What A Difference A Few Words Make!

In an article about the FYROM conflict in the Ekathimerini, I came across the following quote: 

"Greek Foreign Ministry spokesman Constantinos Koutras called on FYROM authorities to focus on 'serious problems... that have to do with the functioning of rule of law... respect for the principle of good-neighborly relations, and the country’s democratic deficit... rather than looking for scapegoats and blaming others for the impasse in their Euro-Atlantic perspective.'” 

I had to chuckle. What if the EU re-phrased this comment as follows: 

"The Eurogroup called on Greek authorities to focus on 'serious problems... that have to do with the functioning of the Greek state... respect for good collegial relations in the Eurogroup... and the country's financial deficit... rather than looking for scapegoats and blaming others for the impasse in their common currency perspective.'"

Allende Needed 3 Years. SYRIZA Only 6 Months?

Below are a few quotes from different articles appearing in the Ekathimerini today: 

“Greece’s social security funds are experiencing a dramatic decline in revenues. These developments, combined with the drop in tax revenues, have led to a 51.6 percent drop in the general government’s primary budget result from the first quarter of 2014.”

“According to the data announced by the ministry, pension funds are in dire straits as the state has reduced its funding to them by 17.1 percent and their revenues have dropped by 12.1 percent on an annual basis, amounting to 8.02 billion euros against 9.15 billion a year earlier.”

“Expired state debts climbed to 4.43 billion euros at end-March from 4.01 billion at end-February, adding 418 million euros in just one month. Most of the expired debts burden healthcare organization EOPYY (1.39 billion euros) and hospitals (903 million euros). The obligations of the Civil Servants’ Pension Fund amounted to 382 million euros while those of local authorities reached 319 million.”

“Greece finds itself in a state of quarantine, as is anything related to the ‘Greek risk,’ due to the ongoing uncertainty and the danger of a serious liquidity accident. Foreign banks and stockbrokerages have either drastically cut or altogether stopped conducting transactions with their Greek peers over fears of the complications an accident or capital controls would generate.”

“Payments for a number of European Commission-subsidized projects in Greece have been severely delayed in recent months during the crucial period just before their completion, according to the Association of Greek Construction Companies (SATE).” 

"’State projects around the country are falling apart as they see work stop one after another due to the financial constraints of construction firms,’ a SATE statement warned on Monday.”

Salvatore Allende, the world's first democratically elected Marxist head of government, needed 3 years to run Chile's economy into the ground. Could it be that SYRIZA will manage to accomplish this in 6 months?

Greece Should Repeat History?

It is a true joy to read Stathis Kalyvas' book "Modern Greece: What Everyone Needs to Know" because it is written in conversational style: instead of doing chronological reporting, the author poses simple questions which he then answers. I had to chuckle when I came across this paragraph: 

"It is quite telling that the International Financial Commission set up after the 1893 default remained in operation until 1978… The regime of international financial control imposed on Greece stabilized the drachma and led to the reorganization of the Greek economy. In turn, fiscal discipline brought benefits: Greek banks expanded, the economy grew and the country urbanized." 

It is often said that modern Greece spent about half of its existence in default and/or rescheduling debt. What is relatively seldom mentioned is that modern Greece had periods of phenomenal growth and investment in infrastructure. For example: during the half century from 1929-1980, Greece's average growth rate was 5,2% (compared with 4,9% in Japan for the same period). The above quoted paragraph mentions another one of those growth periods.

The pattern of such growth periods seems to be as follows: (1) fiscal stability implemented by Greek governments and/or imposed by foreign powers; leading to (2) voluntary inflows of foreign capital; (3) which capital was spent on investments in infrastructure and improving the economy's structure; and (4) resulted in enormous leaps in the country's development.

"Those who don't know history are doomed to repeat it", so the saying goes. Perhaps today's Greece should forget its phases of phenomenal success so that it can repeat them... Or perhaps learn from the past after all?

Confusion About 'Red Lines'

Two headlines on the front page of Ekathimerini today:

Tsipras, Juncker point to convergence on red lines

Greece says sticking to 'red lines,' wants concessions from lenders

Take your pick!

Michael Lewis Compares Greece With The Berkeley Pedestrian!

Michael Lewis true to form on BloombergView: 

"The Berkeley pedestrian, on the other hand, seems bent on his own destruction. In daylight hours you can find him sprinting from behind tall bushes into busy intersections, ear buds in place to ensure he remains oblivious to any danger; at night he dons dark clothing and slips, ninja-like, from shadows onto poorly lit streets. It's California law that a pedestrian, when he arrives at a crosswalk, must stop and make eye contact with any approaching driver: Hardly anyone here pays that law any attention. If the Berkeley pedestrian glances up at all, it's to glare at any driver moving slowly enough to notice his sudden, almost magical appearance in the middle of the road.

Behind that glare lies the source of the peculiar danger on Berkeley's streets. The Berkeley pedestrian is propelled not just by his desire to get from one place to another but also by his sense that he's doing it in a morally superior way. He believes -- even if he might not quite put it this way -- that it is the duty of all fossil-fuel consuming, global-warming promoting, morally inferior users of the road to suffer on his behalf. He's not suicidal. He doesn't want to be run over by a car. He simply wants to stress to you, and perhaps even himself, that he occupies the high ground. In doing so, he happens to increase the likelihood that he will wind up in the back of an ambulance.

Which brings me to the current dispute between the Greeks and the Germans.

In the new Greek finance minister's (pretty great) macho bluster, in the new Greek prime minister's condescending lectures to the German people, in the unquenchable Greek thirst for magazine cartoons of German leaders in Nazi uniforms -- in all of it you see the soul of the Berkeley pedestrian. It's only the source of Greek self-righteousness that is obviously different: The Greek people think the German people should feel shame for the sins of their past, and an obligation to expiate those sins.

As if to illustrate the point, the Greek Ministry of Finance recently commissioned a study to determine how much Germany should pay Greece for the atrocities committed by Germans in World War II. (The number they came up with, 301 billion euros, was suspiciously close to Greece's outstanding debt.) This study did not make it more likely that Germany would pay Greece reparations: just the reverse. It enraged the German politicians whose indulgence the Greek government now seeks. But it still served its purpose -- to remind everyone that the Greek people still insist on their own righteousness.

Greek government corruption, cheating on taxes, resistance to reform: Never mind all that! If a Greek wants to sprint across the autobahn, every German still has an obligation to notice and hit the brakes."

Who Represents the Political Center of Greece?

"It leaves me wondering whether there was ever really a political centre to hold. Some will rightly blame an overdose of austerity for killing off the traditional parties that claimed to represent this middle. But the truth is that the parties of the supposed centre never represented an economically sane, export oriented pro-business or liberal outlook. They were patronage networks that flirted with opposing ideologies while following the same statist, inward looking model."

 

A most interesting article by Marco Veremis, co-founder of Upstream, a very successful Greek mobile commerce company, published in the Financial Times.

Paranoia Combined with Self-Aggrandizement

TheGreekAnalyst published this article by Panagiotis Lafazanis, the Greek Minister of Reconstruction of Production, Environment & Energy and also, as I understand, the leader of SYRIZA's Far Left faction. In short: Lafazanis proposes a rupture with Europe. Here is just one taste of what his article is all about:

"Greece must play a pioneering role through its path and its contribution for a progressive subversion in Europe. The progressive subversion in Greece can be the first step of a larger reversal in Europe. An overturn in our country does not imply only a new progressive path with socialist horizons, but also the discharge of our country from the shackles of servitude and dependence, and the implementation of a new, genuine, independent, and multidimensional foreign and economic policy".

Subversion? Overturn? Socialist horizons?

Oh my, here is paranoia at work combined with delusional self-aggrandizement. My understanding is that the Far Left represents about one-third of SYRIZA and holds about 40 seats in the 300 seat Parliament. What a reflection on Lafazanis' understanding of democracy when a clear minority of society wants to impose something which, according to surveys, a clear majority opposes!