On the new government, Greece’s prospects

A. Papachelas opinion article

I totally agree with Mr. Papachelas?s article about how important it is for a government and for a country to have party unity. If there is an extreme division among the parties, how will this small country advance financially and emotionally? When one party leader is using foul language and negative comments against another leader, what does this accomplish? It accomplishes nothing… but only instills fear, disgust, and undermines the foundation of what Greece was founded on — democracy, freedom, philosophy etc. Greece needs leaders that are role models both for its adult and especially for its young citizens. Please, Greek leaders, stop screaming at each other, and try to start listening. Believe me, you will accomplish more for this beautiful but badly battered country.

Peggy Kotsantonis

Priorities for the new government

Let me offer a set of priorities for the new Prime Minister: spend less resources on the financial engineering of the debt and spend most of the resources on developing specific action plans to revive the economy. Not to revive the economy with more government expenditure or with more funding from official sources like the EU and ECB. Instead, revive it with new financial investment from abroad. Away from the debt-financed consumption boom since the euro and towards an equity-financed investment drive in value-generating projects which lead to sustained revenue streams for new employees and for the state.

When corporations get into financial trouble, the first thing which banks ask for is a business plan showing the future viability of the company. When that plan is convincing, the financing is normally restructured without problems. With Greece it has been the other way around so far: no business plan but a lot of discussion about the financing. This is like saying, ?I don?t know where I am going but the faster I drive, the sooner I will get there?.

A business plan for Greece will undoubtedly have to include some form of import reductions (special taxes on imports which Greece doesn?t desperately need) and prohibition of official capital flight via bank accounts (capital controls). The EU will probably cry ?foul play? about violating the EU freedoms of movement of goods and capital, but so be it. The surplus countries can either continue to export freely to Greece and send Greece the money for paying for those imports or — if they no longer want to send money — accept to export less and allow Greece to produce more on her own. To me, that is algebra and not economics.

And the new investment in production should focus on import substitution because that is where one can get off to the quickest start. Solar energy projects and the likes of that can come later.

Make a new foreign investment law which offers the foreign investors all the political security they need to have and the competitive business framework and return potential which they desire. Have the EU guarantee this law so that investors don?t have to worry about Greeks breaking it. And get started with public bids for new projects!

Klaus Kastner


Illusion and reality

The EU was designed primarily to prevent another European conflict by shackling Germany to the rest of Europe economically. It was designed to prevent conflict and nationalism by creating an illusion of shared prosperity among countries whose economic development was far too divergent to allow shared prosperity. It was not designed as a political system to allow and encourage complete political and economic union amongst such incompatible states as in northern and southern Europe. National sovereignty was always far more important to the member states and the idea of union.

The illusion of shared prosperity depended largely on southern countries accepting loose rules of economic association in return for mainly German handouts. Greece was a primary example of such a recipient. Now that the Germans are fed up with their role as the European cash cow and demanding that southern European countries become financially responsible through German technocratic intervention, countries like Greece are in effect being put on German and German-backed life-support.

For Greece in particular, ‘the party is over?. Greece has to realize that she will never be a country like Germany or France or the UK. She will not even approach the level of development, either economic or social, of Italy and Spain. Her population is too small and her resources too meagre for this kind of development to be realistic. This is something that neither the politicians in Athens nor the technocrats in Brussels want to admit to because it is far too painful a realisation after almost 30 years of EU delusion.

It would be far better for Greece to take the pain of coming off life-support sooner rather than later: she can?t be on life-support for ever. She would need a national unity government to go her own way. Her history and her economy and her culture point her towards the Middle East and the East Mediterranean rather than to Europe. She is far closer to Egypt, Lebanon, Israel and Turkey and the Balkans than to modern European states. The sooner she decides to go with her natural historical and cultural neighbours rather than trying to be a member of a club that she can never really be a part of, the sooner she will find her own feet as an independent nation again.

Getting there will be extremely painful but in the long run it will be more realistic and have more chance of more permanent success. Staying with the EU will be more like a prolonged or indefinite stay in hospital on life-support. And if Italy collapses or defaults in any way, the whole life-support system will collapse anyhow. Far better for Greece to find her own way in her traditional neighbourhood than to try to belong somewhere that she can never realistically be a part of.

Philip Andrews

Commission calls for more measures

The EU is going to be a very small club of countries that are very competitive. So very hard work lies ahead for Greece if it wants to be part of that club. Just to get in, Greece is going to have to go though so much change the country won’t be recognizable any longer. The plan from the north is to model the EU on the USA. So everything becomes business.

I am not sure if it?s worth it for Greece. First of all, Greece is going to have to go though many more years of hardships to balance its budget. Secondly, then it will have to work its ass off to become competitive and stay competitive. That means the Greeks will no longer be Greeks and Greece will no longer be Greece.

Maybe it?s better just to be happy but poor.

Elroy Huckelberry

The irresponsible Mr Samaras

I agree completely with Mr Bob Bratland regarding the totally negative, self-serving and irresponsible conduct of the leader of the opposition during the financial crisis. Little more could have been expected from the man who made Greece a laughingstock over the name of FYROM and then betrayed his own party.

However, I fear that his hope that there is someone ?with talent within ND who can take over from him? is destined to be disappointed. We have only to remember that this is the party which took Greece from the heights of 2004 to virtual bankruptcy, leaving behind them a string of scandals and a burnt-out countryside.

John Tomkinson

The success of Papademos

The job of an interim-manager is not finding solutions, but finding ways to let the organization find those solutions. Of course you can help with relevant knowledge and experience, but more relevant is how you change the mental syntax of the organization: People have to learn a new game with new rules and competences. Realizing when they don?t change this the organization will default.

The success of Papademos will depend on the implementation of this change. A change that has to be reflected in the attitudes and programs of all Greek parties in February 2012. Otherwise this country really will default. And one euro will become 2012 drachmes. Some bankers do know that.

Hans van der Schaaf

Greece?s fiscal and economic crisis has created a situation among the media, foreign politicians, business leaders, and ordinary citizens that a fighter pilot would call target fixation: So much focus is placed on one target that another looming, dangerous target is coming in from behind and will shoot you down before you ever have a chance to react. So many people are focused, understandably so, on the fiscal crisis and the struggling economy that they are missing the fact that Turkish aggressive behavior has contributed to the fiscal crisis through large defense budgets and continues to loom into the future unless something changes soon. Unlike the rest of the EU countries, Greece is the only EU member with a casus belli against it by a neighbor. Greece is the only EU member that has a neighbor that regularly has its military forces conduct exercises that practice seizing its islands. Finally, Greece is the only EU member that has a neighbor whose air force regularly flies its aircraft over land it threatens to take through a casus belli, including overflights by escorted reconnaissance aircraft. Don?t forget the fact that Turkish navy warships regularly make provocative moves into Greek territorial waters or that Turkish forces have occupied the territory of an EU member, Cyprus, for almost forty years. People lament the sorry state of Greece?s healthcare and education systems, as well as the bad state of the economy. And well they should. If Greece had a peaceful neighbor, like the rest of the EU countries have, then it could reduce its military forces, perhaps go to an all-volunteer force, and shave a few billion euros off its defense budget. But because Greece does not have the support from its EU co-members to resolve these issues, the country is forced to do the only thing it can to ensure that Turkey does not act on its bellicosity: Maintain large, modern, well-equipped armed forces that are at a high readiness level as a deterrent. Until these issues are resolved, this will not change, and Greek schools, hospitals, universities, infrastructure and the overall welfare of its citizens will suffer.

Peter Kates

Greeks fed up with Nea Pasokrateia

I hope the mix is right with the new cabinet. The new prime minister is not affiliated with the Greek political parties that have brought shame to Greece and its people. The major problem Mr. Papademos faces is the time needed to implement such much needed reforms. One way out of this could be to use the election card our corrupt political partries hold so dear. The ?election? though should be in the form of a yes or no question: Should the interim government be given a term of four years? My bet is that the Greek people, fed up with the thirty-year reign of Nea Pasokrateia will vote yes.

John Athans

New York

New Cabinet to be sworn in

Finally, a new Greek interim government is being formed, and the Greeks may feel relieved that their hardship brought by the Greek austerity measures will be over soon! That would certainly be wishful thinking as personified by the Greek adage: ?The day-dreaming and the miracle are not compatible!? There would certainly be no miracles or quick fixes, and I honestly don?t see anything getting better until at least the year 2015 for both the protesters and for those whose lifestyles have been degraded by cuts and reductions in their salaries, benefits and pensions.

The premise? The new government of Lucas Papademos won?t be able to change or improve anything in Greece because it will be like a new driver in a sputtering old car. In short, nothing will change until that old car, Greece, is overhauled and starts to run smoothly. And the austerity measures passed by the Papandreou government are the parts and the accessories that will do that but in the long term, not on short order! Lucas Papademos, therefore, will just preside over the overhaul of those Greek fixes, while the European Union inspectors will be watching him to make sure that the fixes are done according to the signed agreements before the European loans to pay for are disbursed. Even then, life in Greece won?t go back to the past times of plenty because Greeks would have to pay then for the accrued ?overhaul loans? which would be massive — even after the 50% haircut loss on Greek bonds by European banks.

Unfortunately, Greeks also need to overhaul their culture too. They have lived on the hog — borrowed money — for too long, and their current misery will give them pause and thinking not to fall into a similar trap again. But I doubt if they will learn anything, because living on the hog has become a ?badge of honor and ingenuity? that is deeply ingrained in their culture. Greeks pride themselves as Europeans, and they try to support that notion with a flashy and upgraded lifestyle that the Greek Domestic Product output cannot support. Worse yet, the Greeks cannot get out of some bad social habits that were inherited from the Turks during the 368 years of Greek occupation by the Ottoman Empire — like loafing on the job and bragging socially to promote their intelligence level and social status.

Let?s hope that the current crisis in Greece, and the ordeal and sacrifices that will be made to re-float the country, will also serve as a re-education of the people on how they live and on how they select their leaders. In short, Greeks have to learn to live conservatively, rely only on the output of Greek products and services, and vote for politicians that promise them ?stability and growth.? Politics is ?who gets what and how,? and I am sure many of them have bragged to their friends and in their social circles on ?what they had gotten and how? from their politicians on borrowed money until Greece started sinking! Now their bragging has been replaced by misery, and they had better think twice before they ask their politicians for an encore. The adage ?Be careful what you wish for, you may get it? must guide their decisions from now on. Otherwise, history will certainly repeat itself!

Nikos Retsos, retired professor