Wednesday, June 29, 2011

Two opinions

Jose Manuel Barroso and Herman Van Rompuy, the European commission and council presidents:
With today's approval by the Greek Parliament of the revised economic programme, the country has taken an important step forward along the necessary path of fiscal consolidation and growth-enhancing structural reform. But it has also taken a vital step back – from the very grave scenario of default. This was a vote of national responsibility.
Max Johnson of forex specialists, Currency Solutions (and just about everybody else):
And so another 10p looks set to be put into the meter of Greece's financial life support machine. With the Greek economy in intensive care, the Athens government finally has the mandate it needs to prescribe more bitter economic medicine. The Eurozone is now likely to approve a second bailout but there's every danger that the medicine will kill the patient.

Few Greeks look like they will take it lying down either. The popular anger convulsing the streets of Athens with strikes and protests will surely get worse.

There is every possibility that poorer Greeks, who will be hit hardest by the austerity measures, will simply refuse to pay their taxes. If that happens the prospects of a Greek default will go from highly likely to inevitable, plunging the country into the abyss and undermining any benefit the austerity measures may have had.
From here

Paul Mason on the violence in Athens:
What Greece is being forced to do is threatening the legitimacy of a democratically elected government and putting at risk the legitimacy of the political system in general. And the question for the EU and IMF is simple: is it worth it?

On the front line

OK - not quite at the front. I'll give you that.
Riots in Athens, hyperbole everywhere, a general strike today and, back in the UK, a big public sector strike on the future of pensions will take place tomorrow. And I am here, already drawing my pension and feeling incredibly lucky.

When I first came to Greece on holiday, I was sold the usual line. It was a faintly mocking one. There was the 'laid back lifestyle', 'slow pace of life', together with the gentle comedy of the ways of those curious Greeks. The favourite cliché peddled at the time was that 'everything worked on GMT - Greek Maybe Time'. It made visitors feel comfortable, patronisingly romantic and not a little superior. I got my first reality check when I strolled to the bus station only to find that the buses depart bang on time and that I had missed mine. I soon realised that, though the country will never be a model of Teutonic efficiency, what was happening was that people were working ferociously hard to make mass tourism work on a limited infrastructure. I gained a lot of respect for them.

Now those same people are staring at an economic crisis that seems scarcely credible. Facing massive state indebtedness, those who worked so hard are now looking at tax rises and at losing significant chunks of their income, if not their jobs. This would be bad enough if it wasn't for the the old stereotypes being trotted out again and again to explain it, basically seeing the crisis as the consequence of the moral failings of the natives. This is why it is nice to see the stereotype being challenged, such as in this refreshing post, even if some of the widely circulated figures are a bit dodgy and brushes with bureaucracy can give another impression.

Now, there is certainly some contributory negligence on the part of the Greeks and there are a couple of good pieces that highlight the history here and here. However, what we are seeing both here and in the UK is a clash between two models of political economy, with a resultant technical argument about how best to resolve problems (with the IMF and ECB's preferred model of austerity looking increasingly non-viable, both politically and economically - even the Economist is arguing for a managed restructure/partial default), and a wider debate about democracy, populism, and the broader purposes of the economy.

The thing that depresses me most is that policies are being presented as if there is no choice at all, as if, to use that lamentable phrase, there is no alternative. The clash of ideas is the very stuff of politics and the lapsing into some sort of post-ideological intellectual mush is one of the great failings of our times. It leads ordinary people to a sense of resignation and to the hubris of political leaders and technocrats alike, convinced that they are being bold when acting cautiously and wise when perpetuating errors. It is one of the oddities of the contemporary left is that foreign affairs have animated a debate (however grim), yet domestic economic policy has been allowed to lapse into consensus.

That consensus has contributed to a political stasis, a failure to deal with the real conflicts that affect everyday lives. Aditya Chakrabortty gives a perfect example of how this works, arguing for the importance of effective, confrontational trade unionism to the health of capitalism.
What's so odd about the current debate on inequality is that everyone deplores it and yet very few will come out and support the mechanisms to tackle it. Perhaps a CEO catching a thought-provoking discussion on Radio 4 will decide to shower his or her staff with payrises. And perhaps one day a plebiscite of turkeys will vote for Christmas.
With the debate on public services being dominated by models of consumer choice, we are forgetting that the bigger choices facing us are about the type of societies we live in, of how we distribute wealth, and on this the political class seem curiously silent, even as crisis engulfs a small, beautiful European country with a rather wonderful climate and hard-working people who deserve better.

Thursday, June 23, 2011


As an antidote to some of the appalling stereotyping of Greeks, which generally omits their long working hours and low pay, and to some of the populist rhetoric being dished out, here is a clear-sighted short piece from Amartya Sen in which he actually praises the Greek government -
It is to the huge credit of the Greek government – George Papandreou, the prime minister, in particular – that it is doing what it can despite political resistance ...
Though he also points out that what they are being told to do is the wrong thing.
... but the pained willingness of Athens to comply does not eliminate the European need to examine the wisdom of the requirements – and the timing – being imposed on Greece.
 In typically elegant style he writes,
The high morals of "sacrifice" do, of course, have an intoxicating effect. This is the philosophy of the "right" corset: "If madam is at all comfortable in it, then madam certainly needs a smaller size." However, if the demands of financial appropriateness are linked too mechanically to immediate cuts, the result could be the killing of the goose that lays the golden egg of economic growth.
As I think back to the debate over European Monetary Union in the 1990s, I had little idea where I stood. This was partly because the anti-Euro campaign featured prominently some unpleasant and obsessive Tory right-wingers, who mixed up their opposition to the Euro with their general hatred of the European Union as a whole, whilst their Euro-scepticism was being disavowed by a newly enthused Labour Party. Yet those who who opposed the Euro were a mixed bunch indeed. It was a broad coalition that included social-democrats and libertarians as well as the Conservative nationalist right.  

Each emphasised different aspects of the argument, which consisted of a range of concerns; the inflexibility of the Euro, the loss of sovereignty and democratic accountability, the built in deflationary biases and the perception that a common currency would not promote convergence, but lead to divergence, between stronger and weaker economies. 

This certainly seems prescient today, though we sometimes forget that the conventional wisdom and liberal opinion was pretty much in favour of the UK joining and it was Gordon Brown who fought to keep Britain out when Labour were elected to power.

The result was that the UK was able to respond to the recession with a 25% devaluation and interest rates of 0.5%, strategies denied to the Greeks. (This also begs the question of why the Coalition government have been so determined to keep up with the new trend for cuts).

With hindsight, it appears that the sceptics got it right and, for those who adopted the Euro, political arguments won out over the economic ones. As Sen points out, that has, paradoxically, allowed political democracy to be undermined by the very economic flaws that were conveniently brushed aside. And it is this threat, and the systemic economic failures that have created it, that needs to be addressed, rather than indulging in stupid ethnic stereotyping of conveniently brown-skinned Mediterranean types and the rain-sodden Irish.

Wednesday, June 22, 2011

Monday, June 20, 2011

There is none so blind ...

... as he who will not see.

This is a fair summary:
The European Central Bank will not countenance the idea of default. That just leaves deflation, and lots of it, as a way of putting the Greek economy back on track and ensuring the single currency remains intact.

This is a crackpot idea for two reasons. First, it runs counter to the basic principles of democracy; the Greek people are clearly not in the mood to bear the spending cuts, the reductions in wages and the sweeping privatisation being demanded of them by the European Union and the IMF as the price of a fresh bailout.

Second, deflation has already made Greece's debt problem worse and more deflation will make it worse still.
Larry Elliott arguing for the need of Greece to leave the Euro. The democracy point is well made here:
After Lehman, there was initial shock and uncertainty – but the collapse of stock, commodity and currency markets did not happen for a few weeks. That was when elected politicians were forced to choose between the demands of voters and markets, and went with the voters.
And there is a large measure of agreement from a Greek economic liberal:
Greece was bailed out to save European banks, not Greece itself, and that the bailout was only a temporary liquidity measure, when our problem is solvency. I explained back then that a massive recession was on its way and that there's no reason to expect anyone to lend to post-memorandum Greece who would not lend to pre-memorandum Greece, as the country will be more indebted and less capable of growth; hence the importance of reform. Finally, I pointed out in that interview that default has been historically proven to be a workable solution to a solvency problem and is an option for Greece. I still believe this, although people have to realise that timing the default is crucial and getting people to demand one right now is not going to help.
Even the IMF is starting to panic.
The International Monetary Fund warned European leaders that their hesitant response to Greece's debt crisis risked triggering the world's second global financial meltdown in three years.
So what is coming out of the EU?
Jean-Claude Juncker, Luxembourg's prime minister who chairs the meetings of the 17 eurozone finance ministers, said he felt for the Greeks: "This is something that affects me greatly. You look at the reaction of the people on the streets. You see they are rebelling. I understand that and I'm touched by that."

But he also said that there was no option but to keep to the existing plan: "There is no other choice than fiscal consolidation in Greece and in other fiscally weakened countries."
When will they wake up?

Saturday, June 18, 2011

Liking Greece

 Anarchists certainly do.
Greece is another country that anarchists have a soft-spot for. But instead of loving Greece for the food and the island scenery like most normal North American and European tourists do, they like Greece for it’s anarchist activity...

There’s also another aspect of Greece that’s very exciting to anarchists, the all important riot-porn. If anarchists catch wind of new austerity measures enacted by the government, they all eagerly await when will get a new gallery of exciting imagery of tear gas, broken windows, destroyed businesses, and things on fire. After they get this out of their system, they can all flock to message boards to talk in disgust about the capitalist folly that brought those austerity measures into place.
Hat tip to an antipodean

Friday, June 17, 2011

Dog days

As I watch a warm afternoon breeze rustle the leaves of the walnut trees and the cat dozes on the wall in the shade of the vine, it is hard to feel as if I am in the centre of a crisis. Yet the turmoil in the urban centres of Greece continues as the government reconfigures itself. In a country where even the dogs riot, there is a sense that the consensus has broken down.  This is hardly surprising when the sole answer to the failure of an austerity package is another austerity package.

In the absence of any recognition that this is partly a systemic crisis, threatening the entire European economy and requiring systemic reforms, it seems that the only possible response to Greece's sovereign debt lies in a choice between growth and default. The first is precluded by a policy of artificially imposed austerity, the second is of uncertain consequence though beginning to look increasingly likely. In a thoughtful piece, the historian Mark Mazower concludes,
Thus, whatever the cost-benefit analysis says about default, the pressing issue for Greece and for the EU as a whole is political. People will not accept further cuts if they think this is simply to bail out Europe’s overpaid bankers, and they will not support a government they believe is devoid of any positive strategy for recovery. If that support vanishes, as it is on the verge of doing, the country may head for bankruptcy anyway. That might well be the worse option not only for Greece but for Europe too. The onus is now on Europe’s leaders to rise above the short-termism and the wishful thinking that characterises their responses so far – the latest EU-IMF agreement is more evidence of this – and to frame further assistance as part of a plausible plan for growth. Given their track record, we should not hold our breath.
 I think that the last word should be left to Loukanikos.

Wednesday, June 15, 2011

Top class

For a British Rugby League fan, watching the Australian Sate of Origin Series between New South Wales and Queensland is exhilarating and bloody depressing. Why? The standards reached are incredible and then it dawns on you that we will never win a series against them, probably not in my lifetime.

Tuesday, June 14, 2011

From the jaws of victory

... Britain and its Nato allies no longer believe bombing alone will end the conflict in Libya, well-placed government officials have told the Guardian.

Instead, they are pinning their hopes on the defection of Muammar Gaddafi's closest aides, or the Libyan leader's agreement to flee the country.

"No one is envisaging a military victory," said one senior official who echoed Tuesday's warnings by Admiral Sir Mark Stanhope, head of the navy, that the bombing cannot continue much beyond the summer.
What could be more self defeating, more likely to ensure that their desired end is not achieved? Could they have sent a clearer message to Gadaffi that holding on and waiting will give him the victory and the revenge he desires, condemning the Libyan people to yet more misery?

Of course the view of the majority of Libyans themselves is less equivocal. These come from a report in the same paper from the capital Tripoli, not the areas under the control of the revolutionaries.
"Most people want him out and more people can talk about this now than before because he is under pressure. But you still have to be careful. If you are caught, God knows what will happen to you." 
"Nato good, good," is a common refrain to be heard from people talking to foreign reporters.
"Look there - plainclothes police," said a taxi driver, driving through an area called Fashloum. "And there, and there. The only people who like Gaddafi are the police and people working with him."

Sunday, June 12, 2011


The jungle is cleared and a garden has emerged. However, the rumble over the Greek economic crisis continues. At village level, the bits that I manage to understand or are translated for me, range from delightful people picking gardenia flowers as gifts whilst expounding the most bonkers of conspiracy theories, the general idea that Merkel is the new Hitler (and the glee at the fact that the Germans poisoned themselves with their own bean sprouts, rather than with something grown by one of those recalcitrant Mediterranean types, is palpable), some pretty crude racism, whilst on the news protesters chant about the politicians being thieves. All have one thing in common, the sense that the cause of the crisis is a moral, rather than a systemic failure.

One of Adam Smith's most notable insights was his much misread notion that the strength of a modern, industrial society does not rest on the virtue of its citizens. Instead, small petty desires and self-interest drive economies and sustain civilisation. The target of Smith's writing was the same one that seems to animate popular debate today and thus leads us away from the major questions about the failures in the Eurozone. And, even if moral failure was a key factor, any system that has to rely entirely on the prevalence of human virtue has a major design fault anyway.

So, with the next tranche of bewilderingly terrifying austerity measures about to hit Greece, it was good to read these two posts from a new blog offering clarity about the systemic failings of both the single currency and the overarching economic model that informs it. This gets it spot on.
Without investment, or/and a dramatic structural change in the economy, to correct any trade imbalances everyone ends up working more for less. The promise is that this is for the short run. The reality is that, while the trade imbalance between the richer and poorer Euro members remain, it is for the very very long term. Under the austerity measures, the poorer states have even less resources to invest in structural changes to make their economies competitive. The ECB/IMF package is massive transfer of resources from the poor.
Instead the blog directs us to schemes such as this, Yanis Varoufakis and Stuart Holland's "modest proposal", and argues consistently that we are facing a EU-wide economic crisis that is not the result of the wayward behaviour of a few swarthy (or Irish) small nations, but an ongoing and inevitable consequence of the failure of the institutional architecture of monetary union. 

And so we face a choice between continuing pan-European austerity or a reform that will recycle trade imbalances to allow for investment and development in Europe's poorer nations. I know what my choice would be.

Hat tip - the ever useful KTG

Wednesday, June 08, 2011

It's a jungle out there

At least that is what the garden looks like. A month away and the combination of rain and sun has led to an explosion of greenery. Time to find a man with a strimmer - Niko!

The rest is more or less unchanging, a new greengrocers has opened and Stavroula comes to my gate to complain about life, speaking in Greek that I can't follow, to ask the usual questions and to warn me about the dubious behaviour and bad character of another of my neighbours before waving a cheerful goodbye. And of course, the moment I opened the patio doors the cat arrived expressing his deep affection and demanding food in return for the benefit of his company when he is not visiting other houses.

We are on the cusp between spring and summer, some of the wild flowers remain and a group of the last of the wild poppies are wearily hanging on amongst the grass and weeds. The most dramatic colour is provided by the pomegranate. The bright red flowers are starting to turn into fruit and it looks like there will be a bumper crop this year, though the bush is still small. Not that I will get to eat them as I will have returned to England for work by the time they are ready.

At least by arriving early this summer I got to taste the cherries. The crop is finished by this time of year but various neighbours had not been as ruthless in stripping the trees as previously and there were a few left.

It is warm, but not hot. The cicadas haven't started making their usual row and have left the cool nights to the nightingales and squabbling dogs. There is a strong gusting breeze and butterflies are flitting through the garden. It is good to be here.

The other delight is to taste real food. Today's simple lunch of tomato and cucumber with feta cheese and fresh baked bread was a gourmet delight. And that was one of the topics of conversation I had on the flight over. You know the years are advancing when a young woman anxiously asks you if you need help putting your rucksack in the overhead locker. Your self image as a young buck dissolves as you realise that you are well into the transformation from sex object to pity object. And when I finally sat down, slightly crestfallen, she, a Greek living in England, confessed that what she was really looking forward to on her return to her homeland was eating a tomato that actually tasted of something.

Yet that was not all we talked about. Our conversation ranged through art and architecture, radical education as well as history and political philosophy as she turned out to be a young and talented freelance animator and designer. She is just starting out, though I think you need to watch out for her name (or names - she seems to have rather a lot of them), she has the ability to go far.

So, summer beckons and as I type this I look through my open window under the klimataria, shaded by the vine, I get that familiar, startled feeling of not quite believing my luck in ending up here, in my own house on an early summer's day.

Monday, June 06, 2011

Far from the madding crowd

And crowds there are in Greece, gathered in city centres - with around three hundred thousand outside the Greek Parliament in Syntagma Square last night - to protest at the latest round of austerity programmes which are certainly depressing the economy but making no impact on the level of debt (See too Paul Krugman on the Helenization of a Europe-wide crisis).

Will I be parading my radical credentials at the forefront of a major protest movement? Of course not. I will be in Greece, but hidden away in rural Pelion indulging in escapism. And as I fly tonight, it seems that I will not be alone.

Friday, June 03, 2011

For sale

Human lives in exchange for a convenient escape.

First there is a little rehabilitation to help the sales pitch:
Britain and the United States are pressing for United Nations sanctions against 18 former senior Taliban figures to be lifted later this month in the strongest indication yet that the western powers are looking for a negotiated peace with the Taliban.
After all,  
Qalamuddin, the former head of the religious police, said however the Taliban had "changed". 
Like this?
Taliban gunmen have killed the headteacher of a girls' school near the Afghan capital after he ignored warnings to stop teaching girls, government officials have said.
 As for the Afghan people? Well some have a more down-to-earth view:
The Taliban are not our brothers, they are our killers.

Wednesday, June 01, 2011


As more news seeps out about the crumbling of Gaddafi's army, it seems a good time to look back on some of the recent commentary on Libya from the usual suspects - a study in the pathology of pessimism, a peculiar trait of the Guardianista.

First up, here's Richard Norton-Taylor:
In Libya, there is no end in sight to a campaign which is not succeeding in its UN-sanctioned aim to protect civilians.
 Hang on a second. "Not succeeding"?  Have I missed something here? Did Gaddafi's tanks and mercenaries actually carry out their slaughter in Benghazi and then move on throughout the East or did the UN action end up preventing it? And even if the conflict is dragging on with its horrible human cost, doesn't stopping Gaddafi's advance and saving the East from his clutches, at the very least, amount to a success? Isn't it a little early to pronounce the whole affair a failure? The revolutionaries certainly do not agree.

And in the second example even Simon Jenkins admits as much. But being Simon Jenkins he is also always good for a bit of light relief.
Britain has done what it said it was going to do – it stopped Gaddafi visiting his wrath on Benghazi. It should then have left, returning only if he did. 
Did I read this right? The moment Gaddafi was forced back from Benghazi he should have been left to crush the revolution everywhere else, securing his power, reinforcing and re-equipping his army all the while? Is Jenkins really suggesting that British forces should have been withdrawn to let him get on with it as long as he didn't touch this one city? Extraordinary.

Finally, we have the star turn, Jonathan Steele.
The best way to protect Libya's desperate civilians is for Nato to reverse its mistaken policy of taking sides.
Leaving aside the obvious point that not taking sides is not an act of neutrality but is de facto support for the the side with the best military hardware - in this case Gaddafi - has his moral compass gone completely awry?  Should we not choose sides between, on the one hand, a popular democratic revolution and, on the other, a kleptocratic, murderous, family tyranny whose leaders have been indicted for crimes against humanity? Are they moral equivalents to be treated as equals? It is absolutely clear that this is precisely the time to take sides. We should support the struggle for democratic change against the systematic violence of fascistic autocrats. Studious and oh so reasonable sounding neutralism is, in reality, the betrayal of the hopes of people risking everything for the sake of freedom.

The least we can give to the revolutionaries is our solidarity, the best is our help when it is requested, the worst is our disdain for their incredible courage in demanding to have what we so casually take for granted.