27 October 2013

Witnessing Greek Reality (Lecture given in Athens)

Speech given in Athens, on 25th October 2013, on the point of view of a social liberal foreigner on Greece's current situation. 
 Good afternoon, goede middag, καλι σπέρα σας.

It is an honor for me that Κοινονια Αξιον (Society of Values) and D66 asked me to give you a summary overview of the Greek situation today.

First, I would like to explain from which point of view I will share these ideas with you. As some of you might know, I am French, although I have lived 11 years in the Netherlands, where I was politically active with the social liberal party D66. I guess I could be described as a centrist, secularist, pro-European reformist. My wife is Greek and we moved to Greece together in May 2012. My academic background is in political science and international relations. Today I work for a maritime shipping company. These experiences did shape my political thinking and it is from this perspective that I will explain how I see Greece and its political, social and economic situation. It is from a social liberal point of view that I will analyze it. It is with the eye of the outsider that I will describe it. In other words, while I will try to be as objective as possible, you must understand that my subjective feelings, my background, my own mentality and culture are also shaping these thoughts that I would now like to share with you.

The situation in Greece has been described in the press of all your countries, I am sure, in less than favorable terms. I will not try and make the picture rosier than it is, but I would like to also show you another face of Greece, beyond the spectacular front pages and the prejudiced clichés of the Northern Europe media. While the current Greek crisis seems to be primarily driven by economic news and uncertainties, I would like to make the point that the current situation is originally a political, social and even cultural one. What I actually mean is that if this country finds itself now in dire straits, the causes are deeper and more ancient than what the press often writes. What is the current Greek predicament? There is a long list of symptoms, most of which you might have heard of already.

First, the obvious: the country ran a structural budget deficit for too many years, which lead to the building up of an unsustainable debt. This deficit was due to a double imbalance: on the revenue side, Greece has a terrible tax collection record, but on the cost side, it also has a lot of unjustifiable expenses (for instance, the military expenses used to be the second highest in NATO countries, in percentage of GDP). This insolvency issue was ignored or at least underestimated by external (European) auditors as well as Greek politicians. The bank sector, like in many other countries, was exposed to this massive Greek’s sovereign debt but it was also exposed to private and corporate debt, through the abuse of credit based on unsound economic assumptions. The result is that current real interest rates in Greece are at an usury level, preventing any local investment by smothering credit, even for ventures which could actually be successful.

Still on the economic symptoms, there is a simultaneous problem which has not been described as extensively by the media: Greece has a particularly poor trade balance. The country exports much less than it imports (in value). The current trade deficit is 1.83 billion EUR. This makes any significant recovery of the Greek economy mostly dependent on the revenues of tourism, a factor which is not entirely under the control of Greeks themselves. All these economic factors (public and private debt, trade balance and the corrective austerity measures) have had a terrible personal consequence for many citizens: unemployment is the highest in Europe with figures around 27.5% of the active population, but with rates at least twice higher for the youth. We can unfortunately speak of an entire generation sacrificed, bearing the brunt of the crisis and of the measures taken to remedy it. The result is a bleeding of the population through emigration, mostly towards Northern Europe and, ironically, Greece’s creditor countries.

Let’s have a word about the regulatory environment (still from a social liberal perspective). The Greek state and administration have created a very bureaucratic regulatory environment. When I arrived here, for instance, I searched for information on how to create a business. I was quickly convinced not to do so. There are multiple licenses and authorizations in triplicate for the smallest of enterprises. There are also capital requirements and rules that are simply impossible to reach for a normal person. All this, obviously, stifles job and value creation, but it also encourages corruption and abuses of power. A typical social liberal answer to this would be to thoroughly liberalize most economic activity, literally freeing the energies. At the same time, this would help increase tax collection, ensuring that the welfare state is funded. But it does not happen in Greece at all, unfortunately. Not only does this prevent Greek citizens from creating businesses and jobs, it also prevents foreign capital to invest in Greece. Foreign investment is nearly always a net benefit for the countries involved. Greece bureaucracy effectively prevents the regular flow of foreign investment.

Bureaucracy is also made evident by the size and structure of the public sector. The efforts of the current government have reduced the relative size of the public sector in the active population (from 27% to about 20), as well as its costs. But it is fair to say that this policy has had huge negative impacts on the population. Also, due to the manner it was carried out, this downsizing and cost cutting effort has been very inefficient. Initially, the public sector was bloated for structural reasons (everything had to be controlled by the state in the dominant left wing ideology). But very quickly political parties began giving away public positions to their clientele without any regard to people’s skills or to the public needs. In some administrations, it is hundreds of civil servants who were hired in complete opacity, without filling any need. When the decision to cut costs in the administration was made, this issue was not tackled at all. Instead, the government did cut the pay of all civil servants by various percentages (more or less 40%). Since more than a quarter of the active population was employed by the public sector, the cuts had a devastating effect on the purchasing power and the standards of living of millions. Civil servants had mortgages and credits based on their previous salary and had to face the new reality alone. At the same time, the useless clients of the parties were not made redundant. So we are now in a situation where there is a lack of qualified personnel for some areas in the public administration, reducing the efficiency of the state action, while unproductive employees are still bloating the public sector. And the Greek state is still short of 2 billion euro this year… Even Unions are part of the problem: instead of defending the common good of those they represent, they consume everybody’s time and resources in sterile blockades.

Another massive problem in this country and one which has been described extensively in the press is the corruption levels. Greece has one of the worst corruption index in Europe (ranked 94 out of 180 in the world in 2012 with a Transparency International index of 36), just after Russia, the Belarus, Ukraine and Albania. I think it is fair to say that it is impossible to live in Greece more than a couple of months without being confronted to it, even in relatively “soft” ways. The fact is that corruption, under all its forms is everywhere. It is not limited to the political “elite”. Everyone participates, at a moment or another and it is very difficult to avoid. From the most modest citizens to the rich mansions of the Northern suburbs of Athens, everyone is flouting the law a way or another. This is done in 3 ways: tax evasion and VAT fraud, black labor and graft or bribery (principally between politicians or civil servants and ordinary citizens or businesses). And everyone has always a very good personal reason or justification to do so. I don’t mean that all Greeks are dishonest. Like most other Europeans they are hardworking, they love their family, and they want to be respected for their qualities. But it is the whole system, the overall structure, which literally bends them into participating in the overall corruption, either actively or passively.

Last but not least of the symptoms, there is a political crisis in Greece. Everyone in Europe has heard about Χρυσή Αυγή (Golden Dawn) and about their activities both political and on the “grass root” level. This extreme right movement has become very popular in some areas, managing to collect votes of the most disheartened citizens, the ones who feel abandoned by the system. Typically for such a party, Golden Dawn blames foreigners for all Greek problems, especially immigrants from the Middle-East, Asia and Africa, which are seen as invasion. But the Golden Dawn issue is of course only a symptom in itself of a wider political crisis: Greek citizens have absolutely no trust any more in their politicians.

The two traditional and currently ruling parties (PASOK and Nea Demokratia) are not seen as representing citizens as in any democracy. They are seen as parasites in a clientele system where political parties are in fact serving the interests of rich clans or families, older themselves than the Greek Republic. Votes are bought in exchange for subsidies or investment projects which have nothing to do with the actual needs of the country. Greeks very rightfully think that they have no recourse, no defenders in the traditional political arena. For this reason, voters transfer their ballots towards extreme parties: Golden Dawn of course, but also and more and more the left wing Syriza. Please remember that Greece is not a proportional representation system. For this reason, many votes get dispersed on smaller parties that don’t reach the percentage for a presence in parliament, despite their individual merits. At this rate, if elections are hold soon, we could have a Parliament where the two main parties could be a neo-Nazi one and a coalition of left wing radicals without even a common agenda.

A word about the role of the media here. Greek media are not really helping to have a proper political debate. Rather than informing citizens on facts, they prefer “entertainment news” and sensational headlines. Hardly a Greek specificity, I will grant you this, but in this case a very damaging issue. Topics such as immigration, suicides or criminality are used as emotional red flags in the media show, particularly on TV, without reflection on facts and reality.

And yet, despite all this gloom, Greece has a great number of strengths and positive aspects. So before I explain why I believe that all negative points I just described are only symptoms of a deeper problem, I will tell you why Greece has all the cards in hand, to be a peaceful, prosperous and socially advanced country.
Greece has several economic sectors which could generate prosperity, jobs and tax revenues. Everyone knows about the tourism industry and most can quote the maritime sector (shipping). But Greece is also an agriculture with a fantastic export potential and products with high added value. It has a mining industry which could generate more jobs and growth. It has a geographic and natural situation which is still unexploited. The combination of abundant sun, wind and sea makes Greece a perfect country to develop green energy. I dare say that with the proper investments, Greece could export electricity instead of depending on imports for its energy. Greece also has modern ports which are in an excellent position at the South-East entrance of Europe, giving potential access to both Central and Eastern Europe as well as all the Black Sea area. Considering that two third of the maritime traffic to Europe comes from Asia via the Suez canal, it is not difficult to see that, with the proper investments, Piraeus should be the location to discharge goods destined to Prague, Vienna, Bratislava and so on.

Greece also has one of the most hard working population in Europe. With effective average weekly hours in the highest within the EU, combined with excellent education of the youth, Greek workforce could be one of the most productive. There is a dynamism in this country’s population, a resilience that strikes me as a great strength and one of the best hopes for the future. This resilience and this dynamism is today mostly spent in internal struggles, social unrest and more prosaically in the day to day fight for survival. This strength is reinforced, in my humble opinion, by one of the pillars of Greek society: families. For anyone coming like me from Western Europe, one of the most striking aspects of Greek society is that it is family based. The social contract might not be very strong with the State, but it is iron within the families. I strongly believe that one of the reasons the country hasn’t imploded yet is the resilience of family bonds.

I would also like to add another strength that is maybe less economically relevant, but which, I think, is politically fundamental. I mean of course the Greek culture. Greece is a country reborn from the Ottoman domination, of course, but it is also a country with a very ancient tradition of political debate, of philosophical and scientific discussion and innovation. It is a country where people enjoy and share classic culture and value exchange. It is a country where people are open to what is done outside in the world. Greece invented the concept of Europe, maybe not as we understand it nowadays, but in opposition to the Asian Empires: as a mentality of individual freedom, of citizenship. It is in Greece that this idea was born, which we are now taking for granted, that individuals have political rights and are actors of the political sphere, not merely subjects.

This naturally leads me to the last part of this discussion on the Greek situation. My idea is that this political and philosophical culture is in jeopardy. I believe that it is its progressive disappearance that created the current problems. It is of course an ancient process, one which probably began right since the independence. It might also have its roots in the centuries of colonization by the Ottoman Empire. It is not the framework of this presentation to identify precisely when and why it happened. But the fact is that a fundamental piece of the democratic social and political contract has been eroded for many decades: what we call in political science the rule of law. In French, we say “l’état de droit”. It does not mean that Greece has no laws. It might very well in fact have too many, at least from a social-liberal perspective like ours.

The “rule of law” means that the law is the same for all citizens or that each citizen has equal recourse within the framework of the law, in case of conflict. For instance it is what, in a democracy, prevents someone to arbitrarily detain you. It is also the rule of law which makes you think that if you are wronged in any way, you can confidently make use of the justice system to get your right recognized. It is for me glaringly obvious that this is exactly what has been destroyed in Greece.

Greek citizens don’t believe that if something is wrong, it will be solved via the courts. Greek citizens, in most cases, don’t even trust the police to actually protect them or simply uphold the law. Greek citizens believe that there are laws and regulations for the ordinary people and that these rules do not apply for the rich and the powerful. Greeks citizens don’t just believe this, they know it because they are confronted with it every day. Most Greeks are so used to this situation, that they sometimes don’t think that it is abnormal. They are participating, willingly or unwillingly into their own oppression. Let me take a very basic and simple example.
I’ll take the car traffic… Any other European who has driven a vehicle on Greek roads for a couple of hours will know what I mean. While Greeks are absolutely charming people individually, they can be lethal behind a steering wheel. There is simply no respect of the code whatsoever, be it on the highways or in the city streets. People drive motorbikes without helmets, stack their two kids on the same motorcycle on the highway, drive over the speed limit on the emergency lane, ignore traffic signalization and generally bully each other on the road. Unsurprisingly, traffic accidents are extremely common and the cost in lives as well as in healthcare and judicial consequences is very high.

You are probably starting to see where I am going with this example. The problem is that there is no one to make sure that the law is respected. The police does not intervene on the road. Actually, many drivers never passed their driving exam. Most of them just bought it from a corrupt license examiner. But even more than the absence of punishment for illegal behavior, there is no deep feeling of right or wrong any more. This is the very basis of the social contract. In a democracy, you should not just obey the law because you are afraid of the police: you do it because you know that it is better for everyone and thus for you too. In other words, it is the feeling of common good which is lacking as well. No one considers any more that a restriction of his/her individual whims can be good for everyone.

If you look beyond the traffic example, and if you generalize this mentality to all other aspects of society, you will realize what’s going on in Greece. There is a fundamental contradiction in the Greek mentality today. At the same time, as I mentioned earlier, there is an incredible family solidarity and private social contract. And at the same time, beyond this family cell, as actual citizens, Greeks behave in an extraordinary individualistic way. The economic problems, the debt, the corruption, the fight about the austerity measures and the rise of extreme ideologies all point towards this debilitation of the social contract: the absence of rule of law.
The attitude towards the police is symptomatic of this. Greek police is considered as an instrument of tyranny, not as a guaranty of the normal functioning of society (this dates back to the Junta time, at the end of the 60’s). So police officers and agents know that if they try to apply the law, they will be abused or ignored. At the same time, in many cases, they are themselves the ones breaking the law, abusing their powers, especially on the weakest in societies. Unsurprisingly, a big proportion of the police corps is tempted by the ideology of Golden Dawn or even actively colludes with the party.

To conclude this presentation of the Greek situation, I would like to say that there is a lot of hope despite the current predicament. There are (social-liberal) solutions to the Greek crisis. But the first issue to tackle, ladies and gentlemen, is the redefinition of the social contract. Not just in the political field (although the good example should be given by those in power), but also in the social field this country needs new “game rules”. We need to associate the liberal approach, the protection of all citizens rights and freedom by the rule of law, with the preservation of the social safety net, with everything this implies: funding it with appropriate and fair taxation, administrating it in the lightest and most efficient way possible.

Thank you, bedankt, ευραριστώ!