Sunday, August 28, 2022

Alexander Clapp Spoils Bullishness About Greece

Alexander Clapp's essay on Greece ("The Rot at the Heart of Greece Is Now Clear for Everyone to See"), published in the NYT on August 22, met with a multitude of reactions. Personally, I thought the essay was excellent and fair but I can understand why the reaction from the Greek side would be less than enthusiastic. One exception to that was The Greek Analyst who published a lengthy thread on Twitter. This was remarkable in as much as The Greek Analyst (73,8K followers) has been extremely bullish on Greece of late.

Since I had been in contact with Alexander Clapp a few years ago, I sent him the following mail about his essay.

Dear Alex,

The key statement in your essay, to me, was the following:

"It is, rather, the unsustainable contradiction between the country Mr. Mitsotakis insists on pitching abroad — an unimpeachably democratic state whose respect for the rule of law and liberal bona fides ought to be rewarded with corporate investments and tourism dollars — and the one he actually presides over.“

That question has been bugging me for quite some time now. I belong to those who were initially overwhelmed by Mr. Mitsotakis: his cosmopolitan demeanor; his superbly eloquent English; the way he handles himself; etc. Watching English interviews with him was always a pleasure. And the trick worked with me because I started believing that a new Golden Age was in Greece’s future. A modernized Western nation where people act rationally, honestly and responsibly. I even wrote a couple of articles in my blog about it.

It started with the push-back’s. There is a Greek journalist at DER SPIEGEL (Giorgos Christides) who really seems to detest the current government and whose articles about the push-back’s were accordingly. So I really didn’t take them too seriously (apart from the fact that I have true sympathies for Greece with regard to protecting EU borders). When the EU published its report on FRONTEX, there were proven facts but I still didn’t get overly excited. And then I watched a session of the EU parliament where Mitsotakis was present. A lady (don’t recall from which party) read him the riot act with innumerable facts from the report. I still did not get excited because I expected Mitsotakis to address each fact in his response. Instead, his response was limited to something like „Greece adheres to all laws and international treaties.“ That, I thought, was arrogant.

Then came his visit to the US and his speech before both Houses of Congress. To use that speech for portraying Turkey as an evil empire (even though it is) was not only displaced, in my opinion, but also arrogant. Those issues should be addressed in private discussions but not as a guest of honor before both Houses of Congress. 

And now we have this issue with the wiretapping. I would have expected Mitsotakis to quickly announce the formation of an investigation committee including international experts and even members of the opposition. His actual reaction I found disappointing.

After Greece’s exit from the program in 2018, I wrote a lengthy article summarizing all my experiences of the crisis and concluding that Greece was now truly on the right track and that, therefore, I wouldn’t continue my blog. 

Of late, I have looked at some of the hard facts of Greece (as opposed to the soft PR of Mitsotakis). I have written about Greece’s massive current account deficit and the staggering increase in foreign debt. While I don’t want to spoil the party of a record tourist season, the hard facts are very disappointing. Greece seems to return to being a turntable for money, money entering the country as debt and leaving it as payment for imports and capital flight.

There is one minister, though, who really commands my respect - Kyriakos Pierrakakis. That man seems to be a digital genius. I wish we would have someone like that in Austria!

When I think of all the billions which will flow to Greece out of the EU Recovery Fund, I really get worried. Will that money be wisely spent or will it be wasted (again)?

I hope you are fine and if you get a chance to drop me a line, I would welcome it.

Best regards.


  1. SYRIZA followed a simple fiscal policy: high taxes that lead to high revenues, budget surplus, low growth and low available income for imports. ND changed this policy in 2019 to a new one that includes low taxes that were expected to bring high growth, that would compensate for the losses in revenues. The tax breaks didn't work out as expected. To make things worse, the government decided in 2019 the de-lignitisation of the economy by 2023. A truly disastrous decision, that led the gradual abandonment of the lignite production for the sake of natural gas plants. The price of electricity is now approximately 0.8 € per kWh for households. The government seems unable or unwilling to force the energy companies to limit their profits (while lignite production takes time to resume) and subsidizes energy bills instead. The subsidies are really high (2 billion euros only for September 2022) thus inflicting much pain to the budget.

    There is no doubt that whoever governs after the elections will implement tough austerity measures. Mr. Mitsotakis might still be leading the polls, but, in my opinion, he has lost his dynamic. If he gets reelected, he would be unable to deal with the country's problems.

    1. I saw a statistic today where Greece is No. 1 in Europe as regards energy subsidies with 3,7% of GDP. Austria (2,3%) and Germany (1,7%) are well behind.