Tag Archives: Nick Malkoutzis

Unbelievable? Not anymore

Illustration by Manos Symeonakis

Brussels – The British indie dance band EMF had only one hit. It was with their first release in 1990, a single called “Unbelievable.” Twenty years on, the possible existence, let alone success of another EMF, the European Monetary Fund, seemed scarcely believable. But Greece’s descent into fiscal hell over the last few months has changed all that and on Monday the European Union essentially took its first, albeit tentative step, toward constructing its own version of the International Monetary Fund.

As far as historic moments go, Luxembourg Prime Minister Jean-Claude Juncker, who also heads the Eurogroup, and European Economic and Monetary Affairs Commissioner Olli Rehn, did their best to make their announcement that the other 15 euozone members had agreed to provide Greece with financial assistance as underwhelming as possible. The briefing room at Justus Lipsius building in Brussels must rarely have been as packed for a monthly Eurogroup news conference as it was on March 15 when journalists gathered to hear that eight years after the euro went into circulation and almost two decades since the signing of the Maastricht Treaty that laid the foundations for the single currency, those using it accepted that the framework needs to be strengthened.

 

Juncker and Rehn announced that a procedure had been put together by which a eurozone member in economic trouble, in this case Greece, would be able to rely on financial backing from its partners. From being one of the European members of the so-called PIGS economies, Greece could soon be handed the key to the EU piggy bank. The EU is not an organization that adapts particularly quickly to changing landscapes but Greece’s plight has caused a seismic shift that puts the very viability of the euro at stake. So, the Union has decided it needs to update its tools to ensure it’s not lost in this new financial geography.

Juncker and Rehn did not reveal exactly how the scheme, which bypasses the “no bailout” clause in the Maastricht Treaty, would work although it appears that it will take the form of bilateral or multilateral loans from other eurozone members or banks in those countries that will be funneled through the European Commission. Strangely, for a measure designed to ward off speculators who think they can still make a quick buck off Greece’s economic weakness, Rehn played down the landmark moment, speaking of “coordinated assistance” which “could be activated if needed” while underlining that any action would be in line with the “treaty framework” and “national law.” 

The EU specializes in technocratic double speak but this time there was a good reason for obfuscating. Any deal relies on the acquiescence of Germany, the eurozone’s most powerful and healthiest economy. Beyond any qualms that the Germans may have about giving cash to a country that has so flagrantly ignored the currency’s rules, the government is concerned about telling the country’s taxpayers they might have to cough up for Greece’s recklessness. Chancellor Angela Merkel leads a three-party coalition of her own Christian Democratic Union, the liberal Free Democratic Party and Bavaria’s Christian Social Union. Elected to power only last year, the so-called “black and yellow” coalition is suffering. Its popularity in opinion polls is sinking faster than Greece’s credibility on international markets and the FDP leader Guido Westerwelle, who is vice-chancellor and foreign minister is pursuing a populist agenda that makes it difficult for Merkel to consider Germany’s participation in an emergency fund for Greece.

This might explain why less than 24 hours after the meeting of EU financial ministers in Brussels, when the bailout was again given approval, Merkel was telling Germany’s Parliament: “We do not need a solution that helps in the short run but weakens the euro in the long run.” This double talk is part of the cat-and-mouse game that Merkel is playing with German voters but also reflects Berlin’s determination not to commit to the financial package before it is absolutely necessary as it fears setting a precedent that would make it easier for another struggling member – Portugal or Spain maybe – to call for assistance in the near future rather than itself taking measures to fix its public finances.

But in essence, the precedent was set on Monday night with the landmark breakthrough in the eurozone, which brought the creation of a European Monetary Fund a step closer. The EMF may be several years away because changes to the EU’s treaties are first needed but it appears to be a natural continuation of what was agreed this week.

Given the financial turbulence of the last couple of years, it makes absolute sense for the EU countries to have a fund that they can rely on to rectify economic problems. It means that the option of the IMF would be off the table and Europeans could be true masters of their own destinies. The IMF, in the view of many economists, provides a one-size-fits-all solution that does more damage than good in many of the countries that call on its help. With the EMF, the EU could adopt a more tailor-made approach based on European economic and social particularities. Also, the idea of each member state contributing toward this fund on an annual basis would make them real stakeholders in the future of the Union and take the EU closer to a more complete economic and political union.

The economic crisis has brought the EU to the point of no return. If Greece doesn’t get the financial help it needs and turns instead to the IMF, as it has threatened to do, then hopes that the Union could stand for more than a collection of common goals and practices would be in tatters. If Germany were to decide that it has had enough of the economic shenanigans of countries like Greece and considers reintroducing the Deutschmark, which would please some in Berlin, then the effect would be even more devastating.

Giving Greece a cash injection is a logical short-term decision to help it and the EU ride the current storm but if the Union is to safely navigate through this crisis then a more substantial solution is needed for the long-term. For all the coyness and brinkmanship on all sides, it is patently obvious that there are still powerful common interests at the EU’s heart and that its future depends on these outweighing individual designs or whims. That’s why the idea of an EMF is not so unbelievable anymore.

This commentary was written by Nick Malkoutzis and appeared in Athens Plus on March 19.

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No more Mr Nice Guy

Illustration by Manos Symeonakis

In times of crisis, when the issues that our leaders have to deal with become infinitely more complex, our expectations of them become very simple. As the pressure is ratcheted up, we like our decision-makers to fall into one of two broad categories: either Mr Nice Guy or Mr Tough Guy. Greece embarked on its current treacherous journey with a prime minister that appeared more nice than tough, but George Papandreou increasingly looks like he’s steeled for the struggle.

If this metamorphosis is successful, apart from leading Greece out of the economic wilderness, Papandreou will also cause a reordering in the minds of most Greeks, whose default position during testing times is to pine for a tough guy, a man who will stand up for the country and put the others in their place, someone who will be unswerving in his attempt to reach a specific goal.

So, it was no surprise that a couple of weeks ago, Deputy Prime Minister Theodoros Pangalos, speaking to the BBC’s Malcolm Brabant, took a meaty swipe at the caliber of European Union leaders. He reminisced about a time when Europe was led by political heavyweights, such as Margaret Thatcher, Helmut Kohl and Francois Mitterrand, not technocratic lightweights. “This is another level of leadership which we don’t have today. The quality of leadership today in the Union is very, very poor indeed,” he said.

There is no doubt that Thatcher, Kohl and Mitterrand provided era-defining leadership but they did so in completely different circumstances. They were political giants who roamed lands whose destiny could still be shaped, where national interest could still come first and in which they could rely on the unflinching support of a section of society. None of these conditions exist today: In an increasingly competitive world, there is little room or time to reshape a country; in an expanding European Union, collective interest often prevails; and in the age of “undecideds” or middle-ground voters, politicians have an ever-shrinking base of support to call on.

The sweeping transformation of Europe’s political and economic landscape since the 1980s to one where right and left, capitalism and socialism, have all been damaged, means that although the lessons learned from their time in power will always be relevant, longing for another Thatcher, Kohl or Mitterrand to make the ground shake is like wishing the dinosaurs would roam the earth again. Pangalos, an intelligent, outspoken politician who gives no quarter to the opposition and couldn’t give two hoots about what others think of his views, is a man of this bygone generation. But while Pangalosaurus Rex may miss running with the other political beasts, today’s leaders have to contend with a whole different set of challenges.

That’s not to say Papandreou and his peers cannot learn from what those who went before them got right and what they did wrong. But while Pangalos invokes the spirit of the loud, the proud, the dominant, perhaps the Greek prime minister should instead examine the achievements as well as the failings of a more quiet and unassuming political character: Michael Foot.

Foot, the leader of Britain’s Labour Party from 1980 to 1983, died last week at the age of 96. For someone who led the party to one of its heaviest ever election defeats, Foot was remembered with surprising passion. The fondness that many within, and beyond, the Labour Party have for him is kindled by the rare qualities he brought to politics: high principles, independent thinking and exquisite oratory skills that drew heavily on his love of literature.

It was Foot’s insistence on existing above politics, rather than sinking into its mire, that meant he stuck by ideas he felt to be morally correct rather than politically expedient. He kept to these principles when compiling Labour’s manifesto for the 1983 election, prompting one of his aides to call the program “the longest suicide note in history.” The Conservatives blew Foot’s party out of the water, Thatcher swept to 10 Downing Street and Britain’s, and perhaps the world’s, course shifted in a new direction.

Foot actually produced the most eloquent put-down of Thatcher ever uttered by a rival politician: “She has no imagination and that means no compassion.” Foot had plenty of both and although his manifesto in 1983 proved to be a disaster, looking back on it now, he appears much more imaginative and less of an idealistic dreamer than once thought. In fact, some of his policy proposals – increased public spending to ease an economic recession, greater control over the financial system, energy conservation and corporate regulation — are actually being implemented now by governments in Britain and elsewhere. Interestingly, the manifesto called for the return of exchange controls to “counter currency speculation” – the 1980s equivalent of Credit Default Swaps (CDS), which Papandreou has been touring the world trying to prevent. As he does so, Greece’s premier might want to consider that one of Foot’s greatest failings was that despite his unique grasp of the English language, he was unable to communicate his ideas convincingly.

Another of Foot’s failures was his inability to keep his party united – a problem that is already starting to rear its head at PASOK, as the party’s old, socialist guard attempts to resist Papandreou’s austerity measures. Foot found himself unable to bridge the gap between Labour’s left, which was still committed to the socialist policies that were torn apart when the International Monetary Fund imposed drastic spending cuts on Britain in the late 1970s (sound familiar?), and the more centrist wing, which eventually broke away to form a new party, the SDP. Foot was never able to get in step with the party’s base, tap into society’s sources of power or develop a strategy that would broaden Labour’s appeal. That’s why Foot was essentially a wonderful caretaker rather than a true leader. These are all aspects for Greece’s prime minister to ponder as he tries to balance harmony within his own party with the arduous changes being demanded of the country.

But if Papandreou is to take just one thing from Foot’s legacy, then it should be the words that he spoke in his final speech as Labour’s chief. Quoting from Joseph Conrad’s “Typhoon,” a story of a steamer encountering treacherous conditions in the South China Sea, he told his audience: “The sea never changes and its works, for all the talk of men, are wrapped in mystery… the heaviest seas run with the wind. Facing it – always facing it – that’s the way to get through.” Forget nice guys and tough guys, that’s what leadership is all about.

This commentary was written by Nick Malkoutzis and first appeared in Athens Plus on March 12, 2010.

The rebirth of a nation

Illustration by Manos Symeonakis

When learning of the death of fellow writer Truman Capote in 1984, Gore Vidal’s response was blunt: “Good career move,” he said. This is how many people have treated the reports of Greece’s untimely demise, believing that the unprecedented publicity makes it a perfect opportunity for the country to hit the reset button, to spruce up its image, to re-establish the brand.

With or without the media attention, Greece finds itself at a crossroads. European Economic and Monetary Affairs Commissioner Olli Rehn may have called the austerity measures announced on Wednesday a “turning point” for the country but the path Greece decides to follow isn’t about just tax and public spending — it’s more a question of how it defines itself and what its values are.

To get to this, we must first understand the circumstances of the current situation. Yes, Greece’s standing in the world has fallen so low that we would have to look up to see the bottom of the barrel, but this hasn’t happened simply because someone momentarily fiddled with economic statistics or failed to execute effective policies. As any marketing expert will tell you, people’s perception of a product, or in this case a country, is built up over time and is based on various factors. And the truth is that the recent trajectory of Greece’s image, except for a few shining moments, has been downward.

“For many years, Greece has been seen as a country that was attempting to stand alongside other European countries, sometimes more successfully than others,” Cleopatra Veloutsou, the head of the Marketing Research Unit at the Athens Institute of Education and Research and a senior lecturer at the University of Glasgow told Athens Plus. “Some events, such as the 2004 Olympics, helped improve the country’s reputation. However, this improvement cannot last if there is no consistent signalling over a long time.”

This failure to consistently convince people is really what has undermined Greece’s image. It’s easy, and understandable, to take offense at the cover of Germany’s Focus magazine showing Aphrodite making a rude gesture and at other damning reports about Greece but responding to them does not address the issue. It’s a reaction to the symptom, not to the root cause; it’s a paracetamol when what we need is a panacea. To find that remedy, we have to look far beyond our bulging debt and deficit.

While the economic crisis may have put Greece in the spotlight, there are many other countries – countries that are much more mature and organized than our own – currently struggling with their identity and core values. The International Herald Tribune’s columnist John Vinocur recently underlined how Germany and France – Europe’s pillars – are both beset by social problems such as poverty, violence, crumbling social security and general discord. “In the background of Europe’s current afflictions – the headline malady of its suddenly shaky common currency or the sputtering of its notional economic recovery – there’s a painful subtext,” he wrote.

“It is the notion that in France and Germany, uniquely European pride, values and self-esteem are quivering as well. The core of the idea is that the economic crisis has exposed or emphasized existing areas where neither the language nor the creed that says general well-being, solidarity and generosity come first and continue to fully apply.”

There may be some comfort in seeing others also grappling with serious concerns but the significant aspect of Vinocur’s observation for Greece is that countries are defined by what happens at their core, which outsiders rarely see, not at its outer edges, which are visible to everyone. For too long, Greeks have failed to look inward to discover more about who they are, instead defining themselves in comparison to the others around them and enjoying being cooler than the French, more generous than the Germans, more hospitable than the British, more cultured than the Americans and so on. Ironically, this obsession with being different to the others and not conforming to their way of doing things is what has landed Greece in the current mess.

It’s clear now that making efforts to improve how other perceive us will only be a short-term fix and, like the reserves of goodwill built up thanks to the successful hosting of the Athens Olympics, they will soon be blown away to reveal little substance underneath. “Greece should consider how it could try to send consistently positive messages to the audiences of interest to try to improve its somewhat poor reputation,” said Veloutsou. “It is hard work, since even positive pieces of information are taken as a weak indication of potential improvement, rather than a confirmation of being reputable.”

There is only one way to do this and that’s to tap into the huge resources of determination and energy that see Greeks succeed in spite of the system, rather than fail because of it: the soccer and basketball players that can become European champions when the country’s facilities are non-existent; the academics that shine at foreign universities although our own have reached a dead-end; the mathematicians that excel even though our governments cannot add up; the civil servants on low wages, who perform their duties without protest; and the citizens who have no qualms about paying their taxes when others offer only excuses.

Greece now belongs to these people. Incompetent, self-serving politicians pretended for years to run the country while swindlers and egotists ran it into the ground — but Greece is still functioning because of this quiet, faithful majority. These are the people now have to make their voices heard, shaming into silence those who have wreaked untold damage.

The government is again turning to this trusted band of brothers and sisters to dig the country out of a hole by earning less but paying more. The question is not whether they will answer this call – they will, as they always have – but what Greece will do for them in return.

If their spirit and dedication is allowed to set the standard, then we can dispel the image of Greeks as loafers and cheats by holding them up as the true representation this country. Instead of billboards about living your myth in Greece, we can present these people to the world: “Hi, I’m Manolis and I pay my taxes,” “Hi, I’m Maria and I have a building permit for my house,” or “Hi, I’m Yiannis and I refuse to pay bribes.” We can allow them to transform people’s perceptions. Only then can today’s painful death become tomorrow’s wonderful rebirth.

This commentary was written by Nick Malkoutzis and first appeared in Athens Plus on March 5, 2010.

The dust of time

Illustration by Manos Symeonakis

The weathermen said the dust that covered Athens last weekend came from the Sahara Desert. Don’t believe them. The air was thick and unpleasant but not because of Saharan sand – the choking, claustrophobic atmosphere was caused by the particles that spewed into the air when time finally caught up with Greece.

This dust was a filthy amalgam of the cobwebs blown out of the corridors of power by the wind of pragmatism, the mould spores sent flying as an antiquated public sector collided head-on with the 21st century, and the tiny particles of wasted potential and lost hope released into the atmosphere as inertia was dislodged by ruthless economic reality.

Breathing in this dusty air was both terrifying and edifying: Something unknown entered our system but something that reeked of decay left it. This was Greece’s moment of apocalypse, when it became clear to its government and its people just how far down they had slipped and how long a distance they need to cover.

Emerging through this thick dust, like Lawrence of Arabia on his sleepless camel ride through the Sinai Peninsula, is the man whose destiny it is to lead the country at this vital hour. How ironic that the party leader who wanted to increase public spending, is now the prime minister who has the task of slashing it like a sword-wielding Arab.

Although fate has played a cruel trick on George Papandreou, he seems to be warming to the task. Following a few months of disbelief and apprehension, his government appears to be getting to grips with the size of the mission, if not necessarily striking on a coherent strategy to accomplish it.

Finance Minister Giorgos Papaconstantinou is set to announce more austerity measures as it becomes evident that the dire state of the country’s finances will not be solved by snipping civil servants’ pay and tweaking some taxes. If PASOK does announce more measures, the implications will be greater than just economic. If the government chooses the additional measures rather than letting the European Union impose them, it could be the first sign that Greece – a country not so much living in denial as languishing in its amniotic fluid – is facing up to the future.

It could also be the first, liberating step toward economic recovery. For the first time in recent history, a Greek government will take painful but necessary action without sweetening the pill, without bowing to the ghosts of the past, without fearing the forces of inertia and with little regard for the political cost that its decisions carry. It would be a small but significant move toward putting the country on a new footing – one where Greeks expect their government to make policy, not grant favors.

As the EU and the International Monetary Fund wait in the wings, ready to be called on should they need to assist Greece, it’s becoming ever clearer that the next few months and years are not just about reducing the public deficit or debt – they are an opportunity to initiate a change of mentality.

Some of the measures themselves will prompt a different mindset. For instance, making people collect receipts to qualify for their tax-free allowance might have a reasonable impact on tax evasion but it will have an immeasurable effect on changing people’s attitudes to collecting proof of payment. Those who were once embarrassed to ask for a receipt will soon do it by habit — abiding by the law, rather than breaking it will become the norm.

With or without the help of the EU or the IMF, the economic battle will eventually be won but Greece’s future won’t depend just on that. It will be decided by the outcome of the psychological war – the fight to conquer the hearts and minds of the Greeks, where collecting receipts, paying tax and rediscovering the necessity of living within certain means will be vital.

It appears there’s a much more positive attitude to some of these measures than many would have expected. A number of opinion polls have shown support for the core of the government’s policies running at 60 to 70 percent. It’s worrying that this level of consensus should not be mirrored on the country’s political scene: After briefly providing PASOK with limp backing, New Democracy and its new leader Antonis Samaras have chosen to revert to the traditional role of Greek opposition parties, which is to lambaste, negate and obfuscate first and ask questions later.

Tempers between the two parties have been raised further by PASOK’s decision to table a proposal in Parliament this week for MPs to investigate how economic statistics were compiled between 2004 and 2009 – the period that ND was in power. The conservatives have hit back by saying any probe should go back to the early 80s, when PASOK was first elected to government.

It has often been said that Greeks get the politicians they deserve but it seems the current crisis has generated a maturity among the country’s citizens that is not reflected in the people that lead them. On PASOK’s part, going back over ND’s five years in power is irrelevant and a waste of time. There is only one question that needs to be answered and that is why a conservative government estimated in the spring of 2009 that the deficit for that year would be 3.7 percent of GDP and by the fall, the socialist government had revised the figure to 12.7 percent. If the country is to regain any credibility or trust within the EU, then it must answer this question. ND’s suggestion of delving back into the 1980s is ridiculous. All we’ll find there is ancient history and Greece has enough of that already.

If Papandreou is to truly make his mark by presiding over a change of mindset in this country, then he must push for a different mentality within Greek politics. The inertia that holds the system hostage will not allow this change to happen naturally, as it appears to be happening among normal citizens.

Papandreou has to be the instigator. Like T.E. Lawrence, he has to throw caution to the wind and maybe ponder one of the British army officer’s most famous quotes: “Those who dream by night in the dusty recesses of their minds wake in the day to find that it was vanity.”

For Greece, the dreaming is over. It’s up to Papandreou now to shake those around him from their slumber and get them to rub the dust of time from their eyes.

This commentary was written by Nick Malkoutzis and first appeared in Athens Plus on February 26, 2010.

A sum of parts

Ilustration by Manos Symeonakis

“The antidote for 50 enemies is one friend,” Aristotle said and goodness knows how Greece could use that friend right now, as it stares at those disgruntled European faces across the table.

The closest it has come to finding a friend among them is French President Nicolas Sarkozy. The warm embrace he offered Prime Minister George Papandreou in front of the cameras in the Paris drizzle last week was symbolic. He was telling the other Europeans it was time to close ranks around Greece and protect it from itself and, more pressingly, from the destructive nature of international speculators. Sarkozy also reportedly contacted German Chancellor Angela Merkel before the Brussels summit to discuss the possibility of offering Greece concrete assistance.

It’s not the first time that Sarkozy has come through for Greece. At the NATO summit in Bucharest in 2008, he rallied the other major powers to prevent the Former Yugoslavia Republic of Macedonia (FYROM) joining the alliance due to its failure to resolve its name dispute with Greece. The same year, Sarkozy visited Greece, the country from which his maternal grandfather – a Jew from Thessaloniki – emigrated. He became one of only a handful of foreigners to address the Greek Parliament, giving a speech that drew its inspiration from the decades-old slogan of “Greece-France-alliance” but which also contained moving references to his grandfather.

Many Greeks believe their country is worthy of this form of personal relationship with other EU countries. They pine for a union in which their northern neighbors are not obsessed with numbers but show understanding for their often erratic behavior. Greeks would like their European partners to display respect for the country’s history and traditions – we may be crafty devils now but we were once philosophers and poets and our continental cousins should not forget that.

What the last couple of weeks have shown, though, is that in times of crisis, there is little room for personal sentiment. Greece has broken the rules and for all its insignificance on Europe’s economic map, its irresponsibility is threatening to blow the whole show sky high. Ancient gods will not save Greece and the EU now, only some very contemporary fiscal belt-tightening and possibly even financial aid can rescue the situation.

Yet, for all the numbers, indices and percentages that govern Greece’s current relationship with the EU and the European Commission, the country’s headlong plunge into fiscal crisis also poses some profound questions about the Union’s future. While Greeks may deserve to be castigated for their mendacity and incompetence, there is a point at which the EU must decide how to support Greece, unless the very unity and stability of the bloc is not to be put at risk. An unprecedented set of events have brought the EU face-to-face with a dilemma that will define the nature of the Union itself. France’s former Culture Minister and another long-time friend of Greece, Jack Lang, suggested as much last week: “Europeans have a unique opportunity to prove the deeper meaning behind the European Union,” he said. “For our love of Greece, out of our respect for Greek civilization but for Europe itself, we have to act.”

The immediate question for the EU is what form this action should take. For the time being, the eurozone countries have settled for declaring political support for Greece while asking the PASOK government to adopt austerity measures. Both are designed to deter hedge funds and other speculators while bringing the Greek economy within the euro’s deficit and debt boundaries. “This is the worst imaginable punishment for a nation but it is also a consequence of being a member of the European community,” wrote the Suddeutsche Zeitung daily in Germany. “It is only in times of crisis that you see what a system is capable of.”

Also in times of crisis, those who support bold action are usually in a minority: an Emnid poll indicated that 71 percent of Germans oppose giving financial aid to Greece. As the conservative Frankfurter Allgemeine Zeitung put it: “The Greeks are taking to the streets to protest against increasing the retirement age from 61 to 63. Are the Germans now supposed to work until 69 and not 67 so the Greeks can enjoy early retirement?”

Merkel, backed by the Frankfurt-based European Central Bank (ECB) and its president Jean-Claude Trichet has so far rejected a solution that would involve lending money to Greece, arguing that this might stop the government from taking tough measures. The German chancellor instead points to Ireland, which restored market confidence through a program of drastic spending cuts and reductions in public sector wages and pensions. Berlin also argues that a German constitutional court would block any attempt to bail out Greece as this is not permitted under the terms of the Maastricht Treaty that set up the single currency.

They would be valid arguments under normal circumstances but we live in extraordinary times – times in which the dithering of governments, the like of which allowed Bear Stearns and Lehman Brothers to collapse in the fall of 2008, comes at a heavy price. The failure of Washington to act then proved disastrous and very costly. Other governments, including many in the EU, learned from this mistake and pumped billions of euros into the financial system to prevent its collapse.

They now face a similar situation but this time it’s a country, not a financial institution, in danger of going under and pulling others with it. As Jean-Claude Juncker, the Luxembourg Prime Minister who heads the eurogroup said this week, if Greece were forced out of the euro, “the effects would be like an earthquake, uncontrollable.” With the other so-called PIGS (Portugal, Ireland, Greece and Spain) economies suffering problems, Juncker, Merkel and the other EU leaders would do well to absorb the implication of a Greek default, rather than just keeping their fingers crossed it won’t happen.

The threat of contagion means it’s impossible to support the argument that taxpayers in one EU country should not be footing the bill for the economic failure of another. Taxpayers in Britain and Germany had no choice about whether their money was used to keep banks afloat last year – they simply had to accept this was the wisest long-term option.

If the Maastricht Treaty, signed in 1992, does not allow for a bailout then it should be altered. The financial landscape has been reshaped beyond recognition over the last two decades and the EU’s institutions and mechanisms need to catch up.

Also, Greece is not Ireland and cannot be expected to adopt the same measures when there are clear, chronic structural problems that need to be addressed first. Masking this with tax hikes and public sector salary cuts will fool no speculator worth his fat-cat bonus.

The EU has given Greece a month to prove that it can get its economy back on track but the Union has to use this time to consider its own role as well. The Greek crisis is questioning the very purpose of the EU, whose strength has always been, as Aristotle also said, that “The whole is more than the sum of its parts.” But what Europe must now consider is that when one of those parts collapses, the whole is not worth very much at all.

This commentary was written by Nick Malkoutzis and first appeared in Athens Plus on February 19, 2010.

The environment, in spirit

Illustration by Manos Symeonakis

There are many prisms through which to view the environmental issues troubling the world but a religious or spiritual one is not the most obvious. Nevertheless, Patriarch Vartholomaios, the Istanbul-based spiritual leader of Orthodox Christians, insists this is the true approach. He had a chance to share this view during a visit to Greece last week when he held talks with Environment Minister Tina Birbili. It has long been clear that Greece needs a miracle to rescue its natural beauty from further destruction – perhaps some divine intervention, or inspiration, is just what’s needed.

Vartholomaios has earned the nickname “The Green Patriarch” for his commitment to the environmental cause since the 1990s. In 1997, he placed environmentalism firmly within a religious framework by saying: “To commit a crime against the natural world is a sin.” In 2008, Time Magazine named him as one of its 100 Most Influential People in the World for “defining environmentalism as a spiritual responsibility.”

Watching the USA’s East Coast battered last weekend by the heaviest blizzards – the so-called Snowmageddon – in almost a century, it was hard not to think of the climate in terms that are broader than just the way it affects the weather. The TV footage was certainly reminiscent of “The Road,” a film currently playing at Greek cinemas, which is based on Cormac McCarthy’s Pulitzer Prize-winning tale of the journey of a father and son through a post-apocalyptic American landscape. The book, which tells a bleak and terrifying story of a struggle to survive, contains a line that captures the spiritual element that Vartholomaios espouses: “Perhaps in the world’s destruction it would be possible at last to see how it was made. Oceans, mountains. The ponderous counterspectacle of things ceasing to be. The sweeping waste, hydroptic and coldly secular.”

For all the Patriarch’s efforts though, the debate about climate change and the environment both in Greece and abroad, rather than being based on spirituality continues to revolve around the very practical, such as temperature changes, rainfall measurements and carbon emissions. Some commentators have taken the cold snap that gripped much of Europe in past weeks and is now putting the freeze on parts of the USA as a definitive sign that global warming is a myth cooked up by environmental do-gooders and socialist governments scrambling for an excuse to tax people more and intervene in their lives.

Environmentalists have responded by pointing out that weather has always been varied or inconsistent and that it’s not the weather we’re worried about; it’s the climate, which is a completely different thing. “The ability to distinguish trends from complex random events is one of the traits that separate humans from the rest of the animal kingdom,” Leo Hickman and George Monbiot recently wrote in the British daily newspaper The Guardian.

On climate change though, many humans seem unable to adopt an approach that rises above their base instinct to have lots of numbers and charts thrust into their face. In other words, we appear incapable of developing a mindset that takes in the wider context; one that touches on the spiritual.

An example of this was the debate generated by an article on The Guardian’s environment blog, in which Ed Gillespie, a director at communications agency Futerra which helps companies develop greener policies, suggested that “The Road” is the latest major film (after the “Simpsons Movie,” “Wall-E” and “Avatar”) to tackle environmental issues.

“Back off sonny,” wrote one blogger, called Princeruprecht. “One of the most powerful aspects to McCarthy’s book is that he never makes it clear what event or events have led to the f***d up world it depicts. It’s left for us to wonder. Don’t try and hijack the man and his son’s story by hitching it your crusade.”

“The ‘ambiguous environmental catastrophe’ is most likely a super-volcano eruption or series of eruptions hence the obscured sun, covered skies, grey dust and the fires,” said Manzikert, another blogger.

“It is impossible that any man-made cause, barring nuclear war, would cause devastation on the scale described in the book,” writes Pikaia, before adding: “I think it’s ironic that the central plank of environmentalism — that humans are destroying the planet — is based on an inflated sense of human importance. We are not capable of destroying the planet — only of rendering it unfit for human habitation for a few thousand years.”

Well, that’s reassuring.

McCarthy has left the cause of the world’s destruction in “The Road” deliberately vague because that’s not the crux of his story. Ironically, the fact this side issue should be the subject of debate is reminiscent of the discussion about climate change itself. When skeptics challenge the minutiae of the evidence that reveals the damage we’re wreaking to the planet, they’re not seeing the burned forest for the missing trees.

Those who seriously doubt climate change have seized on every mistake made by environmental scientists as evidence of a big hoax. The UN’s Intergovernmental Panel on Climate Change (IPCC) had to issue a statement last week regretting an error in a 2007 report that indicated the Himalayan glaciers would melt by 2035. It was the latest embarrassing slip-up by IPCC scientists, which included leaked e-mails that suggested some information that did not fit the climate change argument should be withheld.

The panel’s chair, Dr Rajendra Pachauri, insisted this should not sway people’s opinion. “Look at the larger picture, don’t get blinded by this one mistake,” he said. “The larger picture is solid, it’s convincing and it’s extremely important. How can we lose sight of what climate change is going to do to this planet? What it’s already doing to this planet?”

Therein lies the real issue in the climate change debate – the argument is not about statistics, it’s about common sense. It’s not just to do with how we treat the planet, it’s about how we treat each other and in that sense, it is a very spiritual matter.
You don’t need to believe that McCarthy’s vision is going to become reality to use less electricity. You don’t have to expect the Himalayan glaciers to turn into waterfalls to save water. You needn’t be convinced that Greece will soon turn into a desert to recycle your trash. You do these things because you realize it makes sense, because the world’s resources are finite, because man has to live within some limits, because you want clear air to breathe, because others will also suffer the consequences if you fail to act.

If we can’t understand or don’t want to accept any of this, then, as the patriarch might say, heaven help us.

This commentary was written by Nick Malkoutzis and first appeared in Athens Plus on February 12, 2010.

An accident waiting to happen

Illustration by Manos Symeonakis

London – The world’s most powerful financiers emerged last Sunday from a meeting in the cosy surroundings of the World Economic Forum at the plush Swiss resort of Davos after agreeing that maybe, just maybe, they would consider some reforms to the global banking system. The same morning, a small group of less influential people braved the cold to gather in a corner of Hyde Park, beneath London’s steely winter sunlight, to hear a man who thinks the banks’ irresponsibility has gone too far.

Speakers’ Corner is an enclave of free speech unsurpassed anywhere in the world. Here, in the northeast corner of one of the world’s largest metropolitan parks, anyone with a step ladder or a soapbox, a good set of lungs and a cause to defend can speak out. Naturally, this pulls in eccentrics and jokers but having been around since 1866, it has also attracted luminaries such as Karl Marx and Vladimir Lenin. Both would have been fascinated, if not surprised, to see an English singer-songwriter addressing an audience of less than 200 people about the unfairness of bankers’ excessive bonuses and the folly of capitalism.

Billy Bragg, a 52-year-old London-born musician, is not a natural choice to pick up the socialist baton from the founding fathers of communism but his presence at Speakers’ Corner on Sunday perfectly reflected the failure of our political system to display a social sensitivity as well as a financial one. “I am standing here today because there don’t seem to be any politicians willing to take up this cause,” said Bragg who refused to pay his taxes on January 31 in a bid to draw attention to a campaign that has attracted more than 25,000 supporters online.

Bragg wants to pressure the British government to limit the annual bonuses the Royal Bank of Scotland (RBS) pays its employees this year to 25,000 pounds (26,600 euros) per person. The reasoning behind this request is simple: RBS was on the brink of collapse last year when it was bailed out by the UK government thanks to an injection of 25.5 billion pounds (29.2 billion euros), which was a bigger financial package than the one Greece put together to prop up all of its banks. This cash bought British taxpayers 84 percent of RBS’s shares. As part of the deal, the government negotiated a veto on RBS paying bonuses of more than 25,000 pounds to any of its bankers.

So, unsurprisingly, Bragg and many others were incensed when they heard the bank’s chief executive Stephen Hester say that – thanks to the profits RBS has made on the back of state intervention – it would be paying its employees a total of 1.5 billion pounds (1.71 billion euros) in bonuses this year. Presumably, this is the sort of amount US President Barack Obama had in mind when he labeled some of the bonuses being paid to American bankers “shameful” and “obscene.” Bragg argues that as the majority stakeholder in the bank, the British public should be able to have a say in whether these bonuses are paid.

“I understand that the Treasury had little choice but to use taxpayers’ money to safeguard our savings and stabilize and restore confidence in the financial system,” the singer told his audience. “I also understand that we will all benefit if and when RBS becomes solvent again. What I don’t understand is why the chief executive of our bank thinks that the best way to restore the company’s fortunes is to indulge in the irresponsible behavior that got us into this mess in the first place, by paying excessive bonuses at the first possible opportunity.”

This is where Bragg’s campaign strays beyond just convincing British Chancellor Alistair Darling to exercise the veto he retains on RBS bonuses and into much broader themes, such as the viability of capitalism in the wake of the financial crisis. Hester’s response to critics of the bank’s planned payouts is that he is “a prisoner of the market.” In other words, if RBS does not offer these kinds of incentives, then it will not attract the best bankers and therefore won’t make the kind of profits that will allow it to pay back the public money that kept the bank afloat and in turn generate tax revenues.

It’s an argument that would deserve serious consideration were it not for the fact that the markets ceased to exist, in the form that we knew them at least, when they fouled things up so badly that governments around the world had to rescue them for fear of the whole financial system collapsing. Bankers may argue, with some justification, that practices which are now seen as reckless or greedy were once encouraged by governments looking for a tax windfall. But this does not change the essence of the situation facing us now: Market rules are being rewritten and the banking system, despite the procrastination of the financiers in Davos, is in need of urgent reform.

“Someone should explain to Mr Hester that when the government bailed out RBS they broke the biggest rule of the market – that when a business fails, it should cease to exist. Isn’t that how Adam Smith’s invisible hand works?” asked Bragg. “If the invisible hand of the market has to be replaced by the helping hand of the people in the form of taxpayers’ money, then the market system is broken and the whole free enterprise experiment of the past 30 years has failed.”

Perhaps this last statement from Bragg is too sweeping – although the invisible hand and helping hand have often pulled at each other, they have also worked together to make some things better during the last three decades. But he’s right to question whether we’ve learned anything from the mistakes made during years that led to the brink of financial meltdown. The lack of action on the political and financial front to ensure that the irresponsibility of the past serves as a lesson for the future illustrates that many governments and bankers are willing to play the waiting game when the game is already up. Obama’s plan to tax bankers’ bonuses in a bid to raise 90 billion dollars (64.2 billion euros) over the next 10 years and his call for them to invest their efforts in “meeting your responsibility” rather than fighting the measure was a small step toward setting up a new, fairer system.

In Davos, regulators and bankers failed to agree on how the amount of risk in the banking system could be reduced, so a global system of financial regulation is still out of reach. The closest the world’s top bankers got to making any concessions was discussing the establishment of a global financial insurance levy so the next bailout would be financed by the industry, not by taxpayers. But this is hardly a solution – it’s the equivalent of a chain smoker saving up money for the inevitable cancer operation rather than making an effort to kick the habit.

Although the archons of the financial system appear to be unrepentant, or at least unwilling to make the first move, Bragg plans to be on his step ladder at Speakers’ Corner again this Sunday to keep up the pressure on them. Perhaps, though, instead of delivering a speech, he might dedicate a few bars of one of his songs to those who face tremendous responsibilities but choose to shirk them: “Goodbye and good luck / To all the promises you’ve broken / Goodbye and good luck / To all the rubbish that you’ve spoken / Your life has lost its dignity / Its beauty and its passion / You’re an accident waiting to happen.”

This commentary was written by Nick Malkoutzis and first appeared in Athens Plus on February 5, 2010.