An overview of the Modern Greek Society, the Greek Crisis and the role of the EU
A bitter but true statement
The Greek people constitute an abomination because they are capable of the worst because they are immune to the worst. The Modern Greek society can only give birth to monsters since it has been genetically programmed to do so. The Modern Greeks are internally destroyed people whose creativity can only be engaged in disasters due to their endemic crap mentality, their supernatural vulgarity and their filthy and corrupted leaders. They deserve to be punished for their nightmarish choices and their inability to learn from their mistakes. No pity should be shown to them.
This may sound like a generalization but if one examines thoroughly the ramshackle foundations of the Modern Greek State, he will have no option but to agree even partially, with a very important, well educated but unfortunately, purposely ignored high caliber writer, an intellectual that has been numerously honored by the French Academy of Arts and Letters, Mr. Dimitris Dimitriadis (“The Abomination”, lifo.gr). In his excellent essay he presents his thoughts, his concerns and his opinion regarding the Greek State and the Greek people in general.
Neither East Nor West
The most delicate issue in the relationship between Westerners and Greeks has been the existence or not of a link between ancient and modern Greece.
Every attempt to challenge this relationship — (as the Austrian writer Jakob Philipp Fallmerayer did by suggesting in 1830 that modern Greeks were the descendants of Slavic peoples) continues to cause an intense emotional reaction in Greece. The supposed link between ancient and modern Greece remains a sensitive issue in Greece even today, as it is simultaneously a cornerstone of the supposed Greek national identity and an expression of the nationʼs profound insecurity.
Undoubtedly, the Modern Greeks have realized that their political and economic survival heavily depends on their compliance with the Western ways and the West in general. Nevertheless, the mentality of the Modern Greeks and their attempts to comprehend themselves and their history are remarkably anti-Western. Although they are fascinated with the progress of the Western world, their fascination is restricted to the material goods they consume which have a Western origin.
In reality, the Modern Greek society shows abhorrence toward everything foreign. If somebody has the ability to look under the Western-like cover of Greek society, he will discover that the Byzantine-Ottoman mentality remains as the solid rock foundation which the whole Greek State is built on. This deeply rooted mentality has become the trademark and the intrinsic element of the character of Modern Greeks. This mechanism of internal split, in other words, the fluctuation between adoration and persecution of all foreign things is responsible for the deep mental gap between reality and ideology as well as hope and fear that Modern Greeks suffer from.
This mental crisis has made the Greek society not only confused, politically backward and economically underdeveloped but also dangerously sentimental and narcissist.
In every sector of the Modern Greek life, from politics and economy to the arts and literature, this everlasting and traumatic vacillation unravels.
This vacillation is mainly responsible not only for the identity crisis of Modern Greeks but also for the ongoing, insurmountable rivalries concerning their political preferences which through a blame game, have led to chaotic, unresolved conflicts often baptized as attempts to regain “dignity” and “national sovereignty”.
The bankruptcies of the country (1893, 1932 and 2010) were the result of reforms that failed due to the unrealistic expectations of the people, the demonization of foreigners, the ravaging populism and the willing isolationism that this country has been infested with. The Greek society has always been highly suspicious of the state, which even today is viewed as a hostile, extractive, and repressive entity.
As a result, society seeks to deny state resources both by withholding them (tax evasion) and by appropriating them (appropriation of public land).
Once A protectorate Always A Protectorate
Few would dare to challenge the fact that Greek politics in the 19th century was highly personal with political parties being formed around powerful personalities rather than realistic socio-economic platforms. Historian Richard Clogg writes: “The state and its attendant offices were prizes to be captured by rival cliques of politicians … there was little sense of collective loyalty to, or trust in, the state or its institutions. Voters expected those for whom they had voted to help them to secure employment”. Clogg also mentions that Greek politics at that time were distorted by “the lavish dispensation of favors”, by “open bribery” and by “fraud”. These charges have some resonance in todayʼs crisis.
Stiglitz states: “Countries are effectively told that if they donʼt follow certain conditions, the capital markets or the IMF will refuse to lend them money. They are basically forced to give up part of their sovereignty, to let capricious capital markets, including the speculators whose concerns are short-term, rather than long-term growth of the country and the improvement of living standards, ʽdisciplineʼ them, telling them what they should and should not do”.
Stiglitz also suggests that loss of sovereignty may threaten national cultures. In identifying the importance of the sovereign state for national culture, Stiglitz is definitely right. Wars are fought over culture, and nations that lack a sovereign state, like the Kurds and the Basques, show much interest in acquiring one.
In the 180 years of its history, Modern Greeceʼs lack of sovereignty has often been unveiled. When Greece entered the European Union, the inexistence of its sovereignty became quite apparent. Security was the overriding motivation for Greeceʼs entry to the European Union. Within the same framework, was Greeceʼs adoption of the Euro. One may wonder, however, how a country like Greece was accepted in the EU and was allowed to adopt the Euro as its currency. Werenʼt the technocrats of Brussels aware of the productive dislocation of the countryʼs economy? Didnʼt they know that this dislocation would be intensified by the premature and wasteful adoption of Euro? Didnʼt they suspect that the countryʼs foreign debt would skyrocket and the phenomenon of parasitic consumerism that started in the 80ʼs will cripple every attempt to rehabilitate the countryʼs finances?
Letʼs see what Dr. Barry Eichengreen, professor of economics and political science at the University of California, Berkeley says: “In Puerto Rico, the United States now has its own version of Greece. The territory’s debts are unsustainable. Public employment and pensions are swollen. Work in the underground economy, where taxes are evaded, is rife. Modern infrastructure is lacking. The commonwealth exports little for an economy of its size. Many of the best and brightest have decamped in search of better opportunities. Since these problems were a long time in the making, fixing them will take years”.
So Puerto Rico is, in a literal sense, Greece in another guise. But can you imagine the United States putting all other domestic and foreign policies on hold while it attempts to resolve the crisis? The idea is ludicrous. But that is precisely what Europe has done.
Europe has been unable to broker a comprehensive agreement on how to handle its Mediterranean boat-people problem. It has been unable to effectively counter Vladimir Putin’s incursions in Ukraine and veiled threats to Eastern Europe, while watching Athens drawing closer to Moscow’s orbit. It has been unable to mount a coherent response and even pay sustained attention to events in Syria.
Part of the problem is that European leaders and their publics are preoccupied and exhausted by the endless sequence of euro-crisis briefings and late-night emergency meetings. To be sure, the Greek government has been difficult and erratic. But European leaders, by their own obstinacy, have helped to create this problem.
They allowed the interests of their banks to trump those of the Greek people, refusing to contemplate serious debt reduction for Greece when this was called for in 2010. As self-justification, they elevated the idea that debts must be paid to the status of a theological belief.
Five years later they are still refusing. Greece still requires debt reduction. Eventually it will get it, German Finance Minister Wolfgang Schauble’s opposition notwithstanding (IMF and Schauble havenʼt reached an agreement as of yet, I might add). There will be no resolution of the crisis until then. Unfortunately, Europe may have to experience yet more months, even years, of unproductive negotiations in order to get there.
The idea of „ever closer union“ enshrined in the Treaty of Rome is the most regrettable casualty of these events. The belief of Helmut Kohl, among others, was that deeper monetary integration would lead, logically and ineluctably, to deeper political integration, and that deeper political integration would make possible not just a common economic growth strategy but also a common European foreign policy.
Tragically, the opposite has turned out to be true: The travails of the euro have driven European governments and their publics further apart. While leaders continue to talk the language of cooperation and deeper integration, their publics are having none of it. Across Europe, narrow national interest is reasserting itself.
Catastrophic Management
In fact there was nothing inevitable about this disastrous turn. It is a result of the catastrophic way the crisis was managed. With a little bit of intellectual flexibility, the crisis could have been resolved in 2010, had Greece been offered debt reduction in return for deep structural reform. The country would have avoided the 25 percent decline in gross domestic product it has experienced since 2007. Disaffected voters would not have felt obliged to punish their political class by electing a set of radical neophytes. Europe would have been able to put the Greek crisis behind it and get back to business.
The US Congress will now pass legislation giving Puerto Rico access to American bankruptcy courts. Its debt will be restructured, and all those reckless enough to have lent it money will see their claims radically written down. Once the island’s government, relieved of its crushing debt burden, responds with reforms, the US will provide further aid.
But Puerto Rico will be at most a sideshow. The real focus for policymakers will be growing the US economy. They will offer suggestions for how to deal with the country’s inequality and violence problems. They will pursue a foreign policy agenda intended to cope with a more assertive China, a more aggressive Moscow and a more destructive Islamic State.
As for whether they succeed, we will have to wait and see. One should not underestimate the ability of US politicians to get it wrong. But Puerto Rico will remain only a minor distraction. One wishes the same could be said of Greece.”
EU Means Germany
One has to look into the European decision making processes to realize who the one who calls the shots is. Germany is the answer, Europeʼs biggest free rider. The country that has benefited out of the economic disasters it caused to other EU members, especially the South. Dr. Pavlos Elefteriadis wrote an excellent essay published in Fortune Magazine:
“As worries rise that the Eurozone is slipping into recession, it’s clear Germany is doing way better than its neighbors. Today, the country has low unemployment, very low inflation, a large trade surplus and a balanced budget. By contrast, most members of the Eurozone are stagnating, while some are going through a catastrophic recession and suffering from debilitating unemployment. The German government says that its own success and its neighborsʼ failures are unrelated; that poor performance is due to poor decisions. Yet, even though the policy failures are real enough, this analysis is false.
Germany has for many years pursued a policy of wage suppression, which many economists have described as a competitive devaluation or ʽbeggar thy neighborʼ policy. Germanyʼs gains in competitiveness were immediately translated to gains in trade, since the freedom of goods, services, persons and capital allowed German products to circulate freely and quickly throughout the European Union. These are the fundamental freedoms of EU law and are vigorously protected by the European Court of Justice. German policy would not have been successful without them.
Germany has also benefited from the fixed exchange rate that the Euro effectively secures between itself and its major European markets. This means that its export boom was not offset by a rise in its own currency. If Germany had been outside the Euro, currency appreciation would have hurt Germanyʼs gains. Not so in the Eurozone.
While Germany has benefited so much from the Eurozone, its less successful partners are left to fend for themselves. The Eurozone lacks the automatic stabilizers that other currency unions apply among the various regions — namely, fiscal transfers such as unemployment and housing benefits, shared health care costs, or the pooling of bank risks and deposit insurance. The Eurozone also lacks the large movement of workers across state borders enjoyed by the United States, mostly due to language and regulatory barriers. These institutional features of the Eurozone have created a highly unfair economic union, which magnifies disproportionately the consequences of failure.
Germany might respond, „Tough, the others ought to have seen it coming.“ All members of the Eurozone are subject to the same competitive environment. All consented to its design by ratifying the relevant treaties. All had a chance to adjust. Yet this argument is false too.
Not everyone had the same chance to adjust. Membership in the European Union has not improved the institutions of the weaker members. It has actually made them worse.
When they joined the EU, Greece, Ireland, Portugal and Spain opened their borders and exposed themselves to new waves of trade, immigration and finance. Competition with other member states was meant to bring about ʽcreative destruction,ʼ whereby inefficient firms – i.e. those who could not compete internationally – would go out of business. In order to avoid short-term hardships, the peripheral economies were set to receive large sums of EU funds by way of compensation. These funds were supposed to be invested in restructuring the domestic economies. But this happened very imperfectly.
The funds strengthened those who administered them. In the absence of a strong civil service in most of the peripheral EU members, these were simply the local political classes. In small societies with weak checks and balances, the effect was transformative. This money operated as a ʽnatural resources curseʼ. Since the money was not the result of taxation, domestic accountability for its spending was seen to be an unnecessary luxury.
This situation was made worse once the Eurozone was created. With the ECB looking away, Spain, Portugal, Ireland and Greece built not only asset bubbles with cheap and easy credit (which happened elsewhere) but also opaque and politically driven banking systems. As a result, cheap credit impeded reform and damaged institutions in all the countries of the periphery.
Membership in the Eurozone directed funds to wasteful investment, made cronyism exceptionally profitable, provided new incentives for political corruption and strengthened already existing hierarchies. If all the members of the Eurozone were equally strong, if they all had, for example, an outstanding and independent banking regulator, a powerful judiciary and strong internal mechanisms of accountability, perhaps these things would not have happened. Yet, they did happen.
The examples of the failed banks, Bankia in Spain, Allied Irish in Ireland, and Proton in Greece speak for themselves. In Greece, in particular, the EU has stood by while the political system has been undermined by a small group of oligarchs who have illegally occupied television frequencies for 25 years. By escaping any effective regulation and controlling news and commentary for their own purposes, they have dominated political and business life and undermined the credibility of the political class in its entirety. The bailout deal with the ECB, the International Monetary Fund and the European Commission has not touched their privileges.
In some of the members of the Eurozone the main legacy of the Euro is economic implosion, rising inequality and widespread corruption. This is not the result of isolated domestic failures. It is a result of collective European decision-making that misfired spectacularly throughout the periphery. The relentless pursuit of an ʽever closer unionʼ made EU institutions neglect the question of the quality of this union. It is time to change course. Unless Europe addresses the deep unfairness at the heart of the Eurozone, the crisis is not going to end”.
Unfortunately, Europe wonʼt change as long as it remains Germanized. In the long run, however, Germany will be called to pay the price for its sickening Protestant, punishment-loving mentality as it did twice in the past (WWI, WWII). By manipulating governments and by imposing its policies on other country members, Germany will end up getting exactly the opposite results. “Regulations, whenever they happened to interfere with individual and family self-interest, were obstacles to be overcome, not rules to be obeyed,” historian W.H. McNeill observes. “The more formidable the regulation, the more energetic the effort to escape its incidence and the greater the occasion for bribery” he adds.
The Greek Youthʼs Burden
Greeceʼs current biggest problem is the brain drain it experiences. The young Greeks who still remain in the country are now called to resolve social anomalies inherited by older generations. Social mental attitudes (the demand for a permanent job and a secured high pension, the expectation of state support in health, education, unemployment and the desire for rapid social recognition) are not effective any more. The young Greeks are now called to bring the country to reality by implementing economic reforms and policies and by changing old practices and mentalities and more importantly, the old ways of living. Such attempted alterations are directly related to the aspects of uncertainty, insecurity and constant readjustment. The goal is not feasible but even if it is, it is certainly not easy because the social anomalies inherited from the older generations cannot be eliminated in a short period of time.
Conclusion
Europe is experiencing a multiple socio-political and economic crisis. Neoliberals against populists, hard core conservatives against socialists, fascists and nationalists against pluralists and democrats. Nationalism seems to have gained significant ground everywhere in the world but in the Balkans, we experience its rebirth. It is unfortunate that in this day and age there are people who believe that are descended from the ancient Macedonians (FYROM) or the ancient Illyrians (Albania).
We see leaders that could care less about the well being of their citizens. Their main concern is to remain in power and exercise their authority as they wish (Turkey). Democracy is suppressed; no mercy is shown to the victims of civil wars (Syria). A new class of plutocrats and oligarchs has emerged in Europe. The European parliament is a big joke along with the common foreign policy of the EU. The same goes for the so called alliances among NATO members (Turkey, Greece, Cyprus). Once again, nations grow hostile against their neighbors. Human rights are also suppressed even when this form of suppression is carefully camouflaged.
However, when one looks at Greece, he sees a different drama unfolding, a distinct drama that bears no resemblance with any other dramas that are being played in other Western or non Western “theaters.”
A Modern Greek drama with no happy end.
