EU Referendum

Showing posts with label Greece. Show all posts

It might have disappeared from the notoriously parochial British media, but it is still there – Greece, that is. And their problems have not been resolved. In fact, they seem to be getting worse. The current round of troubles started a few days ago when the nation's lorry drivers announced their intention to go on indefinite strike today over plans to open up their sector to new licenses, opening up the transport business to new entrants.

Predicted shortages of fuel and goods, particularly on the Greek islands, have not been long in materialising and, at the height of the season, hundreds of thousands of holiday-makers look set to get caught up in the chaos, with even food and shortages of medicine threatened.

The government has no choice but to persevere – this strike being one of many as ministers try to implement fundamental economic reforms to meet the conditions imposed by the EU and IMF. Finance Minister George Papaconstantinou, has been struggling to meet the targets to secure a second payment of €9 billion by September.

With at least 100,000 tourists who had driven to Greece from neighbouring Bulgaria and Serbia now stranded, thousands have abandoning their cars as a result of fuel shortages. Officials taking the highly unusual step of beseeching visitors to stock up on fuel in Macedonia.

Premier George Papandreou set out emergency legislation late on Wednesday, threatening the drivers that unless they returned to work they would face stiff fines and their vehicles being requisitioned.

This is only the fourth time since the end of military rule in 1974 that such legislation has been invoked, but as yet no one is sure how the drivers will react to it. Chances are, the riot police are going to be busy, and one or two heads are going to get broken.

What is particularly vexing the government, though, is that the entire administrative structure seems to be breaking down. Under the emergency legislation, so-called mobilisation orders are supposed to have been issues, but most lorry drivers have yet to receive them.

The government is left without its big stick, seeking to negotiate a settlement, yet finding more and more sectors – one of the latest being the air traffic controllers – withdrawing their labour. Greece, it would appear, is not the place to be at the moment. But then it never was when there are a rather large number of Greeks baring rifts.

COMMENT THREAD

Juncker[i-Juncker]The "colleagues" – namely eurozone finance ministers - must have been pretty desperate (or worried) to turn out on a Sunday, although it was a teleconference rather than a physical meeting. Even then, what they seem to have announced could have waited until tomorrow ... or not. What do they know that we don't?

That would be a stupid question if it was meant as anything other than a rhetorical device, highlighting that, when it comes to Greek finances, more than a few things do not add up. And we're not just thinking about the accounts.

Anyhow, the news came officially at an afternoon press conference in Brussels, following which Bloomberg and others reported that a "rescue package" had been cobbled together for Greece, worth "as much as €45 billion".

This is to cover the €11.6 billion needed by the end of May to cover maturing bonds, on top of another €20 billion by the end of the year to pay debt coupons and finance this year's deficit.

As to following years, it was well into the evening before Reuters issued a correction, stating that the aid would be "significantly higher" than €40 billion. This was from an unnamed official who said "it would be logical" for it to amount to some €80 billion over the next three years.

And, contrary to earlier predictions - the money will be available at a variable rate, but below what it would cost it on the market. The level is currently calculated at about five percent for the member state contribution, and less for the €10-15 billion coming from the IMF.

Nevertheless, Greece is still declaring that it intends to seek money from the market. Only in the event that it is unable to get the requisite finance will it ask for the help, when an as yet unspecified "mechanism" kicks in. Or, that is the theory. In fact, there is an amount of incoherence in the statements.

Contrary to the public optimism of the Greek government, the Eurogroup – as it likes to call itself – says it is offering the loans at "non-concessional interest rate", in order to "set incentives for Greece to return to market financing." This makes it sound as if the loans are a done deal, with Greece already planning to take them up.

On the other hand, Luxembourg prime minister Jean-Claude Juncker (pictured), who chaired the tele-conference is saying officially that the money would come only "if needed". But it seems this is said at the behest of the Germans. It is they who are saying that Greece needs to try, and fail, to borrow on financial markets before it gets help – and this may be for domestic consumption.

Quite how the markets will react is anyone's guess – no doubt traders and bankers too are trying to work out precisely what is going on. We will be seeing some sort of a response later today. A Greek finance ministry official says that the reaction over the next few days "will determine future developments."

But that hasn't stopped Greece's prime minister George Papandreou crowing. "With today's decision," he said, "Europe sends a very clear message that no one, any longer, can play with our common currency, no one can play with our common fate."

This sounds an awful lot like hubris. The man may yet have to eat his words.

COMMENT THREAD

Greece+bust[i-Greece+bust]
Unwittingly, The Financial Times may have delivered the ultimate epitaph for the foolhardy experiment of allowing Greece into the eurozone.

It comes in its latest analytical offering – of which there has been no shortage – when we are told of the latest developments, with the rider: "This was not how things were supposed to work out." That, most certainly would suffice for the gravestone of a nation.

The situation on which the FT was commenting was the declaration by somebody or other in the EU telling everybody who would listen that the "colleagues" would come dashing to the rescue if need be. Greece would not be allowed to default.

Somehow, though, this message does not seem to have got through to the markets. Nervousness about Athens' public finances, we are told, has contaminated lending in the private sector, with depositors having withdrawn €10 billion from Greek banks.

This is what the FT thinks should not be happening. Greece cannot be forced out of the euro and is unlikely to leave voluntarily so, with the declaration of support, the markets are supposed to rush in and buy up Greek debt.

The reason for this seems to be that the EU – with Germany looming in the foreground – is playing an elaborate game of chicken. It framed its statement of support, says the FT, in terms of a reason why the support would never actually be needed.

Since Greece would not be allowed to fail – so the argument went – there was no need for the market to worry. And as long as the market wasn't worrying, there would be no need for support, and thus no reason to suppose that the support would not be forthcoming, because it wouldn't be needed ... as long as the market wasn't worried.

Worrying, however, is just what the market seems to be doing – manifest in the yields on two-year debt and the cost of credit default swaps, although precisely where they stand is not exactly clear ... different reports seem to be reporting different figures – rather like the Greek government's accounts.

But, as long as Greece is not going to be allowed to fail, and the wish becomes the promise, Germany – which is going to have to produce the dosh to make it not happen if the worst comes to the worst – is insisting that there is no need for a specific plan to keep Greece out of the schtuck ... because Greece is not going to be allowed to fail, and therefore it isn't going to fail.

Strangely, even though it is not going to fail, the European debt markets are still behaving as if the impossible could happen – which, of course, it can't. But since the debt brokers this side of the pond aren't playing ball, Greece is trying to offload debt on the US market, where it is assumed that there are gullible buyers around who are prepared to take a punt.

Unfortunately – for Greece – US investors seem no longer to be relying for their market intelligence on surface mail delivered by the fortnightly steam liner. Thus, the WSJ tells us, they aren't playing ball either. Neither are the Chinese and Japanese investors particularly interested, especially as there are safer options around ... like Russian bonds. It really is that bad.

As a result, the credit rating agency Standard & Poor is marking Greek debt down as BBB+, with a negative outlook. No one knows for sure if there is a ZZZ- category, but it could be that we are about to find out.

Nevertheless, all is not lost. The Guardian is telling us that Greece cannot be allowed to fail. The union cannot afford another failure like that of the now defunct Lisbon agenda, it says. So the member states must step in and do something. Somebody, anybody, must do something. So there ... sorted.

That leaves the New York Times to note that the question facing Europe is no longer whether Athens has the political will to cut spending and raise taxes to curb its gaping budget deficit, but whether Greece will run out of money before it gets the chance to do so.

The money, so to speak, is on Greece running out of money. "This is no longer about liquidity; it's a solvency issue," says Stephen Jen, a former economist at the IMF who is now a strategist at BlueGold Capital Management in London.

But, since German and French banks own over €100 billion in Greek bonds, it is unlikely that Greece will be allowed to fail. Here we go again. According to Yannis Stournaras, an economist and an adviser to previous Socialist governments, all Greece has to do is ask for the money.

Meanwhile, there are a lot of unhappy bunnies in Greece (pictured). They don't seem to be that convinced that Greece cannot fail. Clearly, they have not been told what to think ... nothing can go wrong ... Greece cannot fail.

COMMENT THREAD

Those who know far better than I have suggested that when the spread between German and Greek bonds reached 450, we would be at crisis point.

According to The Times, that point has been reached and exceeded, when it widened by more than 40 basis points to 456 basis points (bps) today. The two-year Greek government bond yield surged more than 100 bps to almost 8 percent.

The further surge in bond yields, we are told, prompted a leading rating agency to urge Greek policymakers to appeal to the European Union and IMF for cash.

For the rank amateur like myself, this is a foreign language. And no amount of quick studying or pontificating is going to make me into an expert. But the translation seems to boil down to two simple words ... like "belly up".

Quite what the effects of a collapse of the Greek financial system might be – when, rather than if it happens - but they must surely be profound, and not limited to the eurozone. The UK has considerable exposure here, and cannot help but be caught in the fallout.

In and amongst the flood of electioneering, it would be useful to have one or other politician spell out, in simple terms, our level of risk, the likely outcome of current developments, the range of implications for the British economy, and the measures that could or should be taken to mitigate the risk.

That, probably, is too much to ask – but it strikes me that is is far more important than the current political preoccupations.

GENERAL ELECTION THREAD

train-wreck[i-train-wreck]Wolfgang Münchau in The Financial Times seems to be ruling out any possibility of fiscal union in the eurozone. That, he seems to be saying, will lead to a "terminal crisis" and the collapse of the euro.

I am not sure he's right – given that I've understood him properly. He could well be underestimating the sheer determination of the "colleagues" to pursue their integration agenda. The prospect of a "terminal crisis" is precisely the type of beneficial crisis which gives them their power.

Should the euro collapse – with the default of Greece – which Münchau suggests must happen next year, it will signal the end of the EU as a political project. It will not recover from such a blow and, once its agenda goes into reverse, it will not stop there. So weakened will it be that the EU itself will be under threat, and will have difficulty surviving.

The "colleagues" will know that, and have invested far too much in the project to allow it to fail so easily. They will break every law in the book – and some – and even suspend the laws of economics, as far as they can, in order to save it. And if they succeed, they will just stave off the inevitable, making the final collapse even more dramatic.

Either way, they have a train wreck on their hands – the die is cast and in the long run there is very little they can do about it. But it ain't going to be pleasant when it happens. A lot of people are going to get hurt.

COMMENT THREAD

link[i-link]It’s hard to tell how one should react to the various and variegated news from the Balkans. They could be treated as a big joke or as something created especially to try us all. Then again, many a European and world tragedy emerged from that difficult peninsula.

First things first. Serbia has signed a Stabilisation and Association Agreement (SAA) with the European Union. The 27 foreign ministers, who met today decided that Serbia, too, should be placed on the road to possible, if somewhat distant membership of the European Union.

Boris Tadic, the president interpreted the whole process somewhat differently in the statement issued yesterday afternoon:

Today, I am proud to announce that Serbia has finally signed the Stabilisation and Association Agreement with the EU. The Agreement sends a clear message: Serbia's future lies in Europe.

The message delivered today by EU Foreign Ministers was clear and unambiguous - they want Serbia to take its rightful place among them as a full and equal partner. There can no longer be any doubt about our shared commitment to make Serbia an integral part of a stronger and bigger EU.

For the citizens of Serbia the agreement will give greater freedom of travel, closer economic integration and removal of trade barriers, and most importantly the prospect of more employment. By signing the agreement today, we have reconfirmed our commitment to further reform and progress and prevented a path of economic isolation.

It pleases us particularly as we have delivered on this promise to the citizens of Serbia, ahead of the elections.

Now it is up to all citizens of Serbia to think carefully about the real long-term interests of our country and choose accordingly.

Well, of course, the man is fighting an election and the outcome is not at all clear. But this has always been the theme of the post-Communist countries – we want to be part of Europe. Sadly, the EU, incapable of seeing relations with neighbouring countries except in terms of them joining or not joining, never offers alternative agreements that would also make the "newcomers" feel as if they were part of Europe.

The only common foreign policy the EU can agree on with regards to neighbours (the most important aspect of one's foreign policy) is that of an amoeba: endlessly changing shape.

Meanwhile, the aspirant countries see possible membership as a kind of an El Dorado or Shangri-La – it will sort out their problems and give them lots of money to develop economically. Sadly, the reality is very different and the Serbs (and the Croats, the Bosnians, the Albanians) will find out, if, indeed, the EU lasts long enough for them to become members of it.

There are one or two other problems. Firstly, what happens if Tadic’s party loses the election to the more nationalistic groups and the question of Kosovo raises its head again. There is no evidence that it has been solved. Secondly, what is Russia, Serbia’s best friend (though not necessarily in need) going to say about all this?

The Serbs may be happy but neither the Greeks nor the Macedonians are. We have followed this convoluted saga on the blog. Yesterday’s Wall Street Journal carried an article by the Greek author and journalist, Takis Michas, which tried to explain the various problems that prevent the two countries from agreeing on any kind of a peaceful coexistence. They are not about to go to war but neither are they at peace.

It is about much more than just the name, the argument about which is something of a red herring. It is about that elusive Balkan entity – national identity, something that was supposed to disappear in the twenty-first century but, which, to the contrary, creates endless problems in countries, who spend a great deal of time re-writing and re-re-writing historic events and developments the better to define their identity.

Contrary to received wisdom, the dispute between Greece and Macedonia isn't over a mere name, but concerns competing national mythologies, symbols and histories. In other words, we have here all the usual Balkan issues over which people in this part of the world and elsewhere have butchered each other in the distant and not-so-distant past. No easy fix is possible, and a compromise over the name won't put to rest the basic conflict. Unless all the problems are addressed openly and honestly, mutual distrust will persist, ready to erupt again at the first opportunity – or once EU reconstruction funds dry up.

Had Athens and Skopje engaged in serious bilateral or multilateral talks during the past decade on all the points of contention, and not focused simply on the "name", perhaps they would not find themselves in their current, absurd predicament.

Then again, with EU reconstruction funds drying up, the two countries might be forced into some kind of accommodation with each other.

Greek+salad[i-Greek+salad]Boycotting goods is all the rage. The Chinese are doing it to the French (and that deserves a separate posting) and the Macedonians are doing it to the Greeks. News of this comes from Transitions Online, whose journalist, Ljubica Grozdanovska, may know a great deal about the Balkans but seems to be a bit hazy on the United States.

When the French government refused to support the American-led invasion of Iraq in 2003, restaurants in Washington replaced “French fries” with “freedom fries” and the Gallic kiss became taboo. Patriots poured vintage champagne down the drain to show their distaste for the F-word.

Americans may now be eating crow with their fried potatoes and sparkling wines.

I’ve got news for the lady, which she and some other Europeans might like to think about. While French fries have remained available in the States, often called freedom fries, the alternative, known as home fries, are absolutely delicious. Even more to the point, Californian wine is not something to sneer at. Its consistently high quality is pushing French wines out of the world market, boycott or no boycott.

Getting back to Macedonia. As we have written before, Greece will not agree to the country becoming part of either NATO or the EU unless it changes its name, the present one, fully accepted by all except the EU under Greek pressure, apparently indicating that Macedonia may have territorial demands on northern Greece. Macedonia denies this and, to be fair, has, rather unusually for a Balkan country, never given the slightest indication of those demands.

Discussion of Macedonian membership of NATO – not necessarily something to be wished for – was postponed at the Bucharest summit because of Greek objections and the issue was reduced in importance, what with the kerfuffle over Ukraine and Georgia.

The Greeks are now trying bribery, as Macedonia Online reports.

"Greece will increase the financial support of its northern neighbor and will remove the visa regime if Skopje distances itself from the stubborn position for its name" says Greek Foreign Minister Dora Bakoyannis in todays interview for 'Apogevmatini'.

"Athens will invest 75 million euros for the highway infrastructure of Corridor 10, which connects the neighboring country with Greece and EU, will invest in business and will gradually remove the visas". says Bakoyannis.

Well, how nice. And who will be providing those 75 million euros, one wonders, given the amount of money Greece receives from the European Union in the form of one subsidy or another. A case of Greeks bearing other people’s gifts, methinks.

Macedonian President, Branko Crvenkovski has complained to UN SecGen Ban Ki-Moon, about Greece blocking his country’s application to NATO because of the 17-year long dispute over the name.

Don’t know about the UN SecGen but the NATO SecGen, Jaap de Hoop Scheffer, who has gone to Skopje, is staying firmly on the fence, urging all to resolve the name dispute as soon as possible.

Meanwhile, the Macedonians themselves are taking matters into their own hands. As Ms Grozdanovska says:

But Macedonians appear to be using a similar show of altruism against a neighbor by removing “Greek” from their salads and gyros, and dropping olives from their diet.“Don’t buy Greek ouzo.” “Don’t travel to Greece.” “Boycott all Greek products.” “Protest against Greece’s behavior.” “Forget Greek olives.” “Don’t eat Greek gyros.”

These are just a few of the messages and public statements floating around Macedonia since Greece blocked its neighbor’s entry to NATO at the alliance’s recent Bucharest Summit. Leaders of the 26-member NATO alliance agreed on 4 April to invite Croatia and Albania to join, but bowed to Greek opposition to Macedonia’s constitutional name (Republic of Macedonia) after several compromises failed.

There are a few setbacks to the Macedonian boycott policy of the kind that the Americans might not have experienced when they were filled with righteous anger against the people they described as “cheese-paring surrender monkeys”.

But the name controversy may have deeper implications for the citizens of Macedonia, an EU candidate country with a 36-percent unemployment rate and economic output that is 27 percent of the EU average. Since the trade embargo ended in 1995, Greece has accounted for a growing portion of Macedonia’s investment and trade.

In recent years, thousands of Greeks have crossed the border to visit Macedonian towns such as Bitola, Dojran, Gevgelija and Strumica, drawn by lower prices at restaurants, shops and markets.

Visiting Greeks also have flocked to the new casinos built in the near border area. The growth in commerce has boosted cooperation at a very human level – people on both sides of the border are learning the other country’s language.

Strains are now showing in these relationships, with commerce in these border towns slowing to a trickle, according to Greek and Macedonian media reports.

Donco Tanevski, president of the Hotel Association of Macedonia, said 90 percent of Greeks planning to visit Ohrid for May Day had cancelled their reservations. Typically, some 2,000 Greek tourists show up in the lakeside town for the 1 May holiday, Tanevski said.

Then again, this sort of low-level commercial interchange is likely to revive. After all, the Greeks do have to go somewhere to gamble.

alexander_the_great[i-alexander_the_great]Well, actually, this is not for children either because the average child is considerably more sensible and mature than certain politicians. Yes, I am talking about the Balkans again, though not about Kosovo so everybody can go back to sleep again.

There is a sort of a joke about political, social and academic meetings to do with Balkan countries and regions that all you have to say is “Macedonia. What do you think?” to start a fracas that may well lead to fisticuffs.

As part of the break-up of Yugoslavia, as created in 1918 as opposed to the one that was around for a few years after 1998 (no, this is still not about Kosovo), Macedonia became an independent republic. Or, to be quite precise, it became independent of the other Yugoslav republics, specifically, of Serbia.

As it happens, the Yugoslav wars did not affect Macedonia heavily, despite the fact that it had voted for independence in 1991 until the very end when there was a spot of trouble with Albanians, particularly refugees from Kosovo. (Woops, I did mention it after all.)

That seems to have been sorted out by NATO in 2001 and Macedonia’s existence as an independent state would have carried on with little attention being paid to it from the rest of the world (that does not include other Balkan nations, their politicians and, above all, their academics) but for one fact.

Greece announced that it cannot acknowledge that there could be such a country as Macedonia as it was properly a northern province of Greece. Alexander of Macedonia, they said grandly, did not speak a Slavic language. No, he did not but he did not speak modern Greek either. (This is quite a useful summary of the convoluted ancient history of that area.)

By 2005 the country was officially a candidate for European Union membership under the name the Greeks have been insisting on, which is Former Yugoslav Republic of Macedonia or FYROM. Understandably, that name was abandoned by all but EU officials and Greek politicians and the country is known as Macedonia by everyone else.

Now the subject has come up again as Macedonia, together with Albania and Croatia are due to be invited to apply for NATO membership. As it happens I think that full membership is probably not the most sensible idea for those countries, as they are unlikely to contribute much. But then, how much does Greece contribute?

In any case, Greece is objecting to Macedonia being included because of the name. The argument is now somewhat different. Gone are the references to Alexander the Great of Philip of Macedon. Welcome modern Greece as the perennial victim.

Athens objects to its neighbour taking the name of a northern Greek region. It says the name implies a territorial claim on the region, which Macedonia denies.

The Greek Foreign Minister, Dora Bakoyannis, made a rather convoluted statement:

Unfortunately the policy followed by the government of the Former Yugoslav Republic of Macedonia in its relations with Greece, particularly as concerns its intransigent stance and its actions of an irredentist and nationalist logic, do not allow Greece to take the same positive stance as in the case of Croatia and Albania.

A UN envoy is trying to find a compromise solution. Sending the Greek Foreign Minister to clear out the art cupboard and not come back until she is ready to shake hands sounds like quite a good idea.

We Europeans are civilized, humane and gentle - just like we have always been in history. We would never think of waging wars, conquering people or mistreating those we do not like.

So goes the litany, which then continues with the words Bush, CIA, rendition in any order you would like. Or as Dirty Harry says from time to time on Libertas: "Redaction, rendition ... let's call the whole thing off".

But hey, what's this in the Spiegel? It seems Greece, that land of ancient civilization and anti-Americanism (I bet Plato couldn't stomach Bush) "may be in blatant violation of human rights norms".

Hmm, well that's one way of putting it. Apparently, coast guards have not just been turning away refugees from rather nasty parts of the world, possibly because they refused to blame the Americans and President Bush personally for their sorry plight, but have been torturing them.

Read the whole piece.

COMMENT THREAD

Karamanlis[i-Karamanlis]The first of this autumn’s elections has been and gone with little change except for the fact that the Greek government now has a smaller majority than it did before Prime Minister Karamanlis dissolved the parliament. What happened in the meantime were the catastrophic fires and the perception of government incompetence in dealing with them.

We have written about the fires before and pointed out that the problem had much to do with the lack of investment in the fire services in a country where summer forest fires are not exactly unusual. This lack of investment goes back a long way.

The BBC has a prettily coloured chart to show the way the parties have taken their seats. New Democracy has 152, the Socialist Pasok 102 and the three smaller parties have gained support. The two Communist parties, KKE and Syriza will have 22 and 14 seats respectively with the right-wing nationalist Laos holding 10 seats. This is the first time a far-right party has entered parliament since the ending of military rule ended in 1974.

That gives the government a majority of 4 over the combined opposition and the one thing that is likely to combine them is any hint of free-market reforms. It is hard to tell at this stage what these will consist of. The BBC summary, based on Prime Minister Karamanlis’s promises is a little contradictory:

Mr Karamanlis has pledged to use his new four-year term to improve the economy, fight poverty, raise pensions and create a social state for the future.

And no doubt, he will support motherhood and bake the best apple pies in history.

Some of the necessary reforms have probably bitten the dust, as Al-Jazeera reports that

The embattled education minister, Marietta Giannakou, who led planned changes in the education system that sparked months-long demonstrations, failed to retain her seat in parliament.

There is pressure on the leader of Pasok, George Papandreou (very confusing, this hereditary style of politics, as I keep thinking he is his father, Andreas) to resign because he has now lost two elections.

COMMENT THREAD

Greek+protests[i-Greek+protests]The Greek demonstration in Athens has been picked up by several MSM outlets (often in surprisingly similar words). About 10,000 people, some dressed in black, some wearing masks, gathered in Athens to protest the government’s rather feeble handling of the catastrophic (for once, the word is apt) fires that swept across parts of the country.

Among the various complaints are the fact that there had not been enough investment in the fire-fighting services over the years though this, presumably, applies to successive governments; that the law allowing and, indeed, encouraging people to burn down parts of forest for property development still stands; that people in danger zones were more or less abandoned to their fate.

It should be noted that so far 74 people have lost their lives in the fires, mostly people unwilling to leave their homes and their animals till it was too late, though some were firefighters. The numbers of injured run into hundreds and those made homeless into thousands. The loss of wildlife and of natural resources is incalculable.

The fires, as the Times reports, are dying down though there is fear of another heat wave reigniting smouldering undergrowth.

In the Peloponnese, the inferno destroyed hundreds of homes in dozens of villages, fragile mountain ecosystems – which will require decades to revive – and an entire rural way of life in some of the peninsula’s worst afflicted areas.

The flames even damaged parts of the 2,800-year-old World Heritage site of Ancient Olympia, birthplace of the ancient Olympic Games and the place where the Olympic Flame is lit for the summer and winter games.

Well, what a good thing the Elgin Marbles and many other Greek antiquities in other parts of the world are safe.

Thousands of people are receiving immediate food aid. It is not entirely clear how this will affect the soon to be fought election. PASOK, also enmired in corruption scandals, is gaining on the governing, supposedly conservative New Democracy, but the non-investment in Greek infrastructure has been a scandal for several decades.

Der Spiegel, which has published a number of extremely good photos, one of which I shamelessly nicked, quotes from a number of German-language newspapers that show little European solidarity and insist that the Greeks must put their own house in order. This attitude might be coloured by the knowledge that over the years Greece has received billions of euros and before that pounds and marks from the European Union and has, apparently, done very little useful with them.

Die Welt says:

The current catastrophe is just too big to be ignored. Certainly Brussels will show Europe's material solidarity. But maybe this disaster will be a chance to correct the distorted image of the country. Greece is a poor country on the borders with Asia, with its own traditions and countless problems. Beyond Athens, the Third World begins. It would help desolate Hellas, if we could finally understand that.

The left-leaning Berliner Zeitung goes further:

People in Greece like to wallow in self pity and victim mentality. Wherever you look there is the denial of responsibility.

This should be the beginning of a serious debate: Greece has to get itself in order ... The Greek know that after catastrophe, tragedy and apocalypse there is catharsis -- purification through misery, fear and shock.

Of course, as the German newspapers point out, the words we use to describe the situation come from Greek. Greece, they still maintain sorrowfully, is the cradle of Western culture and, because of that, was readily accepted by many as being core part of Europe unlike, say, the East European countries or the ones in the Balkans.

It is charmingly typical of Germans, who have produced some of the world’s greatest classicists, to feel so romantic about Greece. Without going into any discussion about the actuality of that Greek political culture – mostly the cities spent their time fighting each other with ever greater savagery – we can still point out that modern Greece has only tenuous links with Periclean Athens.

In fact, it is a Balkan country and some, though not all, of the East European countries are far more European in the modern sense of the word. In the post-Communist world the division between those that were part of the Ottoman Empire for a long time and those who were not or were only there relatively briefly has shown up very clearly.

It has also been pointed out to me that the division between the Western and the Eastern Churches, culturally and politically speaking, have also shown themselves up very clearly.

None of which should prevent Greece from becoming a genuinely modern European country with a relatively uncorrupt, transparent and accountable government. Sadly, the EU and its previous incarnations have not helped matters. By pouring enormous amounts of money in various kinds of aid – agricultural, structural, as a response to occasional need – it has merely exacerbated the corruption and the dependency mentality.

The result has been a great deal of hubris on the part of the Greeks that has now been followed by nemesis and, indeed, a catastrophe. Given that the EU is already gearing up to pouring money into the country and to using the situation for its own intergrationist purposes, which may or may not work out, the necessary catharsis will remain a long way off.

Greek+fires.02[i-Greek+fires.02]Fires have devastated Greece this summer. Actually, forest fires seem to happen in that country most summers but this one has been particularly bad.

We know that the southern part of Europe has had very high temperatures that spread briefly to Central Europe as well, while we in the northern part have suffered from a cold and wet summer. (Though in London the Bank Holiday week-end seems to be set to be warm.)

There have been complaints of inefficiency in the fire service and government decisions not to use helicopters for the fire-fighting as they were afraid that water from above might cause yet more power cuts. Greece seems to have had quite a few of these in the last few months.

One rather wonders what all the money the EU is supposed to be spending on that country's infrastructure goes on. It can't all be paid out to tobacco farmers, surely.

Now we have news that people are being arrested for causing the fires deliberately. Rather a random group has been picked up so far and it will be interesting to see whether all of it or, even, any of it was deliberate arson or simply thoughtlessness.

Meanwhile, Greece has declared a state of national emergency. And, as we have reported before, there is an election due in that country. Will that be postponed, one wonders.

COMMENT THREAD

Greek+fires[i-Greek+fires]One of the problems with the European Council instructing the IGC about what to put into the Constitutional Reform Treaty was that there was no guarantee that the same governments will be represented at the Conference as were at the Council.

The European Union is, as we know, indifferent to such niceties as elections and different parties coming to power. As the full process of EU legislation takes anything from five to ten years, governments can come and governments can go but the directives go marching on. And that is not to take into account the ten-year plan for such things as food labelling or financial regulation.

Nevertheless, there are likely to be problems with governments retiring, elections being called and, possibly, new people attending the IGC summit in October.

First off, as we know, was Poland, where elections are due to take place on October 21 though Prime Minister Kaczynski (Jaroslaw) has been sacking ministers, reckoning, one must assume that this is his last chance to do so. It will be Mr Kaczynski and Ms Fotyga, the Foreign Minister, but one wonders what validity their presence would be as the likelihood is that those would be the last days of the government.

I am not suggesting that if the Liberals win in the forthcoming election, there would be a change in attitude to the EU, not least because the chances are it will be another rather tense coalition, but an outgoing government does not have much of an authority in negotiations.

Now we have news that Greece is to have an election in September, six months before the government's term is to end. Prime Minister Costas Karamanlis will see the President this afternoon and request a dissolution.

If opinion polls are anything to go by, the conservatives lead by one or two per cent, hardly enough to form a working government. Though the EU has praised Mr Karamanlis for setting Greece's budget on target (not yet achieved) of low deficits and serious reforms, the government is not particularly popular.

This is partly because, in order to achieve those low deficits and reforms, a certain amount of belt-tightening has been called for, though there has been no significant reduction in EU subsidy and partly because of the scandals associated with the government (just as the socialists lost in 2004 because of the scandals associated with them).

Not least, there have been devastating forest fires across Greece. As far as anyone can tell, most of the country's forests have been destroyed with untold damage to wildlife and human habitation. One problem seems to have been (we have been informed by one of our readers) is that the government has been wary of sending fire-fighting helicopters out, lest the water from them damaged even further the antiquated electric system and causeed more power cuts.

According to the BBC Theodore Rousoupoulos, the spokesman for the government explained:

The government, fully responsibly, asks the Greek people to decide on the future of the country, renewing their trust and giving a second strong mandate for another four years.

Sounds like asking for trouble rather than a strong mandate.

So, while the Polish government at the IGC will be on its last legs, the Greek government will, possibly, be a completely new one (not that any Greek politician is likely to turn against the EU) and more than likely elected with a small majority or an uneasy coalition.

COMMENT THREAD

paroulakisphoto[i-paroulakisphoto]As discussions in Britain on how to teach “emotive and controversial history” (on which there will be a posting, I promise), the subject takes a slightly different airing in other parts of the European Union.

The BBC reports that the Greek Orthodox Church, well-known for its sensitivity to others and its firm adherence to historical truth, is up in arms about a new history book. It would appear that, in order to improve relations with Turkey, the authors of a new history school textbook (you mean they have textbooks over there?) have softened the language in describing Turkey and its people.

This, according to the critics, particularly the Church, will corrupt children’s understanding of Greek history and Greek identity.

They are worried about the lack of imprecation and description of violence in two episodes of modern history: the Greek War of Independence and the Greek invasion of western Turkey after World War I followed by the successful reconquest of it by the Turkish army under Kemal Atatürk.

On the first one, the BBC says:

Once a year Greeks gather to celebrate independence. The ceremonies mark the day in 1821 when the war of liberation began and Greeks rose up against their rulers, the Turkish Ottoman empire.

It is a day of oral history for the young participants, when the country's elders recount details of Greek heroism and Turkish barbarity.

One assumes that even the elders no longer speak from memory about those battles.

The second episode is glided over:

But the new text book, which is devoid of animosity towards the Turks and omits stories of violence, takes a different approach.

This is obvious especially when it refers to the war of independence and what the Greeks call the great catastrophe of 1922 when they were driven out of western Turkey.

"There won't be any clear identity of what the Greek fights were all about and why did we want to rebel against the Turks," Jeni Tutsis, a teacher, told the BBC.

Peacemakers[i-Peacemakers]For those of our readers who are interested in that little episode let me recommend a fascinating account of it by Margaret Macmillan in her book “Peacemakers”. I doubt if the Greek Church will approve of that either.

Meanwhile, Prime Minister Costas Karamanlis has made a comment to the effect that the study of history was essential in order that the mistakes of the past not be repeated. Critics of the new textbook have taken it to mean that he is now siding with them but that is not altogether clear.

Panathainakos[i-Panathainakos]What with one thing and another, we do not seem to report news from Greece as often as we should. Let me, therefore, make amends.

First off there is the news that the Greek government has banned all team game matches for 15 days. Trouble broke out yesterday before the projected women’s volleyball match between Olympiakos and Panathinaikos the country’s two largest teams. The police, it appears, had not been aware of the massing of fans in Peania.

One fan was stabbed and run over by a car, at least six people were injured, one of whom was in critical condition, and police made 13 arrests following the 20-minute battle.

Among those injured were bystanders as well as several minor soccer league players on their way to training. Their team logo and colors resembled those of Panathinaikos.

According to the report there had been problems between the two sports clubs before:

Clashes among supporters of the two teams date back decades. The most recent death of a spectator in Greece, in 1995, was after clashes between Olympiakos and Panathinaikos fans during a basketball match.

One can’t help feeling that the Greeks take sport perhaps just a tiny bit too seriously.

In the meantime,

The European Commission on Friday formally endorsed Greece's plan for how it will spend EU aid, opening the door for Athens to receive EU payments of €20 billion (US$26.6 billion) over the next seven years.

Greece is the second country, after Malta, to have its National Strategic Reference Framework for 2007 to 2013 accepted by the European Commission. We can forget that nonsense in the article about it being accepted by the 27-member Union. Nobody but the relevant Commissioners, Danuta Hübner, Commissar for Regional Policy and Vladimir Špidla, in charge of Social Affairs and Equal Opportunities, and their staff even know that €20 billion of our money has been earmarked for the Greek economy.

The Greek strategy, we are told, “shows a strong commitment to promote the quality and the intensity of investments in human resources”. The priorities, outlined in the NSRF will be translated into 13 operational programmes, five of them regional and eight thematic, with an additional programme on technical assistance.

In the last quarter of 2006, unemployment in Greece dropped to 8.8 per cent as compared to 9.7 per cent in the same period of 2005. This is still substantially higher than unemployment across the EU and in the Eurozone. At 25.5 per cent Greece still has the highest (together with Poland) unemployment rate among the under 25s. (I wonder why we see no Greek plumbers or builders or waiters in this country.)

The Heritage Foundation Index for Freedom 2007 lists Greece very low among European countries. Its regional ranking is 36, just below Poland and above Croatia, with world ranking 94. It scores low on most signifiers, but particularly on financial freedom, freedom from corruption and labour freedom, all essential matters if a country wants to develop economically, not simply hold its hand out for more aid from other taxpayers in the European Union.

COMMENT THREAD