Tag Archives: drachma

The Daily Threat Show and a taste of Greek clientelism

Now, most of you must have heard about the rumors. If SYRIZA wins the coming Greek elections, Greece will get out of the eurozone, the EU and might even be expelled out of the solar system. Here’s one of the official adverts by New Democracy, the right-wing chief opponent of SYRIZA.

(for English subtitles, press play, click the CC button on the YouTube player bar and choose English)

The video has been characterized as immoral for its use of children. Paradoxically, the classroom of the imaginary post-elections, SYRIZA-ruled, drachmaggedonized Greece looks much nicer than most of the classrooms in Greek schools today. The kids look healthy, no one is fainting because of malnutrition and, oh yes, they even have books! One might even think that we will be better off if we go back to the drachma.

Another video I wanted to post is a clip produced by New Democracy’s youth organization, ONNED. It’s a satire on Alexis Tsipras, SYRIZA’s leader.

So the EU and the eurozone is the expensive restaurant where we used to eat for free, enjoying fine French wine and blonde chicks in our Erasmus years. But the bill has come and we don’t want to pay it. Unfortunately, the producers have lost their contact with society. Greeks have stopped eating in fancy restaurants years ago (we’re soon to complete the 2nd year in the economic crisis) and for sure we won’t return there soon if New Democracy comes to power. For those who might think that I am a chief propagandist for SYRIZA, the only accurate thing in the video is Alexis’ swashbucklerness.

For those who are not convinced about New Democracy’s Greek old-school political practices, and about why nothing will change with the traditional parties in power no matter how much they express their regret for their old sins, here’s a video from a meeting of New Democracy members in the northern Greek region of Kilkis. The party’s chief campaigner in northern Greece, Panagiotis Psomiadis, is also present. He has a long history of accusations on corruption issues and had to step down from his post as Governor of the northern Greek region of Macedonia because of another scandal. That happened only several months after he was re-elected with 53% of the votes. If you wonder how this could be possible, see this great example of Greek state clientelism.

A message of Hope for the Greek People: the case for a basic income

I received this message to the Greek people by Stanislas Jourdan, an independent journalist who until recently was working for French newspaper La Tribune. The text was originally posted here and I am reposting it here.

Defaulting on its debt and exiting the eurozone is certainly the best thing to do for Greece now. However, this won’t fix all the damages Greece experienced these last years of economical dictatorship. Greece needs more than that. Greece needs a new hope. I think what Greece needs is a basic income.

Let’s face it: far from preserving Greece from bankruptcy, European leaders are denying the simple fact that Greece is already a bankrupt country. Yet the Greek State cannot pay its hospitals’ medicine providers, delays VAT reimbursement, and even the central bank of Greece is printing euros to bail out insolvent banks.

More than never, now is time for a realistic diagnostic: if something might help Greece preserve its economy, defaulting on its debt burden is certainly the first step. Leaving the eurozone would be the second. If necessary, temporarily printing money to fill the budgetary gap, would be another possibility.

These three simple things would relieve every greek citizen from the repayement of an odious debt, it would lead to devaluation of the new drachma thus reinforcing competitivity of the Greek economy. In the end, this would supposedly tackle the vicious circle of economical depression. Theoritically, at least.

Practically, I know things are not so easy, and that these three steps raise a lot of different issues, and will not magically solve all the problems. So, how can we do better than that ? How can we build a better future in Greece, beyond the default ? How can we make this decision progressive and desirable ?

I am not Greek nor i am living there, however, through a lot of readings and some talks with Greek people, i think i have an idea about what is happening there. And I have been thinking of some part of a solution…

A confidence deficit

I feel that what Greece needs the most is much beyond economical measures. The most precious thing Greece has lost these last years is confidence. Confidence in itself, confidence towards others citizens, neighbours, confidence in the future, not to mention confidence in politicians.

This has to be fixed, but deeply relies on economical issues. You cannot ask people to trust each others when they are suffering from hard economical pressures. When you’re too poor to feed yourself or your children, well, things like morality, common sense, or citizenship becomes all relative. This is no more than a human thing, right ?

Moreover, confidence cannot be reached when people feel totally unequal towards some of their fellow citizens. There are studies (notably French ones) that prove this point: the more social welfare is unequal, the more people feel jealous and aren’t willing to play by the rules. They would try to take advantage of the system as much as they can and/or feel others are doing.

What i am saying is that Greece cannot get back on its feets as long as a new social contract is written democratically. And such a contract as to be built upon equality.

The basic income scenario

I don’t have any magic wand, but there is an idea that has been emerging for some years now, here in France, but in many other countries as well : the basic income guarantee. What’s that ? Basically, this consists in giving every citizen a monthly grant. Let say a minimum of 300€ a month for every Greek (this amount should be debated democratically). More from wikipedia:

A basic income guarantee is a proposed system of social security, that regularly provides each citizen with a sum of money. (…) Except for citizenship, a basic income is entirely unconditional. Furthermore, there is no means test; the richest as well as the poorest citizens would receive it.

In others words, if you earn a salary, you also earn the basic income. This detail is important: it means more incentives to work than just receiving the basic income. Of course, the richer actually reimburse the basic income they earn through taxes.

The counterpart of this basic income would be a removal of most of the current social grants, and (at least) a reduction of pensions grants, and unemployment allowances, thus downsizing the government intervention in terms of administration weight and bureaucracy. Also, this would imply big reforms towards a simplification of the greek fiscal system, perhaps with something like a flat tax.

Greece is in debt crisis, and i suggest to spend more?

Humm, yes and no. On the one hand, yes Greece needs a stimulus, on the other hand, the basic income should be funded partially through the transfer of existing budgets, thus not increasing the total budget of the Greek government, but rather optimizing it.

Now that said, i am not a specialist in the Greek economy and have no idea about the figures we are talking about. Defaulting on the public debt will probably help, but might not be sufficient. In this case, the central bank would to the rest.

Indeed, let’s not forget that if Greece were to exit the eurozone, Greece could then ask its central bank to print money and provide the funds this measure requires. I know this is a sensible topic for many economists, but before throwing me some Weimar-like arguments, please mind that Greece has been suffering from a big bank run for two years now, therefore deflation is more a threat than inflation right now. Growth is being slashed down because of a lack of money, not because of a lack of production factors.

And even though inflation were to rise, let’s not forget that giving a basic income to everyone, you are actually compensating the poorest from an hypothetical loss of purchasing power. Furthermore, in a situation where the government doesn’t manage to collect taxes properly, monetary-driven inflation is actually another way to tax people (the richer, by the way) and fund public spendings. As long as everyone truly benefit from the money you print (and not only the civil servants for instance), i think we can agree this is fair.

And at least, once in History, a central bank in the world would actually behave in favor of People and not only for banks and governments…

Greece badly needs a new Hope

I know this sounds like just another utopia. But this is a very serious proposal i have been advocating for, here in France for several years now.

And I am not alone supporting the idea. For many years, economists have been working on and defending such an idea (some of them, like James Tobin, got Nobel prices). Some countries such as Canada and the United States even experimented such a system. At a wider scale, Brazil also implemented a basic-income like system, called the Bolsa Familia. If you are curious, I highly recommend you to read some papers about these experiments: researchers not only found great results about economical output, but also in terms of Education, health and security issues.

Still, people keep on telling me « people will stop working ! ». And i say : « Of course, the others would ! But you wouldn’t, right ? ». Only once for two year, one person admitted to me he would take some rest before going back to work, so i guess not so many people would actually stop working (as the experiments show, overall).

So what about you ? Would you really stop working ? Or would you simply look for a way to create wealth accordingly to your own values and beliefs ? And if you think so, then wouldn’t it be a good idea to allow such a move in everyone’s life ?

There are many reasons that makes the basic income a good solution, from the end of extreme poverty, better redistribution of wealth and productivity gains, the inversion of the bargaining power in the society (to the civil society), and recognition of the non-market economy. I suggest you to read this text (here in greek) if you want to understand a bit more the vision of the society behind this proposal.

Again, i know this sounds crazy, utopist, or whatever reaction this raises for you. But doesn’t Greece need a new hope now ? Don’t protesters, occupyers, indignados, all over the world need a dream ? At least mine is technically feasible.

Now it’s up to you to embrace it, and make it a reality.

Europe’s worst nightmare

Another article, this time from New York Times’ Landon Thomas Jr., talking about the possibility of a military coup in Greece (see this and this for previous mentions).

It would be Europe’s worst nightmare: after weeks of rumors, the Greek prime minister announces late on a Saturday night that the country will abandon the euro currency and return to the drachma.

Instead of business as usual on Monday morning, lines of angry Greeks form at the shuttered doors of the country’s banks, trying to get at their frozen deposits. The drachma’s value plummets more than 60 percent against the euro, and prices soar at the few shops willing to open.

Soon, the country’s international credit lines are cut after Greece, as part of the prime minister’s move, defaults on its debt.

As the country descends into chaos, the military seizes control of the government.

To read the rest of the article click here.

The run-up to the Greek economic crisis (Part 4)

This is the 4th part of Greek journalist Pavlos Papadopoulos’ article on the run-up to the current Greek economic crisis, published by “To Vima” newspaper (16/10/2011). The first part of the article is here, the second part is here and the third part is here.

“Neither Papandreou nor any of us believe in the Memorandum” says a Minister. “I’ll remind you that the Medium-Term Program was fifth in the row when discussed at the Cabinet, right after the legislation for companion dogs. The whole government is in denial”. This denial led to a blackmail, using the drachma. On Friday 6 May 2011 Papaconstantinou traveled to Luxembourg for a secret meeting with several powerful euro zone Finance Ministers, presided by the Eurogroup head, Jean Claude Juncker.

According to the most probable version the cause of that meeting was that, some days earlier, Papandreou had implied at a talk with German officials that the Memorandum’s policy and the German strictness on its implementation could make Greece return to the drachma. This indirect threat annoyed the Germans. It is alleged that Wolfgang Schaeuble himself leaked the information to Der Spiegel Magazine, which posted it in its web edition that Friday evening, after the closure of euro zone banks, in order to drag the Greek government into a disorderly retreat.

Despite the upheaval that was caused in Athens, Papandreou delayed for two hours (!) to allow the then government spokesman Giorgos Petalotis to issue a rudimentary rebuttal. He first wanted to learn the European partners’ reaction to the “Greek ultimatum”. The reaction was not a polite one. Papaconstantinou was attacked by Juncker and and Schaeuble, while Jean Claude Trichet left the meeting within a few minutes. The “Greek blackmail” collapsed but it inspired Schaeuble to examine the famous “Plan B”, which is a “euro zone without Greece”. Despite all these, the Greek demands for a new bailout program with decreased interest rates and a prolongation of the deadlines for loan repayments were accepted. It was exchanged with a deeper “domestic devaluation” (of prices and incomes) through a Medium-Term Program which almost led to the fall of the government.

George Papandreou with Dominique Strauss Kahn

Papandreou maintained a secret communication channel with Dominique Strauss Kahn, looking for a platform for IMF intervention in Europe. Within the Papandreou family the IMF is thought to be an organization with a positive impact around the world. Papandreou’s brother, Nikos Papandreou, who participates decisively in the administration of the country (though always in backstage), was a supporter of the recourse to the IMF. The Papandreous believed that an advanced “international” model of administration should be applied to Greece. They have underestimated the fact that IMF means submission.

The Pushkin Cafe in Moscow

While the prime ministerial mind was lying in Washington D.C., where the IMF headquarters are, Moscow brought Greece closer to… Tel Aviv. The first secret meeting between Papandreou and the Israeli PM, Benjamin Netanyahu, took place at the Russian capital’s Pushkin Café. Greece would provide Israel an alliance and the gateway it needed to push the Leviathan deposit’s natural gas towards Europe. The energy diplomacy with Israel (which couldn’t start paying off but in 5-10 years) was considered a basic component of the strategy for the avoidance of bankruptcy (!). So this is why time was passing by and the government was taking zero efficiency measures, the government’s staffing was carried out through open.gov (unless Nikos Papandreou was intervening in order to promote persons of his own influence into key-posts) and the Ministers were in a constant state of confusion when it came to strategy and responsibilities.

George Papandreou in Davos (January 2010 - photo by Reuters)

The real shock for the Prime Minister came at Davos, at the end of January 2010. “The Hungarian Prime Minister approached me and told me to take measures” Papandreou said to the Cabinet meeting that he called right after his return. “Things are different compared to how they were a month ago” added Papaconstantinou. The Social Democrat Hungarian Prime Minister, Ferenc Gyurcsany, had recent experience with the IMF and wanted to share it with Papandreou. Some time later, he would be defeated at the elections by the Right. After Davos, the atmosphere within the Greek government was like a funeral. They had realized that they “lost” the time. Likewise they also lost the banks. “For a long time they believed that the warnings from bankers were only about the banks’ interests” say sources from the banking sector. They were too late to realize that the state’s exclusion from the markets is accompanied by a similar exclusion of the banks, having as a result the postponing of lending to individuals and corporations which slows down the economic activity, spreads poverty and increases unemployment.

The European Mechanism which was presented in 25 March caused the markets’ attack to Greece instead of making them not to do so. Why would the markets lend a state when they can much more safely lend the Mechanism that would then lend the state? Greek bond yields skyrocketed in mid-April 2010. On Friday 23 April, the Prime Minister had a planned visit to the tiny island of Kastellorizo, which had to do with issues of regional development. During Wednesday and Thrusday before the trip the telephones in the Maximou Mansion and the Finance Ministry didn’t stop ringing. Heads of governments and Finance Ministers of big states were calling Papandreou and Papaconstantinou. They were demanding that Greece recourses to the Mechanism because the crisis was hitting bank trust towards their own countries jeopardizing their future.

“Are we going to cancel the trip to Kastellorizo?” Papandreou was asked by his associates. “Why should we cancel it? Life goes on” he replied and added “I will make the announcements from Kastellorizo”. The circumstances necessitated a purple tie. In a surreal scenery, with a small fishing boat sailing in the picturesque port, the Prime Minister called forth metaphors from the Odyssey.

He wasn’t wrong. The odyssey for Greece had just started and he was aware of it. This is why he avoided signing the Memorandum. He wanted to avoid an odyssey of an agreement which could chase him forever. The new “social contract” was signed only by Finance Minister Papaconstantinou. Probably the only Minister who really believed that the Memorandum could actually save Greece…

The Memorandum was signed only by George Papaconstantinou

End of Part 4 of 4.

November 17 or why this day is so important for Greeks

A date haunts Greece, the date of November 17. It’s the date when the uprising of several hundred of students, who stood up against the military dictatorship by occupying the Athens Polytechnic, was brutally crushed. The iconic photo of a tank driving through the Polytechnic’s gate is a symbol of freedom for (probably) all Greeks.

The tank just before it was ordered to enter the Polytechnic (photo borrowed from http://eteriafotografizontas.blogspot.com)

It was back in 1973. The student uprising was crushed but the beggining of the end for the military junta begun that day. The colonels fell from power a year later, in the summer of 1974.

To describe how central this day is for modern Greeks one needs to mention a few simple facts.

  • One of the characteristics that the new Greek state has (or had until recently) was the so called “university asylum”. It was an emotionally heavy (due to the Polytechnic uprising) law that officialy prohibited the police from entering any university building. From then onwards, the university compounds would be an area of free expression. In the decades that followed that law meant a lot of freedoms indeed, but few abuses as well. Police only stepped inside university areas after the local dean would ask the prosecutor for their presence. The freedom of speech boomed but Greek universities became at times a haven for different sorts of criminal activity (from rioters who caused mayhem and then hid in university buildings, playing hitch and hike with riot police, to people selling copied DVDs). In any case that law was so emotional for Greeks that, despite its occasional abuses, people were more or less supporting or tolerating it.
  • Another illustrative fact is that the biggest terrorist organization in Greece was named after that date. November 17 aka 17N. It was the Greek version of Red Army Faction or the Red Brigades, a pure urban guerilla movement targeting individuals who were connected with the dictatorship or the establishment and was relatively popular, especially up until the end of the 1980s.
  • The 1967-1974 dictatorship was one of those CIA sponsored coup d’ etats that were so popular back then. The American role behind the scenes would never wash away from our collective memory. Even today, people in the streets would tell you things like ‘The Americans are behind everything”. The first victim of 17N was Richard Welch, CIA’s station chief in Athens back in 1975. The last one was Stephen Saunders in 2000, he was the military attaché of the British Embassy in Athens. So you get the picture and now you know all about the infamous Greek anti-americanism. This is why the 17 November demonstration always begin from the Polytechnic and ends at the American Embassy.

Graffiti at the Polytechnic's gate: "Kick USA out" - "Kick NATO out"

This year’s celebration for the 17th of November is a special anniversary. It’s not a round year number as the media people would suppose (it’s 38 years since November 1973). It’s special because last summer the Greek government passed a new Education law which abolished the “university asylum”. The law, which contains much more serious reforms to the Greek Higher Education system, was suspiciously passed at the end of August, a time of the year when, traditionally, important legislation is not discussed. Mysteriously, the abolition of the university asylum was discussed (and rejected) only 6 months earlier, but last August both PASOK and ND voted for the new Education Law. So this will be the first time we celebrate the day the abolished university asylum was inspired from. It practically also means that rioters cannot hide in university buildings any more. Of course police (and the government that is ordering the police) are not stupid enough to start wandering in university classrooms chasing rioters or trying to find an answer as to why they never managed to study anything.

Today there is no 17N. There is only the government to terrorize the citizens. After the “accept these measures or we’ll run out of money” blackmail we’ve been hearing a month before every new wave of austerity measures, they now try to scare people away from the demonstrations by leaking information or implyinh that there will be too much violence. The Minister of Citizen Protection (no, seriously, it’s not an Orwellian joke, that’s the official name of the former Ministry of Public Order), Mr. Christos Papoutsis, has informed us that there will be around 7.000 policemen in the streets of Athens patroling and preventing bad things from happening. A week earlier he has met the Deans from all Athens’ Universities in order to discuss how they will better protect this year’s celebrations.

It’s interesting to have a flash back here.

Christos Papoutsis was the president of the Greek National Union of Students between 1978 and 1980 and Deputy Secretary of PASOK Youth Movement for about the same period (1978–1981). From 1984 to 1995 he was a Member of the European Parliament and served as a EU Commissioner from 1995 to 1999. For many Greeks he belongs to the degenerated “Polytechnic’s generation”. This was the generation which participated in the uprising and who belonged, politically speaking, to the Left. A lot flirted with PASOK and became politicians in the 1980s and a lot from this lot also were corrupted by consecutive years in power. Although Papoutsis was never found guilty on corruption or embezzlement, Greeks didn’t forget (and some never forgave) the fact that as a Minister of Mercantile Marine he did not resign after the MS Express Samina disaster in 2000.

But there is another more impressive example of the so called Polytechnic’s generation. During the uprising the students, calling themselves the “Free Besieged” (a reference to a poem by Greek national poet Dionysios Solomos inspired by the Ottoman siege of the city of Mesolonghi in the 1820s), barricaded themselves in and, using laboratory equipment. constructed a radio station that repeatedly broadcast across Athens this message:

This is the Polytechnic! This is the Polytechnic! This is the radio station of the free struggling Greeks. Down with the junta, down with Papadopoulos (the junta leader), kick the Americans out, down with fascism, the junta will be brought down by the people… People, come out to the streets, come to support us and you will find your freedom…

The female voice of that message which was repeated over and over again belonged to Maria Damanaki. She was then a member of the Communist Youth (KNE). After the fall of the colonels’ regime, Damanaki became an MP with the Communist Party (KKE) and then with the more progressive Leftist party, Synaspimos (Coalition of the Left) of which she also became leader between 1991 and 1993. In 2003 she resigned from Synaspismos and when George Papandreou succeeded Costas Simitis to the leadership of PASOK (January 2004), she decided to join with him. That decision came despite the fact that after her departure from Synaspismos she had ruled out the prospect of her joining PASOK. After several years as a PASOK MP, Damanaki was nominated as the representative of Greece in the European Commission and on 27 November 2009 was appointed as the Commissioner for Maritime Affairs and Fisheries. Since the 1973 student uprising, this iconic figure of the Polytechnic generation has managed to travel across the political spectrum, from the communist left hardliners to the practically liberal PASOK. And, just recently, in May 2011, I was totally disappointed to see her participating in the blackmailing game of the government in order to pass another round of austerity measures. “Either we agree with our creditors on a programme of tough sacrifices and results, undertaking our responsibilities to our past, or we return to the drachma” she said, being the first senior Greek official to raise that possibility.

The Athens Polytechnic courtyard after the end of the students' uprising

Her statement shocked Greeks, a lot resigned from their objections, Athens saw the biggest demonstrations in decades, but the measures were passed as Memorandum No2. It didn’t sound as sweet as that young girl’s voice which was so thirsty for freedom. Here’s how sweet it was:

Another originality of this year’s celebrations is that, for the first time, the Minister of Education, Anna Diamantopoulou, will not visit the Polytechnic in order to lay a wreath in the memory of the students who died. The crowd would probably attack her physically not only because she is a member of this government but especially because she introduced the new Education law that caused so many reactions. And guess what! If she’d go, she wouldn’t be in a university asylum anymore. Anna Diamantoulou said in a statement: “Respecting the Polytechnic means, above all, respecting the truth. And the truth is that, under the circumstances which have  been created by the non-democratic actions of some dynamic minorities in the past years, there is absolutely no point to lay wreaths accompanied by either the police or the party supporters”. As my friend Ioanna commented “what’s her problem? everywhere she is going, she is accompanied by cops or party dogs anyway”.

Banner hanged from the Polytechnic's roof - the word "Freedom" is written on it