66 responses to “Greece and the euro: The flight of Icarus

  1. Thank you for this analysis. Had I been in the audience, I would have asked a few questions for the purpose of better understanding of Greek society:

    (1) Why does Greece appear such a divided and divisive society? What are the roots of that? Here in Chicago, one of the largest diaspora cities, we see Greeks sticking together, supporting one another. There is ONE Greek community. Why is this so different in Greece? Sometimes, one gets the feeling that there are two different Greece’s and two different kinds of Greeks.
    (2) Greeks outside of Greece tend to be very cosmopolitan people. Many Greeks in Greece are, too. But why are so many Greeks in Greece seemingly so suspicious of everything that is “foreign”? There is a debate on Youtube between the old Karamanlis and the old Papandreou. The former argued emotionally that “Greece belongs to the West!” The latter deadpanned him by declaring “Greece belongs to Greeks!” I can’t think of any European country where that kind of an exchange would have attracted much interest in the public.
    (3) Why does the ultra-rich Greek oligarchy do so little for their home country which they undoubtedly love and from which they derive great benefits?
    (4) Greece may always have been a rather unfair society in terms of income and wealth distribution but this has been aggravated to extreme levels since the crisis. It often seems like the suckers & suckees. Apart from the loud Trispras followers, most of the suckees are still quite tolerant. Where does that tolerance with unacceptable conditions come from?
    (5) Finally, where does the Church come in in all of this? Possibly no other European country has such a close linkage between church and state as Greece does. No cleatr separation of church and state. When church and state are close together, why does the Church not play a more active role in pointing to unacceptable realities?

    I am not asking that you answer each of these questions. Perhaps other readers will comment on them. I just wanted to point out that these are some of the questions which always go through my mind and for which I have no answers.

    • Klaus:

      It’s very simply. Division is a form of survival and in fact an extremely successful form of survival.

      If all Greeks were united then anyone who wanted to control them could easily do so by manipulating the center of power.

      As is, by being extremely fractionalized it’s mathematically impossible to control Greece in a political setting. It’s all by design and as I said it has been learned through centuries of survival.

      The only thing one could hope to achieve in Greece is some temporary but fragile truce. The minute the truce is broken, everyone is conditioned to run in a different direction and usually towards the mountains.

      • >”As is, by being extremely fractionalized it’s mathematically impossible to control Greece in a political setting.”

        Thats too true and the current fragmentation will lead to financial default. If not know then next year latest!

    • Ad 1) All western societies are very diverse and with higher education and life style it tends to further increase.

      Ad 2) I personally know only very few Greeks, but they all are very nationalistic. Greek history before the Romans makes them proud (I admire that culture too). I know pretty well people in southern France and Italy and they also seem to be pretty nationalistic.

      Ad 3) Maybe they have given up?

      Ad 4) Mentality has formed in the last two generations before the current crisis. Part of the current protests are orchestrated by political powers, and of course there also are lots of people with realistic fear of their future.

      Ad 5) In all southern countries church is more influential than in Germany, Switzerland, Holland, Denmark etc.

      Even the Christian Democrat and former minister Heinrich Geissler recently published a book saying that capital now reigns the world in an unfavorable way! You certainly read what Archbishop Ieronymos said in Greek TV (http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_27/10/2012_467647) This definitely will not improve the mess.

  2. Klaus, you are very correct in your observations but you fail to link these traits and divisions to Greece’s modern history that has played a major role in nurturing these traits. In Greece it has always been ‘us’ and ‘them’. History will show you that this has not been entirely the fault of the Greek people but those of the various conquerers and colonists who have created this divisiveness in Greek society and thus, in the mentality throughout her modern history. Even as recently as the ’70s it was between the right and left–if you had any family history of left-leaning politics you could not get a decent job. These problems were never properly addressed or resolved, only glossed-over during the boom years. As for the church, in my mind, it is a parasitic institution out of touch with reality.

  3. I admire the conscious effort to try and keep the script positive, and dispel myths, in what are very difficult circumstances. Pinning hopes on the highly educated younger generation is noble. My hope is that Greece is able to attract home it’s vast diaspora studying and working in more stable economies -I meet them everyday here in the UK, in London, Newcastle, Edinburgh. They speak poorly of the country that so eloquently educated them: it’s a good place for a holiday, they tell me, but no place to live. Reversing the brain drain is a crucial factor in reducing the gap between import and export deficits. Greeks are great researchers; this needs to be capitalised on and turned into product. Like you I have no easy solutions but welcome the discussion and am writing on similar issues on my blog.perryeyes.blogspot.com

  4. We can address the statement in your speech individually, but here is an umbrella statement:

    It would be naive to believe that if Greece had its financial house (meaning the public house) in order that somehow it could have avoided the crisis. We now know that much better managed economies, considered to be “models”, are in deep crisis also.

    I will say it one more time and please read my lips(no, it’s not hubris): “This is not an ECONOMIC crisis. It’s a POLITICAL and IDEOLOGICAL crisis”.

    Germany’s long held objective is/was to achieve political union in the EU. By choosing Greece as its experiment guinea pig, Germany bit more than it could chew. Greeks are the wrong people for forced experiments. Greeks are willing participants in experiments only when they see that everybody else around them has gone through the experiment first.

    It’s that simple. Germany will suffer a defeat in Greece because Greeks are not Germans nor they will ever be.

    • >”By choosing Greece as its experiment guinea pig, Germany bit more than it could chew.”

      Dean, on what planet do you live? You still owe me an answer in the previous discussion!

  5. Your speech is very interesting, because it seems more revealing than you like it to bee. Although many facts and conclusions are correct and brilliantly written, you manage to avoid the crucial point that Greece only managed to prematurely enter the Euro zone by some criminal financial tricks of the Greek government.

    I agree that it is psychologically understandable that you and other journalists avoid to publish the whole truth, but there can be no doubt that this provably leads to misbeliefs in the Greek population that prevent the majorities in a democracy to realize those prerequisite reforms you also mention.

    By your very smart use of the words crisis and hubris, you avoid to bluntly tell of what ugly death Icarus was overtaken.
    >”Joining the European Monetary Union was Greece’s chance to take flight and soar above the problems that had dogged the country for decades.”

    When in November 2004 the problems became obvious, Greece again had it’s fair chance to remedy the situation. Eight years later there are some results of the too drastic treatment visible, but what I learnt from reading your blog and Ekaterimini English news in the past months I no longer believe that the current political and economic system can solve those problems.

    Nick, please explain me why no Greek media tell the plain truth to the population?

    • Where is your evidence that Greece lied to enter the euro? Check the Ameco database. There are no such statistics to back up this claim, which is repeated incessantly by those with little knowledge of the facts.
      The Greek deficit was revised in 2004 by the New Democracy government because it wanted to get one up on the previous PASOK administration and buy itself some time.
      What they did was change the way that defense spending was recorded. Instead of recording spending when equipment was delivered, they recorded it on purchase, thereby creating a bigger deficit. For the record, Eurostat had approved both methods and the eurozone was fully aware of what happened.
      That’s the plain truth.

      • I have given more detail in the discussion to your former blog entry about “anyone-for-debt-tennis”.

        Are you claiming that all those publications like BBC with that title “Greece admits fudging euro entry” are not telling plain truth?

      • @ H.Trickler: I’d propose you repeat and summarize these arguments here. You shouldn’t expect Mr. Malkoutzis to crawl through the more than 100 comments of that discussion. 😉
        > Are you claiming that all those publications like BBC with that
        > title “Greece admits fudging euro entry” are not telling plain truth?
        Meanwhile I suppose, anywhere here you can find another main differences between the public debates in Northern Europe and in Greece, resulting in a kind of culture clash.

    • HT:

      The essence of you argument is:

      1. Why don’t Greek journalists become obedient instruments of the German line? and,

      2. “when are you people will tell the “truth Made in Germany”?

      And this is precisely what we want to avoid.

      We want, to the largest extent possible, Greek journalists unbiased and therefore able to judge and pin point the failings of the system (whether the system is endogenous or exogenous).

      I once had an issue about this with Nick but then I realized that he was entitled to his opinion.

      Imagine a world where the official single line prevails. Isn’t this what fascism is all about?

      What you seem to suggest is that Greeks are prolonging their own misery by resisting, which is the precise argument of a typical opressor.

      • Dean, if you tell me that Germany has bought all those numerous journalists that wrote all the texts I mentioned in the previous discussion, including BBC England (!!) then Greece definitely is on another planet 😉

    • I think one should drop this argument about Greece’s having “cheated its way into the Eurozone”. First of all, I don’t think it is correct (my understanding of the situation is as described by Nick). But even if that weren’t so, it would be a question of a few basis points above/below the 3% limit. That is immaterial.

      A lot of smart financial engineers advised probably ALL countries how they could “massage” their figures a bit. In Austria, the most popular instruments were to outplace debt into autonomous entities which had the material or immaterial guarantee of the state but did not count against Maastricht; or to use a lot of PPP-models which were PPP only pro forma but exclusively public in reality; or cross-border leasings with US SPVs; etc.

      It think this alleged non-compliance as regards the 3% limit as well as the cross-currency swaps with Goldman are blown way out of proportion. To focus on these issues does not serve any constructive purpose whatsoever. On the contrary, it only distracts from what is really essential.

      One thing is noteworthy, though. If I recall correctly, the countries in the South actually viewed Maastricht and the Eurozone’s straight-jacket as a blessing in disguise which they welcomed at the time. The arguments which I remember went something like: we want stability; we need reforms; we can’t manage that alone; the Eurozone will force us to do it; that is great! Well, somewhere along the way, it turned out that the Eurozone was not the straight-jacket which would force reforms but instead a seemingly unlimited source of cash flow. And as long as cash flows, one doesn’t reform.

      • I never checked how figures without cheating would look. But it must have been considerable. I do not know how much window dressing was done in Austria, but obviously it must have negligible because 3 years later the Austrian figures still looked pretty good, while Greec already busted.

        And if you do not tell the population the beginning of the whole mess they either find marvelous writings regarding Ikarus or come to the conclusion that Germany is to culprit for everything.

      • My understanding is that the difference was something like 2,9x and 3,0x, i. e. a range of less than 20 basis points but perhaps Nick can clarify.

        I wasn’t suggesting that Austria would not have met the targets without windowdressing (it would have by far). I was just saying that EVERYONE
        was and still is massaging figures when necessary (Schäuble: “Auch wir bescheissen manchmal”). Today, it’s a bit different for Austria than it was then because with so much debt added, a very bad debt situation would turn to terrible if all debts were aggregated (about 20% higher than actual). While we are speaking from Austrian to Austrian: Austria shows almost extreme parallels with Greece (huge black economy, much tax cheating, much corruption, 2-party dominance throughout society, huge public sector; etc. etc.). The major difference is that Austria has a well-functioning and value-generating private sector and Greece does not.

        Again, I really don’t think it serves any purpose to belabor the issue of the 3% more than a decade later. In fact, I would argue that Germany’s/France’s precedent of violating the Maastricht criteria and treating it like a cavalier’s delict did much more damage to the longer-term discipline in the Eurozone than anything else.

      • > In fact, I would argue that Germany’s/France’s precedent of violating
        > the Maastricht criteria and treating it like a cavalier’s delict did much
        > more damage to the longer-term discipline in the Eurozone than
        > anything else.
        I think the same. If there is a point to blame Germany for the actual crisis, it is the way how it violated Maastrich criteria first and was not punished for doing so. That was an bad exemple of moral hazard for each one following.

  6. failedevolution

    Ambiguities, contradictions, stilted questions, but truths also


  7. > What you seem to suggest is that Greeks are prolonging their own
    > misery by resisting, which is the precise argument of a typical opressor.

    Even if (or because? ;-)) H. Trickler is an Austrian, he seems to know quite well about the problems of societies (as well as people) refusing to accept displeasing realities and in the short-time-hurting, but long-time-liberating effects of the acceptance of even humiliating realities.
    He (and I and many others) may have the growing impression, that main parts of the Greek Society still prefers to close their eyes toward “own” faults, preferring to play blame-game toward others.
    That “eye closure” is the best recipe to repeat the same mistake again and again.

    • In no way are the Greeks closing their eyes to their ‘own’ faults. However, it is easy for an outsider to simply say accept even the most humiliating of realities or else… At this point in time and with the implementation of the newest measures demanded by the Troika imminent, the society cannot endure anymore until it has become accustomed to the new order and can stabilize itself in anticipation of possible further necessary actions. We are not talking numbers here. We are talking about people, lives, aspirations and futures. We cannot divorce the humanitarian consequences from the sudden and deep financial burdens imposed by the demands of the creditors however justified they may or may not be. Who of them cares if people cannot access health care, food or are evicted from their homes? Changing cultural norms usually takes generations but what is asked and required of the Greek people is that everything must change literally overnight. I wonder who is closing their eyes to reality.

      • Unfortunately argumentation by Nick and Dean proof that they are not prepared to fully open their eyes…

        I see the same problem with lots of Greek comments in Ekaterimini english section. Sorry but from Austria this looks like Greece being on a different planet…

    • Roger:

      Let me point out the major flaw of your argument.

      When the Greek government(s) made cumulative mistakes that lead to its credit overextension, that’s the problem of the institution, not the people. If government is incompetent or dumb or corrupt then the government bankrupts and the problem is contained by starting fresh again.

      Under no circumstances you transfer burdens of the institution into the backs of innocent folk.

      What you are attempting to do here is to transfer ownership of a problem from a bureaucratic/technochratic class to millions of citizens who simply did not know, were not aware or never been informed of the true magnitude of such problems.

      Can you give me one grounded reason why the Greek people should take ownership of a failure and in the process keep alive the entire banking EU system and other economies going into the tank? Who is help who here? Instead of you and other Europeans being eternally grateful that average Greek citizens are saving your a$$, you got the nerve to tell us that we ought to be more cooperative?

      I think you got it all wrong my friend.

      • Louna Coumeri

        i’m with you Dean!

      • >”Under no circumstances you transfer burdens of the institution into the backs of innocent folk.”

        Sorry Dean, but this argument is far below your level and once more proofs how feelings drag you away from logic:

        It is _always_ the innocent part of the population that pays the bills of the emotional and careless elites, beeing it in war or economic crisis.

        You never answered my question if you have withdrawn your savings fron the unsafe accounts of Greek banks, and I have no doubt what a honest answer would be 😉

        Less educated and poorer parts of your country do not have this possibility and contrary to you they not even know what would happen in case of default of the Greek state.

        I would be surprised if the do not learn that lesson within the next 12 months.

      • > When the Greek government(s) made cumulative mistakes that lead to its credit overextension, that’s the problem of the institution, not the people.
        The mistake has been made by the government, yes, but sadly the price usually has to be paid by the ordinary people. So usually it is the problem of the ordinary people and they should be interested to take care it wont repeat.
        So I still wonder why there is not at least an kind of crminal investigation toward the responsible politicians in that government.

        > Under no circumstances you transfer burdens of the institution
        > into the backs of innocent folk.
        Nevertheless If you devaluate the currency or increase the depts or whatever else, sadly in all cases the ordinary people will suffer. Hence they should take a better control of their government.

        > Can you give me one grounded reason why the Greek should […]
        > keep alive the entire banking EU system and other economies
        > going into the tank?
        As I told several times I’d advise to declare bancrupt and leave the EU banking system alone with their depts. But even that will not solve all problems for Greece.

        > I think you got it all wrong my friend.
        I simply fear that be declaring “Greece is totally innocent” and not analyzing also the own mistakes of government and society (including the still missing check-and-balance-system that stops the goverment from ruining a country) the greek society may not learn the lectures it needs to avoid falling to the same traps in short time again. That would be a quite high price for ignorance.

      • Roger:

        You seem to be proud of Germany/Austria merely being one step above the most imperfect form of government which is Tyranny. In essence what you are saying to us is that after centuries of tyrannical rule you are now beginning to enjoy another form of imperfect government called democracy.

        Are all German/Austrians/ Northern Europeans so ignorant of what constitutes a higher form of government? Have you guys ever read Plato and the optimum hierarchy of types of government?


    • I do not think that Greek population should feel humilated if their former government lied to EU. This is the sole (moral) responsibility of those who commited the crime.

      I however see complicity if journalists today whitewash the past or play the blame game or hide behind well thought out narratives where Ikarus becomes an ideal…

      • HT:

        We are not humiliated about our “governments”. We are simply indifferent about them. We have seen so many “governments” throughout our history to know that rarely are governments of the people and by the people.

        If they mess up, that’s their problem, not ours. We do not equate temporary “governments” with the ideals of Greece or of our nation. We innately understand that governments are fallible because all of us people are fallible.

        And there is no particular desire of any Greek to sacrifice so that he/she can save a transitory “government”. Governments are a dime a dozen. If you don’t like one, you vote in another and if they prove below the task you vote another yet. Until you find a competent and responsible government.

  8. Pingback: Greece and the euro: The flight of Icarus | Inside Greece | billet vert

  9. @Dean Plassaras | October 29, 2012 at 9:06

    This attitude might explain the past 30 years of Greece and many Italiens also think along these lines.

    I am however convinced that with such misconception Democracy is bound to fail, and Greece might the proof to this theroy. If in Italy Mr. Berlusconi or some similar person should follow Mr. Monti they will fail too.

    • HT:

      Austria and/or Germany are hardly paragons of democracy. You have lived for ages under authoritarian regimes, Prussian mono cultures, Kaiser and other ridiculous “Father figures”(you even call your country Fatherland whereas we call ours Motherland). In fact, your democracies are the least mature of all democracies.

      You are born with an ingrained obedience to the state (even if the state turns out to be pure evil), you easily surrender your freedoms to some form of state collectivism or another and you approach your governments with some reverence as if they descended from heaven.

      To us you look like immature children, afraid to be punished and unable to be free. To yourselves you appear to be “responsible” citizens and doing your part of the sacrifice required for that all of you remain in prison. Because how else you could be exploited if not by voluntarily surrendering yourselves to the abuses of authoritarianism which seems so natural to you and so abhorrent to us?

      • Dean, you not only live on a different planet, but also in a very different period.
        Now doubt that Germany and Austria have had bad periods before and during WW2, but afterwards democracy is live and healthy and works as expected!

      • HT:

        Are you suggesting that 60 years of democracy is enough to develop a democratic culture?

        We have invented it 2600 years ago, and you want to be an expert in 60 years?

      • > Austria and/or Germany are hardly paragons of democracy.
        I wouldnt use your words, but you have one central point: The stability proof of a democracy comes when it is burdens by heavy internal and/or external stresses, when it is close to get overburden.
        Germany and Austria actually are quite fine, the burden is relatively low.
        Greece instead since several years faces the heaviest internal and external stresses it had to since tens of years. So it is in a situation it may have to face a real test of its democratic stability. As long as Germany or Austria do not have to proof their own stability at a similar test in this times, we cannot judge about Greece.
        And not to forget, in the last century Germany and Austria both proofed to be to weak to stay democratic under the very heavy burdens they had to carry.

        > You are born with …
        I dont know if this and the next chapter is the disabled attempt of an insult or simple ignorance, but its so much under your usual level I prefer to ignore it. You can do it better.

      • > We have invented it 2600 years ago, and you want to be an expert in
        > 60 years?
        So you should remind quite well that it is not only the question of “inventing” than also the question of defending a democracy toward its enemies. The ancient greek polis have shown lots of examples how a democracy has gone lost again after more or less years. Not to speak about the modern greek democratic track record of just 38 years since the last dictatorship.

        By taking a look to the persons governing modern greece I got two impressions: http://en.wikipedia.org/wiki/List_of_Prime_Ministers_of_Greece
        1. I feel reminded to an oligarchy of familes:
        – Konstantinos Karamanlis and Kostas Karamanlis,
        – Georgios Papndreu, Andreas Papandreou and Giorgos Andrea Papandreou,
        – Eleftherios Venizelos, Sophoklis Venizelos and Evangelos Venizelos
        2. I do not remind knowing of any other coutry requiring 185 (!) prime ministers / heads of government in the 190 years since 1822. Even Italy seems to have a solid govermental track in comparison.

  10. HT:

    Maybe you want to refresh as to civic bonds:

  11. Seriously now guys. I think it will do you a world of good if you quickly read the synopsis here. Not only it will assist you tremendously with understanding the ideal but it will also clarify many issues we seem to be struggling with. It only takes a few minutes.


      • @ Dean: Even if you seem to open a side show, its a quite interesting one. I have to admit I didn’t know that book of Plato neither his dialog of an ideal state, so his valuation was quite surprising for me, but worth thinking about it. So I have to sidestep a bit for reading and thinking. 🙂

      • Roger:

        What is most amazing is that the book was written 2500 years ago and is still more advanced than anything you can think of today. 🙂 Oh, well! Here come the Greeks again!. 🙂

      • Excurse about Platon, his five regimes and his critic Karl Popper

        > and is still more advanced than anything you can think of today.
        Hmmm. If I were Greek maybe I would say so too. 🙂
        But as it is with everyone human beeing there is a good chance that time has shown the flaws of its ideas – and I suppose it did.

        I am a bit puzzled for getting the impression that German philosophers discussed a lot about the ideal government system of philosphers king, but seems largely having ignored the other four options that Plato seemed to declare as beeing more realistic, and Platos motivation to balance them up in that succession.

        Spontaneously I felt most sympathetic with the critic of Karl Popper, even if he seems to be unfair in accusing Plato to ignore developments and findings that happened thousends of years later, that Plato could not know about it.
        But I feel more comfortable with Poppers sceptical approach I would describe as “Measure the leaders design in “How to avoid the worst, if the government fails and abuses its power” than in “How to get the best way if the leaders remain perfect”. As you actually see in Greece, a failing government is able to ruin the country. And as we know in Germany, it is also able in muatrdering millions of people and destroying a continent too. So its important seriously trying to avoid the worst.

        Following Popper I see the main advantage in a democracy in the ability to displace a leader without the need of a bloodshed. Additionally I see the strict neccecity to install checks and balances to prevent ill-fated governments of abusing their power to much.

        Maybe Germans in history concentrated too much in search of the ideal leader in kind of “philosophers king” and hence forgot installing solid checks and balances.
        – Even in my family some ancestors were really idealistic followers of Hitler and its proposed idea of a nation uniting the whole people as a “race state” (even if it is really hard for me to understand that today), later felt bitterly betrayed. As far as I know about them they were really honest people in ordninary life, what makes it nowadays even harder to understand their enthusiasm for Hitler.
        – As well in Eastern Germany I personally know several really idealistic minded people and strong followers of communistic ideals feeling bitterly betrayed by the abuse of the idea in real communist regimes. trong ideals but no controls against power abuse.
        – As well I remind well to the Prussian King Frederick the Great (http://en.wikipedia.org/wiki/Friedrich_II_of_Prussia) who aspired to be like and partially was like a “philosophers king” in the Plato style (eg writing an “Anti-Machiavel”), but who had by far too many flaws to depict him as a role model for a government. By having nearly absolute power of course he also abused that, e.g. by starting totally hazardous, kamikaze-style wars against Austria.

        History has proven much too often that idealistic utopians, if not bound by checks and balances, anytime abused the power. And I suppose among the best check and balance is the democratic election of ALL people as best chance to displace leaders without bloodshed.

        So I won’t follow Plato in weighting the lead of few above the democratically elected leaders of all in his five regimes neither in despicting a “philosophers king” with abolute powers as an ideal leader.
        But nevertheless thank you a lot for opening that side show. 🙂

      • Roger:

        That’s not a side show. That’s the main course 🙂

      • Dean:
        > That’s not a side show. That’s the main course 🙂
        What do you mean with it?
        Is there a serious discussion in Greece that following Plato, a government of a small elite (eg a military junta or a communist group following the leninist avant-garde modell) should be preferrable toward the democracy modell for Greece?
        Or what are you talking about?

      • Roger:

        What I mean is that politics (especially the good type) are far, far, far more important than economics. The main course of society is its brand of politics not the state of its economy.

        In any event here is the latest:


  12. Klaus, I’m coming late to this commentary but I’d like to have a go at answering your (very pertinent) questions.

    I start by reversing the order of 1. and 2. –

    (2) The Karamanlis – Papandreaou debate refers to our recent post-war history as a client state of the USA.
    Greece was the first guinea pig of the Domino theory due a) to its geopolitical importance in the Eastern Mediterranean, and b) because it emerged from WW2 with its infrastructure totally destroyed, and surrounded on all its land borders by new communist states. Greece rapidly descended into civil war, communists vs non-communists. The anti-communist side won with the help and intervention of the British and USA, and when this was over the war-impoverished Brits handed their part to the Americans. Immediately following the cessation of conflict, the Truman Doctrine was formulated and put in place in 1948, to re-construct the infrastructure in Greece, with the US Embassy ‘keeping an eye on’ and advising the government. (The Truman Doctrine mutated into the Marshall plan for the rest of Europe in 1950).
    To cut a long story short, the USA failed to support the modernising government of the first (George) Papandreaou, and gave succour to the junta which replaced it, of which one of its 3 Colonels was a former CIA link.

    Karamanlis was not pro-junta, but he was pro-west and pro-American (with a pinch of salt). Older than Andreas Papandreaou, he had been the government technocrat who oversaw the infrastructural reconstruction of the country under the Truman Doctrine. His pro-West attitude was also based on earlier modern history, the Balkan wars and Turkey/ Micrasia, in which he saw that Greece needed NATO and western backing for self-protection.

    Andreas, who had been jailed by the junta and fled the country immediately after, (as did Karamanlis), is talking about the need to free ourselves from being a US vassal state and Greece taking back his own destiny. On becoming PM, his first 2 acts were to throw the US bases out of the country, and join the (then) EEC.

    In effect they are talking past each other – while basically agreeing with each other though not on the details. A fascinating debate.

    1) Greeks are divided on the surface but not underneath when push comes to shove. Partly geography (islands & highlands – we’re hard to conquer), and again, the recent history in (2) above. Specifically, the communists suffered immensely and unfairly after the civil war from the US hegemon, many incarcerated for years, and denied jobs. Yet most greeks had joined the communist party not as cold war ideologues, but because it was the most effective social force after WW2 for interior aid and social help. Spirou Mercouri, Melina’s father, the greatest and only effective Mayor of Athens, was Communist.
    This political divide lasted basically until we joined the eurozone.

    3) Good Question!! This was not the case historically. Modern Greece from the Filiki Etairea onwards benefitted enormously from diaspora and interior benefactors – Syngrou, Pezmazoglou, Zappeios, Benaki..the list is incredible. It benefits now from many of the foundations of the shipping magnates – not least the Onassis Foundation which is the main supplier of student scholarships abroad.

    Today’s bunch are nouveau riche benificiaries of government cronyism. The ones who when they cheat you, see you as the fool.

    4) “Apart from the loud Trispras followers, most of the suckees are still quite tolerant. Where does that tolerance with unacceptable conditions come from?”
    It is certainly not true that only Tsipras (SYRIZA) followers are intolerant of conditions. The vast majority of the country is totally intolerant, they are simply following different political paths. Dem Left, ANEL, Chrysi Avgi, KKE are all “anti” parties. And most of the recent ND voters are intolerant but terrified of being kicked out of the euro. These recent ND voters proved to be mostly over 55. I can’t speak about PASOK – joke! – except to say they are intolerant on paper.

    5) The church has just this week taken a hard public line against Chrysi Avgi. I think they’ve been keeping a low profile due to their immense land wealth – which of course has proved to be a liability with all the land taxes. However on the ground they have been unbelievably pro-active. Under Ieronomos, and studying the social programmes of the Church of England, they instituted Church in the Streets 4 years ago (feeding hot meals to 2000 illegal immigrants a day in Athens centre), set up adult and children’s Hospices, education programmes, are building hostels for the homeless. Every parish church in Greece feeds a hot lunch to needy parishioners, and provides clothes, blankets and other succour.

  13. Dean, I’d like to thank you for the time and effort you spent to defend your standpoint. The links to publications you gave have helped me to understand how a very well educated and intelligent person actually can happily live on another planet in a different epoch.

    > “If government is incompetent or dumb or corrupt then the government bankrupts and the problem is contained by starting fresh again.”

    You certainly are not alone with your attitude towards the state in Greece. It is well known most people in southern countries see no problem when politicians go the line of least resistance and finance the state by inflation and in worst case by default once per century

    By asking to become part of the Eurozone, Greece had to change such attitudes and follow the rules of the austere regime. If you now blame the Germans, this is psychologically understandable but an unfunded and unfair reaction. If Nick now publishes a beautiful story about Ikarus, it pulls the wool over the eyes of the population and will not be helpful at all.

    During the past 8 years Greece had a fair chance to become a modern and efficient state of the euro zone. This was the duty of Greek parliament and Greek population, not of Euro bureaucrats. You got a lot of money from EU which was not spent to do vital reforms.

    Now, I see only two solutions:
    Go bankrupt and change to Drachma as you explained before. This will not be the end of the Euro, and in maybe four years Greek economy will have recovered and inflation will help to make the balance as we all know. The other solution is highly speculative and of high risk: Get some Greek to go the way Ataturk went in Turkey.

    In both cases I wish you good luck, and Dean, you certainly will find some old Greek philosopher explaining that hatred always falls back to the person applying it (even if there would have been reason for hate!!).

    I go to holidays now and will no longer respond.

    • Happy time off.

      We will bankrupt as you suggested but we will remain in the euro. Just follow what Ackermann says:


      • Probably. But how will it secure Greece to get into the same mess soon again if they shouldn’t install better checks and balances controlling the government?

      • @ Dean: The discussions of the last days started me to rethink several economical questions. In some points I am still totally controverse to your positions, maybe partially due to a different cultural background. In other points at least I started understanding your logic, even if not beeing convinced if I should follow it, in even others I would follow you in huge parts. By also reading some economical blogs I wouldt be interested to know your opinion about two special articles. As far as I understand ypu they may be compatible to your opinion and also seem to be very logical for me. What do you think about them and their conclusions?
        1. (Same article in German and English): http://kantooseconomics.com/2011/08/16/ryan-avent-und-das-gespenst-der-1930er-jahre-ryan-avent-and-the-ghost-of-the-1930s/
        (Comparing the actual economical crisis with that of 1920’s and 1930’s and calling for dept cut, but also asking if a leaving of EURO-currency may help))
        2. (Same article in German and English): http://kantooseconomics.com/2011/04/18/hundert-jahre-alte-lehren/#more-3502
        (A comparison with a european gold standard 100 years ago and some conclusions)

      • Roger:

        I have enough trouble conversing with at least 3-4 guys here than to start another disagreement with another blog.

        In general, I consider the arguments of gold bugs sort of ridiculous and self-serving. If you are into wealth protection you should have bought gold when it was $200 an ounce not when it’s 9 times higher at $1800/ounce.

        The sad conclusion of the gold argument is that whatever you think your total assets are today, in reality their true value is about 1/10th . So, if your total wealth is 10 Million then it’s real value is about 1 Million or below.

      • I am far away of advising any goldbugs. 😉
        I was more interested in the comparison to a former monetary union.

        It’s closer to the ideas that:
        – indeed a debt cut is nessecary
        – perhaps the core inflationary rate of EZB actually is to low for such a diverse economy as europe and has to be increased (Something I start to believe but what will be really (!) hard to tell germans.)
        – it still is not shure if it is better for greece to stay inside eurozone and adapt or leave eurozone and devaluate.

      • PS: I dont stick in Gold because it has no real inner worth.
        You can’t eat it (like food), you cant’t live in it (like houses), you cant produce stuff with it (like industry), you cant heat with it (like oil), you simply can adore it as a golden calf.
        Thats not mine. 😉

      • Roger:

        Gold is a form of money. It may not be a form of money easily converted but it is money novertheless.

        My point here is that most German savers fear inflation, not realizing that 9/10ths of their wealth has already evaporated.

        Their behavior reminds the proverbial “closing the barn door after all the cows have left”. What they think they are protecting is already gone. And what’s left will be gone too. It’s just a matter of time.

        The entire world has already decided that the debt burden which weighs throughout the globe will be addressed with controlled inflation.

        Germans for some reason or another seem willing to fight the inevitable. They could try but they will lose for sure.

  14. Hear! Hear! A well-balanced and nuanced presentation of the current predicament Greece is faced with.

    That said, is it possible that more weight to the origin of the Greek crisis should be placed on what happened in the eighties rather than in noughties? There is a discourse going on in Sweden (where I am based) that the euro is to blamed. While there is some truth to that argument, I believe that it conceals the fact that the seed of the current crisis goes way back to eighties.

    What is your take?

    • If one is to believe Prof. Yanis Varoufakis, who is probably the most quoted Greek expert in the world these days, the “terminal decline of the Greek economy started in the 1970s”. At least that’s what he said in this 1993 interview.

  15. Klaus, we both know Yanis. He is a “leftist” economist. The fact he is the most quoted is not material.

    Yanis is letting his core ideology dictate his message. According to the Greek Left, the decline of Greece started with the junta collapse because the Left failed to take control of power. And as long as the Left is out of the power game, Greece will continue to “fail”. Greece will begin to “succeed” as soon as the Left installs itself in power….or something like it the message goes.

    The problem with the Left (aka Yianis) is that they can make a pretty accurate diagnosis of the problem but then take a sharp left turn (no pun intended) and fall over the edge of the cliff. The fact that they could identify the problem correctly throws off many people into believing that they can pin point the right solution also. Nothing could be further from the truth. Yianis and I agree on about 90%-95% of what he says but then we radically disagree on the solution required.

  16. Pingback: Sandy Cometh | AgoraNews

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