Unravelling Greece’s crisis

Nick Dallas sits down with former radio broadcaster and community activist Kostas Karamarkos to talk Greek politics, the crisis and the worsening state of the Eurozone

Nick Dallas (ND): When looking at the Greek crisis, not a single constituency emerges well from it; Greek politicians, Greek society, the EU leadership, investment banks and many other entities, all exhibited a collective display of hubris, miscalculation, deception and simple sheer greed over a prolonged period. The party had to come to an end. Why is it that most of us switch off our critical faculties or downplay the seriousness of misdeeds when we see an opportunity for economic growth or financial gain, even though our intuition tells us that there are serious concerns about the appropriateness of certain actions or measures?

Kostas Karamarkos (KK): If rationality and intuition were to rule human action, wars and other human inflicted calamities could have been avoided in the past. I can understand the motives of profiteering interests, I can understand the conflicting agendas of various competing interests, both in Greece and in Europe, but what I find difficult to understand and justify is the shortsightedness and the lack of leadership exhibited in this crisis by many. This might be because of the fact that the elites of hard core Eurozone countries, in order to deal with the Asian century and in order to secure social cohesion and expectation management in their own countries firstly, have decided to make the life of the European South difficult. Personally, I don’t think that an EU without the cultural and the numerical clout of its southern members can be a global player.

ND: The grotesque over-lending to peripheral Eurozone countries, coupled with harsh austerity measures with no guarantees of success, has placed severe strains on their political systems and even on public order. Is the Euro common currency project under threat as 17 dissimilar economies try to grapple with what’s essentially a global problem hastened by over-leverage and excessive levels of government debt?

KK: In political and economic matters as well as in life, no one has an equal footing. The European project is in need of reform. Democratisation of institutions, a more federal and a more socially-oriented spirit when it comes to planning and applying economic policies, backed up by relevant structures of course; for example, the issuing of Eurobonds or a more interventionist ECB might be some of the answers. Unfortunately, these ideas don’t seem to preoccupy, at least publicly at the moment, the minds of the ruling elites in Europe, especially the mind of the current German leadership. As we know Germany is the leading decision maker and enforcer within the Eurozone and the EU. However, if Germany wants to remain not only a leading European power but a global player through its leadership of the EU, then it might have to amend its policies in relation to the European crisis. Some people might think that a smaller Eurozone, or ‘solutions’ like the one imposed in Cyprus might be the answer but, when social cohesion and political stability is becoming an issue for many states as a result of the imposed economic policies, then alternative thoughts and policies have to be considered.

ND: One of the features that characterises post-1974 Greece is the practice of clientelism where political administrations in power distribute largesse to interest groups in exchange for voter loyalty. This was exacerbated by nepotistic appointments devoid of any meritocratic value. How does one overturn such practices that have become ingrained in Greek society?

KK: It will take a long time to change social and political attitudes deeply entrenched for a long period of time in Greek society. It would require political will, which unfortunately does not exist to the extent it is needed at the moment. It will be forced upon Greece by necessity. What makes this task even harder, though, is the fact that we don’t have in Greece a civil society. We don’t have a public sphere, a public space, or significant social movements that transcend party politics and other sector interests and try to lead or point society towards another way of thinking, of organising or doing things. I am not saying that these forces of change do not exist. They do exist but they are either on the periphery, or they cannot force or influence change through their own action or to the extent required.

ND: One of the most worrying things about Greece is the unwillingness rather than inability to carry out even very obvious reform measures. Where does this inertia emanate from?

KK: Greece is a very individualistic society. The concept of collective good, if and when it exists, stops at smaller entities: the family, the local region, the professional or the political association. The prevailing discussion and the conceptual framework are mostly in terms of rights. Rights and responsibilities, either personal or collective, do not go hand in hand. The concept of the national interest, never mind the rhetoric about ‘us Greeks’, is distorted or is virtually non-existent. People during the years of the distorted boom, from 1974 until recently, were living in parallel worlds, accommodating or being really indifferent to each other, but not talking or understanding each other. And now there is a multiple crisis in the country, they all feel it one way or another – the weaker sectors of society pay a heavy price, but they keep on shifting the blame to foreigners or to other Greeks, even though they understand that the time of reckoning has come. When it comes to addressing the various dead-ends, the people don’t have a more or less common understanding of their situation, and the ruling elites of the country hide by blaming only the politicians, while at the same time are fighting for a better placement in the new socio-economic, the new political and cultural era that is coming in Greece.

ND: They say that two thirds of an economic recovery is psychological, while a third is actual. With the recent Cyprus fiasco, rising unemployment and an ever-increasing brain drain, do you believe Greece can put itself in a positive mindset in the short term and stabilise the drastic descent of living standards?

KK: It will take longer than needed or planned I am afraid. Greece has intrinsic structural and social problems. The general prevailing European economic and political outlook does not help either. Most people are resigned. Unemployment keeps rising and it will do so for a while. When recovery comes it will be a ‘downsized’ recovery. Salaries, wages, opportunities, expectations, rights, institutions are all being ‘downsized’ at the moment and this, unfortunately, won’t change in the near or intermediate future.

ND: The last thing that dies with people is hope. Despite present difficulties, Greeks have a reputation of being both resourceful and enterprising. Where do you see the seeds of Greece’s recovery emanating from?

KK: Building on your strengths is always the best way to go about it I believe. The cultural heritage, the physical beauty and the weather in Greece should enable tourism to be strengthened even further now that costs are coming down. An energy oriented recovery (solar, wind, gas, petroleum) offers many opportunities. There is an increasing interest in the agricultural and fishing industries. Real estate used to count for almost 20 per cent of the GDP before the crisis. If the Greek state is forced to get its act together by substantially reducing bureaucracy and improving productivity, a lot can happen.

* Kostas Karamarkos was an advisor to the Greek Secretariat of Greeks Abroad in the Ministry of Foreign Affairs and from 2006-2012 worked as a journalist in the political office of George Papandreou. He is in Melbourne to give a public lecture at The Wheeler Centre, 3.00 pm Sunday 19th May. Admission is free.