Saturday, March 29, 2014

Greek Roulette Being Played on German ARD (2)

A few days ago, I published this post about a report aired on the German ARD about misapplication of EU subsidies by Greece. The post triggered very good comments which I show below.


  1. I don't understand the title of the documentary: there is no game of chance being played, since the probability of EU funding being misused in Greece is well over 50%. Systematically, the Greek state and society have exploited weaknesses in the EU system to suck out money and use it for personal gain, job creation, et al. Even when the intended purposes are actually satisfied, the money embezzled can be as much as 50% of the budget.

    I have been told confidentially by investigators of massive embezzlement and corruption in the Athens metro construction -- with such sophisticated money-laundering schemes that the expert opinion was that the Greek courts could not cope with the complexity and there was no point in the Commission prosecuting. When the situation is clearer, such as the project requirements not being met, then the money has to be returned to the Commission. That happened with the land registry scheme, for example.

    Few people know that Greece is the only EU state that has been found guilty of massive fraud and conspiracy to defraud the EU, committed by the Agriculture Ministry in the late 1980s -- the Yugoslav corn scandal, where the Ministry officials conspired with farmers and importers to pass off imported Yugoslav corn as having been produced in Greece and claiming the EU subsidy.

    At the non-state level, I know of systematic fraud by small companies providing IT training schemes financed by the Commission. People who signed up for these schemes were told to turn up for the first and last days only (just to sign a form) and they would get an official certificate stating that they had completed successfully a course on IT skills. After thousands of such fraudulent schemes, the result is that people are without proper IT skills and most of the certificates they produce are meaningless.

    Basically, Greeks think that anyone giving out money is an idiot to be abused and cheated, and that anythijng goes. Equally, I have had the same experience of bringing money to Greece -- where the Greek university fake professors try to get their grubby little hands on everything while doing nothing to facilitate the collection of funds, let alone actual hard work in doing research. Many of them have never done proper research or published anything; very few have any sort of international reputation for their work.

    When you read these things, you understand why Greece is in such a bad position within the eurozone. It is the incompatibility of a backward and corrupt culture with modern competitive economies as can be found in northern Europe. Greek society has either to abandon its dirty money-grabbing habits and learn how to work productively and collaboratively, or go back to third world status and leave the EU.
  2. One wonders why the Germans would particularly care about any of this except to point the finger one way sufficiently noisily to keep fingers from being pointed toward them. Whatever money they lent has been returned with profit, its horrendous irresponsible banks are firewalled, and it has managed to destroy the healthy part of the Greek economy to reshape us to its own profit. I suppose its momentum depends on ongoing contempt - an old ploy.

    This is said as an honest Greek who has not cheated the greek state. Yes there are quite a few of us. This might surprise those whose agenda is only to denigrate. And of course 'you', whoever you are, will only sneer at such a statement.

    Apart from the notorious German arms and industrial bribes, there is the open "secret" that German companies deliver cash to all greek political parties according to their polling %s. Considering that the German government and industry work hand in hand this is therefore state-sanctioned policy.

    Germany through Troika has recently insisted on micromanagement of certain areas of the greek economy that will destroy greek companies and open the way to german producers to take over the market with inferior products - milk being an example. Germany (Federation of Industry) has been negotiating these last 2 years for tax free status of SEZs it plans to build here, notoriously stating that greeks will work 6/7 days a week, 13 hours a day with no benefits. But this unwanted (by Greeks) "investment" will only materialise when the Greek minimum wage is sufficiently 'competitive' - ie super cheap for German companies. Croatia's 320€ per month is held out by Germany as its goal. This is German 'investment', something that benefits only Germany and not the greek state nor greek workers - except to raise 'employment' numbers. Since desperate greeks will of course take these mind-numbing jobs since Germany has purposely, maliciously and successfully destroyed the greek economy.

    That all of Germany's / Troika's moves have torn up and thrown away the EU social contract is not only immaterial but obviously an aim. That German preferred "salaries" are 1/4 of the EU's poverty level is also immaterial to this country.
  3. Part 2
    As an honest Greek, I can only see a history stretching back to just after the first world war of 100% negatives coming from Greece's contacts with Germany. Germany had obviously targeted and corrupted a whole class of Greeks to work for Germany's profit, not ours. I grew up in a family that saw all 'germanoellines" as quislings. This is neither a right nor left position, and is far more widespread than you'd imagine judging by your columns.

    I note in Germany that the only "doctrine" associated with Merkel, the so-called "Merkel Doctrine" according to Der Spiegel is the sale of german armaments to any and all countries that want to buy them. We can only assume that each of these sales everywhere come greased with huge bribes. Thus Germany's raison d'etre - trade - knowingly and deliberately corrupts everything it touches, while providing blackmail opportunities to the German government any time a foreign government steps out of line.

    Of course Germany looks on Greeks and Greece with contempt, as I look on Germany with contempt, and also our greek collaborators. There is an historic reason that half of Greece - I would venture to say the good half - have been strongly anti-german throughout the 20th century and well into this one. With reason.

    Germany thinks it owns Greece now. Through its illegality, bullying and limitless greed it certainly does. But it doesn't own all of us, nor the hearts and minds of greek people - who are not as ill-informed or propagandised as the germans.

    Under US protection, neither Germany nor Greece cleaned themselves of nazis or collaborators after the war, and this has contributed enormously to the present situation.

    So I won't join you in your endless denigrations and not-so-petty anti-Greek agenda. I mourn bitterly the loss of Greek independence and our present reality as a German colony. Tragically a colony of a country that no one can admire, and whose 'achievements' since becoming a country have been, at best, self-absorbed and negative. Germany the country of small engineering and tool & die manufacturing I have no problem with, but its total lack of integrity and its passive-aggressive culture of 'victimhood' has proved endlessly dangerous to all of Europe and the world.


    1. @AnonymousMarch 26, 2014 at 7:42 AM

      I have to concede that my rant looks a little like an informed antio-Greek agenda, but it is not. It is more like the frustration and outrage of a jilted lover, who has devoted over 15 years to his beloved only to see crooks and charlatans being invited to her bed, in preference to his own sincere overtures.

      Of course, there is a significant number of Greek people who are not actually corrupt -- but are forced into survivalist bad practices by structural economic and bureaucratic factors. This excludes all those with houses in Ekali and Mercedes and Porsches, etc and multiple holiday homes on various islands.

      Nor do I think that the Germans care so much, apart from a moralising and hectoring attitude. Indeed, it is an excuse to ignore Greek politicians and impose the outrageous behaviour of the Troika on Greece.

      So, I agree with most of what you have written. I see the problem as being that the eurozone is dominated by one country, which lacks legitimacy for historical and democratic reasons, and that Greece is so corrupted that even the Spanish, Italians and Portuguese are either shocked or amused when I explain issues in detail. Usually, their reply is something like "We used to have problems like that here, about 30 years ago.

      Herein lies the clue: Greek society, polity and hence economy refuse to change. This is a cultural problem, and a very serious one. The destruction of Greek society by the Troika is not something that I support; on the other hand, if Greece had been handed money with no conditions then all the problems I listed above would merely have continued apace.

      In my opinion, as an inside-outsider, Greeks have to solve their own problems -- possibly for the first time in modern history. That requires removing a political class that consists of lazy and incompetent parasites, creating a new breed of meritocratic elite, and taking responsibility for the country. I doubt that many in Greece support the concept of meritocracy and healthy (i.e. professional) competition, for money or jobs. What I have seen is that most Greeks oscillate between collusion/conspiracy to limit competition (in all spheres) in order to control and manipulate others, and very nasty jealousy or bitter personalised rivalries. These are features of a very backward society that belongs in the feudal period. It does nothing for a country that is participating in a globalised capitalist world of competing production and services.

      The German/OECD idea of cutting Greek wages to half their current levels is an explicit recognition, I think, that Greece does not actually belong in the European Union (and especially the eurozone) without undergoing massive social, political and economic change. It is up to Greek people to convince the rest of Europe they are wrong, that Greece can do better. Merely placing the blame on Germany does not address the very serious issues within Greece that I have described
  4. @Anonymous, nothing stops you from leaving the party. You will see a sign on your way out. "You are now leaving a protected economic zone and entering the real world."
  5. And we are not talking about the past or isolated cases; it is on the rise with the improved absorption of EU funds. In remembrance of your metaphor of fixing the well and filling it up, RIP Lake Karla.
  6. @Guest(xenos)March 25, 2014 at 9:46 PM

    Journalists think that a title must be 'sexy' and since "Russian Roulette" is a well known metaphor in Germany they changed Russian to Greek. Maybe they also wanted to hint that this game goes on until it is suddenly stopped...

  7. Looking at the conversations between my Greek copatriot and the other gentlemen makes me wonder if it highlights one of the fundamental issues with the eurozone. We are one currency but we are not one people. How can you implement budget recycling mechanisms etc when the voters are not going to buy the idea. You can escape from the democratic will of the people for some time but not for ever.
    The whole thing has to break up, we need an exit strategy. No politician wants to risk associating their name behind it though.
  8. Still the question is: what to do with 80% of the population, now that 20% of it can produce much more than what we are able to consume.
    This is the key question, Greece falls in the 80% of unneeded, unwanted, and therefore are left to die by the economy itself.
    We are witnessing evolution at work: to survive Greece must go back to a economy where people are all employed and as now this is farming (by hand), raising chickens (only 100 at a time), fishing (only 2 people max 7mt long boats 50mt nets) etc - in short jobs which need a lot of people and produce barely enough to live.
    If they go like now they will be shredded apart by the force of natural evolution themselves.
  9. @AnonymousMarch 27, 2014 at 11:48 AM

    Your question has a simple answer:

    Financially let the Greek government do what Klaus Kastner suggests.

    For the rest have a look at what Spain has done differently:
    They have considerable exports to EU of agricultural products including wine, manufacture cars and electronics, and last but not least have a perfectly functioning tourism industry.

    Why should Greece not be capable to do that???
  10. There were some extraordinary good comments above. Thank you!

    I am reminded of an experience I had around 2006/07 (i. e. long before the Greek crisis when Germans and Greeks were still 'good friends'). I lived in Munich then and took Greek lessons from a young Phd student from Crete. She had lived in Germany for about 10 years by then and had also lived in other European countries. Once, when talking about Greek mentalities, she said that she couldn't think of any two countries in Europe which were mentalitywise farther apart than Greece and Germany. I expressed surpise at that as well as disbelief but she told me that she knew and that I should simply believe her.

    Well, I guess this only proves that, be it countries or marriages, mentality differences don't play that big a role when things go swimmingly well. They may even be a source of amusement. When the going gets tough, the tough mentality differences really get going.

    Regarding the ARD-video, it obviously comes across offensive to Greeks when a foreign TV station (particularly a German one!) airs such a report about misuse of EU subsidies. What has surprised me since the beginning of the crisis, and I have written about that, was/is that Greeks don't seem to get as excited about that as one would expect. After all, this is Greek money which is being channelled away by some Greeks. I would have expected that the people who would get most mad about that would be the Greeks themselves. I once referred to freely available EU data banks which contain every single EU subsidy disbursed, to whom it was disbursed and for what purpose. Here one doesn't have to buy any lists about foreign bank accounts in the black market. Instead, the information is publicly available.

    I once got data from the EU which suggested that, since joining the EU, Greece has received on average over 5 BEUR annually in EU subsidies. If put to proper use, that could accomplish more than the Marshall Plan accomplished then. If not put to proper use, it is ALL Greeks who, directly or indirectly, pay the price for that.


  1. If put to proper use, that could accomplish more than the Marshall Plan accomplished then.

    Did Marshall Plan accomplish that much? The reason why I ask is because I keep on listening Mr. Tsipras talking about a new Marshall Plan. I know that Mr. Tsipras isn't familiar with academic texts but one would expect that he would have read Y. Stathakis book about the Marshall Plan and its effect on Greece, which points out negative effects as well. After all Mr. Stathakis is currently a Syriza MP!

    It seems to me, however, that Mr. Tsipras isn't familiar even with popular left-wing reads like V. Rafailidis' legendary "History (comic and tragic) of the Modern Greek State, 1830-1974". I recall reading in this book the origin of the word "αμάκα" (translitaration: amaka) and "αμακαδόρος" (translitaration: amakadoros). "Αμάκα", a rather forgotten word today, more or less means "free lunch" (in a figurative way) and "αμακαδόρος" means "the one who has a free lunch". According to Rafailidis the term originates from the acronym AMAG (American Mission for Aid to Greece) and indicates the easy enrichment and corruption caused due to the american funds.

    1. I am no expert on the Marshall Plan. What I remember reading about it is that the financial impact was quite limited (for Germany, I believe, 0,5% of GDP for 4 years). I think the Marshall Plan needs to be looked at as an overall package (particularly debt forgiveness for Germany). Perhaps it was more like the match which made a pile of wood burn.

      Interestingly, I don't think the funds were ever returned. Austria, for example, still has the ERP Fund (European Recovery Program) which provides susidized financing to Austrian industry today (and tomorrow). Which reminds me of some fun I had with this issue. When in anti-American debates (which are quite frequent in Austria), I would suggest: if we dislike America so much, why don't we return the ERP funds to them so that they can give them to other countries more in need thereof? That, of course, was always a discussion stopper.

      Regarding the TINSTAAFL ("there is no such thing as a free lunch"), I once published an essay about this which, as a matter of fact, won the First International Gary S. Becker Prize (back in 1996). I link the prologue which leads to the other 9 parts below.

  2. >"What has surprised me since the beginning of the crisis, and I have written about that, was/is that Greeks don't seem to get as excited about that as one would expect."

    I think that in each country that kind of money is seen as coming from far away Bruxelles and NOT belonging to the the individual taxpayer.
    Of course a fatal error!

  3. This is a conversation about two separate issues.

    Issue one concerns the problems of the Greek economy and society.

    Issue two concerns the problems of the Eurozone and it's deficiencies.

    The two issues should not be confused, and yet they are. More importantly, the attitude of "two wrongs make one right" seems to prevail. We shouldn't use Greece's problems to justify the problems of the Eurozone, and yet that's what we do.

    The Eurozone is a very problematic structure as proven by the fact that it's not just Greece that is facing problems.

    Greece is what it is and no doubt it could do much better in many areas. But as I've said before, if other central banks behaved in the same manner as the ECB, then the whole planet would be bankrupt.

    The ECB chooses to not control interest rates. It's as simple as that.

  4. I generally agree with the initial comment by Xenos. It is obviously written in anger, but the basic premise is correct: a variety of social and
    historical reasons conspire to create a powerful unwillingness to change. However I disagree with one point, which I think is very telling. I quote:
    "I have been told confidentially by investigators of massive embezzlement and corruption in the Athens metro construction -- with such sophisticated
    money-laundering schemes that the expert opinion was that the Greek courts could not cope with the complexity and there was no point in the Commission prosecuting." Let's parse this a bit. "I have been told ..........metro construction-" absolutely correct "with such sophisticated money-laundering schemes" this is complete tosh. It is well known that the trick was to raise the price of cement 5fold. If you got an invoice from a residential development and compare the cement price with the one paid by Athens Metro you will find that the wholesale prices of the Metro were 5 times up on the retail ones paid by single family dwellings developers. This inconsistency between the Brussels and Athens rumours is very strange. I suspect that the Brussels rumour is deliberate disinformation, to cover the experts' ass. They should have stopped the Athens party but they didn't, basically because they and their political bosses where on the take from that money. This goes a long way to explain both the unwilling-gness to reign in the Greek government and the virulence of the reactions once the party was over. Do you want a possible channel? Mr Baroso and Mr Latsis. When Mr Baroso came to the Commission he was caught by journalists to be on a Mr Latsis superyacht. The explanation (correct as far as I can tell) was that they were together at LSE as students. Oh Dear!!

    On a different note does anybody else has problems posting from Mozilla?This is posted from Explorer.

  5. @theAthensdog.
    A clarification of the rules of this crazy construct called the Commission is called for I think. Contrary to national foreign aid programs, the grants from the EU are controlled by the government of the receiving nation (letting the wolf tend the sheep's). The Commission (OLAF) can only prosecute if the perpetrator is a staff member of an EU institution. If OLAF get information about local corruption or crime they can inform the local government and ask them to take action, OLAF will always offer their assistance as well. When I lose all hope for Greece I turn to OLAF's home page and see that their efforts with Greece is increasing and there are some small success stories. The latest such story is the confiscation of 40 million cigarettes in Pireaus port (EURO 7.0 MIO in taxes); it was touted in Greek media as a Greek accomplishment. How much political arm twisting do you think it took to get the Greek government to react? In some countries OLAF has an easy job, in Greece it is an uphill battle, but don't say they do not put up a fight. Will they succeed in Greece? I don't think so.