Wednesday, February 8, 2012

Greece and the Euro – Balkan Tribe meets Northern Barbarians

Understand the Greeks? Do we have to? I resist the impulse to seek an “explanation” that takes in the whole Greek nation, as if it were one person. And at this late stage, maybe I should just leave it alone after so many others have been heard on the subject. But then again, living in the euro zone it's hard to be indifferent to something very likely to affect your own future – affect it considerably. So my hesitation and resistance yield to curiosity.

First, like many visitors to Greece, I have always found their lifestyle and personal ways irresistibly charming, at least what they reveal to visitors. A Greek wants to be your friend, and he expects to be reciprocated. You will be won over. Millions of visitors to Greece will testify to the same thing. That is also why it is hard to be critical. However, in a serious situation like this one has a duty to give one's view as it is.

What is visible to us outsiders in Greece is public political life. From my profession I have learned there's a limit to what is worth observing there, compared to what is hidden behind the curtains. Still, judging from what little that is visible, and like most other observers, I find the behavior patterns of Greek politicians over time curious. Whether or not Greece ultimately defaults, I am utterly convinced that the Greek parliament and government have all along – for two years now - had the ability to quickly agree, accept the terms, implement them and thus resolve the crisis. That way Greeks could have gotten on with their lives, and left the rest of us to ours. In Greece it would have been a tougher life than before, no doubt, but not forever.

Compare Greece to Latvia, or Iceland, to offer just two examples of how it might have been. The Latvians have taken their medicine, several times, in fact, according to the dictation of the EU and the IMF, and now they are well on the way to recovery. Greek politicians, however, just haven't had the inclination.

The evident determination of the unions and large parts of the population to resist a solution dictated to them is perhaps admirable if seen in isolation. Yet the mentality seems to be that “we have done nothing wrong, and then these outsiders come in here and tell us what to do”.

Facts apart, this kind of closure to an us/them mode is interesting. Of course it is nothing extraordinary to a group under pressure, nothing specific to Greece. It still occurs to me, though, that there is an entirely different quality to it in Greece. I shall draw on a couple of points relevant to this tendency.

One is the Balkan thing. I always have to be reminded by my Greek friends when I come to Greece that they are a Balkan country; they are quite aware of this - and many are proud of it. But it does not fit our Western image of the country we regard (in a facile way) as the cradle of our European culture. To a Western mind the Balkan image does not bring up pleasant associations. Hence, we non-Greeks tend to suppress the knowledge that Greece is a Balkan country, and we expect them to behave according to our standards. But whatever they perceive themselves to be is what counts, it shapes their behavior. The rest of us need to adjust our own view to take that into account.

That identification of Greece as a Balkan country, and the established record of Greek negotiating behavior, bring to mind another Balkan negotiator, one who also had Western leaders in agony and rage over his style – Slobodan Milosevich. There was never a way he could be bound to finalize an agreement. He thought his procrastination was a way to win, but - as we all know and he learned too late - he misjudged his opponents. That tendency finally provoked NATO's attack on Serbia. It should not be forgotten that in the Kosovo War of 1999, the Greeks - though members of NATO - opted out of participating in NATO's military operations out of sympathy and solidarity with their Balkan brothers. Greek public opinion was massively against the war.

To say this is not to suggest that Greek politicians would condone the kind of violence previously long accepted by their Serb counterparts. But their style of negotiating is very similar. It reveals a basic attitude of defining an interlocutor – the person one negotiates with - as always an opponent to be beaten, combatting him and resisting him to the bitter end even over matters not vital, and by any means available, including mendacity if it saves Greek honor. Greek politicians demonstrate that to them negotiating is a game to win, not a way to settle differences. Many observers therefore argue that Greek political culture is not really of the West.

Most of us on the outside have tended to see Greece in this crisis as unified, of one ilk, with only its government (possibly) on the side of Western sanity. The Greek people see it the other way around, with only themselves representing sanity, their government caught in the middle, and the whole world outside ranged against them. Keep in mind, it was the Greeks who invented the word “barbarian”. Guess who's at the gates once more.

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5 comments:

Anonymous said...

Olav, Very good piece. I don’t know Greece, but what I DO know of it leads me to think that you are spot-on. (I would point out, however, that you begin by rejecting the notion of “national character”, but you go on to rest your argument on it.) But you are right: there is definitely a Greek political culture that has been obvious in this crisis, that is deterministic, and that we see running its course. In my view, that political culture got them into the current problem, and it will prevent them from getting out of it – they will agonizingly and resentfully be able to create enough of a temporary political coalition to “promise the West what it wants”, and then immediately begin to back pedal and fail to deliver on their promises. There is already ample evidence of this syndrome. Being tough has worked in Ireland, Iceland and Portugal, but Greece will not keep its promises and is politically incapable of keeping its promises. I have lost patience, and while I admit I do not fully appreciate or comprehend the possible financial/economic consequences, I would now let them go under – having first put in place the financial firewalls that could stem the contagion. An orderly bankruptcy for Greece would right the European ship, serve to enforce future financial discipline, and disabuse people of an earlier and (now obviously) over simple idea of “Europe.” - Bob

Anonymous said...

As always very interesting and insightful, Olav. However, as Bob also noted, you begin by saying that it is questionable to talk about "national characters". I definitely think so, not the least in this case (I would love to see an empirically well-grounded definition of the "Balkan character", for example).
I think two points are important to remember here;
1) It is correct that medicine is sometimes needed, also bitter medicine, when you are sick. What is not advisable, though, is to give the medicine to the wrong person. Correct me if I am wrong, but I guess a substantial part of the frustration and unwillingness to accept heavy cuts in wages, widespread unemployment etc. has been caused by the belief that the ones to blame is the political/bureaucratic aristocracy (of which of most will go through this crisis without much harm) rather than by “ordinary people”. An important part of this tragedy could thus be that the wrong patients are forced to take the bitter medicine. Could/should we blame them (on the other hand, what other solutions are there?)?.
2) It is clear that it is not only illness that matters. As important is who is ill. Germany and France early on set the example when it comes to fiscal prudence, and showed that it was not important to abide by the regulations that then recently had be decided upon. No medicine needed there (possibly causing contagion effects). What about US fiscal and financial prudence? No medicine needed there, despite the fact that it would be hard, indeed, that we all were no hit hard (harder?) by the latest recession, primarily caused by US bank policies... Or? Contagion effects possible.
Regards, Björn H

Anonymous said...

Dear Olav,

Thanks for your effort to make sense of what happens to Greece and its possible impact on us. But I don’t think you got all the facts right. And you rightly held something under the curve by admitting the partiality of your own observations, the anecdotal part of it.
Firstly, by comparing the conduct of Latvia people or government to the Greek ones.
Read for instance, prof M. Hudson’s assessment of the hopeless situation of Latvia and the positive spin the mainstream press tries to sell us.
http://www.guardian.co.uk/commentisfree/cifamerica/2011/sep/16/latvia-anders-aslund-austerity
What are the sources for your following statement: Anders Aslund?
“The Latvians have taken their medicine, several times, in fact, according to the dictation of the EU and the IMF, and now they are well on the way to recovery. Greek politicians, however, just haven't had the inclination. The Latvians have taken their medicine, several times, in fact, according to the dictation of the EU and the IMF, and now they are well on the way to recovery.”
In spite of your reservation about generalisations, what has the Balkan to do with the wish to win during negotiations? Has Israel or the USA ever given in on important issues with negotiations? And how important is your sovereignty: selling your country to the lowest bidder in a kind of fire-sales?
The politicians are the same figures who tricked the people in believing that the debt round 2003 was in accordance with the 3% rule of the EU, after the fraudulent, hidden consultations with one of the big banks (J.P. Morgan?). You stated that much is invisible for outside observers, but that goes very much for their own people, who feel trapped by their own politicians. I would not call them “on the side of Western sanity”
For your characterisation of the Balkan-attitude you lean too much on the style of Slobodan Milosewich, who actually had very good reasons not to give in. A good read in this respect is
To Kill A Nation: The Attack On Yugoslavia - by Michael Parenti
(For seventy-eight days, in 1999, US and NATO forces launched round-the-clock aerial attacks against Yugoslavia, dropping 20,000 tons of bombs and killing upwards of three thousand people in the name of humanitarianism. Among those who could not help noticing the gap between action and words was Michael Parenti. Drawing on a wide range of unpublished material and observations gathered from his visit to Yugoslavia in 1999, he challenges mainstream media coverage of the war and uncovers hidden agendas behind the Western talk of "genocide", "ethnic cleansing", and "democracy"
To Kill a Nation reveals a decade-long disinformation campaign waged by Western leaders and NATO officials in their pursuit of free-market reforms. This continues, Parenti shows, as industrial and ecological destruction wrought by the war last year helps the West to destabilize Montenegro and Vojvodina today.)
This disinformation counts just the same for “the gab between actions and words” in the case of Libya and Syria.
Well, in short: I hope that Greece defaults on its bank loans. For some banks that would be better too, so the insurances must pay out. I agree with your last statement “the barbarians are at the gate once more” – for the banks and hedge-funds with their financialisation of the economy are the true barbarians!

Olav F. Knudsen said...

Bob and Björn both point out that I contradict myself on “national character”, and Anonymous thinks so too. But I don't think I do. First of all, I have consciously avoided the expression “national character” because of its controversial nature. I do say that I will not seek an explanation that takes in the whole country as if it were one person. In other words, I want to talk about tendencies that are deep-seated, may be visible or prevalent, but not necessarily universal.

Above all, Björn, it must be noted that the tendency I am talking about is not my invention, it is a self-identification clearly shown in statements repeatedly made by Greeks themselves. They are the ones who will tell you that they are a Balkan people. The empirical and deep-seated nature of the beliefs in question is, I think, well reflected in the fact that the Greeks themselves not only bring it out, and pride themselves of it, but go to the length of having their government abstain in the Kosovo War and massively (over 90% according to polls) admiring the stance of the Serbian dictator. The Balkan factor I am talking about is subjective, but also empirically documented. It is certainly not anecdotal. Call it what you want if you don't like “the B-word” (Bracewell and Drace-Francis 1999), but it is there.

So, granted, the experts seem to agree to disagree about whether there really is something that deserves to be called Balkan culture, but the Greeks themselves are not much in doubt.

Then there is Björn's objection that it is the political/bureaucratic aristocracy who are mostly to blame. Anonymous says the same thing. And it is true. But it makes no difference. It even makes it worse to see that the leaders of a nation deal with such serious matters in such an irresponsible way. So, yes, the wrong patients are forced to take the bitter medicine. It is only unfortunate that they cannot be differentiated. This is all in character for a Greek tragedy.

But is the people “innocent”? Hardly. Rather it is, I think, the case that most Greeks are deep down committed to the idea that whatever is wrong, someone else is to blame. This principle is a guarantee for divisive politics. “Not me, my neighbor!” “Not our neighborhood, the one over there!” “Not our town, ...” (etc) “Not our country, Germany and France!”

If you think I'm wrong, show me. Until then, I strongly believe this is a key part of Greek political culture. (On this score I think Latvia and Iceland differ from Greece.)

Anonymous is fully on the side of Milosevich in the Kosovo War. He is not alone. In addition to the Greeks there were many in Eastern Europe who were on that side. If this view is based only on the Rambouillet agreement, I find it myopic. It was not what was demanded of Serbia in January of 1999 that led to the NATO attack. It was the whole pattern, over many years, of Serb procrastination on Kosovo.

Anonymous thinks I criticize Greeks for defending their own interests in negotiations. This is not my point. He is of course right that everybody with common sense fights for his interests as long as he can. But tenacity is admirable only up to a limit. There are usually also common interests to consider, in addition to the separate interests of the two sides.

My point is and was that the Greeks (like the Serbs) have shown no sense of proportion in the defense of their own interests when there are also common interests to consider.

Olav F. Knudsen said...

Finally, to "Anonymous Anonymous", a separate comment on the economics he keeps hurling at me: I'll grant him the following, namely that I believe the Great Depression of the 2000s will not end until governments can add stimulus policies to the current austerity campaigns. But it must not be forgotten that the current crisis in Southern Europe came partly as a consequence of ill-timed stimulus-like projects during the good years, just the wrong time for that kind of endeavor. Huge infrastructure projects with very low returns were financed by credit (e.g., the Greek Olympics and Greek defense investments, Spanish regional airports, motorways and high-speed railways). Moreover, government bureaucracies were overstaffed and overpaid, also paid for by credit. Loans could be serviced without problems in the good years up to 2008 when government income was generally high. Not so in the subsequent bad years. Of course, the downturn and its severity were not expected, but it was poor planning. To service the old loans today, new loans must be secured, since a contracting economy is not yielding sufficient income to cover the payments. The stupidity of the loans taken is only seen when times are bad. Credibility is shaken and interests rise. The downward spiral has started.

Too bad the stimulus projects were not saved for the bad times.