However, the EU institutions and other European leaders, gave a warning to Athens, to stick to the policy commitments it made in exchange for €289 billion of loans. (Financial Times)
EU economic affairs commissioner Pierre Moscovici said on Monday (20 August) that Greece will once again be treated as a "normal country" after over eight years of international aid and austerity measures.
He added that the EU lenders will no longer impose "any kind of measure or decision", adding that Greece is now free to define its own economic policy within euro-zone structures.
The commission does not aim to give Greece an entirely free hand, however. EU officials will travel to Greece on the week of 10 September to check on developments. Four such visits will be made annually.
Over the last 10 years, Greece's GDP also went down by 24.2 percent. Unemployment is around 27 percent. It will also have to keep it at 2.2 percent until 2060 to pay back debt, a massive task for a weakened economy.
But the commissioner said he was confident the Eurogroup’s decision to implement a series of "robust, short and medium-term debt measures will meaningfully lighten Greece's burden and secure its sustainability."
Moscovici also said Greece's economic structures had been modernized and should be capable of helping create jobs and attract investments. (EUObserver)
Something that is highly needed
if the country is to get back on track. But even if we accept that the worse is
over for the Greeks, one can only wonder how the country will become
"normal," by simply focusing on debt repayment.
As if the only thing that
Greece's lenders care about is getting their money back; with interest of
course. And while the "Eurocrats" celebrate, the ordinary Greeks have
little reasons to be jubilant. For the next 42 years they will be paying off a
massive debt, that will hinder a generation's opportunities. If course during
this time, another economic crisis doesn't weaken further Europe's most
vulnerable, peripheral economies.
The problem with Greece.
Greece's trouble was not only
its debt, rather political and social to begin with. The country had little
chance for stability since its formation and liberation from the Ottoman
Empire, that left it with a totally broken and outdated system.
And if you think that stability
and peace have nothing to do with modernization, then take a look at Sweden, a
country that avoided both world wars, with diplomacy and political manoeuvring,
that sometimes required to cooperate with both sides of each conflict.
Greece did not enjoy that
luxury. Ever since its liberation from the Ottomans, the country entered every
war on the European continent, initially with its neighbouring countries over
territory, but later in the two most catastrophic world wars with the Western
powers' interference.
In fact, the modern Greek state
would never have existed without European participation, meddling or influence.
For example, it was only able to free itself from the Ottomans, after European
public opinion was in favour. After its liberation, it has always been a
European protectorate.
Its first king was a Bavarian
named Otto, while during the rest of the years leading up to WW1, Greece was
swinging between being a democracy and a kingdom, with heavy political
influence by the European powers.
After Otto was forced to leave
the country, the Greeks accepted a Danish King, mainly because the proposed
British candidate-Prince Alfred was blocked by other European powers. As a
reward for accepting a pro-British new king, Greece was allowed to be united
with the Ionian islands, which where until then under British rule.
This "give and take"
in fact, was continued for many years to come, when Greece was sometimes favoured,
while others losing out in territories, depending the interests of the European
powers of the time.
With the Balkan wars, Greece
expanded its territory by nearly doubling its size, always with the agreement
and permission of Western powers. However so did its debt to its European lenders.
The country went from boom to bust, defaulting many times on its debt to its
creditors and all this to gain more land, while the Balkans were being redrawn.
After the two Balkan wars came
WW1, which Greece was coerced in by the Allied Powers. Subsequently territories
have been awarded to Greece for its participation and being among the victors,
which later were lost during the Greco-Turkish wars. A massive humanitarian
disaster was unfolding, with the uprooting of millions of people, under the
exchange of populations between the two countries.
Then the horrors of WW2
followed, together with a brutal Nazi occupation. Again, Greece tried to remain
neutral, but its hopes sank with the attack of Italy in October 1940. The
country had not only to endure the pillaging of its resources by the Nazis and
the extermination of nearly all of its Jewish population, but the Allied food
embargo, which aimed to restrict the supplementation of the Nazi army. It
caused thousands of civilian Greeks to die of hunger-especially in Athens.
This war ended again with
Greece being among the victors, however it was not treated accordingly. It was
in fact used as the battleground of the first proxy war between the two
emerging ideologies in Europe; communist and capitalism.
In December 1944, Greek
nationalist army and the Athenian city police, together with the British forces
started fighting against the Greek communists and their various insurgent
parties, that were joined by many Greek guerrilla regiments which until then,
they were fighting together with the nationalists and the British against the
Germans.
This led to a disastrous civil
war during 1946-1949 between communists and nationalists, that divided Greece
for decades to come. British forces were actively involved in this war and the
years after, just to make sure that the country will remain under Western
influence. Greece nearly ended up becoming another British colony.
For the same reason a US backed
junta was promoted in 1967 that lasted 7 whole years. During this time the
Greek state was the oppressor of its people, turning it into a brutal police
state, just to keep the Soviet and communist influence out of Greece. It
wasn't until the late '70s that the country has finally managed to establish a
robust enough democracy, that soon allowed it to join the European Community in
1981.
However, it has never been a
"good pupil" in Europe. With the "Metapolitefsi" years (the
return of democracy in Greece after the junta) we have seen the rise of the
PASOK political party, which mostly ruled Greece through the '80s.
One of the characteristics of
this era, was that PASOK and its leader Andreas Papandreou's policies were
focused on reducing the gap between Greece's social classes, which was created
by years or conflict and the Cold War, by using EEC funds. While the goal was
reached, it created a culture of entitlement, corruption and nepotism as the
centralized Greek government relied on the expansion of its public sector, to
create jobs.
With the promise of
political allegiance, people found employment in the public sector and for a
few decades, Greece had finally a thriving middle class. However, while PASOK
and its main opposition -the New Democracy party- were wasting Greek and
European funds in order to stay in power, the country saw little reforms in order
to become competitive.
The Greek public was starting
to enjoy prosperity, but it was standing on weak foundations. Not only the
years of wars have allowed corruption to take hold in the Greek society, as the
only way to survive in such harsh and dehumanizing conditions was to do deals
"under the table," but also it led to a huge mistrust towards the
Greek state and its institutions. This attitude can be blamed for avoiding
engaging with government bodies such as the revenue or the police.
After such oppression during
the junta years, coupled with foreign meddling, political, social and economic
instability, extreme poverty, deep social divisions due to the civil war, the
Greek psyche has become self-centred and survivalist, with a great disregard to
the country's laws. It had to during the difficult years, yet it should have
abandoned such practices after the '80s.
In addition, the Ottoman Empire
has left Greece with a system that was not compatible with the rest of Europe,
however it only needed a strong and stable political environment to proceed
with reforms, something that Greece never got the chance to enjoy. The
divisions caused with the civil war, created a society in conflict with itself,
that instead of focusing on modernization, they wasted resources in fighting
each other, living to constantly reopen past scars.
This schizophrenia was
encouraged by the two main political parties, in order to stay in power. They
deliberately kept the country divided, with populism, nepotism and the promise
of job in the public sector. If anyone was to change the country and proceed
with reforms, it should have been the PASOK and New Democracy administrations,
which failed in this task dramatically.
Europe's role.
However, the mess that followed
was not just Greece's fault. Europe was becoming increasingly unhappy with the
country's use of European funds, yet not only they tolerated it, but they
invited to join the euro-zone, although it was clear that the country was not
ready. It was a political decision that made no sense in financial terms.
Since then, every time the
European institutions and their supporters called for further integration, or
deepening fiscal union, it was the governments of the biggest EU economies like
France or Germany that opposed such development. Even when the economic crisis
started being felt, Europe decided that it needed a scapegoat to put all the
blame on, not to accept that the euro-zone was incomplete and lacking the right
tools to govern itself and be sustainable.
Soon after the Greek government
admitted that its budget deficit was much higher that the euro membership
allowed, the other EU governments started a barrage of accusations and counter
accusations towards the Greeks as a nation.
Not only they paid little
attention to the fact the economic crisis started in the USA, with the
corruption and bad financial choices made by many of its institutions-notably
the meltdown of the Lehman Brothers Investment Bank-but they turned Greece as
the single cause of what was to come. In fact, the first European country to
default on its debt and go bankrupted was Iceland, yet no one bothered to
examine why this happened to them in the same extent.
But for the Greeks things were
different. Soon German workers were blaming them for not getting a salary rise,
not the euro-zone's weaknesses. The country's media and government, angered at
Greece's lack of clarity and responsibility, poured a toxic propaganda against
all its citizens.
It resembled the harsh
treatment and humiliation that Germany itself received after it lost WW1, which
resulted in the rise of nationalism and the Nazis in the country, paving the
way for an even more disastrous war in Europe. Our continent it seems never
learns from its mistakes.
In return, the Greek media
opted for old clichés about the Germans, that were equally unrealistic, biased
and offensive. Europe was turning against itself and its unity was put to the
test. Soon people realized what they haven't done since the euro was
introduced; that whatever happens in one country, deeply affects the other and
the continent as a whole.
You see until then, money
lending and borrowing was easy. Everyone got complacent and overspent, each
government according its own agenda. In Greece, partially this was to sustain
the public sector with little appetite for change or reforms, to maintain the
status that has been established since the '80s.
In addition to this, the
country had to overspend as now was sharing the same currency with economies
such as Germany, the Netherlands and Finland, which were more robust. In fact,
the euro itself was designed around the German mark, making it more fitting for
exporting, more industrialized economies like the Northern European ones, not
for a largely agricultural country like Greece.
In order to cope with rising
prices that the euro itself, together with greed by the local tradesmen
brought, Greece opted in increasing its public spending by raising of salaries
and pensions, hosting the 2004 Olympic Games and generally living beyond its
means.
One could blame solely the
Greek government for that, but after all it was French and German banks that
profited from this madness and continued to encourage it by throwing cheap
money towards Greece. Once the euphoria ended, someone had to pay the price,
and it was the ordinary European citizens, not just the Greeks that ended up
with the bill.
The view from an EU citizen
from two bailed out countries.
Suddenly European media were so
focused on Greece and its faults, that the country went through scrutiny and
humiliation. No other nation had such an extensive prying in its internal
affairs, than Greece.
During the first years of the
Greek economic crisis, I was living in Ireland and have established myself for
good there. One of the reasons why I left my home country, was because I could
not stand its sluggish, corrupt government and always wished for Europe to
become a federal entity, as I saw this as the only solution to modernize not
only Greece, but Europe as a whole.
However, soon I realized that
the main impediment to such goal was not corrupt little Greece, but the bigger,
richer nations like Germany or Britain. Thus, I found it peculiar that now it
was them that were so keen in accusing Greece for lack of compliance with EU's
requirements, while themselves dominated the European project, often shaping it
according their own interests.
Many times, it was them who
first broke EU rules, like Germany did with the Maastricht treaty. As I
continued to observe this unfair ridicule of Greece, I often wondered if I grew
up in the same country that the European media were describing.
Not that I was not aware of the
level of corruption and nepotism in my native country, yet I found it hard to
accept that all these things were happening only there. People claiming
benefits illegally or pensions for their diseased members of their family. Taxi
drivers not issuing receipts, while nobody paying taxes. It felt surreal.
I had to explain to my Irish
colleagues why Greece was so corrupt, while they expected me to answer their
questions which they often could not accept or understand. "Why do Greeks
take so many holidays and don't like to work harder," they were inquiring,
but when my response was to ask them why do they often call sick at work, usually
on Mondays after a heavy drinking night out, left them uncomfortably
surprised.
They expected me to apologize
for my country's bad behaviour. Yet they haven't done their own self-criticism
beforehand, just like any other European nation. Instead of blaming the
collective bad policies regarding how the euro was introduced, European leaders
needed to diverge their voters' anger towards Greece.
Having lived in Ireland already
for over 5 years, while working in the country's public sector, I have witnessed
the same type of corruption here, although I cannot be sure about its extend.
No taxi driver in Ireland-and in fact in most European countries that I have
visited- ever gave me a receipt unless I asked for it.
The same applies for free
tradesmen in Dublin, like plumbers and electricians, which also often avoid
giving an invoice unless asked. I have heard of cases of people working while
claiming benefits, while many landlords not declaring the true number of
tenants in their properties and thus, the real income they generate.
No European media bothered to
look so extensively in Ireland's, or in fact any of the other EU members
engulfed by the economic crisis, like Portugal, Spain or Italy. It is highly
unlikely that the same level of corruption that exists in Greece, is not also
present in Italy-a country with Mafia still in control of a large part of its
economy in the south.
The fact that even the OECD
supports the Greek people's claim that they work among the longest hours in the
EU, naturally escaped everybody's attention. You really need to work hard in
Greece, especially if you are in the private sector. The problem is the system
and the economy are so fragmented and disorganized, that it does not generate
enough products for exports, or sustainable growth.
A look at modern Greece's
true problems.
In addition, many of Greece's
problems were highly exaggerated. Yes, people in the Greek islands often leave
their homes unfinished to avoid higher taxes, however this is because they
enjoy a different tax regime than the rest of Greece. It is not something that
applies all over the country, as the government is trying to offer people in
the islands an incentive to stay there, by offering them various tax
breaks.
The habit of many of the Greek
people to offer money to doctors, allegedly for a bed in a hospital was also
something that was portrayed very poorly. Yes, there are doctors who take
advantage of this Greek custom, resulting in corruption. However, the
phenomenon started out as a way to thank doctors for their help and services,
back then when Greece was very poor, and its doctors inadequately paid. People
often used to support them financially, but it was not obligatory initially.
One good thing that came out of
Greece's shaming though, was the soul searching that followed. Many Greeks
admitted their mistakes and realized how badly this affected the economy. I
have heard people regretting the things they've been doing, like overcharging
tourists or not declaring some of their income.
But the truth is that they were
brought up to believe that what they were doing was "necessary" to
make money. These people were raised in almost absolute poverty, most were
uneducated in a very unequal system that in order to achieve anything you
needed to bribe or affiliate yourself to a local politician. It is a system
that originates in the Ottoman years, yet our ruling elites conveniently used
it to remain in power.
And while it is easy to blame
the Greeks for perpetuating a highly dysfunctional system, how many countries
have proven to be quick in reforms? One of the biggest EU economies is France,
itself being brought to a standstill in every attempt to reform. You see once a
system is set, it is hard to change as people who have profited from it will
resist the necessary reforms.
In the case of Greece, not only
the established elites resisted reforms, but through the constant instability,
wars and foreign meddling, the country has never had a chance to take control
of its finances, politics or social issues and tackle them. Greece is in fact a
very young, immature democracy, despite being the birthplace of this political
system.
What it mainly lacks though is
leadership. Ireland's governments want to match its neighbouring countries and
forced ahead with major reforms. Being surrounded by progressive, rich nations
while itself being the most conservative and backward country in Western
Europe, gave the Irish an ambition to change and reform.
Once their economy got almost
in parity with the rest of the developed EU economies, it could attract educated
workforce from all rich nations of the world; US, Australian, German, French,
Japanese, Dutch, Swedish, Italian and British young job seekers arrived in
Ireland, changing its social fabric and influencing further the necessary
reforms.
Greece on the other hand, has a
leadership which thinks nobody else but themselves and wants to remain in power
by perpetuating the status and the policies that allow them to do so. Most
young educated Greeks are leaving the country, to find work elsewhere in Europe
and around the globe, since there are no jobs created in their country on the
field of their studies to offer them a career.
So, Greece is left with its
pensioners, lower skilled workers, pensioners from the richer European
countries that buy property there and lower skilled immigrants from poorer
non-EU countries. How can this nation be modernized, where can it find a
dynamism and ambition in order to achieve this goal, since the pensioners and
the public sector workers care little for change?
Consequently, I was very surprised when the European leaders tried
to bully the Greeks to not vote for a "populist" party like Syriza in
the elections right after the first bail-out, trying to maintain one of the
establishment parties-like PASOK and New Democracy- in power.
They were afraid of the changes
and the challenges they would bring, if another political regime gained power
in Greece, although they knew very well that it was the establishment parties
that brought the country in this mess; with the cooperation and tolerance of
their European partners of course.
That can be explained if you
look at how the Greek governing elite, blamed its own people and threw them at
the mercy of the foreign tabloid media, by portraying their voters as lazy and
corrupt. Naturally to hide their share of responsibility, while maintaining
their power and Europe's support, by avoiding the grilling by the EU
institutions and the other European governments. Something that the Irish
leadership did not do.
Not only the austerity measures
in Ireland were not as harsh as in Greece, but the country's government came up
with a far more functioning plan to solve the problem. They did not impose
savage cuts in salaries that amounted to 40% of the wages, allowing the debt to
grow further and throwing the country into the jaws of international usurers;
just like the Greek leaders decided to do.
The NATO burden.
On top of that, Greece is
burdened with heavy NATO membership spending, something that countries like Ireland
or Austria and Sweden do not have to bare. It is second only to the USA in
keeping up with its membership obligations and payments, while richer countries
like Canada, Belgium, the Netherlands, Denmark and Germany itself are falling
short in their contributions.
With an excuse that we need to
protect ourselves from Turkey, a NATO ally of ours, the Greek government has
convinced us that we need to overspend in arms and military spending. To the
detriment of course of our economy and to the benefit of those countries that
sells us their weaponry; like Britain, France, Switzerland, Sweden, Germany and
the United States.
It is no wonder that this
situation is being perpetuated and tolerated by our European and NATO allies,
since they are making good money out of us, yet they blame us for being on the
receiving end of the EU budget; while we must spend a large part of it straight
back into buying arms from them.
Conclusion.
When this crisis begun, I was
hopeful that Greece will receive some of the punishment that it deserved, in
order to get a grip and modernize, so that one day I can return back home in a
fully functioning European economy and democracy.
However, it soon became
apparent that Greece was being scapegoated and used to sustain other nations’
economies, that in fairness tried to get their money back and protect their
interests. What Greece needed all these years, was a new governing elite to
push for reforms and proceed with attracting investments, not become heavily
indebted one more time.
And while calls were often
being made for another approach to solve the euro-zone crisis, the European
elites, following Germany's wishes, opted out for punishing the Greek people
for their government's lack of competence. But how could any Greek, that had no
choice when it was decided for their country to join the euro, bare the whole
blame for the block's woes?
Does any EU citizen have an
acute knowledge of their country's finances, or is fully aware of how their
government run its books? We as Europeans must realize that we need to
familiarize ourselves with each other's background and problems that we are
facing. It is not good enough to accuse or to blame, without understanding the
root of the issue.
We now have managed to deal
with the crisis, yet still we haven't achieved long term reforms on a
pan-European level. The debt is spread to the periphery of the euro-zone,
however what happens when the next crisis challenges our economies?
In Greece things are so bad
that people confess that they are forced to tax evade again. "If we were
to declare everything, there will be simply no money left to survive,"
many of the country's small business owners declare. The type of austerity that
the EU and Greek governments have imposed on Greek people, with taxes higher
than Sweden's yet salaries and pensions as low as Slovenia's, have destroyed
the local market and money is scarce.
The country's brightest have
abandoned the country, while public spending is limited, as expected by
Greece's lenders. However now they declare the country as "normal,"
ready to accept investments and generate new jobs. What I fear is another
generation being raised in poverty, forced into corruption and tax evasion due
to lack of opportunities just like their grandfathers, thus perpetuating the
very attributes that Europe despised in the Greeks in the first
place.
I hope this time, Europe's
"meddling" in Greek affairs, will be to bring it in line with the
rest of Europe. The country does not need more European money from now on, in
fact it never really did, and it is obvious that the reliance on EU subsidies
proved to be a huge mistake.
What Greece needs is
investments, jobs and a fully integrated European economy under one single
currency and market. If the Germans want to have the Greeks as equal partners,
they will have to realize that they need to establish a new Greek economy that is
compatible with theirs; which means the industrialization of Greece so that it
can become an exporting country.
And not just Greece, but the
whole of the euro-zone must be reformed and the problem here is not the
peripheral economies, rather those of the core. Will they choose to keep
subsidizing the weaker European states, or will they accept to spread
investments outwardly towards the periphery?
We need to realize that we are
trying to integrate countries with a very different mentality, due to historical,
religious and cultural differences. In addition, Europeans need to understand
that this type of economic model which Europe tries to adopt, was not designed
to match equally everyone's mentality or available resources; rather that of a
small core, which in their majority belong to the north-western, protestant
group of countries.
We cannot force the rest to
change as quickly, especially when we ridicule and humiliate them, imposing
either debt or subsidies over them, instead of offering equal opportunities for
employment, prosperity and growth.
It is not just Greece that must
change after all and become a "normal" country, but Europe as a whole
that needs to be transformed into a "normal" functioning union of
states, if that is what its people desire.
