Greece: A reality check

Petros Giannakouris/Associated Press

And like that… poof, the crisis is gone. More bailout loans approved by the Eurogroup, a sovereign rating upgrade from Fitch, economic sentiment at the highest it’s been for the last 40 months, the Athens Stock Exchange becoming the best-performing stock market in the European Union and Greek bond yields dropping below 9 percent for the first time since 2010 have helped give the impression Greece has overcome the worst of its problems and that recovery is within touching distance.

This is certainly the story that the government will, understandably, run with. The three parties in the coalition have taken on considerable political cost in sticking with the EU-IMF fiscal adjustment program and their only hope of survival is to convince a large enough section of the Greek population that the chosen path leads from economic catastrophe to stability and then prosperity.

In Athens, there is also a belief, which seems to be shared by decision makers in Brussels, Berlin and elsewhere, that a change in mood alone will make a significant contribution toward overcoming the crisis. This rising tide to lift Greece’s boat will not only make the program more acceptable to the public, it will also make investors more buoyant, the thinking goes.

Advertisement

From austerity to Ottocracy: Rehhagel’s return

Illustration by Manos Symeonakis

Otto Rehhagel has proved throughout his long career as a soccer player and coach that he has many qualities. Diplomacy was never one of them. “Everyone’s free to say what I want,” he once told journalists. His tendency to gradually assume total control of the German clubs he managed even merited its own term – Ottocracy.

Yet, at the age of 74, Rehhagel is being called on by his homeland to show tact and sensitivity on a mission to Greece, which was his adopted home between 2001 and 2010 when he coached the Greek national team. Bild newspaper provided the rather surprising news on Wednesday that German Chancellor Angela Merkel had chosen Rehhagel to go on a goodwill mission to Athens in a bid to give relations between the two countries a boost and ensure that German tourists give the Greek economy a lift over the summer.

Although Rehhagel will reportedly meet with President Karolos Papoulias and Prime Minister Antonis Samaras during the visit, his assignment appears to be the latest attempt at low-level micro-diplomacy between Germany and Greece.

Anyone for debt tennis?

“Breakfast with Samaras. You would never guess he’d won Wimbledon so many times,” tweeted @Queen_Europe, a fake Angela Merkel account, on Friday morning as the German Chancellor met Greek Prime Minister Antonis Samaras. The New Democracy leader is known to like a game of tennis but he is certainly no Pete Sampras.

In fact, he admitted that his tactics at this summit were limited; a serve and volley game that lacked any forehand or backhand flourishes.

“I prefer to be defensive on this issue,” Samaras said in response to questions about the longstanding matter of Greek debt sustainability. The Greek leader said his aim was first to conclude negotiations with the troika, secure the all-important bailout tranche of 31.5 billion euros and then consider all other matters.

Mrs Merkel goes to Athens. Why?

Illustration by Manos Symeonakis

One of the first tasks young Otto von Wittelsbach and his regency council undertook shortly after the Great Powers appointed him king of Greece in 1833 was to try to subdue the people of Mani. Greece’s first head of state, Ioannis Capodistrias, had met his death two years earlier after attempting to bring some of the Maniots into line over their refusal to pay taxes. The newly-arrived Germans launched three military operations involving thousands of Bavarians soldiers marching into the southern Peloponnese. They all proved fruitless as the wily and determined Maniots made best use of their limited resources and inferior numbers.

Then, the council decided on a more nuanced approach. They dispatched a Bavarian diplomat called Max Feder to the area. Feder spoke Greek and had good knowledge of Mani. He travelled the region, sat in village squares and met with locals face to face. Rather than force the Maniots into submission, Weber convinced many of the local kapetans, or clan chiefs, to join a new military unit consisting just of locals that would be responsible for policing their own area. It proved a significant move in bridging the gap between the Maniots unruliness and the emerging establishment. “Kindness and tact succeeded where coercion had been powerless,” wrote Patrick Leigh Fermor in his magnificent book, “Mani”.

Europe’s fiscal pact: The final irony?

Illustration by Manos Symeonakis

Last Friday, December 9 — the day when 26 of the European Union’s 27 leaders agreed on a “fiscal compact” designed to save the euro and place the bloc on a sounder economic footing — marked exactly 20 years since Germany and France presided over a similar meeting that led to the drafting of the Maastricht Treaty, which became the cornerstone of the single currency.

Among the euro entry conditions agreed in 1991, a country’s public debt would have to be limited to 60 percent of gross domestic product and its deficit to 3 percent of GDP. The first countries to breach the deficit rule were France and Germany in 2003 but they voted to let each other off, thereby undermining the rules that they had been instrumental in drawing up. So, there is more than a hint of irony in the fact that two decades on, France and Germany are again at the forefront of pushing for strict budget discipline, this time as a way of keeping the euro from falling apart.