Greece’s German rage

[update below]

Amitai Etzioni writes in The National Interest about the rage in Greece against Germany. One understands the Greek anger, though only up to a point. Etzioni thus concludes his commentary

As a Jewish child who escaped Germany in 1935, and as someone who lost most of the members of his sizable extended family in the concentration camps, I have more reasons to resent Germans than most Greeks. However, I cannot find a moral ground on which to condemn those Germans now with us—most of whom were not even born by the time the Nazi regime ended or were children during its waning days—for the actions of their forefathers. Moreover, I respect Germans for having faced up to their past and for making very substantial efforts to ensure that they will be never again commit such atrocities through numerous educational drives and constitutional arrangements. Comparing the way Germany has learned from its past to postimperial Japan (and even Austria) helps to highlight my point.

Germany may or may not find it prudent to support and help underwrite an even larger bailout for Greece. But I fail to see the moral reasons today’s Germans owe Greece more, a nation that by grossly manipulating its data faked its way into the European Union. Surely demonizing the Germans is hardly a recommended way to win them over.

There is a lesson here for other nations that face severe austerity. They should be careful not to yield to the temptation to lay the blame on the other and seek bailouts (or “loans”) rather than engage in painful reforms. Otherwise, they truly may end up as miserable as Greece is.

The last paragraph may be debated but the general point is well taken. As for Nazis, swastikas, and the like, Aristides Hatzis, a professor of law at the University of Athens, has a tribune in the FT (h/t Stathis Kalyvas) on the rise of extremist parties in Greece, of both the left and the right. This is a big danger for Greece, of course, but also for the rest of Europe, including Germany (and which the Germans need to think about).

I can only imagine what the atmosphere will be in Athens on Friday night, when Greece plays Germany in the Euro 2012 quarter-final. Sorry, but I have to leave politics out of this one and focus strictly on the sporting side. Auf gehts Deutschland!

UPDATE: I just came across this op-ed in the NYT from a week ago by Charles Grant of the Centre for European Reform—the best think tank devoted specifically to the EU—, where he explains the veritable views of German policy makers on the euro crisis. Policy makers in Paris should take note of what they have to say about France.

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Alexis Tsipras: loud-mouthed radical

The FT called him that, not me, in a portrait (h/t Stathis Kalyvas) of the man who may become Greece’s prime minister after today’s election. If the stakes weren’t so high I would hope his party, the hard left Syriza, wins and that he accede to state power, so as to put his money where his loud mouth is. Then again, maybe one should hope for this anyway. Money quote

In fact, [Syriza's radical policy stance] may misread Mr Tsipras’s poker-style tactics: he is raising the ante before he knows what is in his hand, and once he sees his cards after the election he may adopt a less intransigent approach. He has noticeably toned down his anti-creditor rhetoric since Greece’s May 6 election, when Syriza was catapulted from nowhere into second place by the collapse of support for Pasok, Greece’s once dominant socialist party. Syriza no longer denounces outright the EU-IMF loan terms, but calls for their “replacement”. Influential party strategists insist Syriza will not unilaterally suspend Greek debt repayments and will, in its own way, honour Greece’s commitments to fiscal discipline.

Lefties the world over are eagerly hoping for a Tsipras victory. But, as with Lula in Brazil (and Mitterrand in France, etc), they may end up disappointed. I’ll be worried for Greece even if New Democracy wins, which, in view of its track record, hardly reassures. Au contraire. And with Pasok, which was no great shakes, out of the picture, a Syriza victory may not be the worst outcome for Greece.

UPDATE: Stathis Kalyvas, who knows Greece far better than anyone I’m ever likely to meet—and to whom I will reflexively defer on matters having to do with this country—, sends me the following comment on this post: “Believe me, he’s no Mitterrand or Lula. Take my word for it, as I really, really don’t wish to test my belief.”

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The end of the world as we know it

Dani Rodrik—who is no slouch economically and intellectually speaking—lays out a scenario of what may happen if the situation in Greece goes from bad to worse. Not quite the end of the world but not far from it. The scenario may be remote, Rodrik concludes, but “not remote enough.” Read it. It will make your day.

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Greece votes itself in the foot

Stathis Kalyvas, professor of political science at Yale (and personal friend), has an article on the Foreign Affairs website on the upcoming Greek election, the rise of the radical left coalition, and the eventual demise of Europe. Stathis is one of the sharpest social scientists I know. And when it comes to Greece, he knows of what he speaks.

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Greece: private sector bosses speak

Le Monde had an interesting full-page enquête the other day on the complaints of Greek private sector employers. As the piece is difficult to find on LM’s website even for subscribers, here’s the whole thing

La complainte des patrons grecs
Article paru dans l’édition du 26.05.12

Un secteur public tentaculaire, des syndicats tout-puissants, une politique clientéliste : en Grèce, les entrepreneurs ont une interminable liste de griefs. Eux-mêmes ont délocalisé, négligé la recherche et le développement, pratiqué à outrance l’évasion fiscale

Larissa (Grèce)
Envoyée spéciale

Assez vite, Andreas Liontos a senti le vent tourner. D’abord, il y eut quelques retards de paiement, des explications douteuses, puis plus de paiement du tout. Inéluctablement, sa compagnie d’assurances, créée en 1990 à Larissa, ville agricole du centre de la Grèce, en Thessalie, a basculé dans le rouge. Etranglés par les mesures d’austérité, les Grecs se fichaient bien de souscrire un nouveau contrat d’assurance-vie ou de protéger un véhicule – que le plus souvent ils n’avaient plus. Pour Andreas, l’ardoise a été salée : 5 millions d’euros.

A 45 ans, l’homme, ambitieux et taiseux, n’a pas sombré. Il a compris que son avenir se jouait désormais hors des frontières et qu’il ne devait compter que sur lui-même. « Tout ce que j’ai fait, je l’ai toujours fait seul, sans aide, sans

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Greece: the misunderstanding

Jean Quatremer, Libération’s Brussels correspondent, has a must read essay on his Libé blog ‘Coulisses de Bruxelles’, “Grèce : le grand malentendu.” He is not too tender toward the Greeks and their apparent lack of will to carry out necessary reforms, and despite the massive, unprecedented transfers they have received from the rest of Europe, not just during the current crisis but since the country was admitted to the EC three decades ago. Read it. The whole thing.

[European Union: who pays, who receives]

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Greek immobilism

Greek writer and philosopher Nikos Dimou had an op-ed in Le Monde last week on how “immobilism in Greece has gone on for way too long.” The piece was translated from English but as I couldn’t find the original version here it is en français

LE MONDE | 24.05.2012 à 13h35

Par Nikos Dimou, écrivain et philosophe grec.

En 2009, quand Georges Papandréou est arrivé au pouvoir, la situation était critique, mais pas désespérée. La Grèce pouvait encore obtenir des prêts sur le marché des titres. Mais le gouvernement s’y est pris tout de travers. Au lieu d’élaguer les dépenses et de miser sur la productivité, il a dilapidé les fonds publics. En mars 2010, au bord de la faillite, la Grèce a dû faire appel à la communauté internationale.

La troïka formée par le Fonds monétaire international, l’Union Européenne et la Banque centrale est venue renflouer la Grèce et l’a exhortée à restructurer son économie. En vain. Certains membres du Pasok (dont des ministres) et les syndicats tout-puissants se sont montrés hostiles à toute réforme. Il s’agissait d’éponger le déficit budgétaire en réduisant la voilure, en allégeant le secteur public, en liquidant les entreprises publiques déficitaires. Et de lutter contre ces fléaux nationaux que sont la corruption et la fraude fiscale.

Au lieu de cela, le gouvernement a procédé à des coupes horizontales de 20 % à 30 % sur les salaires, a augmenté l’impôt sur le revenu et la taxe foncière (acquittés par les rares contribuables honnêtes) et majoré les impôts indirects (la TVA a augmenté de 23 %).

Si les fonctionnaires ont sauvé leur poste, un million de salariés du secteur privé se sont retrouvés au chômage. Sur l’essentiel, rien n’a changé. Les professions “fermées” le sont restées : taxis, notaires, pharmaciens, avocats, transporteurs et une centaine d’autres catégories réglementées sont à l’abri de la concurrence. Nous vivons encore sous le régime des guildes médiévales !

Pourquoi un tel immobilisme ? Le philosophe Stelios Ramfos dénonce une société statique, en proie à l’insécurité, au ressentiment, à la méfiance et à la peur du changement. Cet état d’esprit ne date pas d’hier ; il repose sur des fondements culturels et religieux (de même, la défiance des Grecs envers l’Occident a alimenté plusieurs théories du complot). La seule réforme votée à une écrasante majorité par le Parlement concernait le système universitaire. Même cette loi n’a jamais été appliquée : les universités refusent d’évoluer.

Les lourdeurs et la corruption qui plombent l’administration empêchent l’application des lois et des réformes. Et que dire de son obsolescence ? La plupart des fonctionnaires ne savent pas se servir d’un ordinateur. Des procédures qui pourraient se régler en un clic prennent des semaines. Au cours des dix dernières années, l’Etat a investi 8 milliards d’euros dans des équipements informatiques qui n’ont jamais été utilisés.

Dans un premier temps (le 17 juin, si tout se passe comme prévu), les Grecs auront à élire un gouvernement. Celui-ci devra négocier un nouveau mémorandum. La déflation et la récession sont aujourd’hui les principaux problèmes et, si le pays ne reprend pas la voie de la croissance et de la productivité, il ne pourra pas survivre (encore moins rembourser sa dette !).

Ce qu’il nous faut, c’est une nouvelle génération d’hommes politiques, un nouveau secteur public (plus dense et plus efficace), un nouveau plan économique. Plus important encore, il nous faut adopter une nouvelle mentalité. Le temps est venu de nous secouer de notre torpeur et de nous ouvrir à la modernité. Telle était l’ambition partagée par tous les grands dirigeants politiques grecs au cours de ces deux siècles de liberté. Qui sait ? Peut-être la crise aura-t-elle un effet bénéfique ?

The bit about how most Greek functionaries don’t know how to use a computer struck a personal note with me. From the early 1980s on I had a dear friend in Athens, whom I visited a few times there and carried on a regular correspondence with. When I first wrote her a letter printed from a computer, circa 1986, she took it negatively. She thought the computer-generated printed word was cold, impersonal, unspontaneous, devoid of emotion… I hadn’t heard that one before (and haven’t since). Several years ago—not having heard from her in some time—I called her in Athens and, among other things, asked if she had e-mail. Response: oh no, not at all, don’t know about that. I said that was really too bad, as it’s hard to stay in touch otherwise (does anyone still write letters and send them via the post office?). I imagine she still doesn’t have it (otherwise I think I would have heard about it by now). And my friend was not some time-serving functionary but a lawyer, whose office was in central Athens and home in an upscale suburb (Kifisia). Now I know there are plenty of Greeks who are computer savvy, use the Internet, are on Facebook, etc, etc, but if my friend is at all representative of educated Greeks of her generation (she’s in her late 40s), then, as we say here, la Grèce n’est pas sortie de l’auberge…

[The person on the left (labeled "European inspector") is saying "I have come to impose some order." The person on the right (Greek civil servant sitting at the desk with the message "state apparatus"; there is a pun, see below) responds "Not even Chuck Norris can achieve this, my friend." The pun consists of the use of the word "mihani" (as in ex machina, mechanics, etc) for apparatus; adding an "a" at the beginning has the same effect as adding an "un" in English and the word means something like "unfunctionability". — Thanks to Yannis M. for the translation.]

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Lagarde to Athens: Drop Dead

Like Ford to NY City in Oct. ’75. Christine Lagarde at the IMF is talking tough to the Greeks, telling them that they need to pay their taxes and STFU. If she’s saying it, don’t expect softer talk from Merkel or Barroso. (h/t Stathis Kalyvas)

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Don’t fear the Grexit

So say Thomas Oatley and Kindred Winecoff, of the political science dept at UNC-Chapel Hill, on the Foreign Policy website. Based on their research on global financial networks, they argue that the global economy will weather the storm of a Greek exit from the euro with relatively little damage. Inshallah.

For his part, Nouriel Roubini, the so-called Dr. Doom, says that Greece must exit the euro and the sooner the better. Better pain now than greater pain later. Roubini carries considerable cred given his predictions of the 2008 financial meltdown but I’d like to know how his analyses since then—which I read episodically but not systematically—have held up. Is he a one-prediction wonder like French intello flake extraordinaire, Emmanuel Todd, who predicted in 1976 that the Soviet Union would eventually disappear but was à côté de la plaque on most things since then? My question is if Greece quits the euro what will the price of gas at the pump be there? Will Greeks be able to afford to drive their cars and heat their homes in winter?

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France and the Grexit

France is the country with the most to lose from a Greek exit from the euro, reports Les Echos (via Walter Russell Mead). We’re talking about France taking a €100 billion hit. Seen from this angle, now I’m not so sure about the desirability of a Grexit…

UPDATE: From today’s NYT, “What history can explain about Greek crisis.”

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Tracing Europe’s long road to economic catastrophe

Peter Baldwin, professor of history at UCLA, has a good, succinct piece in TNR summing up the pickle the European Union finds itself in. I’ve said it numerous times and will say it yet again: all this is ultimately the fault of France. It was the French (Giscard d’Estaing) who wanted Greece in the EC, it was the French (Mitterrand and Delors) who led the charge for EMU, and it was the French (Chirac and Jospin) who pushed to bring Greece into the euro. If it had been up to the Germans and/or Brits, it is unlikely any of these things would have happened. Désolé mais ce que je dis est vrai.

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The Greek state (non-)tradition

[update below] [2nd update below]

There’s a fascinating interview in Libération with Greek historian Nicolas Bloudanis, on the modern Greek state—or the lack of it. Bloudanis says that the relationship of Europe to Greece has been based on a fundamental misunderstanding, which is that there is a link, or continuum, between the Greece of antiquity and the Greece of today, that modern Greece is the cradle of European civilization. But this is a myth, as modern Greece is much more a product of four centuries of Ottoman domination than of anything that preceded it. The modern Greek state, which dates from the 1820s, is much closer to a patrimonial state of the Arab world or Africa than a rational-legal state in northern/western Europe (this is my observation based on what Bloudanis says). And the Greek economy has been closer in structure to that of the countries of eastern Europe in 1989 than to those in the EU. It’s obvious to just about everyone nowadays that Greece should have never been admitted into the euro. But it should also have never been admitted into the EC/EU period, either in 1981 or after.

Bloudanis mentions the capital importance in all this of the massive influx into Greece of ethnic Greeks from Asia Minor in the 1920s—of the forced population exchanges between Greece and Turkey—and of the traditions these Greeks brought with them. Very interesting.

The interview dates from October but was brought to my attention by a friend just this week. Read it—the whole thing—here (if it’s behind a wall, then try here). I should mention that the interview was conducted by Jean Quatremer, Libé’s excellent Brussels correspondent. Quatremer is not only tops in his EU reporting but has the distinction of being the very first French journalist to write—and warn—about Dominique Strauss-Kahn’s issues with women, and as early as 2007 (and for which he was denounced by his journalist colleagues, even in his own paper). Good for him.

UPDATE: Jean Quatremer has a post on his excellent blog on the Libération web site, Coulisses de Bruxelles, on why the IMF is asking Greece to lower private sector wages and prices. (February 8, 2012)

2nd UPDATE: Nicolas Bloudanis has a new blog, La Grèce contemporaine (May 7, 2012)

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How to save the euro

Two articles on the euro crisis and what should be done: this one from The Economist and this by George Soros in the NYRB. The former predicts catastrophe in the event of a Greek withdrawal from the euro, the latter not necessarily. My view? It depends on the last good analysis I read or heard (e.g. from these two guys, who are frequently solicited by the French media). In other words, solving this issue is above my pay grade. Or just over my head.

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A nation not in denial

Last month I had a post on the Greek crisis entitled “A nation in denial.” According to this very good piece by John Lanchester on the LRB web site, the Greeks are not in denial. Or, rather, they understand quite well what’s happening to them. Well worth reading.

UPDATE: Kemal Dervis (via Krugman) has a good long-term growth model for the Greek economy.

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A nation in denial

For those following the Greek crisis, there’s a good analysis on the Reuters web site, “Source of the Greek Crisis? A nation in denial.” Among other things, the authors observe that “the Greeks seem more inclined to blame others for their troubles than accepting that something is deeply wrong with their country and painful medicine is urgent.” (h/t Stathis Kalyvas).

À propos, if one didn’t see it, Michael Lewis had a great article in Vanity Fair last October, “Beware of Greeks Bearing Bonds.” A must read.

And not to defend the attitude of Germany in all this but this graph—”European Union: the payers, the receivers”—gives an idea as to why the Germans have been a bit peeved at the Greeks.

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