Greek exports have grown since the beginning of the crisis. In my periodic analyses of Greece's current account, I have paid due attention to this fact. At the same time, I have always pointed out that, yes, exports have grown but, no, definitely not fast enough when considering the substantial internal devaluation and the decline of the Euro against third parties during the time (USD/EUR from about 1,60 down to about 1,35). Last year, exports even registered a decline over the previous year.
This article by Daniel Gros essentially reinforces my point in more detail. Suppose Greece still had the Drachma. That Drachma would have experienced a devaluation of at least 25% (combination of Euro-devaluation and internal devaluation). Wouldn't one have expected that such a devaluation would rather quickly lead to substantial export growth?
There is definitely the issue of the export capacity of the Greek economy but still: the Greek economy is operating way below capacity (so I read). So even if Greece was unable to discover new export capacities, at least existing capacities should have been better utilized. I have no details to prove this point but I think my general premise is hardly refutable.
This article by Daniel Gros essentially reinforces my point in more detail. Suppose Greece still had the Drachma. That Drachma would have experienced a devaluation of at least 25% (combination of Euro-devaluation and internal devaluation). Wouldn't one have expected that such a devaluation would rather quickly lead to substantial export growth?
There is definitely the issue of the export capacity of the Greek economy but still: the Greek economy is operating way below capacity (so I read). So even if Greece was unable to discover new export capacities, at least existing capacities should have been better utilized. I have no details to prove this point but I think my general premise is hardly refutable.
No big mystery.
ReplyDeletehttp://www.macropolis.gr/?i=portal.en.economy.658
"The lack of price adjustment compared to labour costs partly reflects higher indirect taxes and public service charges as a result of the fiscal consolidation effort that Greece is undertaking."
"The lag in adjustment of prices is also a product of the nature of the Greek economy, which is dominated by small- and medium-sized enterprises (SMEs)."
"The liquidity drain in the economy is impeding the entry of new players that will apply competitive pressures and push prices down."
"Non-labour related costs are on the rise resulting from difficult or expensive access to bank credit, supplier cutback of credit, long waiting times for VAT refunds from the state and delays in payments by customers, in many cases the state itself."
"The approach adopted during the Greek program, which has focused largely on costs and not so much on the ease of doing business, have been too one-sided and may in some cases been counter-productive."
I had read that article when it came out and I agreed with it (like with most of the Macropolis articles). One thing is to make a correct analysis (particularly the last paragraph). Another thing is the question: what is being done about it?
DeleteI don't think much can be done in the absence of what you call infant-industry protection.
DeleteWe can sit and wait until the miracle of the primary surplus evaporates into the thin smoke of over-taxation and delayed payments that it is made out of.
Sorry but the above is the drivel of people who never had to dirty their hands. The Greek export problem is far deeper. One simple but lethal example: the barcode system does not work properly. There are two organizations handing out barcodes. one of which is not recognized by the international association. These illegal barcodes appear as duplicates, they cannot be recognized by the international databases etc All the companies using them eventually lose their international custom because of these problems. Many Greek export companies do not use barcodes on boxes or palettes, but only on the product themselves, as they cost money. However no logistics program can operate without them resulting in outright rejection of greek products. And so on and so forth. Only when the vast number of problems of organization are sorted out will the above discussion become relevant.
DeleteI found this article of about a year ago.
ReplyDeletehttp://klauskastner.blogspot.co.at/2013/04/global-greece-effort-to-promote-greek.html
Yes, the Greek economy is operating below capacity, capacity utilization (operating rate) for some random European countries are: Greece 68, Italy 72, France 80, Germany 83, Austria 84, all in %, courtesy of Trading Economics, I think they pinch them from Eurostat. That would seem to be good news for Greece as it indicates that a large increase in output could be obtained without investments in production equipment or work force. However, that only apply to developed countries, where the work force and production facilities are of such a quality that they can produce things that people need or want, at the quality and price that they want. Further, that production facilities and work force are able and willing to adapt to ever changing circumstances, domestic and foreign. Analyze that one and see what applies to Greece.
ReplyDeleteAn example of idle capacity (32%), construction has delivered largely unnecessary goods and services to the state, plus building unnecessary second homes to private persons. That will not return in the foreseeable future, these people will have to be re-trained and production facilities written off.
Some of the producing capacity (68%) is unnecessary, there are 3 times as many pharmacies as European average, these people will have to be re-trained. The same will numerous doctors, architects, engineers, notaries, economists, civil servants, lawyers etc., unless they can be exported.
At the same time the universities educate (badly) lots of people for these professions, they are mainly feeding themselves with teachers and professors (the reason we have so many universities). Combine that with the fact that the actual work in the 4 largest industries tourism, agriculture, construction and shipping (all labor intensive) is carried out by low paid foreign workers. What a monster state.
To Byron, Winckelmann and other philhellenes: I hope you burn in hell for telling these innocent Balkan peasants that they were noble Hellenes.
Lennard
Right, because without those philhellenes, not even Adamantios Korais would have ever thought of himself as an Hellene. There was no Greek language, there was no Greek intelligentsia, there was nothing. I wonder if Lennard and certain other commentators even realize how arrogant and racist they come off.
ReplyDeleteDimitris
I can see why you as a Greek would feel offended. Let me respectfully suggest, though, that this may have something to do with perceptions.
DeleteYou perceive what Lennard says as racist. Maybe it is. But maybe it is not. Maybe it is even meant well. Lennard is, of course, alluding to Nikos Dimou. Dimou did NOT blame the Greeks for being peasants (why in the world would anyone blame anyone else for being a peasant?). Instead, Dimou blamed the Germans, or rather one German (Winckelmann) for making Greek peasants unhappy (“It’s the fault of a German” are his words). A quote by Dimou: “We used to speak Albanian and call ourselves Romans, but then Winckelmann, Goethe, Victor Hugo, Delacroix, they all told us, ‘No, you are Hellenes, direct descendants of Plato and Socrates,’ and that did it. If a small, poor nation has such a burden put on its shoulders, it will never recover.”
Almost every argument that I have ever run into with a Greek (notably my wife…) had something to do with an extreme shortage on the Greek side of self-perception; the ability to see oneself objectively; to accept oneself realistically; and to act and behave accordingly. And a total inability to see ‘the other side’; to put oneself in the other person’s shoes.
If you perceive what I say as something which is worthy of further discussion, then you are in good shape. If you see it as an offense, then we will always talk past one another. I found a couple of Dimou articles which are interesting to read:
http://www.independent.co.uk/voices/commentators/nikos-dimou-the-agony-and-the-ecstasy-of-being-greek-6166154.html
http://www.spiegel.de/international/europe/interview-with-greek-writer-nikos-dimou-on-crisis-a-837024.html
Mr. Kastner, thank you for your reply. It is obvious why someone like Nikos Dimou enjoys popularity these days among German, Austrian and other European audiences. Regarding, however, issues of Greek history and identity, I would suggest that you look for more valid sources.
DeleteHere is some basic information about the “Roman” identity:
http://en.wikipedia.org/wiki/Byzantine_Greeks#Perceptions
So “Roman” was a 100% Greek identity based on Greek language, Greek-Orthodox religion and Greek classical tradition. And it had been shaped long before any European philhellene told those “Balkan peasants” that they were Greeks. The ¾ of the surviving ancient Greek literature is due to the Byzantine Greeks. Until the 15th century no one outside the Greek world had any idea even who Homer was.
Dimitris
Several decades ago, Erwin Ringel, a world-famous Austrian psychiatrist, wrote a little book titled "The Austrian Soul" (available only in German). In it, he diagnosed Austrians with a severe case of national neurosis stemming, among others, from the break-down of the Austro-Hungarian Monarchy. He argued that it was no big deal for Sigmund Freud to develop his theories in Vienna because, in his mind, no other place in the world was such an extreme breeding ground for neuroses as Vienna was at the time.
DeleteMany Austrians reacted to that book the same way as you and many Greeks have reacted to "The Misfortune of Being Greek". What they were not aware of was that, by reacting that way, they only proved that there was substance to Ringel's points. Otherwise they would have ignored him.
Incidentally, I was fascinated by the book and I have read it several times. It helped me to better understand what I felt was my national identity and it also made me aware of some of my own personality traits. "Know thyself!" someone once propagated (and it wasn't an Austrian...).
All the Dimou-critics take him apart on technicalities like you do. Strange, though, that such an alleged ignoramus became overnight a best-seller in Greece when his book came out.
Let me suggest this: what the ancient Greeks accomplished is of relevance to today's Greeks ONLY IN ONE WAY, and that is the question: what can we learn from our ancestors that would help us today and in the future. To justify today's alleged greatness on the basis of ancient ancestors reminds me of today's citizens of Salzburg who act as though they had created Mozart with their own hands even though the historical fact is that the Salzburgers had kicked Mozart out of their archdiocese in his adolescent years. In today's language, Mozart - for most of his life - had been a guestworker in Vienna (don't ever say that to any Salzburger...).
Mr. Kastner, your last reply is irrelevant to what I’ve been objecting to: the claim that the Modern Greek identity is a product of 18th century philhellenism. I’m not talking about, well-deserved or not, national pride, I’m merely talking about ethnicity: Had a Greek identity with references to ancient Greece (language, history, literature) pre-existed the European philhellenism, yes or no? I say “yes” – and that, actually, it was the other way around: European philhellenism would have never occurred hadn’t ancient Greece been (and preserved as) a part of the Greek Byzantine identity and tradition. If you say “no”, that’s OK, but you need to provide more convincing arguments than a few provocative “nikodimou-isms”. Nikos Dimou is far from an expert on Greek history (I could give several examples).
DeleteDimitris
As I feared, we are talking past one another. Frankly, I don't care at all whether today's Greeks are direct descendants from ancient Greeks or not; whether there was a Greek identity before the philhellenes or not; whether Nikos Dimou is a good historian or not; etc.
DeleteAll I am concerned with is the now, here and the future; period. Like with an individual person, also for a society/nation it is helpful to understand what its origins are and how its value structures, cultures and mentalities developed. All Dimou does is to offer his version of how he thinks today's Greek value structures, cultures and mentalities developed. All Dimou says is that, during the last 2000 years, the territory of today's Greece was overrun by not only one wave of migrants but by several (no surprise; that happened all over Europe). Every such wave adds to culture. By the early 19th century, the territory of today's Greece was populated by a rather impoverished agricultural class living in extremely medieval standards. Check what Lord Byron wrote when he first visited Greece. I have a picture of Athens around Independence and what I see on that picture is a run-down Turkish village (residences more like tents than houses) and a run-down Akropolis which I guess was some kind of an ammunition depot. And it is totally understandable to me that when a society at that kind of a stage in its development is called upon to jump over 200 years of societal development, societal stresses and strains occur.
I link below an article which may be of interest. It deals with another aspect of Greek cultural and mentality issues and I think it is quite educative.
http://greconomy.net/home/2013/5/20/foundationsofthegreekproblem
It's not the first time I'm being told that I'm arrogant, no doubt it has something to do with my preference for sarcasm and irony, no harm done.
ReplyDeleteThat I come off as a racist I find strange as I consider myself of the same mixed race as you, and the rest of Europe.
More about Adamantinos Korais when I have time, I do not share all his views.
Lennard
A. Korais was a talented linguist and he gave the potential new nation a common language, I respect that and realize its importance. After learning the language the citizens promptly started a discussion about whether it was the right language, which discussion lasted for the next 150 years.
ReplyDeleteAs a philosopher he is not my cup of tea. To introduce neoclassicism is like going back to the future; it's a long way to go to introduce something that was maybe good 2500 years ago. In the arts it is innocent copying, in morals politics and ethnicity it can be dangerous. To his defence I will say that he did not claim (I have not read all of his works) that all of the hodgepodge of people collected in the new nation were direct descendants of the ancient Hellenes, that distinguish him from the philhellenes. He just suggested that the new nation persued some of the Hellenic virtues. The worst of the philhellenes were preaching that:
-The ancient Hellenes were a homogenous race.
-The citizens of modern Greece were direct descendants.
-The ancient Hellenes were behaving in accordance with the virtues they held dear; it was a part of their character.
The ancient Hellenic scholars knew very well that they did not live in accordance with the virtues, THEY KNEW THEMSELVES, the virtues were something to STRIVE FOR, the virtues were not human. It being so the Hellenes also made laws.
Korais as a politician and potential law maker also has my respect, a respect not shared by modern Greeks I meet; they pay lip service to him. How many of his ideas are realized in the modern Greek state 200 years after he wrote them? Are we converging or diverting them? Do we have a state with non-involvement of the clergy in political affairs? We have a state where the clergy censor school books and you can go to jail for making fun of a dead monk, where the clergy is as corrupt and criminal as the rest. Do we have a state of harmonious coexistence, virtue, justice, morals, equality before the law, good education, upright government, liberalism????? How many modern Greeks think of his words of freedom? They were hammered into me in my formative years, the only reason I remember his name. "The aquisition of freedom is a laudable feat. The preservation of that freedom is the greatest achievement, and for that it is not enough to fight a short war against tyrannical rulers, one has to fight incessantly against the much more tyrannical passions of one's inner self, in order to subject them to the sacred yoke of justice and the law." But, keep talking Greece.
Lennard
1. Korais inventing katharevousa is nothing but a persisting myth. He just supported a mildly archaic variety of Greek, which was used by many Greek scholars of his time and had been gradually formed during the previous centuries. If you can read Greek, here is a sample from 1528 (the second half of the text, under the title "Ο Έλληνας Άγιος"):
Deletehttp://kynigetikes.selides.org/index.php?option=com_content&view=article&id=550&Itemid=99/
The truth is, hardly any of Korais' own linguistic ideas were realized, especially the "correction" of the demotic words: ψάρι (fish) didn't become οψάριον, σπίτι (house) didn't become οσπίτιον etc. Also, katharevousa never became a common Greek language - it only served as an official language (typical case of diglossia).
2. Hellenization has been an on-going process since the dawn of Greek history. Apparently, however, it always required an existing Greek majority. How on earth e.g. would the Galatians, Goths, Phrygians etc. living in Anatolia have eventually become Greeks without a strong Greek Anatolian demographic base? The same goes for the Arvanites and the Vlachs of modern Greece. Here is a 1890 map of Peloponnese by the geographer Alfred Philippson:
http://upload.wikimedia.org/wikipedia/commons/6/6e/Pelopones_ethnic.JPG
As you can see, this is far from a "hodgepodge of people". Greece was Greek enough even back then. Anyone claiming otherwise only shows his deep ignorance and anti-Greek prejudice.
Dimitris
When we talk about nationality my Greek friends often ask me if I am not proud of my nation, I find that I cannot answer yes or no; the answer requires an attention span of more than 2 minutes. I have tried to distill my thoughts about it in order to be able to give a short answer.
ReplyDeleteI have lived 60% of my life in cultures different from those of my birth country. I came to Greece the first time in 1979, I have spent 10 years in Greece (accumulated) since then. Long and short periods, working for foreign and Greek companies, working in executing, consulting and educational functions. I have tried to find out where my awareness of national identity differs from the Greek perception. THE thing that come to the front is that I cannot be proud (or ashamed) of events that happened before I was borne or had influence on the behavior of my nation. Never the less I must honor the promises my nation has made, I must suffer the consequences of my nations previous actions, or disassociate myself from my nation.
So the short version I now present is: Yes I am proud of my country because the citizens are generally honest and law abiding. Because they live from what they produce with their hands and brains, plus whatever meager natural resources they have. If I'm being hard pressed I will ad that we have managed to cultivate radishes in our national colors, no mean feat for a small nation. (No Klaus, I'm not Austrian in spite of the colors). Not all my Greek friends are happy with the answer, neither am I; I know I should only be proud (or ashamed) of what I have done.
Lennard