Sunday 4 September 2011


Returning to Greece after a 2-month work sojourn in France, Cyprus and a few other countries, I am sardonically following Greek custom in wishing my friends «Καλό Χειμώνα» - «Happy Winter». With the temperature reaching 38 degrees today and tempers short due to a strike of the Athens Metro and Train system, winter seems a long way away.

I have made good use of these past two months. The last one, August, was spent largely in the northwest corner of France, in Bretagne, a blessed land of green pastures, granite cliffs and long sandy beaches, where everything seems to be in its place, according to custom and common sense. People are polite; the food is excellent; there is no end of cultural or recreational activities, from church concerts to market fairs to guided chateaux tours to golf and sailing and kite surfing. The contrast with Greece could not be greater.

My return to Greece is, as every summer, marked by a power sense of unreality. This is heightened by watching television news broadcasts, which give the most visceral sense of what’s happening at a high political and social level. Three points really stood out today:

1.     ET3 proudly reported that a church dating to the 12th century in Tournikiou Grevenon was being moved on rail up a hill to avoid an encroaching artificial lake, the result of a dam. “The longest such removal in Europe”, crowed the commentator. The expenses were paid by DEH, the Public Power Company of Greece, and perhaps one of the worse-managed public utilities in the country. Besides the shock of that familiar triumphalism “the greatest in Europe….”, I couldn’t help but wonder: why is PPC, and therefore the Greek taxpayer, paying for this? Why doesn’t the Greek Orthodox Church move its own church? Sure, I know this is cultural heritage. But Greece is bankrupt, and PPC is about to be hit by major financial problems from (a) carbon emission taxes in 2013, and (b) paying higher energy feed-in tariffs from PASOK’s grand renewable energy drive. Does the Greek public sector really understand the meaning of austerity?

2.   This was, however, hardly the most shocking news. I reserve that for the continuing occupation of public universities and schools, due–once again–to higher education reform.  The reform bill is relatively minor: it involves evaluation of teaching staff and greater powers for rectors under a decentralisation package. These are commitments already made at the European level by the Bologna process, and already adapted in Greece under the reforms made by Minister Marietta Giannakou under the previous government. They have, of course, never been implemented.

If anything, the reforms don’t go far enough: They don’t allow the function of private tertiary level institutions: the public sector retains its monopoly on recognition of degrees from public universities. They don’t institute a co-pay principle: students continue to get everything for free, including tuition, books, etc. They don’t truly decentralise the universities, transforming them into independent institutions with a budget depending on enrolment, the ability to raise funds independently, and truly autonomous decision-making, e.g. on admissions.

We were treated to the spectacle of Anna Diamantopoulou, Minister of Education, imploring the head of the Synaspismos Party, Alexis Tsipras, in coded language during a Parliamentary debate, to stop occupations of schools and universities, and restrict the debate to the Parliament. Once again, at least two political parties are using proxy groups to occupy and destroy public property, which in many other countries would be considered illegal if not treasonous activity. In Greece, this is considered normal.  

3.  Another really shocking development was the proposed law on illegal construction proposed by Minister of Environment George Papaconstantinou. This law foresees the partial legalisation (over a limited term of 30 years) of houses built on public or forest land, in exchange for a financial fine. This is yet another desperate attempt to gain revenue, ignoring the fact that laws have been broken, and contributing to the sense of total lawlessness in Greece. What this law proves is that few laws much be respected, since they will be recalled or “settled” in the future.

Furthermore, it becomes clear that this law does nothing to address the root causes of illegal activity on public land: the lack of a unified, town planning strategy which would progressively free land for integrated development. The Ministry of Agriculture, for instance, has proposed turning over unused public land to young, unemployed farmers for development. This will lead to yet more investment in a low-productivity, subsidy-driven sector of the economy. Why not implement a similar programme for development of public land for urban development and vacation residences?  

And apart from this, it appears that little has changed. There is still no plan for privatisation, on which so much of the second bail-out plan is based. No plan for a real or useful liberalisation of closed professions. No resolution of the taxi crisis. A growing deficit and a worsening economic situation, with unemployment over 16% and a GDP decline now forecast at a minimum of 5%. The Athens Stock Exchange has reached historic lows. The instability in the banking sector continues.

Some good news is occurring, however, although we probably won’t see this reported on the private TV channels:

·       Tourism is estimated to rise from about 15 mln arrivals in 2010 to about 16.5 mln in 2011, based on industry estimates. This rise is largely attributed to the elimination of Tunisia and Egypt as holiday destinations, rather than to any organised national plan for tourism.

·       The number of new business starts is rising due to simplified procedures as well as due to the growing recession, which is forcing people to take their economic futures into their own hands, rather than rely on employers.

·       A major Germany investment in photovoltaic energy production is set to be announced in September or October. There are approximately EUR 20 bln in foreign investments undergoing a fast-track licensing procedure. A deal on the Hellenikon airport site may also be announced soon.

On the downside, the Troika will likely report a lack of progress on major reforms as a result of its most recent evaluation visit, while Greece’s deficit and public spending continue to rise over the planned target. Far too many reforms have been announced but not implemented. Rumours and reports of elections and an uncontrollable crisis situation abound.

I expect further demonstrations and gridlock, slow implementation of reforms, and the likelihood of a major international crisis, both economic and military, as we move into the fall. It’s definitely going to be a “hot September”, no matter what our wishes for a good winter may be.

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