The eyes of the world are now firmly fixed on London as the thirtieth modern Olympiad and all the drama and raw emotion associated with the games is well underway. Meanwhile back in Greece, the birth-place of the first Olympics dedicated to Zeus, brotherhood, peace and the ‘hellenikon’, Troika inspectors have recently come door-knocking. Whilst to the West in nearby Spain the situation unfortunately appears to be unnervingly teetering with a sense of eerie déjà vu only all too common for many in Greece. It seems then that over the next fortnight London might not be the only city in Europe beset by drama and overcome by raw emotion.
Amidst this backdrop, Greece’s current coalition government sits poised to continue implementing an economic program involving further austerity measures. A two-part concoction that includes spending cuts to social services and the sell-off of some of the nation’s public assets. Measures incidentally, which as yet have arguably failed to alleviate Greece’s economic pain. An inconvenient truth that when raised is often met with a proverbial shrug of the shoulders and the claim that there simply is no other answer.
This tired old refrain sung by proponents of austerity, reduces the complexity of the crisis and usually goes on to describe austerity as an act of medical treatment, whereby all Greece has to do is simply swallow the medicine it has been told it must and everything will eventually get better. However, for Greece (and others for that matter, such as Portugal, Ireland, Italy and Spain) the medicine being prescribed is proving more than just a bitter pill to swallow. This so-called medicine is leading to side effects that in many ways, are proving just as detrimental, if not worse than the original disease it was intended to combat.
If one wants an analogy that truly captures the harsh reality (particularly the social cost) of the current Euro-zone crisis, austerity should not be envisioned as a curing therapy but rather as a misguided and condescending paternalism whereby Greece and others, are taught a lesson by being forced to sleep in a bed not entirely of their own making. Greece certainly played ‘a’ part in making its current economic bed, but it most certainly did not play the ‘only’ part. A distinction very rarely acknowledged. A case perhaps, where the truth for some, ironically is also proving a similar bitter-pill to swallow?
Analogies though will not change the dire circumstances Greece currently finds itself in. Five years of economic recession, one in five people unemployed, compounded by decades of corruption, cronyism and nepotism, are all alarm bells that clearly suggest that Greece needs major internal structural reforms. This however, is not the issue. No one is denying that Greece is in a precarious situation that needs to be urgently addressed. Rather the issue at hand is ‘how’ this precarious situation is actually urgently addressed.
In spite of the pressing situation in Greece, or rather very much because of it, if there is one thing Greece can truly not afford, it’s to be lead astray by panic. In such circumstances matters of urgency are often confused with the need for rushed decisions that in turn often lead to rash responses. Calling for cooler heads to prevail therefore is not burying one’s head in the sand, it is simply a reminder to proceed with caution.
Yes Greek and EU political leaders are charged with a responsibility and should be expected to act decisively to resolve the current crisis however, such actions should always be taken after critical evaluation, not as knee-jerk reactions. In addition, such actions should always be taken with human dignity as the ultimate bottom-line index. Simply put, ‘urgent’ should not be the harbinger of the economic version of electro-shock therapy. Nor should profits be put before people.
The EU would do well to remember what the ‘U’ stands for in its acronym – ‘Union’. Greece, Portugal, Ireland, Italy and Spain are members of this unity project and by rights, partners in the European enterprise, not lifeless specimens to be economically experimented on, nor subjects to be politically patronised. Similarly, the Troika would do well to remember that these countries are not uninhabited entities, they are states, more importantly, states comprised of individuals, individuals in turn who qualify as citizens. Citizens that live, breath, hope, dream and feel. Citizens, who very much feel the very real impacts of the austerity measures ‘work-shopped’ on their behalf and imposed upon their lives from behind closed-door summit meetings. Finally, the governments of these countries need to remember that in a democracy the constituents to be served are the people, citizens and residents, not lobby groups and corporate interests. In a world where the constituency lines for many modern democracies appear to be blurring, this is one fact with no shades of grey. It remains as black and white today, as it ever was – citizens’ needs, must and always must, trump corporate want.
More than just romantic demagoguery, or naïve idealism, to have the reverse situation, i.e. the persistence of the less appealing aspects of the current status quo, where many citizens increasingly feel disenfranchised from the decision-making processes of their societies, disconnected from their leaders who are either really, or perceived to be only serving their own self-interests and uninspired by a future that shows little to no signs of relief and hope for many; is to then also persist in cultivating a situation that runs the serious risk of sowing the seeds of discontent and ultimately exacerbating an already volatile crisis that as yet unfortunately shows no sign of abating.
With all this in mind, why then is Greece – depending on who you talk to – either voluntarily opting, or alternatively, agreeing to have both of its arms twisted to ‘throw the baby out with the bath water’ and undergo an intensive policy of increased privatisation?
In terms of what the privatisation projects in Greece actually look like, news reports have indicated that the Greek government has earmarked 28 privatisations, including state natural gas, water and betting companies, redevelopment of the former Athens airport, along with other airports, marinas, state railways, the sale and leaseback of 28 state properties and the later privatisation of the Public Power Corporation.
Privatisation may indeed be a partial answer to restoring Greece’s ailing economy, but in the same breathe, aggressive privatisation is arguably also far from a panacea. This is exactly the type of knee-jerk reaction that can inadvertently aggravate an already precarious situation. Such comments, however, will no doubt arouse criticism, anger and ridicule. Although questioning Greece’s proposed privatisation plan need not be reduced to some archaic throw-back Cold War debate about Capitalism vs Socialism. In fact, putting Greece’s current privatisation plans under the microscope has less to do with political allegiances and ideological affinities and much more to do with recalibrating society’s moral compass. Nor is questioning Greece’s proposed privatisation relishing in the role of the doomsayer, instead it’s a lesson in basic economic rationalism in the etymological sense of the word, i.e. economics as ‘household stewardship’. From this definition, reconnecting people once more with seeing value in the collective is not so much a politically motivated act, in so much as it is an economically logical one.
Speaking of logic, how can it possibly make sense for a fire-sale of some of Greece’s most valuable assets? Particularly when they are more than likely set to be picked up at a ridiculously cheap price, itself superficially dictated by an unflattering current market value that completely discounts the actual value of these public assets. In effect, Greece is being put in a position where it is forced to cover a financial short-fall in the immediate term, at the expense of the economic long term potential of certain assets.
In other words, a policy of rushed privatisation would mean unnecessarily foregoing the wealth-generating prospects certain national assets could offer Greeks in the future. And that’s not even mentioning the ethical considerations associated with democracies – of all systems! – selling off public assets that have the capacity to generate social capital for a nation’s citizenry. And by rights, actually belong to these citizens, as part of the public commons that a nation’s body politic shares in, as society’s key stakeholder.
It is important to point out that this is not a blanket argument against all privatisation, nor is it, as no doubt many will discard, just another diatribe that tries to conveniently avoid dealing with the fact that some public assets can certainly be better managed. There is no doubt that many Greek public industries require a long overdue overhaul in order to be made more efficient, innovative and productive. However, an overhaul is one thing, a significant sell-off of a nation’s essential utilities, present-day capabilities and future potential capacity is very much another. This is therefore, unapologetically a call against rushed and rash privatisation.
Any country, but particularly one such as Greece that is not only facing serious economic hardships at the moment, but also finds itself in a very complex situation, dealing with equally serious social, political and cultural challenges; cannot solely be driven by the mentality of the stock market. The obligation of any state to its citizens, particularly countries confronting the Euro-zone crisis, should be guided by something far more substantial than just the stock broker’s natural inclination to “Sell! Sell! Sell!” or the rogue-trader’s short-term, opportunistic penchant to make a ‘quick buck’. If the current Euro-zone crisis is to be resolved and a future such crisis avoided, real long-term planning should be the order of the day, with a human security model (encompassing genuine and fair environmental, food, economic and energy security measures) as the ultimate goal.
As unconventional and unpopular as it is to suggest, public enterprise and effectiveness need not be seen as mutually exclusive entities. In an era of intense globalisation where the traditional role of the state is constantly being challenged by complex, multifaceted social, political, economic, cultural and technological forces, a way where the state can actually ensure its relevance is to in turn ensure it guarantees the well-being of the individuals that make up its membership. A well-being incidentally that should extend beyond cosmetic, trivial materialism.
This is perhaps what is most unsettling about Greece’s proposed privatisation policy. Selling-off sections of Greece’s water utilities runs an unnecessary risk of potentially jeopardising the well-being of all Greeks, but particularly the most defenseless of Greece’s residence. This sell-off was announced by the Hellenic Republic’s Ministry of Finance on its website in June 2010 where the sale was outlined as follows “39 % of Hellenic Post (ELTA), 23% of Thessaloniki Water utility EYATH, and 10% of Athens Water and Sewage utility EYDAP, leaving the government will a 51% controlling stake in the aforementioned companies”.
In the same announcement the Ministry stated: “The Greek government announced a wide ranging privatisation programme…The program is aimed at leveraging private investment to help restructure the Greek economy, safeguard the public interest, and contribute to the ongoing fiscal consolidation effort.” Granted this statement was made two years ago, however, on the same website in the Hellenic Stability and Growth Programme 2008-2011 the Ministry stated: “the government’s economic policy is based on a two pillar strategy: further improving public finances while providing a social protection “safety net” for the most vulnerable population groups and implementing structural reforms so as to raise the potential growth of the economy.”
It’s worth ‘unpacking’ some of these claims. Firstly, “Privatisation safeguarding the public interest”, is this possible or a paradox? Some would argue that at its heart, the very nature of privatisation breeds enterprises that far from enabling the safeguarding of the public interest, are instead beholden a small but influential group of elite stakeholders, chiefly, management executives, powerful board members and large share-holders. For many the cynical, but not unfounded conclusion, is that it is these interests that are ultimately safeguarded. Secondly, “Privatisation, providing a social protection safety net for the most vulnerable”, again is this possible, at the same time when social assets are being prepared to be sold off? Aren’t the public assets and in turn the money they generate, the very social protection safety net in question? A contradiction in terms perhaps, or maybe the mantra of ‘rushed privatisation’, is also due for a much needed overhaul?
To be fair, since the 2010 Ministry of Finance announcement Greece has changed governments, nevertheless, privatisation of key utilities including water supply is set to proceed. Surely, a 51 per cent stake in the nation’s most fundamental resources, chief of which is water and thereby access to the most basic of life giving sustenance; is only the slimmest of controlling margins? To have 33 per cent of a nation’s water supply, effectively a third of the country’s water access out of the public’s hands appears an unnecessary gamble with life’s most fundamental and precious resource. Furthermore, this also raises a potential grey area under the UN Human Rights Council’s 2010 Resolution A/HRC/15/L.14 (The right to water and sanitation), which makes the issue of access both to safe drinking water and sanitation legally recognised as a basic human right. And as such, ultimately the primary responsibility of a nation-state, in order to ensure its citizens’ access to this basic human right is fully realised.
Surely, Greece does not want a ‘war over water’ as reports suggested took place in Bolivia during the years 2000-2002 between some of Bolivia’s poorer citizens and a multinational consortium that bought the Cochabamba’s local water agency. Here Greece’s Ministry of Finance needs to be cautious lest its own rhetoric comes back to haunt it. Consider what happens when the Ministry of Finance website’s announcements are transferred across to the Bolivian situation and superimposed verbatim. Here two questions naturally beg: (1) how did privatisation safeguard the public interest in Bolivia? And (2) how did privatisation provide for the social protection safety net for Bolivia’s most vulnerable population groups?
Sure one runs the risk of eating some humble pie if nothing like a Bolivian situation ever arises. God forbid though, if it does, one then runs a far more serious risk of being caught out and blindsided by events, from which it would be very hard to recover. Thus, even though the Bolivian example revolves around the worst-case scenario, far from an alarmist stunt, comparing Greece with Bolivia clearly illustrates the high stakes nature that underpins the proposed privatisation of a nation’s water utilities. Even if for nothing else, other than political self-interest, surely when faced between an option of either eating some humble pie or the potential downfall from hubiris to nemesis, surely political leaders would have to opt for the former. In which case water access cannot, and must not, feature in any of Greece’s proposed privatisations plan.
If the Euro-zone crisis has a take-home lesson, it is that risk is becoming ever increasingly harder to avert. Logically then, risk must try to be managed. In doing so there is merit in erring on the side of caution, as opposed to throwing caution to the wind, particularly when such disregard for risk does not go according to plan. In such cases, more often than not it’s the most vulnerable members of our communities that seem to bear the devastating brunt for the miscalculation of others. ‘Others’ who are usually much better equipped to withstand any such devastating fallout. Again though, to even suggest as much, is to invite criticism, anger and ridicule.
However, the fact that conventional thinking regarding modern economic neo-liberalism in some quarters has ossified into an infallible article of faith, is nothing new. Naturally then, any argument that puts across a contention that calls for ‘caution’, ‘sustainability’ and the concept of ‘having enough’ instead of constantly ‘wanting more’ is obviously going to be seen as stifling progress. But this is only valid if progress is conceptualised through the narrow prism that the only avenue to achieve high financial reward is through unnecessarily high-risk speculative behaviour. In addition, the fact that this type of thinking has endured even in spite of the fallout from the Global Financial Crisis highlights the persuasive powers many vested interests have and the campaign they have waged to convince themselves and others that the most calamitous economic meltdown since the Great Depression was merely a small blip on the radar of global economic history, a minor glitch in the system of the international political economy, that should otherwise not be allowed to get in the way of business as usual. A business mentality in many ways that is best summed up in the maxim ‘high risks for all, high returns for a few’.
Alternatively if progress is appreciated as humanity’s need not only to cover the biological basics of subsistence to survive, but rather also the social and cultural stimuli to thrive, then our understanding of progress needs to broaden to include sustainable and ethical economic practices in order to be able to bequeath a more just world for our future generations. Subsequently, under such a model there is still scope for public industry. Privatisation is not the only answer and therefore it is incumbent on Greece to stop for a brief moment, recalibrate itself and think strategically before it makes a public asset sale that in the future it will struggle to reverse, or outright regret.
The annals of History are filled with countless national and international emergencies that bear witness to the adage that ‘cooler heads prevail’. Rather than brashly embracing unnecessary risk, groups, societies and individuals have saved the day by stopping for a moment, recalibrating and thinking strategically. This type of thinking, at times unfortunately sadly lacking from those who would call themselves leaders, has both eyes set on the big picture. Whereas a policy of rushed and rash privatisation appears more to have one eye set on maximizing short-term gain, while the other focuses on perfecting the art of the clever sound-bite.
Whilst History like beauty, is obviously in the eye of the beholder, it is worth considering the more enduring narratives associated with the three following events: (1) FDR’s momentous response to the 1929 Wall Street Crash, not only his famed first 100 days, but his overall subsequent time in office dealing with the impact of the Great Depression, (2) The successful global struggle against extremism in the form of Fascism/Nazism and Imperial Militarism throughout the 1930s-40s and (3) Kennedy and Khrushchev’s fateful (albeit high-stakes) two weeks in October 1962, where in light of the Cuban Missile Crisis (which incidentally will have its 50th anniversary later this year) both men proved capable of seeing past their own immediate political careers and where in turn able to eventually step back from the nuclear brink, for the sake of all humanity. In all three examples ‘cooler heads’ prevailed and as a result, calamities if not outright averted, were at least, ultimately overcome.
Now is yet another such time that demands similar ‘cooler heads’ to once again prevail, not only in light of satisfactorily solving the entire Euro-zone crisis, but particularly in regards to the suggested sale of quite a substantial portion of Greece’s water. In fact, nowhere is one more powerfully reminded of the pressing need for such ‘cooler heads’, than in Rachel Carson’s 1962 seminal work Silent Spring (also set to celebrate its 50th anniversary later this year). Here Carson, beautifully, yet ominously wrote “In an age when man has forgotten his origins and is blind even to his most essential needs for survival, water along with other resources has become the victim of his indifference.”
Carson’s words speak a simple honesty, just as – if not far more, relevant today than when they were first penned. Greece stands to lose nothing by heeding Carson’s words. The same cannot be said for continuing down the path of austerity, where the answers to Greece’s current woes arguably boil down to three fundamental precepts (1) the Troika knows best, (2) the 130 billion euro bailout package is akin to lifeblood and (3) growth is God, thus the ends justify the means (means such as rushed and rash privatisation). The type of ‘wisdom’ needs to be questioned, it emanates from the same rationale that continues to enforce austerity measures as if the EU were trapped in a ‘ground-hog day’ like curse. Subsequently, it’s the kind of thinking, or rather lack thereof, that both fuels a reluctance to consider the possibility that the Euro-zone crisis might also be a political structural issue, as well as a similar unwillingness to acknowledge the human toll to this crisis.
It’s interesting to wonder whether citizens across South America, Africa and Asia that have had first-hand experience with the harsh micro realities of economic neo-liberalism’s macro conditionality would see a group such as the Troika as knowing best. Similarly, where many see the 130 billion euro bailout package as a lifeblood, is it fair to say, let alone ever have the gumption to try and possibly comprehend why many others, might instead see it as a a double-edged sword, if not an outright poison chalice? As for the issue of growth, growth is good. Unsustainable growth though, be it debt-trap credit and/or un-environmentally friendly initiatives, underpinned by unnecessarily high risk behavior, is actually quite counter-productive and in actual fact, has all the parasitic qualities of a cancerous tumour. In both situations the host body is eventually destined to be consumed and destroyed.
Growth for growth’s sake no doubt looks good on financial graphs and economic charts and goes someway in restoring consumer confidence by putting investor’s minds at ease (not the ‘ma and pa’ small variety but the ‘big fish’ traders, who pre-GFC, once upon a time strutted their hour upon the stage referring to themselves as the Masters of the Universe). This is all very much part and parcel, in fact, some might even say an inescapable reality of the current global economic structure. However, is it the matter of urgency that it’s made out to be? If the answer is yes, then rushed and rash privatisation can and will, no doubt play a ‘useful’, not to mention, potentially destabilising part in Greece’s ‘salvation’. On the other hand, if the answer is no, then the question naturally begs, whose confidence is it first and foremost that we should really be aiming to try and restore? In fact, when one considers Europe’s youth, the ‘700 euro generation’ starring hopelessly into the abyss, being punished for a situation they did not create, along with the fateful tragedy of Greece’s austerity suicide victims that have already fallen into that very same abyss, perhaps it’s timely that Greece, the EU and the Troika all rethink their strategic priorities – privatisation plans included.
Through the lens of a human security approach, it is not far-fetched to suggest that growth in and of itself, is arguably meaningless if it is not subsequently translated into real social benefits for communities, and not translated as the mere trickles intended to slowly ooze down to the ‘average Joe’. The simple scraps from the table of speculative finance that fall upon the ground, where ‘the wretched of the earth’ are set to be waiting cap in hand, or ecstatically clutching at the air, ever thankful for some, or any of the crumbs that might fall their way. If economic growth is to have any real meaning, be it generated as a public project, a private venture or both, citizens of the world must overcome their apathy, disenfranchisement or fear and try to do two things. First, imagine an overall economic system that is more than just a process of shadowy financialisation and casino-style capitalism, and second, work together to realise such new possibility. A mammoth task – no doubt! An unrealistic task – not necessarily! Particularly if people (i.e. ourselves and our loved ones) ever expect to be placed before profits. If there is any rationality to economic rationalism then it must reconfigure itself along its original etymological lines. When one tries to grasp economics as a system of household stewardship, rather than a corporate culture of greed, then ideas about social justice, calls to place the well-being of the citizen as paramount and laws that work to protect human dignity do not actually seem utopian or unattainable. Rather, much like free access to water, they become the very essential foundations for life.
Nicholas Melaisis is an educator in Melbourne and completing his Masters of International Relations. You can contact him on nmelaisis@gmail.com
