Can Europe Make It?

Greece is not Weimar

The insistence by the British commentariat on seeing Greece through the eyes of their own need for Eurozone breakdown is part of British pathology about Europe.

Denis MacShane
13 November 2013

Small bondholder calls Greek and German heads of state liars outside Bank of Greece on World Savings Day, October 31, 2013. Demotix/Konstaninos Tsakalidis. All rights reserved.

To read the reports in British newspapers about Greece since the Eurozone crisis began is to have a sense of imminent breakdown. Paul Mason wrote a long blog for the BBC in October 2012 comparing Greece to Weimar and Hitler’s seizure of power.  A year later the Financial Times headlined a comment piece earlier this month ‘Watch Greece. It may be the next Weimar.’ The insistence by the British commentariat on seeing Greece through the eyes of their own need for Eurozone breakdown is part of British pathology about Europe. Greece is not Weimar and it disserves the left to argue it is.

There are indeed major problems in Greece – political, economic, and social. But they need solutions rather than lectures from visiting journalists. Yet the most important aspect of this phase of Greek history is how the Greeks are again offering a principled resistance to the role assigned to them by superior Europeans from the north, or by their own professoriat at Greek, British, American and European universities who are ready with rent-a-column predictions about collapse and chaos.

This mixture of resistance and pride has long echoes in Greek history. Resistance to Ottoman imperialism, to Italian invasion and Nazi occupation, and resistance to the crude Stalinist attempts at an armed takeover to make Greece an Aegean Albania and into a communist country after 1945. The resistance to the Colonels after 1967 led to great cruelty, attempts to strip Greeks of their citizenship, and a sense of pride as students rose against the Colonels in 1974.

Now that same sense of resistance can be seen in the refusal of Greeks to play the role allotted to them by ‘experts’ like Professor Nouriel Roubini, or vulgar Hellenophobes who edit the Bild Zeitung or Daily Mail that they have no place in the modern European economy and should revert to using the drachma or performing Zorba the Greek dances for the delight of rich tourists.

The City coined the term ‘Grexit’ in 2010 which was seized by the Financial Times and London papers that then used the term ‘Grexit’ (it only works in English!) endlessly in headlines and columns to create a self-fulfilling sense that Greece would be better off outside the Eurozone and even the EU.

This however is not what the Greeks want. Even the most powerful left grouping in Greece, Syriza, rejects both a return to the Drachma and a ‘Grexit’ from the EU. Instead what Greece asks for – not unreasonably – is some revision of the counter-productive austerity programme that the EU-IMF-ECB troika has imposed on Greece along with other over-indebted countries.

The Greek left

Syriza has brought together many disparate anti-system forces in Greece, much like Beppe Grillo’s Cinque Estella movement in Italy. Anti-capitalist Maoists rub shoulder with anti-carnivorous Greens. The once mighty socialist Pasok has shrunk to about 7 per cent in the opinion polls. But as with the eclipse of other social democratic parties at different stages in national political history, Pasok can come back.

Pasok’s tragedy was that it won power on a programme of a statist nationalism and statist control of the economy in the 1980s just at a time when the rest of the European left was copying Sweden and the Netherlands in an open market theory aimed at liberal social democracy where private enterprise would co-exist with social justice mechanism – the Delors idea of Europe.

Pasok politicians in Greece instead sought to turn citizens into clients – offering specific jobs in the public sector in exchange for votes. New Democracy – the main rightist formation – was as bad as Pasok. Hence the stories of schools with 20 pupils but 17 gym teachers, or a railway system where the wage bill was a hundred times the ticket revenue. Athens had a municipal radio station which earned no money but which employed people sent by local politicians who did an hour or two of work before going off to other jobs.

Blaming German banks

The low-interest credit that flowed into Greece when it entered the Euro actually prevented necessary reform. Theo Pangalos is the rumbustious ex-communist whose father, a general, was one of Greece’s dictators in the 1920s. Pangalos switched to Pasok and was foreign and culture minister in the 1990s. Now talking of the Euro decade he says Mazi ta fagame – ‘We ate it all together.’ Both Greek citizens, politicians of left and right, and local capitalists consumed the cheap capital that flowed into Greece.

Blaming the wicked German banks for lending the money or firms like Siemens for corrupting Greek politicians is feel-righteous rhetoric. Pangalos, now 75 so past personal ambition, told a stark truth – namely that all of Greece enjoyed the easy money that flowed with the Euro. Both Pasok and New Democracy were in power in this period and utterly failed to change the political-economic culture to prepare Greeks for the tougher choices that a full integration into the Eurozone would entail.

Trade unions in Greece are linked to political parties and there is no centralized social democratic autonomous and hegemonic trade unionism as in Germany or the Nordic countries, or even more tenuously in the TUC in Britain. Each ministry had its own unions, its own pay deals with 2, 3 or even 4 month’s extra pay at Christmas according to the principles of clientalism that governed politicians’ relations with the swollen public sector.  When the reformist George Papandreou became Pasok prime minister in 2009 he asked how many state employees were on the Greek payroll. No-one had an answer.

So the Eurocrisis is also a crisis about the organization of the Greek state and Greek capitalism which was unfit for purpose long before 2008-7. The grotesque tax avoidance covers all sections of society. Papandreou turned to Google Earth as a tax collecting tool because rich Greek dentists or lawyers claimed annual taxable incomes of €20,000 yet had swimming pools in each property they owned.

It is easy to describe the malady, not so easy to prescribe the cure, assuming that Greece stays fully democratic, operates open borders, and allows people control over their bank accounts. Tanks would have to be in the streets in front of ATMs if Greeks thought their Euros would be devalued into drachmas.

Classic stoicism

While the ugly excesses of the neo-Nazi Golden Dawn make for easy TV reporting, it is the classic stoicism of the Greeks that is the most impressive. Finally, the Greek government has taken rigorous action against the thugs and racists of Golden Dawn. Like communists and extreme rightists in the former western Germany, whose rights were limited under the German Grundgesetz, Greek democracy is not going to allow Golden Dawn to turn into neo-fascist day. The methods may worry constitutional free-for-all purists but Greeks welcome some curb on overt neo-Nazism.

The extremely heterogenous Syriza and its effective publicist leader, Alexis Tsipras, catches headlines and support, but it is not remotely a governing party. It tried to win a censure motion on the government in mid-November but was easily seen off by 153 votes to 124. Some Syriza mlitants and MPs adopt the anti-Euro slogans of Marine Le Pen, Ukip or Jean Luc Mélanchon. But Tsipras is too canny to allow such reversion into Balkan fragmentation to become official Syriza policy.

What is surprising about the Greek crisis is how relatively calm it has been. More people were killed, more buildings set on fire, and more shops looted in the riots in London and other UK cities in August 2011 than we have seen in Greece since then. Small clashes in Syntagma Square between a few score police and demonstrators look exciting on television but to anyone who has been in real tension regions of Europe in recent decades or seen what a real mass demonstration and occupation can be like, the Greeks are living with their difficulties and not dreaming that there is a single, simple policy change that can make all the difference.

There is sadly a culture of political violence and terrorism in Greece left over from the German Rote Armee Fraktion or Italian Red Brigade cultures of the 1970s, but it remains fringe activity.

The suffering is real. The Greek GDP has declined by 25 per cent since 2008. Unemployment amongst young people is over 60 per cent. Barter has returned and many poorer people do not choose between heating and eating – instead they both freeze and go hungry. Unemployment benefit runs out after 12 months. Investment into Greece has collapsed and while the cuts and lack of imports allows Greece to have a primary surplus, the way the country has been placed in a modern equivalent of a nineteenth century debtors’ prison shames the rest of Europe.

Help Greece

Meanwhile reforms are agonizingly slow. Greece has more coastline than the rest of Europe which should open the way to tourist development. But there is no adequate land register, local lawyers take years to agree a deal, and the local Mayor always wants a cut. The cost of flying to Greece is prohibitive as there is a ban on building any new airport within 200 km of Athens, which charges the highest landing fees in Europe.

The most obvious way to help Greece is to write off some of the debt incurred when German and French bankers were showering Euros on Greece before 2008 in order to boost their own balance sheets and justify their bonuses. Like crack, cheap Euros were addictive but the peddler and not just the addict should accept responsibility.

But this requires a mature understanding of modern Greece not just Weimar comparison language. Greece is not Weimar and its people will resist the pressure to revert to subordinate Balkan status in place of full participation in the European Union.

It would be good if Europe had leaders - or even editors - in Germany or France (forget about Britain) who could make the case for a new deal to get money flowing into the Greek economy. It would be good if the Greek democratic left would stop blaming everyone else and occasionally pick up a mirror. Gnothi seauton – ‘Know thyself’, is famously inscribed on the pronaos at Delphi.

Greeks are beginning to know themselves and understand that the pre-crisis Greece was unsustainable. But regular contact with Greece reveals a country that will stay European and not gives wiseacres in London the pleasure of seeing Greece collapse and redrachmarise.

Meanwhile Greece needs advice and its ordinary people who pay the price for bad, sad politics and economics need solidarity from the rest of Europe. But it would be helpful if the word Weimar could be quietly forgotten as Greece in 2013 is neither Germany of 1923 nor 1933.

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