanting, the protests.
(SOUNDBITE OF PROTEST)
UNIDENTIFIED PROTESTERS: (Chanting in Greek).
SMITH: The protesters tend to come in the early evening. And you can see the shop owners sort of hear the chants. They poke their head out. They look down the street. And then, really nonchalantly, they pull down these giant metal gates in front of their windows, in front of their storefront. And the protesters, they start coming from all different directions. The guy who's been showing me around Athens, George Sgouros, he knows all the protesters by sight.
Who are these protesters? They're headed toward Parliament. Who are they?
GEORGE SGOUROS: They are protesters that come from the Communist Party.
SMITH: And there's a whole other set of protesters over there.
SGOUROS: They are people that originate from the anarchy spectrum.
SMITH: So we have the Communists over here, the anarchists over there.
SGOUROS: Yeah, exactly. They will all unite.
SMITH: Because basically, they are all upset about the same thing. They're upset that the Greek Parliament made a deal with European leaders. They're upset at the prospect of more austerity, more tax hikes, less government spending - you know, all the stuff that Greek people voted overwhelmingly against two weeks ago. The Greek government, all they can say is, we had no choice. As I'm standing there, one of the protesters breaks ranks. He runs over to this big marble wall of a bank. And he starts to scrawl on it with a sharpie. It's something about the prime minister.
What did you write here? Can you tell me?
UNIDENTIFIED PROTESTER #1: (Speaking Greek). Jerk off - not with people, but jerk off.
SMITH: George tells me that it is slightly more clever than that. The actual graffiti reads, Tsipras, play with yourself, not with the people. After all the angry Communists and anarchists and trade unionists and pharmacists - yes, there is a whole pharmacist faction. I'll explain that later. But after they march by - followed, of course, by riot police - the stores and the cafes just open up again. They just raise the metal gates like nothing ever happened.
SGOUROS: Business as usual. You have to make a living, you know, in everyday life.
(SOUNDBITE OF MUSIC)
SMITH: Hello and welcome to PLANET MONEY. I'm Robert Smith in Athens, Greece. Today on the show, what is business as usual in Greece these days? How do you get back to normal after bringing your country to the very edge of destruction? We'll talk to a bald guy who's hoarding his cash, government-protected milk peddlers and an olive oil tycoon all trying to make it in the new Greece.
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SMITH: So as the Athenians are sitting around in their cafes, the question now is what's next. What do we do next? And the first challenge that everyone mentions for business as usual in Greece is opening the banks. And I'm not talking about just opening the front doors of the banks, but really about restoring faith in the banks, restoring trust in the banks. I talked to this banking expert who did the calculations. And he figured out that people pulled out an extra 15 billion euros in cash in the last few months - once again, 15 billion euros in cash. And I would walk around and think, where did all the money go? Where is everyone hiding it?
I did eventually find someone who would reveal his secret hiding place.
All right, what should I call you? Are you going to give your name, or is this going to be undercover?
UNIDENTIFIED MAN #1: Undercover.
SMITH: Why undercover?
UNIDENTIFIED MAN #1: Because I don't want to risk it. I have worked a lot, many hours, for this money.
SMITH: He is a mechanical engineer and has been saving his money for years. And a few months ago, he saw what was happening with the political situation in Greece, and he decided no way. There is no way this is going to end well.
What were you worried was going to happen to the money if you left it in the banks?
UNIDENTIFIED MAN #1: Maybe (speaking Greek) - haircut, haircut. Maybe haircut in my money - not in me.
SMITH: I should tell - I should tell people you're completely bald.
UNIDENTIFIED MAN #1: Yes, I have too much haircut (laughter).
SMITH: But you were afraid the government was going to take part of your money, a haircut.
UNIDENTIFIED MAN #1: Yes.
SMITH: And so our mechanical engineer withdrew his money from the bank, 50,000 euros - 50,000 euros in 500-euro notes, which are the ones that drug dealers famously use. So he bundled it all together. He brought it home. And he started planning where to put the money in his apartment. Now, think for a moment. If you were in this situation - you had your life savings - where would you put it in your house? Just think - like, where would you put it? What's the best hiding place? Now, here's the dilemma I have. Any time I think of a place to put my money, I realize that a burglar who is a pro at this would probably also think of the same place. Now, of course the mattress is cliche. Our mechanical engineer didn't want to put it there. He thought about prying up the floorboards. But he thought, no, he's not a carpenter. He's going to make it look messy; everyone will know. And then he looked at the bookshelf.
UNIDENTIFIED MAN #1: Too obvious.
SMITH: Too obvious.
And then, then he saw the perfect place.
UNIDENTIFIED MAN #1: It's... OK, I don't have problem. It's in the refrigerator.
SMITH: It's in the refrigerator, but not in with the milk and the frozen peas. He's a mechanical engineer, after all. So what he did was he pulled his refrigerator out from the wall. He opened up the back of the refrigerator. And he put 50,000 euros underneath the compressor, screwed it all together, and he pushed it back. It was like his own private bank vault. And he thought of everything. I asked him, well, won't the thieves see the scrapes on the floor where you pulled out the fridge? And he's like, no, no, no, I put little pads on the refrigerator. And so I asked him, well, what if a thief comes with a screwdriver and takes the whole refrigerator apart? And he says, that is why he replaced the screws in the back with special screws.
UNIDENTIFIED MAN #1: So you have to have with you a very specific tool in order to get out the screws.
SMITH: You can't use a regular screwdriver?
UNIDENTIFIED MAN #1: No, no, no. It's a totally different tool.
SMITH: If you want his money, you're going to have to take the whole fridge. It is genius. I asked him what's going to happen when the banks open. Is he finally going to unscrew it himself, take the money and put it back in? And he just laughed. He said as soon as the banks open, he's going to take the rest of his money out. He still has a few thousand euros in there. And in fact, remember the banking analyst I mentioned, the one who figured out how much cash is out there in the Greek economy? He said that he's thinking of doing the same thing. When the banks open, he's strongly considering taking all his money out, which is why Greece has to do something big to fix the banks. In fact, it has to do two big things. First of all, it has to find more money to prop the banks up, either through loans from the European Central Bank, which it is negotiating with now, or through more investors, whoever they may be. But Greece also has to fix this other problem, this psychological problem, because people know the banks don't have enough money. They were reminded of it every day over the last two weeks, when they couldn't pull their savings out. When they have the chance, they are going to take the money and run. Opening the banks back up is almost as much a psychological hurdle as a financial one. How can a bank prove to a middle-class mechanical engineer that it's more trustworthy than his own fridge?
Do you guys have anything sad, sort of bittersweet?
UNIDENTIFIED MUSICIAN: No, no way, no sad songs in Greece.
SMITH: OK, the second challenge for Greece's economy, taking on big milk. In the agreement that Europe made with Greece, there's all this stuff about drastic tax hikes, spending cuts. That's what got all the media attention. You probably heard of that part. But there is a section you might not have read. It is a section that mentions bakeries, pharmacies and milk.
ARISTIDES HATZIS: Milk is a very curious and (unintelligible) interesting story. Why?
SMITH: Why? Aristides Hatzis is about to tell us why. He's a professor of law and economics at the University of Athens.
HATZIS: Because there is a cartel protecting milk prices in Greece. There is a cartel that is comprised by major corporations, big milk companies, who do not want competition from foreign companies.
SMITH: Seriously, it is a Greek dairy cartel fighting against the rest of Europe. Greece is in the European Union. So it cannot technically keep out German milk or Danish milk. They can't put tariffs on dairy products or anything. But the Greek milk producers came up with a very clever way around this whole situation, expiration dates. You know the dates that are on a carton of milk or a bottle of milk? What Greece did was to limit the shelf life of fresh milk in the country, literally require that the date printed on the bottle had to be seven days after the milk came out of the utter. I went to a corner store here in Athens. And sure enough, the woman behind the counter knew exactly what I was talking about.
UNIDENTIFIED WOMAN #3: This one, this one is - small farm, family farms.
SMITH: And this one says, this one was harvested - what? - yesterday.
UNIDENTIFIED WOMAN #3: Yesterday, and it expire the 21 of July.
SMITH: So in four days.
UNIDENTIFIED WOMAN #3: Mhmm.
SMITH: Fresh milk is awesome. I'm not knocking fresh milk. But by keeping the expiration dates so brief, there isn't time for milk producers in other countries to get their milk into Greece and still comply with the law. They can't compete. In the rest of Europe, milk's shelf life can be up to twice as long, but not in Greece. And so tiny Greek dairy farms were saved with these regulations. Milk drinkers - well, milk drinkers had to pay more. One European study showed that Greek milk prices were 35 percent higher than the rest of the EU. Now, I know this seems like a small thing. Why was it in this big deal that almost brought down the entire country of Greece? Well, Professor Hatzis says it is a symbol. It is a symbol of the problems that affect just about every industry in Greece.
HATZIS: Greece is a paradise of small and big cartels. Almost every sector of the economy is protected in one way or another. There are barriers to entry in almost everything.
SMITH: Including, he says, his own profession. Hatzis is a professor at a public university. Private universities in Greece are banned. It's actually in the constitution, no private universities. There's no competition whatsoever in higher ed. And all the professors apparently, they get paid the same amount. Another big controlled industry, pharmacies. You can't buy things like aspirin and Tylenol and cold medicine in the supermarket like you can in the United States. You have to go to a licensed pharmacy. That's why pharmacists marched in that protest I was telling you about. Part of deal with Europe is letting grocery stores sell over-the-counter drugs. And the pharmacists, of course, hate it. See, this is the problem because if the Greek government actually does open these professions to competition - and they've been promising to do so for years. But if they actually do it, it is not going to be easy for Greece, especially these days. There will be small inefficient dairies that go out of business. There will be pharmacies that definitely will close. Big chain stores might come into the country. There might be Walgreens and CVS or whatever the European equivalent is on every corner. But the theory goes that should this happen, prices will eventually come down. People will have more money to spend on other things. And Greek businesses, Greek businesses will finally get stronger. They'll finally be more competitive.
UNIDENTIFIED MUSICIAN: (Singing in Greek).
SMITH: All right, that brings us to challenge number three, perhaps the most important one for any struggling country. And that is how do you make something the rest of the world wants? How do you export? And this is a question that weighs heavily on Greece because they've had a huge problem exporting things, even things with Greek in their name. You like Greek yogurt? - probably not made in Greece. Feta cheese, feta cheese - they invented feta cheese. But other countries make more of it than Greece does. And olive oil - olive oil built ancient Greece. And yet, if you go to a U.S. grocery store, you will rarely see a bottle of Greek olive oil on the shelf. And the reason why this is so gets people pretty upset around here. A few days ago, I left Athens and went to the hills of Kalamata. And they are beautiful, row after row of these hundred-year-old trees stretching up to the ridge. And the olives, these beautiful, bright little green things that you just want to pluck off the tree and put into your mouth, Fofi Nickolitis says, don't do it.
FOFI NICKOLITIS: It's very bitter.
SMITH: I should have listened to her.
It's not - oh... OK, it's bad.
I learned afterwards that you are supposed to soak them. There's a whole process that olives have to go through. And then, you press them for the oil. And that part of the process belongs to Demetrious Carrubalis.
DEMETRIOUS CARRUBALIS: Car-ru-ba-lis.
CARRUBALIS: It's a Greek name.
SMITH: Of course it is. He runs the big machinery down at the bottom of the hill that crushes the olives. And he says they do sell most of the oil they produce. In fact, during the fall and the winter, there's a whole line of tanker trucks on the road outside the factory.
CARRUBALIS: One-hundred-fifty tanks every day.
SMITH: So 150 tanker trucks are driving out of this region, out of Kalamata.
CARRUBALIS: From Kalamata.
SMITH: But the oil doesn't go to some bottling facility in Greece. Instead, these tanker trucks go right onto a ship, a ship bound for Italy. And this is the problem. The Italians buy Greek olive oil in bulk. They put it into Italian bottles. They slap on Italian labels. And they sell these things for far more money than the Greeks make, selling it in bulk. You have probably tasted Greek olive oil. It's probably in your grocery store. You just wouldn't know it. It's under an Italian label. The Greeks lost out to Italy, we think, because they never really invested in the big processing and bottling and storage facilities you need to be a world competitor. The government really didn't market the olive oil industry. It was good enough to just get some money, OK money, for the bulk oil.
NICKOLITIS: It was not planning for the future.
SMITH: Fofi and her brother Vassili have about a thousand olive trees. And they thought, enough of this. They wanted their olive oil displayed in those fancy gourmet grocery stores around the world, just like the Italians. So they designed a fancy bottle. And right away, they hit their first hurdle. They could not make the bottles in Greece.
NICKOLITIS: In Greece, unfortunately, the glass industry is not growing.
SMITH: They had to have the bottle made in, of course, Italy. They are the experts, after all. But OK, they start bottling. They came up with a lovely Greek name for the product, Ladi Biosis. And then they hit another hurdle. Because the situation in Greece is so uncertain right now, the bottle maker and all their other suppliers wanted all the money up front. Normally, you can get a loan for these kind of business expenses. But there isn't lending going on right now in Greece. You know, their depositors have taken out all their cash and are hiding in their fridge. It is a bad time for bank loans. And then, Fofi hits the biggest hurdle, the taxes. Greece is so desperate for money right now that the government is planning something that would be unthinkable in just about any country in the world. They are asking businesses to pay next year's taxes - next year's taxes, this year. They call it 100 percent prepayment. They will literally estimate how much olive oil they think Fofi will sell in 2016 and then tax them now.
NICKOLITIS: So that means we don't have any money after that, any money to put into our protection.
SMITH: Fofi says that Greece has always been hard. It was hard for her grandparents. It was hard for her parents. It's hard for her. And she says she's just going to have to grow the company without a lot of infrastructure and without a lot of financing and without help from the government.
NICKOLITIS: Everything is going to be from our own side. Doing it - we'll do everything ourselves.
SMITH: Her brother says they're all just going to work longer hours. And you see this all over Greece right now. Not that many people have jobs. But the ones who do are working some of the longest hours in Europe. I've seen the stats. Everyone is trying to stay afloat by themselves. And the rules are, you know, don't trust the banks. Don't trust the government. And don't trust that expiration dates and bureaucratic rules will keep you protected forever. It seems like everything in Greece right now needs to be rebuilt all at the same time. As for Fofi's oil, Ladi Biosis, it's actually doing well. It's actually holding its own. It won some major awards. It's in gourmet grocery stores in Europe and Canada. And soon, it's coming to the United States. You will know it. It will stand out on the shelves because it will have on its side a label that says, product of Greece.
(SOUNDBITE OF BAD BAD HATS SONG, "FIGHT SONG")
SMITH: Let us know what you thought of today's show. I'm headed back to New York, but you can email us at email@example.com or tweet us @planet money. Our episode today was produced by Francis Harlow with help from Nadia Wilson and Jessica Jang and basically the entire team. And if you're looking for more shows to listen to, you should check out StoryCorps, showcases unscripted stories about real life. You can find the StoryCorps podcast now at npr.org/podcast. Thanks for listening.
(SOUNDBITE OF SONG, "FIGHT SONG")
BAD BAD HATS: (Singing) But I won't run and hide from my (unintelligible) battle me. No I will stay and fight, fight, fight, fight, fight, fight, fight.
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