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Tuesday, July 17, 2018

Comparative Charts About Greek Pensions

I came across the below selected charts in a paper by the Austrian think-tank Agenda Austria where they analyze Austrian pensions. They come to the conclusion that Austria should switch to the Swedish pension model (both, higher pensions and lower contributions than at present). Perhaps someone will some time compare the Greek pension system to the Swedish model. The source of the graphs is the OECD:

1. Actual vs. Legal Retirement Age

The dots show the legal retirement age and the bars the actual one. For men, the legal retirement age in Greece is 65, the actual is about 3 years below that. That puts Greece roughly in the middle of the group. Interestingly, for women, the legal and actual retirement ages are identical at 60.

2. Contribution Rates

Here, too, Greece is in the middle of the group with 20% of gross salaries. One wonders how there can be such huge differences among pension systems (33% in Italy, 16% in Belgium).

3. Pension Gap

The table shows pensions as a percentage of the former gross income. Here, too, Greece is in the middle of the group with a rate of 70%. I am highly suspicious of the chart because the 90% for Austria seems far from reality and the 101% for the Netherlands seem unreal.

Sunday, July 15, 2018

Bloomberg's Model Shows Dramatic Decline In Greek Interest Expense

The source of the below graph is Bloomberg, as presented in this article. The graph shows annual debt payments broken down into bond maturities, loan maturities and interest on both. What stands out is the interest payments shown in this graph. It's a bit hard to tell from the width of the bars how much the underlying interest is in Euros but a full column represents 5 BEUR. And there is at best one column (2019) where the interest bar spreads over half a column, i. e. interest in the area of 2,5-3 BEUR.

In recent years, Greece has spent on average about 5,5 BEUR on annual interest. The Bloomberg graph would suggest a dramatic decline in interest, much more so than I read in the recent debt relief agreement. So either Bloomberg's numbers are wrong and/or they know something which the world hasn't been told yet. If someone from Bloomberg reads this, a clarification would be welcome.

Saturday, July 14, 2018

The Farce Of EU Elites' Jubilation About Greece

Tansparency International has published a report on the "Evaluation of the Level of Corruption in Greece and the Impact on Quality of Government and Public Debt." Here are the highlights (very interesting reading!) and here is the full report.

The highlights list 10 "other key facts" (other than corruption) which underline my previous argument that the recent jubilation by EU elites about Greece having turned the corner were rather a farce.

Sunday, June 24, 2018

"The Greeks Can Now Smile!" - After Having Benefited From The "Biggest Solidarity The World Has Ever Seen.”

Government spokesman Dimitris Tzanakopoulos is credited with the promise that the Greeks can now smile following the successful settlement of Greece's exit from the 3rd program in August and ESM chief Klaus Regling reminded Greeks that they had been the beneficiary of the world's biggest solidarity effort ever. No better way for Alexis Tsipras to celebrate all this than by putting on a red tie.

It would be unfair to spoil the party by diminishing Greece's accomplishments. Only 3 years ago, the vast majority of politicians, commentators, analysts, etc. expected chaos for Greece's future: declaration of default and perhaps even repudiation of debt; exit from the Eurozone; breakdown of domestic stability; etc. It is unquestionably to the credit of Alexis Tsipras that all of this could be avoided and that now, 3 years later, the political establishment is celebrating Greece as a great success story. The fact that Tsipras accomplished this by essentially accepting just about everything, without resistance, that was put before him is a moot point. The end justified the means. I would further venture to say that no non-leftist government could have gotten away with accepting just about everything the creditors demanded.

If Tsipras celebrated with a red tie, the EU and Eurozone leaders celebrated with an effusion of self-praise. That, I think, was inappropriate, to say the least. The way the EU handled, beginning in the spring of 2010, the external payment crisis of Greece was a blunder of historical proportions and here is a compilation of articles I wrote about the subject back in 2012.

So how good is the new agreement which was reached a few days ago?

I propose that in any debt crisis, be it personal, corporate or sovereign, the borrower is faced with 2 principal issues: (a) the amount of interest he has to pay and (b) the amount of loan instalments he has to repay. The unique character of sovereign debt is that loan instalments never really get paid, i. e. nominal debt is hardly ever reduced. Instead, loan instalments are always refinanced. As a result, to offer an overindebted borrower like Greece an extension of maturities is nothing other than the recognition of reality. Those who consider this substantial debt relief should explain why they would prefer to waste time and effort every few months to renegotiate individual debt maturities.

So the crux of the matter is interest expense. Interest expense flows through the budget which means that it comes out of government revenues. Every Euro of interest payments is a Euro which is not available for other government expenditures. Pensions may have to be cut in order to pay interest. The point is: if one wants to give a sovereign borrower debt relief, one has to reduce his interest expense.

In 2016 and 2017, Greece's interest expense was stable at 5,6 BEUR. Back in 2011, Greece's interest expense had been 15,0 BEUR. The enormous reduction in interest expense, particularly when considering that debt was increased during this time, reflects that Greece has received substantial debt relief in recent years.

If the new agreement reduces Greece's interest expense below the 5,6 BEUR, then it is debt relief. If it doesn't, it is no relief at all.

The published information does not allow me to pass judgment on this. There are references about not applying the step-up interest margin on a certain portion of the debt which only means that interest expense would not increase; neither would it decrease. There are references about a further deferral of EFSF interest which would also hold interest expense stable but not reduce it. There are references about finally distributing to Greece SMP profits which had so far been held in an escrow account. This would be a significant reduction of interest expense. And there are references about replacing some expensive IMF debt with cheap ESM debt. This, too, would reduce interest expense.

At the same time, Greece is taking on quite a load of new debt for the primary purpose of building up a cash buffer. That cash buffer, of course, would increase interest expense.

In short, the principal benefit for Greece seems to be that its debt has now been regularized. That is in and by itself a very significant benefit because only if one's debt is regularized can one begin to commit time and resources to things other than debt negotiation. Whether or not Greece's budget will be relieved of interest expense as a result of the agreement remains to be seen.

Sunday, June 3, 2018

At Some Point Germans May Discover That They Are In Deep Trouble

Below are some interesting charts which I picked up in this Zerohedge article.

First, the phenomena which got the problem countries into trouble in the first place - current account deficits: Greece & Co. had been spending much more money outside their borders than they had revenues outside their borders, having to cover the gap with loans from outside their borders. Today, 8 years later, the situation is as follows:

There are current account surpluses wherever one looks. Almost wherever one looks: France seems to have become rather problematic with a current account deficit representing almost 4% of GDP but Greece's current account deficit is now minute compared to what it used to be.

A current account surplus doesn't mean that the domestic economy is in order. All it means is that the country is financially self-supporting as regards its economic activities outside its borders. It has enough revenues outside its borders to pay for all the essential and non-essential imports the country is buying. Theoretically, the country could be barred from any foreign credit and yet, it could continue its cross-border transactions.

The next chart is particularly interesting. The credible narrative had been that the ECB's Target2 payment system - as a quasi unlimited credit card - allowed countries to run current account deficits even though the foreign private banks were no longer funding them. That was certainly true in the early years but following that logic and seeing current account surpluses now, one would expect Target2 claims of the North to decline.

The following chart shows the development of the (in)famous Target2 balances:

The earlier narrative no longer holds because Target2 claims of the North, specifically of Germany, have increased phenomenally even though current account surpluses were recorded in most countries. There is only one other explanation: capital flight. Now here is something to ponder for all those who always blame Germany for bleeding out the suffering South: Germany has run up nearly a trillion Euros worth of Target2 claims so that, mostly, Italy and Spain could transfer money out of their countries (even back to Germany). Should Italy or Spain ever exit the Eurozone, the Bundesbank might say to them "We want you to give us our money back" and Italy or Spain would respond "The money is already back in your banking system, except it's now in our name and no longer in yours!"

Much has been said about the brutal internal devaluations which the South has had to go through. No doubt that's true for Greece but when one looks at Italy, one sees that nominal unit labor costs, the most crucial element of international competitiveness, have actually increased by 10% since the crisis began. The new Italian government intends to increase deficit spending which is unlikely to favorably impact nominal unit labor costs.

And now to the final chart which leads J. P. Morgan to the conclusion that an exit from the Eurozone may be Italy's best option:

Italy's net foreign investment position is only minimally negative which leads J. P. Morgan to conclude that an Italian Euro exit should be a lot less threatening to creditors than a Spanish one. Put differently, with a current account surplus and a walk-away from Target2 liabilities, Italy would owe only very little to foreigners. Well, not quite because the above foreign investment position is a net between assets and liabilities. While the assets/liabilities are not necessarily owned/owed by the same parties, it is still a fact that there are about 3 trillion Euros of Italian financial assets outside the country's borders and foreign creditors would use all legal expertise to get a hold of some of them.

The old saying goes "If you owe the bank 100.000 Euros, you have to be nervous. If you owe the bank 100 million Euros, the bank has to be nervous." Germany has many more reasons to be nervous about an Italian exit from the Eurozone than Italy itself. And here is another thought.

Deutsche Bank, once Germany's financial calling card, is in great difficulties. Should Germany ever be called upon to bail-out Deutsche Bank, they will discover that Deutsche Bank is counter-party in derivatives with a notional amount totalling almost 3 times the GDP of the United States!

Certainly at that point, Germany will stop educating others about reforming their financial sectors and economies.

Wednesday, May 30, 2018

Parallel Currency - Revisiting Justified?

Ever since it became public that Yanis Varoufakis had worked on a Plan X for a parallel currency, the term 'parallel currency' has assumed a bad odor. When it became public that Star-Lega of Italy were also eyeing the alternative of a parallel currency, markets went into shock. But why?

Before the introduction of the Euro, every country had a parallel currency. It was called 'local currency'. Business was conducted in other currencies as well and they were called 'foreign currency' (I remember when, years ago as a tourist, Greeks seemed to prefer getting paid in Deutsche Marks rather than Drachma). The difference between the two currencies is that the local currency was the only legal tender in each country and it could be printed by each country whereas the foreign currency had neither advantage.

With the Euro, the members of the Eurozone gave up their local currency and opted for a foreign currency as their only legal tender, a foreign currency which they could not/cannot print. What's badly missing now is a local currency which a country can print, even though it may not be legal tender. In short, a parallel currency.

Greece, actually, already has one parallel currency - postdated checks. If B accepts a check from A, dated for payment 3 months later, in lieu of cash payment, then the postdated check has assumed the character of a currency. B will only accept the postdated check in lieu of cash payment from A if he knows that he can pay his creditors' bills with that check. I do not know how common this practice is today but I remember that, only a few years ago, I was told that postdated checks were a rather common form of payment among small businesses.

Assume that Greece starts with a parallel currency called 'Drachma' with an exchange rate of initially 1:1 to the Euro. Assume further that the Bank of Greece commits that the new Drachma is fully backed by the gold reserves of the Bank of Greece, i. e. each holder of a Drachma can redeem his notes in gold at the current gold price. I doubt that Greeks would have a problem accepting this new Drachma at the same value as the Euro. The only problem is that the Bank of Greece will not have enough gold to back all the new Drachma issued.

As a result, the new Drachma would be backed by the full faith and credit of the Greek state, no more. And since the Greek state would generously print the new Drachma (that would be the idea of the whole thing), it is near certain that this new Drachma would lose value against the Euro very quickly.

The great advantage of a parallel currency over a Grexit would be that Greece remains a fully-fledged member of the Eurozone and those who have Euros can happily continue to do business in Euros without incurring any additional fees. The advantage for the Greek economy is that the state could provide financial breathing space by issuing the new Drachma. Greeks may discover that it is better to receive payment in a parallel currency of lesser value than no payment at all in a Euro of full value.

The great challenge of a parallel currency lies in its implementation. Since it is not legal tender (only the Euro is allowed as legal tender within the Eurozone), no one can be forced to accept it. And people will only voluntarily accept payment in a parallel currency if they know that they can pay others in the parallel currency and how much they can buy with it.

Perhaps the time has come to revisit Yanis Varoufakis' Plan X.

Tuesday, May 29, 2018

Greece's Debt Profile Per March 31, 2018

Below is one of the best graphs which I have seen of late, Greece's debt profile per March 31, 2018:

The most expensive sources of financing for the Greek state are freely placed bonds and Repo's (both currently around 4%). Yet, the state seems to be in love with its two most expensive forms of financing: the famous 'return to the market' is being celebrated every other day and Repo's are treated like a permanent source of financing.

The least expensive source of financing is the ESM (a little over 1%). That's the source which Greek politicians are bragging to get rid of before long. The GLF is irrelevant for the purpose of comparing costs because it is not available for fresh money (GLF stands for Greek Loan Facility. It was the first financial support program for Greece, agreed in May 2010. It consisted of bilateral loans from euro area countries, amounting to €52.9 billion, and a €20.1 billion loan from the IMF).

There is only one argument for not taking advantage of the least expensive source of financing, and it is a political one: if freeing Greece from the shackles of foreign domination has been elevated to the most important political objective, one cannot very well continue doing business with those who allegedly had imposed the shackles in the past.

A very high price to pay for a political objective!

Monday, May 28, 2018

Yanis Varoufakis In Overdrive

In a blogpost after Varoufakis's resignation as Finance Minister, I predicted that he would remain in the public eye for a long time to come and I put the following words into his mouth: "The only thing I have not yet decided is the timing of my future publications. I do not intend to put everything out there at once. Instead, I will time my publications in such a way that they keep the flame burning for a long time."

For almost 3 years now, I have been amazed at the media's fascination with a failed Finance Minister of a small country. Time and again, and rather often, Varoufakis was able to place thought pieces in major international publications and give interviews to prominent news media. But this was nothing compared to the last 24 hours.

In the last 24 hours, I received a total of 12 alerts to publications, interviews, podcasts, etc. authored by Varoufakis. One of the publications was a very interesting article about Italy in The Guardian which was appropriately titled: "With his choice of prime minister, Italy’s president has gifted the far right!"

I am now pondering an article with the title: "With its enormous political turmoils, Italy has gifted Yanis Varoufakis!" My prediction is that Greece will turn out to have been only a warm-up for Varoufakis. Italy will give him a much broader audience and my guess is that he will play that audience better than most other commentators.

Friday, May 11, 2018

Piraeus & Cosco: A Pure Success Story!

The Piraeus Port Authority S.A. (PPA) is a publicly traded stock corporation which operates everything that takes place in the Piraeus harbor (the land is leased from the state; not owned by PPA). The largest shareholder is Cosco Shipping of China with 51% outright. Another 16% are held in escrow in favor of Cosco until 2021 by which time they will also pass into outright Cosco ownership provided that Cosco completes the mandatory investments. The Hellenic Fund and Asset Management Association (HRADF), i. e. the Greek state, still owns 7,14% after having sold the above 67% to Cosco in 2016. Domestic and foreign institutional investors own roughly 8-10% each and the rest of the stock is widely distributed.

PPA has made a comprehensive Presentation of Financial Results 2017 to the HRADF. Here are some highlights:

* PPA recorded total revenues of 112 MEUR in 2017, spread over 5 business divisions: 3 container terminals (64 MEUR), 1 car terminal (12 MEUR), cruise operations (11 MEUR), coastal operations (10 MEUR) and ship repair (7 MEUR).
* The 3 container terminals are named Pier I, Pier II and Pier III. Already in 2008, Cosco had signed a lease for Pier II and it subsequently added, in 2013, Pier III. Pier I had operated under Greek management until Cosco's majority acquisition of PPA in 2016.
* PPA recorded earnings before taxes of 21,2 MEUR, which is a return of 19%; an outstanding performance!
* Leaving aside Pier I, the pre-tax earnings were contributed by Pier II and III (33,4 MEUR), car terminal (1,7 MEUR), cruise operations (2,0 MEUR), coastal operations (1,9 MEUR) and ship repair (1,0 MEUR). Since the sum of these individual parts amounts to 40,0 MEUR and since the total pre-tax earnings of PPA were 21,2 MEUR, it is obvious that there is a rotten apple in the group.
* Pier I, the pier which had been operated by Greek management until Cosco's majority acquisition of PPA in 2016, contributed a pre-tax loss of 15,1 MEUR! (this on revenues of 20,0 MEUR!). In previous years this loss had even been substantially higher.

The non-financial part of the presentation includes the following highlights:

* Piraeus is the 7th largest container port in Europe with good chances of moving into the top-5 in the near future.
* Piraeus is the 6th largest cruise port in the Mediterranean.
* Piraeus is the largest passenger port in Europe.
* 150 MEUR will be invested into the expansion of the cruise port.
* 20 MEUR will be invested into the expansion of the car port.
* 55 MEUR will be invested into the expansion of the ship repair operation.
* the cruise passenger terminal will be expanded and 2 warehouses will be converted into 4* and 5* hotels.

It is hard to think of a better foreign investment for Greece. A 'good' foreign investment is an investment which leads to something positive which would not have happened without that foreign investment. It is obviously impossible to say how PPA would have developed if Cosco had not become involved in 2008 but one point of reference is that the pier which had been operated by Greek management until 2016 had essentially been a money-squandering machine until that time (almost 100 MEUR pre-tax losses in 5 years!).

Thursday, May 10, 2018

ESM's Klaus Regling: Germany's 1953 Debt Restructuring A Model For Greece?

Klaus Regling, head of the European Stability Mechanism (ESM), this week drew a parallel between Greece today and postwar Germany in a speech in Aachen, Germany. Germany, he reminded the audience, had repaid the last instalment of the 1953 debt restructuring only in 2010. Successful debt restructuring was all a matter of long tenors, according to Regling.

Regling casually overlooked a few details in his speech. One, a very major debt forgiveness had been part of the 1953 debt restructuring (50% of all debt). And, two, there was the Marshall Plan which provided a key stimulus for the unfolding Wirtschaftswunder in Germany.

But still, the valid question is: Would the Greek economy experience its own Wirtschaftswunder if only a sufficient external stimulus and adequate debt relief were given? That is really the key question haunting Greece observers since 2010. Yanis Varoufakis, for one, had argued tirelessly in his blog, long before he became Finance Minister, that only a major public stimulus could get Greece out of its depression because, he said, when the situation is as depressed as it was/is in Greece, no private initiative could accomplish this goal.

One thing is certain: whenever there is an economic problem and one throws money at it, there will be an improvement. If Greece were given, as a present, say, 10 BEUR, the Greek state would spend most of that money domestically. The expenses of the state are incomes/revenues for privates. The privates, in turn, spend their new incomes/revenues and they become incomes/revenues of others. And so forth.

But here is the great uncertainty: Will that initial improvement trigger a lasting recovery or will it only turn out to have been a flash in the pan?

One can liken the situation to a large campfire. A cup of gasoline will certainly convert a flamelet into a darting flame. The question is whether that darting flame will lead to a lasting fire and lots of glow. If the campfire is built well; if there are small pieces at the bottom and the larger ones at the top; if the wood is dry; etc. --- the darting flame will likely lead to a full-fledged fire. If, on the other hand, the campfire is poorly built; if there are only few small pieces at the bottom; if the wood is wet; etc. - well, then the darting flame will soon extinguish and the situation will be worse afterwards than before because the darting flame will have burnt whatever there was left of small pieces.

There are many economic examples for both scenarios. The postwar German campfire was very well built and the Marshall Plan, actually a relatively small stimulus, provided the darting flame which turned into a lasting fire. Forty years later, the former East Germany was not a well-built campfire. The West did not throw a cup of gasoline on that campfire. Instead, the West threw (and still throws) truckloads of gasoline on that campfire (roughly 100 BEUR annually) and it still hasn't really developed its own strength.

How can one explain the difference between postwar Germany and the East Germany of the 1990s? Well, it certainly can't have been racial and/or cultural reasons: the East and the West were ethnically the same Germans. The answer must be found elsewhere.

Is the Greek economy today more akin to the postwar Germany of the 1950s or East Germany of the 1990's? One thing is certain: post-1953 Germany was a tremendous economy to invest in, both for Germans as well as foreigners (particularly Americans made huge investments in Germany). Greece, in contrast, ranks as one of the least attractive countries of the Eurozone, of the EU and of Europe in total to invest in (Doing Business Report 2018).

Statistics since 1981 show that as money flows into the Greek economy, as growth occurs, as purchasing power increases --- much of that purchasing power goes into consumption instead of investment. Since the Greek economy cannot satisfy, by far, the desires of Greek consumers, the increased purchasing power goes into imported products. All the reforms discussed/implemented since 2010 had as their declared objective to change/improve the structure of the Greek economy: more productive output and less services; more exports and less imports; more private and less public activity; etc. A distant observer cannot see that much has changed in that regard.

On the other hand, there are some positive examples. My favorite one is Cosco which I have described in many articles since 2012 as the prototype of a desirable foreign investor. Cosco proves a couple of important points to me: (a) there are investment opportunities in Greece which are of great interest to major foreign players; (b) there are major foreign players who are willing to invest even during risky times; (c) there are major foreign players who take a long-term view on Greece instead of eyeing only quick profits; and (d) when such major foreign players who take a long-term view on Greece make their investments, the results for the Greek economy can be miraculous.

Cosco had encountered a lot of criticism/objection in its early years. Reactions to my positive articles about Cosco pointed out inhumane working conditions in Chinese sweat shops. The announcement around 2013/14 that Cosco was projected to add about 1-1/2 - 2% to Greece's GDP by 2018 did not catch much attention. Today, it seems that actual results have persuaded the critics.

So is the Greek economy now akin to a well-built campfire waiting for the initial darting flame or not?

My gut feeling is that there is no major change/improvement in Greece's overall attractiveness as an economy to invest in. The truly important changes/improvement in the structure of the Greek economy have not taken place. At the same time, I believe that there could be new 'Cosco's' and the Greek government should make every effort to look for them and find them. If only there were a dozen 'Cosco's' in the Greek economy, their presence would probably do more to change/improve the structure of the Greek economy than all the Troika's, Task Forces, etc. put together.

Tuesday, May 8, 2018

Surprise, Surprise - Germany Not A Model Pupil!

The English edition of the German Handelsblatt published an article showing that Germany was, by the end of 2016, the leading breaker of EU rules:

The German author of the article concludes: "The country, which has lectured debt sinners like Greece, performs worst in complying with European Union legislation. Physician, heal thyself!"

Monday, April 30, 2018

Greece's GDP Per Hour Worked

Below is the link to a chart which observers call the chart which says it all about Greece's problems: GDP per hour worked.

GDP per hour worked

Saturday, April 14, 2018

Personal Economic Indicators

I have commented on several occasions about my personal economic indicators for Greece. Every spring and fall, we spend a couple of months in Thessaloniki and I have developed the habit of looking out for things which - albeit totally non-sophisticated - strike me as being indicative of how the economy is coming along. One of these personal economic indicators is the commercial traffic in the harbor of Thessaloniki.

That commercial traffic had been increasing significantly in the last couple of years. Where I used to count perhaps 3-4 ships in previous years, last year there were always at least 10 freighters, including some very large ones.

We have now been back in Thessaloniki for over one week and --- I see hardly any freighters in the harbor of Thessaloniki! I have certainly not yet seen as many as 4 at one time, not to mention 10 or even more. What is happening here???

Another personal indicator is life in the villages. We spent Easter in my wife's village near Kavala. Off the bat, the village seemed somewhat empty compared to previous visits. The one hotel was closed. Quite a few shops had closed. And, above all, some buildings had obviously been deserted.

On the positive side was the story of my wife's nephew, Giorgos, a graduate of a technical school and now 29-years old. Giorgos had taken over his father's business about a year ago. Essentially, a one-person earth-moving business with some sales of building materials on the side. Where Giorgos' father had considered "working" as sitting on his machines and moving earth, Giorgos considers "working" as doing business, as looking for jobs, as farming out jobs to others when he has no capacity on his own. Of course, Giorgos is - like his father was - an extremely hard worker and he also sits on machines and moves earth. BUT - he spends a good portion of his time knocking on doors to get orders. Most importantly, whereas his father had waited passively for customers to pay their bills, Giorgos spends time collecting them. In the evenings, Giorgos and his fiancée - who is taking care of the sales shop during the day - browse the internet for jobs which are tendered in the area.

When Giorgos' father did not get orders, he had nothing to do and there had been some extremely slow times since the crisis. Giorgos, on the other hand, is extremely busy and when he told me how much money his business made every month, I was stunned. Giorgos says that there is no crisis. Instead, money is lying on the ground and one only has to make the effort to pick it up. There is no unemployment, he says. Those who don't have work don't want to work, is Giorgos' opinion. Those who wanted to work but couldn't find work have left the country, Giorgos says.

Giorgos gives work to several people. They are Greeks and not Albanians, he says. Two of them have university degrees. He employs them officially under short-term contracts; they get between 30-50 Euros/day, depending on the type of work they do, plus insurance. I asked Giorgos if he officially declared all his revenues. He hesitated, thought for a moment and then he said: "If I did that, I would be bankrupt within a year."

Giorgos has the view of a "worker", a small-town operator who can drum up business when he tries hard. He says he doesn't feel too good for anything. When he had a slow period in the winter, he found someone who had a lot of manure to be removed and he found someone else who needed manure. So Giorgos got into the business of transporting manure.

I told Giorgos that, perhaps, the situation if different for a bookkeeper in a large city. If he loses his job and there is no new job as a bookkeeper, he can try as hard as he wants but he will not find work. Giorgos' response: "I would knock on 20 doors every day and ask people if I could do anything for them. I would find some people who needed something."

I discussed this with my neighbor in Thessaloniki. In his view, the overall economic situation is as bad as ever. But, he hastens to add, the situation might be a bit better in the villages. In the villages, he says, there is always something that can be done. If nothing else, one can start cultivating a field. My neighbor is not surprised that Giorgos feels that there is work for everyone but he stresses that this represents the narrow view of a small-town operator and is absolutely not reflective of the country as a whole.

Thursday, April 5, 2018

Greece Is Still The Least Attractive Place To Do Business In Europe

The World Bank's Doing Business Report compares roughly 190 countries in terms of competitiveness. Back in 2011, Greece ranked as Nr 109, the lowest ranked country in the Eurozone, in the EU and in Europe altogether.

There have been up's and down's since then but, overall, Greece improved its position significantly: the 2018 report ranks Greece as Nr 67. So much for the good news.

The not-so-good-news is that Greece is still behind everyone else in the Eurozone, in the EU and in Europe altogether. It pains particularly when seeing that Greece's neighbors outperform Greece: Albania (65), FYROM (11), Bulgaria (50) and Turkey (60).

Tuesday, March 27, 2018

Greece - Once Upon A Time There Was A McKinsey Plan...

Once upon a time...

Once upon a time, in mid-2011, McKinsey first published their report "Greece Ten Years Ahead" (GTYA). The report outlined a National Growth Model which, the study predicted, would create over 500.000 new jobs and add roughly 50 BEUR to Greece's GDP within a decade. I had written a total of 14 articles about it at the time.

I found the McKinsey report by googling "greece economic development plan". It is amazing how many different entries from different sources one finds when googling that subject. Including several Greek sources like the think-tank IOBE.

The common thread of all these plans is that "Greece needs to change its growth model to ensure the return of its economy to high growth rates and this model should be based on limiting the importance of consumption spending on economic growth, strengthening the role of business investments and raising "net" contribution of the external sector by boosting exports" - IOBE.

There has been no shortage of proposals as to what needs to be done about Greece's economy. Eight years after the first memorandum, it would be interesting to see a detailed report as to how many of these proposals have actually been implemented and with what degree of success.

Target2 Claims Revisited

Target2 is the cash management system which the ECB uses in order to settle balances among the banking systems of the Eurozone member countries. If a national banking system transfers more money abroad than it receives from abroad (e. g. Greece), it builds up Target2 liabilities with the ECB system. If a national banking system transfers less money abroad than it receives from abroad, it builds up builds up Target2 claims with the ECB system (e. g. Germany).

The miraculous world of Target2 was revealed to the public in February 2011 by the German economist Hans-Werner Sinn. This is how the tale goes: Hans Tietmeyer, a former President of the Bundesbank, was reviewing the Bundesbank's balance sheet over the Christmas holidays and he came across a rather large asset position, i. e. Target2 claims, which he didn't know what they were. Thus, he asked Sinn about it but, off the bat, Sinn did not have an explanation, either. Sinn then researched the subject and the net result has been a never-ending debate about the risks associated with Target2.

The below table shows the development of Target2 balances of the most significant countries since 2008 (details are here):

Target2 Balances (BEUR)
Belgium Germany Greece Spain Portugal Italy Lux
2008 -104 115 -35 -35 -19 23 42
2018 -20 882 -58 -399 -83 -433 196

Belgium has significantly reduced its (originally quite high!) liabilities from minus 104 BEUR to minus 20 BEUR whereas Portugal has increased its liabilities from minus 19 BEUR to minus 83 BEUR, a very large figure compared to the size of its economy. Greece has increased its liabilities from minus 35 BEUR to minus 58 BEUR, a rather moderate amount when considering what Greece has been through (at one point during the crisis, Greece's liabilities had exceeded 100 BEUR!).

These countries - like all the others - are only sideshows when comparing them to the truly big players: both, Spain and Italy, increased their respective Target2 liabilities by over 400 BEUR (!) since 2008! The magnitude of these figures is mind-boggling. To illustrate: through a combination of current account deficits, capital flight, QE, etc., the banking systems of Spain and Italy lost over 400 BEUR each in liquidity during the last decade!

"For every credit, there must be a debit" - this we learned in Accounting back in school. The debits of Target2 are in Germany, Luxemburg (particularly relative to its size) and the Netherlands (plus 114 BEUR, up from minus 19 BEUR). When Sinn first uncovered the secrets behind Target2 in February 2011, Germany's Target2 claims were 326 BEUR and Sinn considered this as coming close to the end of the world. Now, Target2 claims are almost 3 times as high. Inconceivable from the viewpoint of only a few years ago but an accepted fact today.

How high can Target2 claims go before they system breaks?

Saturday, March 24, 2018

Report On Greek Official Debt - Barry Eichengreen & Co.

"In sum, it is hard to avoid the conclusion that any solution to the Greek debt crisis that does not fall on the shoulders of taxpayers several generations removed will require conditional face-value debt relief."

Report on Greek official debt

International Energy Agency - Greece 2017 Review

"Greece has prioritised development of its abundant renewable energy resources and as a result of a supportive policy environment, renewable sources today play a key role in the electricity sector. Building on this success, it is important for Greece to explore its renewable resources beyond solar and wind and to advance their usage in the nonelectricity sectors. In this report, we look at the ongoing reforms to the support schemes for renewable energy and additional initiatives that Greece could put in place to further accelerate the shift towards renewable energy sources, including on the Greek islands, without compromising electricity security."

International Energy Agency - Greece 2017 Review

Monday, March 19, 2018

An Exchange About Greek/Roman/Balkan/Russian/Ottoman History

My article on Ivan Savvidis prompted many comments and, before long, the discussion moved away from Savvidis and towards Greek history. I reproduce below a very interesting dialogue between the readers Dean and Lykinos. History buffs will enjoy this!

To: Lykinos

Since we are the topic if Savvidis, please bear in mind that in the 19th century there was a real Pan-Slavic plan (with Russia front and center pushing it) of expanding Slavic influence to the Aegean which created the basis of the Macedonian conflict. Which makes all more fascinating why the Greeks feel a kinship to Russians thinking that Russia is a friendly force (enter Savvidis and the Greek Pontiacs) when in fact Russia in many occasions could care less about the Greeks and in fact plotted openly against them (I blame the orthodox church for such gross misdirection).

V is absolutely correct when he says that any attempt by Slavic elements to misappropriate Greek symbols and Greek history is a straight invitation to annexation.

And before we start crying about rights of minorities in Greece please think for a second whose revisionist agendas these latter-day stories actually represent/serve.

The reality is this in the Balkans: There is a struggle for Russian influence whose purpose is access to the warm waters of the Mediterranean. The core of the Russian influence in the Balkans is Serbia. To a lesser extent Bulgaria and other Slavic countries. Turkey is trying to exert influence on religious grounds (supporting Muslim populations of Bosnia and others such as the sizeable Bulgarian Muslim minority close to 2 Million). Germany and your beloved Austria have many old scores to settle in the Balkans in trying to stem Russian expansionism.

This is a long topic and I would like to close with a simple factual statement. The whole basis for the "Macedonian Problem" which is tormenting Greece and certainly affects the mood Thessaloniki was a Byzantine mistake of administration. Whereas the whole world knows ancient Macedonia to be pretty much within the geographical area of today's Greek province of Macedonia (and with its center 22 km from Thessaloniki), there was this certain Byzantine princess Irene who for administrative purposes of ruling the area from Constantinople shifted a new contrived notion of the Macedonia province further to the east which included mostly present-day Bulgarian and today's Greek Thrace territory. And this is how this endless game of "to whom Macedonia belongs began". By a deliberate Byzantine administrative decision is the answer which is another element of cruel irony: that the two entities which the Greeks consider favorable to them i.e. Byzantium and Russia are in fact a considerable source of their own troubles.

Try please explaining this simple truth to your Greek friends and find out how biased and misinformed they are. I bet you they have no clue about the correct framing of the Macedonia Problem. Start the conversation by asking your Greek friends of Thessaloniki how much they know about Princess Irene and the Byzantine Macedonia province and ask them to sketch it on a piece of paper. Don't be surprised about the answers you get because they will be all over the map.


To: Dean

Although I may understand where you're coming from (Greek-American), fact is your take on Byzantium is completely screwed up! Since I wouldn't know where to begin with that, I'm just leaving you with this:

I know it's a rather long and heavy read, not strictly scientific (not peer-reviewed) by a rather peculiar (to say the least) writer but it remains adequately researched and most importantly benefits from the charm of an outsider looking in and being astounded by the "conspiracy" he uncovers! (Although his "discoveries" are in fact widely recognized and discussed amongst historians, albeit as a relatively recent development of the 80's and onwards - even Wikipedia has somewhat caught up.)

Allow me a couple of points: Macedonia as an administrative region of the Roman Empire has always been fluid, same as the province(s) of Greece. Empress Irene or not, Skopjans would have latched onto the name and identity anyway because they had need of it when they first became independent in the early 90 and perhaps they still do.

I'm speaking of the Roman empire because there has never existed a thing such as a "Byzantine Empire", at least not until the middle of the 16th century when a… German came up with name remembering that the ancient city of Byzantium used to stand where the City (Πόλη) is. In fact a "Byzantine" on the streets of Constantinople would have most probably never heard of this "Byzantium"-thing, he would have called himself first a Christian and then a Roman (Ρωμαίος and eventually Ρωμιός) and he would have denied being Greek, at least as far as ca. 1204 when he would have found himself opposed to the barbarous Φράγκους or Λατίνους (mind you, they never reserved the term "Roman" for these western invaders…) - although the people concerned with identity questions, i.e. the intellectuals, would have long before that recognized that of course Hellenismus is theirs as their θύραθεν παιδεία (their non religious education and cultural reference) which they funnily enough considered vastly superior to the Latin, i.e. classic Roman one!

As for Hieronymus Wolf, that aforementioned German, he invented "Byzantium" as a means to deny this reality stripping the Eastern Roman Empire of its historical heritage so that he can claim "Romanitas" (and even "Latinitas") for his emperor, i.e. the ruler of the Holy Roman Empire of the German Nation that famously "was in no way holy, nor Roman, nor an empire" nor… of the German Nation, I would have added! Now, the reason this falsification caught on - aside from past grievances between East and West - was that claiming to be the rightful heirs of the Imperium Romanorum was something that almost all European states used to do, from Paris to Moscow, in order to justify their expansionism. The most, if not successful, at least innovative, were the British who took that tired old notion and transformed it into that of the still going Western world, where they initially placed only their dearest selves, begrudgingly the French and the most… exotic and comically oversexualized Italians! In fact, their little grouped expanded or shrunk according to the each time prevailing imperial interests and ideology. Last but not least, the Germans after they realized that the Roman label would not stick they fancied themselves the new and improved Greeks (!) before settling for being the natural conclusion of all the best ancient civilizations have ever produced throughout the world before finally settling once and for all in the fatherland!

Given all that, I always find it sad to hear Greeks repeat all those long debunked and yet still circulating calumnies against "Byzantium". Something tells me you're one of those people who also believe Byzantium "killed" Ancient Greece, probably ignoring or finding a way to side-step that almost none of those famed Greek written monuments would have perished had it not been for those Greek-speaking medieval Romans… Again, there is a long and interesting history behind these ideologically conceived great narratives of European historiography who worked hard to make Byzantium synonymous with "Byzantine" (the worst offender being Gibbon) and the reason Greek intelligentsia sheepishly adopted these dishonest stories, but I don't have the time to expand upon and besides part of it is covered in the link I provided. For my part, the best aphorism I've ever read about Modern Greek identity is the we are "romanized Hellenes or Hellenistic Romans" (ρωμαϊκοί Έλληνες ή ελληνιστικοί Ρωμαίοι)!

PS. You're right nonetheless about the unmerited and wholly displaced appreciation of Greek nationalists towards Russia, who has always acted as any other Great Power would. The Church is to blame.


To: Lykinos

The way you explained it created new conflicts for me. All of a sudden I feel much closer to the German position on Ancient Greece and that's a tremendous self-awareness moment because it makes me a lost German child who is fighting against its own people. Never would have thought that such calamity would befall on me; to be discovered to be German in my views after all.

Let me just explain. For starters, I am a born Greek who immigrated to the US at the age of 24. My children both born on American soil are Greek-American or Colombian-American if you want to bring their mother into the picture (whose family ancestral name is traced to a German town close to the Austrian border).

So, my views are not typical Greek-American; in fact, I would call them very atypical of Greek-American views. Greek-Americans use the Greek church as an identifier and I, on the other hand, want nothing to do with it.

My reasoning is very simple:

1. To be Greek means to be a person of reason and science.
2. The Eastern Roman Empire/Byzantium/Orthodox Church is a form of complete darkness (faith-based construct) which is in direct conflict with science and reason, hence by definition anti-Greek.
3. If you call me Romios (or Rum as the Turks call us) then I would probably be deeply offended.
4. An empire which issues the Edict of Thessaloniki, whose only purpose is the forceful conversion of classical Greeks to Roman Christian citizens, has nothing to do with Greek values. In my opinion, it has everything to do with anti-Greek values and as such is rejected on purely logical grounds.
5. This incredible and highly abnormal stronghold a foreign Roman religion (which you know as Christianity) has on the modern Greeks is the source of all troubles for Greece. If you want to truly reform Greece you need to start with the Greek church. Its vast real estate holdings need to be confiscated by the state, its sizeable tax bills need to be enforced and its freeloading on state salaries need to stop yesterday.
6. There is no way for Greeks to ever prosper as a nation if their notion is that their true capital (which according to the false religion is Constantinople) is the only European capital still remaining under occupation. This fact alone paralyzes Greeks into inaction and fatalism. It makes us victims of a continuous trauma.

Not that it matters, but you sound as a member of the Left which considers being a Romios as the only form of true Greece because the Ancient Greece staff is for the nationalists and fascists?


To: Dean

I enjoyed your comment and I'm sorry I'wont have the time to respond to the extent that it merited.

Since you equate Greeknes with Reason, which is a very German thing to do (remember for Germans it used to be that Germans = Greeks 2.0), I can only suggest this seminal work which is also an extremely enjoyable read:

Reading it you'll understand why Christianity found a fertile ground in our Hellenistic lands and perhaps you'll find your self curious for his next significant opus:

Trust me it will be an eye opener!

Afterwards you can continue your studies by reading up on the history of Greek language and literature, which is actually by far our truest and most meaningful connection to our Ancient world: Greek and … Roman.

One of the best on the field is:

I can't recommend it enthusiastically enough!

You'll be pleasantly surprised to find out that you can read everyday-use papyri from Ptolemaic Egypt (a much more important centre of Hellinismus at the time than Athens), without any previous training, and you'll be flabbergasted to discover that probably we wouldn't be speaking Greek nowadays or we would be speaking a very different, cut-off variation as, say, French are to medieval Latin, had it not been for the Church after 1204; there wouldn't also have survived almost anything from the Greek literary Corpus (safe from some annotated but very altered and truncated Arab translations of Aristotle) had it not been for many very learned and industrious monks!

As for me,  I'm an atheist (not a cowardly atheist, i. e. an agnostic that Christians righty abhor) and although I identify as Leftish most of the time (unless I have to listen to one speak for a great big time) I can never forgive Greek Left for in the past taking a page from the most pseudo-scientific and dishonest European books in order to vilify Byzantium ! Oh yes! They loved Ρωμιούς but hated Ρωμαίους!

Incidentally, did you know that briefly but passionately during the 19th century the Church of the Greek Kingdom also spat on Byzantium, wanted to cut ties with Constantinople and turn itself essentially into Protestants?

In the end! Rejoice! We're much more resilient, cosmopolitan, complicated and interesting than you previously thought!

PS> Why not try also that old but always good:


To: Lykinos:

From the pdf you provided I take the following points:

1. Roman army during the late stages of western Roman empire mostly German composed.
2. Greeks inherited the eastern Roman empire ("Eventually pared down to the Balkans and Anatolia, the Empire finally consisted mainly of Greeks, or at least Greek speakers, as well as Armenians, Albanians, Vlachs, etc. Conquered and humiliated by Rome, the Greeks inherited Romania and subsequently always called themselves Rhômaioi"). This, of course, is incomprehensible unless one understands the meaning and consequences of the Constitutio Antoniniana, let alone Christianization. As such, it is well over the horizon of popular culture, much academic culture, or Hollywood -- to whom the history of "Byzantium" is like something from science fiction, if even that. I cannot say that there has ever been a "Byzantine" Emperor represented in a Hollywood movie -- or a Constantinople that was not already Istanbul.
3. Anatolians (presumably Greeks) recolonized mainland Greece. ("The money, as it happens, came from Anatolia, which, although raided regularly by the Arabs, was in much better shape than the Balkans or Greece, where Slavic migration had broken all the way into the Peloponnesus -- Greece had to be resettled with colonists from Anatolia. The paid military would eventually draw recruits from Russia, Sweden, Denmark, Norway, Iceland, and England. Meanwhile, the libraries and the Classical art of Constantinople might leave one wondering if very much had changed at all in the passing centuries, while visitors from the impoverished West or barbarian North were left to gape in awe at the bustle, wealth, architecture, and sophistication of a place unlike any other in Christendom.")

So as long as we speak of Christendom, this is another way of saying Rome and Greeks are but a minor player in all this?

I think we are coming to the same conclusion when I say that the Eastern Roman Empire was an anti-Greek concept, even though it had some Greeks in it.

Because from what you provided, I cannot possibly conclude that East Rome or New Rome had anything to do with Greeks other than the mainly Greek population of Anatolia which was better preserved from barbarian invasions of mainland Greece and mainly Greek-speaking (Ionians of Athens, which the Turks today call Yunans i.e. Ionians).


To: Lykinos

I am very interested in your reaction to this Cyprus Mail opinion piece, making a direct charge against the role of the orthodox church:

"During Ottoman rule (1571-1878), Cyprus may have, in theory, been ruled by the Bey, appointed by the Pasha but in reality it was ruled by the Archbishop with the clergy. The former was responsible for the imposition and collection of taxes and his leadership role was indisputable. We should therefore not be surprised by the zeal showed by every archbishop to maintain the status quo and fight any display of insurrection. Why would he not fight it having become the natural ally of the Turkish oligarchy?

He was, in short a nenekos (collaborator of the occupier). There were, admittedly, some Greek Cypriots that participated in liberation initiatives, before and during the Greek war of independence of 1821, but as the researcher Giorgos Giorgis explains in his book, ‘The Cypriot Contribution to the Revolution of 1821’, no parallel revolutionary activity took place in Cyprus. He wrote: “… there was disarmament of the island, there was compliance of the residents to the calls of the Pyli (Ottoman government) and the archbishops were making efforts to prevent the outbreak of any anti-regime action by the Cypriots.

How do we explain the turn towards Greece, with the arrival of the British to the island in 1878? The change in regime was an immense shock for the Church of Cyprus. Suddenly, the whole world was turned upside down by the creation of a secular state by the British. The economic privileges enjoyed by the Church were abolished. The Church was no longer exempt from taxation for land ownership, but was also obliged to pay taxes. In addition to this, members of the clergy that violated civil law, were now tried in civil courts instead of church courts.

The only way for the Church to regain its lost privileges would be through Enosis, a concept unknown in the 19th century. The choice of Enosis at the start of the 20th century was the most ‘advantageous’ because in Greece there was never separation of State and Church. While the option of independence, in contrast to that of Enosis, was an attainable target it was not discussed because of the power of the Left which controlled the municipalities of all towns (except Nicosia’s) as well as the trade unions. In the event of the Left taking power, in an independent state, there would be complete secularisation, which was anathema to the Church.

Faced with the prospect of the marginalisation of the priests, the Church cultivated through education over which it still exercised some control, the yearning for Enosis and inspired, organised and financed the armed struggle. Unfortunately, for the Cypriot people, the Church leaders could not, because of ignorance, short-sightedness and narrow-mindedness, understand that this objective, especially with an armed struggle, was clearly unattainable and would end in national tragedy.

Kyriacos Matsis, the Eoka hero, had told Governor Harding, with regard to the Eoka uprising, that “we are not staging the struggle for money.” I doubt that any of the high-ranking priests of the time could have said this, with his hand on the bible, without removing ‘not’ from the sentence.

I would not be surprised if some are taken aback by the conclusions of this article. After all the books on the history of Cyprus were written by the ruling class, the Church. And as Marx said, "analysing economic determinism, the dominant ideas of every period were the ideas of the ruling class."


To: Dean

I see you’ve reached a rather selective interpretation of your reading material and I think I can guess why.

Judging from the passages you cited, you place great importance on how much if any Greek “blood” remained untainted by intermarriage with the invading “Barbarians”. Apparently they couldn’t keep their mongrel hands off pure-bred Greek beauties and … vice versa! Barbarians are sexy! If I misunderstood, please disregard everything that follows.

I’m not an anthropologist or a geneticist or whatever, nor do I care to find out about the matter because it doesn’t matter. Identity and nationality are not transmitted by blood like venereal diseases! One of the great many strengths of Hellenismus but also Romanitas / Romiosyne is their assimilating power. For example, the pseudonym I use is a Hellenized variation of Loukianos, the already Hellenized name of the Syrian also known as Lucian of Samosata, who wrote in the 2nd century AD in the most finely tuned Atticist prose (but also occasionally leaning towards Koine) that even your beloved 5th & 4th century Athenians could ever have hoped to achieve, a monumental series of always laugh-out-funny satires and parodies that draw upon and offer knife-sharp insights on the best of what centuries-spanning Greek philosophy (mainly stoic and epicurean), rhetoric and philology had to offer ( Indulging occasionally his mean streak he found it a tremendous good time to make fun of the honest folk of Syria, Phoenicia, Palestine, Egypt and environs who having perfected or even just started to learn Greek couldn’t wait for even a generation to pass before going about boasting to be descendants of Pericles and Aspasia or the great great great … great grandsons of some obscure Marathon fighter! What’s better, he made mercilessly fun of the concept of Divine Providence, and yet Christians adored him! ( He is one of the most copied and better transmitted ancient authors by the Byzantine monks, who apparently enjoyed a good laugh after of course having stated loud and clear for anyone interested that what the old master says is true only for his own, long dead Gods and in no way for baby Jesus and Panagia and, after all, they’re reading him only for the betterment of their Attic Greek, for science and so on and so forth and what have you… Another of their all time favorites was Aristophanes.

On a more serious note, the idea that the Nation is a Community of Blood didn’t appear but in the end of 18th and the beginning of the 19th century closely related with the already nefarious notion of racial history, both almost as by-products of the emerging concept of the Nation / Nation-State. Your everyday Pre-Alexander Greek despite having a vague idea akin to Herodotus’ Όμαιμον, would have struggled greatly to understand it, not only because he associated blood purity almost exclusively with noble bloodlines, but also because he lacked the very notion: his equivalent word “ἔθνος” was much more loosely and fluidly defined, so that one could speak of ἔθνη ἑταίρων or λαῶν, meaning band of comrades or body of men and safely use it to refer to swarms, flocks and other animal populations; he could also tell you of the various ἔθνη of Greeks before later designating the various Ἔθνη as opposed to Greeks who are not one (cf. Jews and Gentiles). Same problems arise with the term: “γένος” who doesn’t quite fit its nowadays usages. Don’t get me wrong! He was Greek all right and he was acutely aware of it because he lived in one of the many and varied Greek communities; in more modern speak, his identity was much more a matter of society than of biology and certainly it had nothing to do with any hematological analysis or pedigree. After Alexander happened were the one asked an intellectual he would have looked even more perplexed and he would have you know that only Greek παιδεία could make a Greek out of you, sir! As for Romans, you are of course right bringing up Constitutio Antoniniana since for them it was full citizenship that gave you the privilege to be Roman. And yes, that was a world-changing development that Caracalla probably unintentionally caused!

And if all that seem fastidious and convoluted to you just think that the Northerners that came up with the equation pure: “blood makes a pure nation” where most of them imperial or feudal subjects stemming from people as bastardized as any on our old continent. Nowadays any honest Englishman knowing what came to pass on his island at about the turn of the first millennium (and also much earlier and quite some time afterwards) would laugh thinking about the unmixed Englishness flowing through his veins. Also the Prussians who united Germany kicking and screaming were famously often faced with the accusation reserved to them by their German brethren that they - the Prussians - are nothing but Germanized Slavs! The horror! And since we’re also talking about names, the general designation Romans tended to attribute to people and tribes living east of the Rhine and north of certain parts of the Alps, i. e. Germani (whereas Greeks initially preferred calling them Γότθους, Goths) no matter how completely different they may have been one from another, was a source of great confusion and anxiety for modern Deutsch when trying to determine who they were so that they can unite themselves – certain very esteemed and influential practitioners of this “blood science” concluded that almost all of Western and Northern Europe (but not the Slavs!) were indeed Germans but they had simply forgotten it! Public opinion followed suit... You don’t want me to remind you what they thought of us! Or, should I bring up Fallmerayer… Are you sure you wanna cast your lot with them?

By the way, and provided I haven’t misunderstood you, do you consider yourself also American? And what about your children? How do they feel?

To be continued with why language matters when being Greek or / and Ρωμιός!


To: Lykinos

In short, I do consider myself an American and my children even more so because they find my attempts to defend the motherland really odd and somewhat entertaining. So, don't worry my feelings about Greece will die with me (like the Last of the Mohicans) and there will be no more problems in this regard.

As to your didactic approach, I honestly feel somewhat naked, tied in the public square and you delivering lashes on my body with certain kindness intermixed with a stern message, which makes the whole experience surreal. Can I be so wrong in my beliefs and why? Where did I miscalculate?


To: Dean

Naked public flagellation, you say?!? How divinely Roman of you!

No, seriously, if you can feel both Greek and American in this day and age where one can have a meta-attitude towards nationalism, you're already well equipped, better than most, to understand how fluid and even multiple identities could be back then when people didn't have such a well refined vocabulary or any at all to contemplate such matters. And I wouldn't worry about your kids! If they've been taught Greek well enough, they'll hear the call sooner or later!

As for your adoration of ancient Greece I can only guess that you were exposed form a very tender age and never willing to give up on that sweet dream Western Europe dreamed about its distant origins: Europeans came into the forefront of history with a bang of… pure reason! They flattered themselves, and we in turn were more than happy to pick up the story and build on it thinking the compliment was meant for us… Served us right then that they eventually chose to set the record straight! It was brought to my attention that I exaggerated the matter and that in fact the artists and philosophers of the West painted eventually a far more colorful picture of Antiquity. I admit I spoke hastily and in just a tad of bad faith, but I still invite anyone to visit Athens and Rome and then take a stroll through Munich; perhaps he'll see then how little the most fervent and sincere of all the Philhellenes were ready or willing to deal with the chaos and ugliness of history!

(By the way, the absurd implications of going through life as a devoted practitioner of reason, mathematics and philosophy were dealt with already by Aristophanes: check out Nephelai / Clouds ( They're quite funny! On another note, Euripides had Medea explaining to Jason that it only stood to reason that she should have killed their children as an inevitable consequence of his own actions).

As for your disdain for our Roman ancestry, don't beat yourself up about it! That was the norm till the 70s or even 80s. I think Kelley L. Ross did a good job explaining why. Especially in Greece "Byzantium" is closely associated with the Church who didn't miss the chance to claim it exclusively, so it's perhaps understandable that one watching the conduct of the Church of Greece will reach the wrong conclusions about what is essentially a fairly different matter.

Since you're in the habit of referencing Edicta you must already know that by the time of Justinian, whose Greek famously was nothing to write home about, our language was on the verge of almost completely displacing Latin on all administrative and judicial matters as well. ( This had already happened quite some time ago in the field of education, literature, everyday life parlance and even folk culture at least south of the so-called Jireček Line (

So it's no coincidence that I mentioned by name what must be your favorite emperor, cause although he ordained the closing down of the Athenian Neoplatonic Academy (, by then every Roman citizen - or not - who wanted to go places in life (i.e. to step outside of his little village and its surrounding fields) should have been able to do so because Greek-speakers could understand one another throughout the vast empire; and should he be lucky enough to have any advanced schooling, if he wanted to cool off from all this theologizing (after all he was Christian first and foremost), he would have cracked open a book (or unravel a papyrus) and enjoy the only highbrow entertainment he ever knew: Greek novels, Greek poems, Greek drama, Greek orators, Greek historians, Greek philosophers, Greek scholars, all those dead white (or not so much) guys (and the occasional woman); after that, if he wasn't exhausted or bored stiff, he would have gone to meet his equally arrogant elitist friends and shown off how broad his θύραθεν παιδεία is (it literary means the education / culture that comes in from outside the doors of the church.)

That's a shitload of books!, I hear you say! (here it is perhaps worth the trouble to google "Photius' Myriobiblos / Μυριόβιβλος"). That's the work of many a scribe who labored tirelessly at the monastic libraries (quite a few for the Early Middle Ages: so that we could still have access to all this ancient wisdom. Well, obviously, the real reason back then was that they had to satisfy the demand which was strong enough nonetheless to have kept us supplied - aided by some relatively recently discovered papyrological material - till our days. Keeping in mind the many catastrophes that befell New Rome in her "latter" days - starting with the biggest of all, the sack of Constantinople by the Crusaders in 1204, when books were destroyed en masse and so are now lost to us forever, and which laid the ground for the Ottoman rule - one can understand how the manuscripts lucky enough to have reached us aren't but only a very small portion of what the supposedly obscurantist Byzantium read and preserved. ( Oh,yes! That's the work of your beloved Church! But don't worry: έχω ράμματα και για τη γούνα της.

I'm going to insist on this aspect of the "Byzantines" as guardians of the Greek written word, cause in this day and age they're yet to get their due credit, at least when it comes to popular fora and culture. Instead, the great old 19th century myth of the Arab intervention lives on! At its origin lies the fact that the West rediscovered Aristotle by way of the Arabs mainly of the Iberian Peninsula. That happened through a rather restricted collection of the philosopher's works that Arabs found relevant and useful enough to translate and annotate, and not through the Greek texts themselves, since - unlike Byzantines - Arabs didn't care to preserve the original text after they were done with it; after all they could always procure another one from the "Byzantines" (whom they called Greeks!) as they had already done to begin with. In the disdain of the 19th century Europe for anything Byzantine (remember the esteemed idiot that was Gibbon) many diligent and conscientious scholars were very happy to explain away the origin of the Greek manuscripts in their libraries by attributing everything to these enlightened Arabs of the old age. Little did it matter that, even if one went through the vaults of every western institution of knowledge and walked through the whole wide Islamic world looking for it, one wouldn't find a single line of Thucydides, Xenophon, Plato, Aeschylus, Aristophanes, Theophrastus, Epicurus, Plutarch (Europeans adored Plutarch) and Lucian to name only a few having been copied and handed over by Arab hands; not even a translated one! What's worst, the Greek Left took that myth, thinking they're sticking it to the nationalists in doing so, and propagated it to an extent that many progressive Greeks still love to tell it, thinking they present their liberal credentials in doing so…

Back to the learned people of Eastern Rome who of course didn't just copy ancient Greek texts but also wrote their own, trying to "copy" this time almost all of the genre of secular writing that the Greeks came up with: historical narratives, rhetorical demonstrations, novels, mathematical dissertations were being written with the ancient models in mind. Ex. a historiographer would aim to present himself as the heir of Xenophon, Polybius and Thucydides, not only in form and "thought" but also, if not before all, in language. In another of my long-winded comments I've already went on and on to poor Leander about the atticist current in the history of Greek language; here I'll only say that the "ancient Greek" prose of Anna Komnene's Alexias would have given pause or exasperated even the most achieved of 5th or 4th Attic writers (so, the "real deal") with its overworked archaism- probably to her greatest delight…

All that to say that not only the language but also Greek culture in general was something significantly more to these people than just a tool handed down to them - say, like American English are to us. It was the main if not sole non-religious common cultural reference that spanned through a bi-continental multiracial, multilingual and multicultural empire that lasted for a thousand years. It wasn't their main cohesive element - that was undoubtedly Christianity - but it was sure strong and prominent enough (for some of them more so than others) to prompt the Westerners who wanted to antagonize these eastern Romans and claim their name as their own to start calling them… Greeks! They didn't want to be called that! Until… they started to do so themselves after 1204 in opposition to western inventers, Φράγκους or Λατίνους (but also to other Balkan nations formerly of the Empire); some intellectuals in southern Peloponnese really went for it and became… radical Platonist! (See Hermes' comment or google Gemistos Plethon). But Romeos / Romios remained by far the preferred appellation of most Greek-speaking Christians until relatively little before the Greek state came to be; propelled by Western fantasies of ancient Greece the name "Hellen" or better "Elinas" began to gain ground and to eventually become dominant but without ever completely displacing the persistent Romios, now out of vogue or even maligned in certain milieu.(,_Roman,_and_Greek). Confusing? Extremely so! Because now to the Greek and Roman and... post Roman strain added itself the domineering Western influence, riddled itself with chaos and contradictions. And I'm planning on making you even more confused: (Trust me, she's better when arguing in a purely abstract level; in her interviews, she usually suffers from the self-centeredness that plagues old intellectuals returning home after having made their career abroad and usually lets her politics get the better of her.)

Just so I'm not being misunderstood, allow me to state it plainly: "Byzantium" is not just another way of saying Greece or medieval Greece. It wasn't one of our modern 19th-century-born national states but an ancient empire that contained multitudes of people who would never consider themselves Greek or even Romans and their affinity to Greek cultural heritage was little to miniscule or heavily intermediated. For example, the ways that Bulgarians related themselves with Rome (Tsar = Caesar) and the Romans of Constantinople and the Greek language was a whole different beast. BUT, for a great big part of the people who called themselves Romans and spoke Greek their relationship with Greek culture was of a closeness and intensity - they claimed to OWN Hellenismus - wholly different than say that of the artists and scholars of Renaissance or even - or rather definitely - that of our own; for them this was the main cultural reserve they had outside their Christianity and whatever Roman "Mora" remained embedded in the functioning of the State and the everyday life of the capital, more and more unrecognizable as such from the moment the linguistic connection got severed - never forget: they copied the writers of Athens not Rome!

And these people are an integral part of our Modern Greek identity.

To: Lykinos

I don't disagree with you on the importance of Greek language and culture which somehow Byzantium preserved. That's a given that Greek was the official language for the very pragmatic reason that the basis of all wealth in Asia Minor was in the hands of Greek speakers.

But when you say that Byzantium was an "ancient empire that contained multitudes of people" all kinds of red flags go up. You see, by definition, Greeks (the classical Athenians) are anti-empire people. They fought an empire (Persian) and then fell by another empire (Roman). I also think Alexander lost his soul with the Hellenistic Empire which is when Greece became part of a cosmic admixture which in the end conquered Greece rather than the other way around.

So most Greeks accept the Alexander transition to the world stage which then leads to Rome, Byzantium, and Hellenism as part of a cosmic experiment.

I somehow have great difficulty crossing over. I would rather stick with the notion of Greek city-states fostering competition and trade as well as promoting principles of democracy which when you reach a certain size are impossible to maintain (I am thinking of Dutch merchant cooperatives when I think of Ancient Greek states).

What bothers me about Byzantium is its size, its empire type character and its hatred of classical Greece (all of these being clear signs of anti-Greekness). I can't simply be fooled by the fact that Rome or New Rome spoke Greek because such was the mark of the educated people of the time. Greek, then, was like English today (even though English is more like a universal language of commerce) but you get the drift. Sophisticated people of that era would have surely had to have spoken Greek.


To: Dean

First of all, you know as well as I do that Greeks were not only the 5th century Athenians. Also classical Greece was not a network of self-sufficient and self-content cities vying with each other to see who can promote fair trade and democracy better; in fact most of these city-states quite regularly alternated between oligarchic, democratic and tyrannical regimes, subsequently passing through violent transition phases (yes, even Athens) and more often than not in armed conflict with each other in order to secure the most of the precious little resources Greece had - especially mainland Greece.

Until the Athenians came into play. They aimed big and had a name for it: Ἀρχή, Arche i.e. hegemony, Dominion: The only reason they didn't get their own proper empire was that, try as they may, they just didn't cut it. But boy did they ever try! They were off to a good start subduing with a speed and to a degree unparalleled in the then Greek world their old allies which they have vowed to protect against the big empire looming in the East ( In this regard, they obviously didn't have any ideological objections to dominion upon others as long as they were themselves who exercised it. Nothing new here! But then they royally screwed up when in an extremely ill-advised and poorly planned application of the strategic dogma: "offence is the best defense", they tried to expand to the West: The only good thing that came out of this is Thucydides' narrative.

Furthermore, it is at the same time befitting and ill-suited that you should mention the Dutch experience as counterpoint to imperial civilization. I trust we're in agreement here: there is little to no comparison between a merchant company and an ancient city state, not least because e.g. classical Athenians could hardly conceive the city aligned itself with specific interest groups of individuals and not the other way around; the former it's a development that owns a lot to the Roman concept of citizenship and the Christian doctrine of every person having been created in the image and likeness of god. No matter that, it's quite ironic how you just can't bring yourself to do without the possibilities and contradictions the extended world of empire affords you, even at the moment you rage against hem! The merchant companies you so admire were nothing without -in fact THEY WERE - the Dutch empire! ( Not only that, but given how that was a colonial empire going about its business - which included quite a lot of slave trade - and competing with others of a similar kind in a geopolitical and cultural globe immensely expanded and still expanding as the Age of Exploration went on, the "provincial" Eastern Rome, who afforded citizenship to the greatest part of its peoples and recognized no slaves, appears in comparison more "democratic" and in any case closer to your cherished image of a world guarding its distance from the admixtures that "cosmic experiments" entail…

Besides, what your insistence to tie down true "Greekness" to a specific time and - most importantly - place centered around Athens tells me is that you struggle to accept the notion that what it is wasn't always what it was. This concentration if not confinement of Greeks inside, more or less, mainland Greece is a relatively recent development (reaching its pick after 1922) concomitant with the establishment and prevailing of nation states in 19th and 20th c. Europe. That was almost never the case with your Ancients: the coasts of Asia Minor were since almost always an integral part of their world and as early as the first centuries of the first millennium they started to launch expeditions in order to expand the furthest possible east and west from Greece proper; and they never looked back! ( Needles to say that they didn't exactly hold off from getting to know the locals better… So you see you mourn an age of innocence that never was! In all seriousness now, do you actually believe that the world would have been so interested to find out, preserve and keep on discussing through whole millennia what the Greeks did, wrote or discovered - that yourself would have done so - if Alexander hadn't taken what it was essentially a time and place specific experience, a provincial civilization and used it as the cornerstone of his "brave new world", his Oecumene? I personally doubt that we would still be speaking Greek without his "cosmic experience" and the subsequent Greco-Roman world and I'm totally convinced we wouldn't be calling ourselves Greek...

Finally, the whole point of my diatribe about Greek language AND Greek culture in "Byzantium" was that "Byzantines", our very own Romans, no matter how strained this relationship occasionally got, never actually hated the Greeks; nor did they learn Greek as nowadays we learn American. For start, you've totally forgotten that for a great big part of them Greek was their native language and knew nothing else. What's more, certainly at Constantinople and as the time went on to more and more places of the empire you couldn't even be considered Roman if you didn't speak the language of Romans, i.e. Greek. And not only that; take for example a person who nowadays learns English because he wants to further his professional prospects in our globalized world; he doesn't feel obliged to also study Shakespeare, Milton, Poe, Hemingway and even lots of minor, obscure writers and even less so to an extent that he can make their language and general style his own - not at all. But that's was exactly what a young Roman had to do if he wanted to move up in the Empire. Same goes with the attitude towards the culture: when a modern day Greek, French, Polish or Indian learns English, no matter how open-minded and erudite he is, doesn't actually feel that he's (re)discovering something which is essentially his own; he doesn't feel part of the English or American culture. But this is something close to what a Roman student should have been feeling when he was learning his ancient Geeks, since those were the authorities any proper Roman such as himself was supposed to get acquainted with; when it came to non religious education and high culture he wouldn't have in mind anything else - not even Rome - but Greece.

These all are good reasons why "Byzantines" were the ones - and not any others - who took upon themselves the challenging task of locating, preserving, storing, collating, studying, editing, disputing, illuminating but before all endlessly copying Greek manuscripts; to this goal a whole "industry" had been set into place working for about a thousand years that modern readers very often don't even begin to suspect when handling the "finished" texts. I'll state it one last time: no other people neither in West nor in East felt such a deep connection to Greeks so as to take great pains to keep their legacy going on. So I think it's pretty ironic that you reject and vilify those same Roams without them you'd have little to no idea about those Greeks you're so proud (and anxious) to call your own…

In the end, it doesn't matter! You've already made the transition to Oecumene long ago together with your fellow Neoelines whether you realize it or not… Until you do, I leave you in peace


To: Lykinos

The changes over time in the valuation of ‘democracy’ – from depreciation of ancient, direct demokratia (the word as well as the thing) to upwards revaluation of indirect, representative ‘democracy’ today – tell a powerful story, as my Democracy: A Life tries to show:

i. there was hardly any genuine demokratia (people-power) anywhere in the Greek world after 300 BCE.

ii. demokratia came typically to mean ‘republic’, i.e. not-monarchy, or/and freedom from direct rule by either Greek autocrats or by Rome.

iii. Rome (first the Roman Republic, then the Empire) hated Greek-style direct democracy; the Latin for demokratia was democratia… The rule of the Roman People even under the ‘free’ Republic was variously mediated and in effect nullified by the power of the - aristocratic-oligarchic – Senate.

iv. the Byzantine Greeks, who called themselves ‘Romans’, were ruled autocratically by divinely authorised monarchs, and by the 6th century CE the term demokratia had been so devalued that it could be used to mean ‘riot’, a form of ‘mob-rule’.

v. Not before the 17th century did the word ‘democracy’ start creeping back into political discourse as a potentially viable system of governance, only to be firmly and overwhelmingly rejected – by both the American and the French revolutionaries -within the largely negative reception of ancient Greek direct democracy as little better than mob-rule.

vi. Only with the invention of representative, parliamentary democracy – since then variously morphed into ‘Western’, ‘liberal’ democracy, based on universal adult suffrage – did democracy become an accepted governmental norm. It remains a fragile achievement.

Two ‘lessons’ may perhaps be drawn from this brief comparativist exercise.

First, the past, as L.P. Hartley (author of the novel The Go-Between) wrote, is a ‘foreign country’. They (in this case the ancient Greeks) organized political ideas and their reception quite differently there.

Second, a real puzzle remains as to why and how ‘democracy’ – the word as well as very various and disparate versions of the thing – so rose in estimation from its late 18th century disapproval to its generalized approbation (and too often mis-appreciation) today."

Paul Cartledge (A.G. Leventis Senior Research Fellow, Clare College, Cambridge; emeritus A.G. Leventis Professor of Greek Culture, Faculty of Classics, University of Cambridge)

Bottom line: Romans hated Greek style democracy. Romans were autocrats; the byzantines even more so. Therefore neither the Romans or Byzantines are my people and not your people either. Somehow you want to give Byzantines a cookie because they preserved the Greek language. So what? What's the big deal about it?


To: Dean

Cause I want to understand Modern Greek identity. Without the language it’s simply not the same if not non-existent. As for the concept and history of Democracy this is a wholly different discussion. But even there, let me remind you that we wouldn’t know much about the Athenian direct democracy you admire, safe from what Latin Romans wrote about, if the Eastern Romans weren’t so keen in studying what the Athenian orators, philosophers, historians and dramaturgists had to say about it themselves. Their cookie is well merited.


To: Lykinos

The greatness of the Greeks is not their language (of which us modern Greeks speak an incomprehensible version; shall we say a Latin bastardized version?). It is their political system and the ethos of strife. Striving to be the better of your competition. Read what the Stanford University prof. Josiah Ober has to say in unlocking the essence of the Greek contribution to civilization.

"Stanford Classics Professor Josiah Ober has long suspected that some of the long-held ideas scholars had about the ancient Greek world could be wrong. Thanks to his innovative digital research project, he now has the data to show it.

Ober says there was previously a developing and crystallizing consensus among classical scholars that there was little to no economic growth in ancient Greece – as was the case in most societies of that time.

But instead of portraying a static, poor Greek economy, Ober’s new findings have shown that from about 1000 to 300 B.C., classical Greece had impressive rates of economic growth that were unparalleled by its contemporaries in antiquity.

Together with a team of other Stanford scholars and students, the professor of classics and of political science digitized huge amounts of archaeological, documentary and literary data. Using these new tools, the team created analyses and visualizations that map out aspects of Greek life, such as how money circulated and how many people lived in cities versus small farms.

At a certain point, Ober explained, the team compiled “a critical amount of evidence and recognized that the old story couldn’t be right.”

So why was ancient Greece so prosperous compared to its contemporaries? In his new book, The Rise and Fall of Classical Greece, Ober links this unexpected prosperity to a relatively democratic, decentralized state system that allowed for innovation and cultural development.

“Basically the answer to that is politics,” Ober argues. “The Greek world is distinctive in having this dispersed structure so that there are many, many independent states rather than a single empire – or rather than a few big and powerful states.”"


To: Dean

Wow! 700 hundred years of (relative) democracy? That’s certainly not what I know and what, I suspect, Greeks themselves ca. 300 would have been surprised to find out. I guess I’ll have to read the book myself especially since I’m familiar with Ober’s work on Thucydides and I have enjoyed it. But I’m afraid that by know we’ve started talking past each other: you’re telling me why you admire ancient Greece and I’m talking about how without Byzantines we wouldn’t be what we are…

And NO! We shall NOT say that our language is incomprehensible or a Latin bastardized version cause we’re not in the habit of telling dirty-dirty lies, thank you very much, Sir!

Anyway, I’m letting you celebrate the day your Ρωμιοί forefathers rose up as Έλληνες to fight for their freedom! And despite the fact their beloved church excommunicated them for that! Fianlly, if you ever per chance come up against this:, promise to tell me if it’s worth its provocative title!


To: Lykinos

Ρωμιοί forefathers rose up? I am afraid this is revisionism of the worst kind, especially with the role the Church played in it.

The only reason we are free today is because of the Battle of Navarino and some crazy philhellene British officers who diregarded clear instructions from Whitehall and then lead Greek irregular troops in capturing most of the small territory of post 1830s Greece.

By the way, I know of no other nation in the world who starts military campaigns in glory like supposedly in 1821 or 1941 and then it ends up thoroughly defeated but still a victor nevertheless. Not even talking about the Smyrna campaign which followed the exact same pattern in disaster.

And we owe nothing to the Byzantines except to put them in their right place as inferior Roman subjects.

If there is something worth following in our history to use it as a present-day model then Josiah Ober knows it but we have our ears full of wax because we could hear none of it. Forget the language stuff because what we speak today is not even Greek. It just looks and sounds like it is.

And unless we become Greeks then we will forever live as worthless Roman subjects or the lowest of the EU low. Enjoy your contrived 25th of March celebration which is really a good reason to break into uncontrollable tears and remorse for what we have become.


If there are additional exchanges between Dean and Lykinos, they will be added here.