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Monday, March 19, 2018

An Exchange About Greek/Roman/Balkan/Russian/Ottoman History

My article on Ivan Savvidis prompted many comments and, before long, the discussion moved away from Savvidis and towards Greek history. I reproduce below a very interesting dialogue between the readers Dean and Lykinos. History buffs will enjoy this!

To: Lykinos

Since we are the topic if Savvidis, please bear in mind that in the 19th century there was a real Pan-Slavic plan (with Russia front and center pushing it) of expanding Slavic influence to the Aegean which created the basis of the Macedonian conflict. Which makes all more fascinating why the Greeks feel a kinship to Russians thinking that Russia is a friendly force (enter Savvidis and the Greek Pontiacs) when in fact Russia in many occasions could care less about the Greeks and in fact plotted openly against them (I blame the orthodox church for such gross misdirection).

V is absolutely correct when he says that any attempt by Slavic elements to misappropriate Greek symbols and Greek history is a straight invitation to annexation.

And before we start crying about rights of minorities in Greece please think for a second whose revisionist agendas these latter-day stories actually represent/serve.

The reality is this in the Balkans: There is a struggle for Russian influence whose purpose is access to the warm waters of the Mediterranean. The core of the Russian influence in the Balkans is Serbia. To a lesser extent Bulgaria and other Slavic countries. Turkey is trying to exert influence on religious grounds (supporting Muslim populations of Bosnia and others such as the sizeable Bulgarian Muslim minority close to 2 Million). Germany and your beloved Austria have many old scores to settle in the Balkans in trying to stem Russian expansionism.

This is a long topic and I would like to close with a simple factual statement. The whole basis for the "Macedonian Problem" which is tormenting Greece and certainly affects the mood Thessaloniki was a Byzantine mistake of administration. Whereas the whole world knows ancient Macedonia to be pretty much within the geographical area of today's Greek province of Macedonia (and with its center 22 km from Thessaloniki), there was this certain Byzantine princess Irene who for administrative purposes of ruling the area from Constantinople shifted a new contrived notion of the Macedonia province further to the east which included mostly present-day Bulgarian and today's Greek Thrace territory. And this is how this endless game of "to whom Macedonia belongs began". By a deliberate Byzantine administrative decision is the answer which is another element of cruel irony: that the two entities which the Greeks consider favorable to them i.e. Byzantium and Russia are in fact a considerable source of their own troubles.

Try please explaining this simple truth to your Greek friends and find out how biased and misinformed they are. I bet you they have no clue about the correct framing of the Macedonia Problem. Start the conversation by asking your Greek friends of Thessaloniki how much they know about Princess Irene and the Byzantine Macedonia province and ask them to sketch it on a piece of paper. Don't be surprised about the answers you get because they will be all over the map.


To: Dean

Although I may understand where you're coming from (Greek-American), fact is your take on Byzantium is completely screwed up! Since I wouldn't know where to begin with that, I'm just leaving you with this:

I know it's a rather long and heavy read, not strictly scientific (not peer-reviewed) by a rather peculiar (to say the least) writer but it remains adequately researched and most importantly benefits from the charm of an outsider looking in and being astounded by the "conspiracy" he uncovers! (Although his "discoveries" are in fact widely recognized and discussed amongst historians, albeit as a relatively recent development of the 80's and onwards - even Wikipedia has somewhat caught up.)

Allow me a couple of points: Macedonia as an administrative region of the Roman Empire has always been fluid, same as the province(s) of Greece. Empress Irene or not, Skopjans would have latched onto the name and identity anyway because they had need of it when they first became independent in the early 90 and perhaps they still do.

I'm speaking of the Roman empire because there has never existed a thing such as a "Byzantine Empire", at least not until the middle of the 16th century when a… German came up with name remembering that the ancient city of Byzantium used to stand where the City (Πόλη) is. In fact a "Byzantine" on the streets of Constantinople would have most probably never heard of this "Byzantium"-thing, he would have called himself first a Christian and then a Roman (Ρωμαίος and eventually Ρωμιός) and he would have denied being Greek, at least as far as ca. 1204 when he would have found himself opposed to the barbarous Φράγκους or Λατίνους (mind you, they never reserved the term "Roman" for these western invaders…) - although the people concerned with identity questions, i.e. the intellectuals, would have long before that recognized that of course Hellenismus is theirs as their θύραθεν παιδεία (their non religious education and cultural reference) which they funnily enough considered vastly superior to the Latin, i.e. classic Roman one!

As for Hieronymus Wolf, that aforementioned German, he invented "Byzantium" as a means to deny this reality stripping the Eastern Roman Empire of its historical heritage so that he can claim "Romanitas" (and even "Latinitas") for his emperor, i.e. the ruler of the Holy Roman Empire of the German Nation that famously "was in no way holy, nor Roman, nor an empire" nor… of the German Nation, I would have added! Now, the reason this falsification caught on - aside from past grievances between East and West - was that claiming to be the rightful heirs of the Imperium Romanorum was something that almost all European states used to do, from Paris to Moscow, in order to justify their expansionism. The most, if not successful, at least innovative, were the British who took that tired old notion and transformed it into that of the still going Western world, where they initially placed only their dearest selves, begrudgingly the French and the most… exotic and comically oversexualized Italians! In fact, their little grouped expanded or shrunk according to the each time prevailing imperial interests and ideology. Last but not least, the Germans after they realized that the Roman label would not stick they fancied themselves the new and improved Greeks (!) before settling for being the natural conclusion of all the best ancient civilizations have ever produced throughout the world before finally settling once and for all in the fatherland!

Given all that, I always find it sad to hear Greeks repeat all those long debunked and yet still circulating calumnies against "Byzantium". Something tells me you're one of those people who also believe Byzantium "killed" Ancient Greece, probably ignoring or finding a way to side-step that almost none of those famed Greek written monuments would have perished had it not been for those Greek-speaking medieval Romans… Again, there is a long and interesting history behind these ideologically conceived great narratives of European historiography who worked hard to make Byzantium synonymous with "Byzantine" (the worst offender being Gibbon) and the reason Greek intelligentsia sheepishly adopted these dishonest stories, but I don't have the time to expand upon and besides part of it is covered in the link I provided. For my part, the best aphorism I've ever read about Modern Greek identity is the we are "romanized Hellenes or Hellenistic Romans" (ρωμαϊκοί Έλληνες ή ελληνιστικοί Ρωμαίοι)!

PS. You're right nonetheless about the unmerited and wholly displaced appreciation of Greek nationalists towards Russia, who has always acted as any other Great Power would. The Church is to blame.


To: Lykinos

The way you explained it created new conflicts for me. All of a sudden I feel much closer to the German position on Ancient Greece and that's a tremendous self-awareness moment because it makes me a lost German child who is fighting against its own people. Never would have thought that such calamity would befall on me; to be discovered to be German in my views after all.

Let me just explain. For starters, I am a born Greek who immigrated to the US at the age of 24. My children both born on American soil are Greek-American or Colombian-American if you want to bring their mother into the picture (whose family ancestral name is traced to a German town close to the Austrian border).

So, my views are not typical Greek-American; in fact, I would call them very atypical of Greek-American views. Greek-Americans use the Greek church as an identifier and I, on the other hand, want nothing to do with it.

My reasoning is very simple:

1. To be Greek means to be a person of reason and science.
2. The Eastern Roman Empire/Byzantium/Orthodox Church is a form of complete darkness (faith-based construct) which is in direct conflict with science and reason, hence by definition anti-Greek.
3. If you call me Romios (or Rum as the Turks call us) then I would probably be deeply offended.
4. An empire which issues the Edict of Thessaloniki, whose only purpose is the forceful conversion of classical Greeks to Roman Christian citizens, has nothing to do with Greek values. In my opinion, it has everything to do with anti-Greek values and as such is rejected on purely logical grounds.
5. This incredible and highly abnormal stronghold a foreign Roman religion (which you know as Christianity) has on the modern Greeks is the source of all troubles for Greece. If you want to truly reform Greece you need to start with the Greek church. Its vast real estate holdings need to be confiscated by the state, its sizeable tax bills need to be enforced and its freeloading on state salaries need to stop yesterday.
6. There is no way for Greeks to ever prosper as a nation if their notion is that their true capital (which according to the false religion is Constantinople) is the only European capital still remaining under occupation. This fact alone paralyzes Greeks into inaction and fatalism. It makes us victims of a continuous trauma.

Not that it matters, but you sound as a member of the Left which considers being a Romios as the only form of true Greece because the Ancient Greece staff is for the nationalists and fascists?


To: Dean

I enjoyed your comment and I'm sorry I'wont have the time to respond to the extent that it merited.

Since you equate Greeknes with Reason, which is a very German thing to do (remember for Germans it used to be that Germans = Greeks 2.0), I can only suggest this seminal work which is also an extremely enjoyable read:

Reading it you'll understand why Christianity found a fertile ground in our Hellenistic lands and perhaps you'll find your self curious for his next significant opus:

Trust me it will be an eye opener!

Afterwards you can continue your studies by reading up on the history of Greek language and literature, which is actually by far our truest and most meaningful connection to our Ancient world: Greek and … Roman.

One of the best on the field is:

I can't recommend it enthusiastically enough!

You'll be pleasantly surprised to find out that you can read everyday-use papyri from Ptolemaic Egypt (a much more important centre of Hellinismus at the time than Athens), without any previous training, and you'll be flabbergasted to discover that probably we wouldn't be speaking Greek nowadays or we would be speaking a very different, cut-off variation as, say, French are to medieval Latin, had it not been for the Church after 1204; there wouldn't also have survived almost anything from the Greek literary Corpus (safe from some annotated but very altered and truncated Arab translations of Aristotle) had it not been for many very learned and industrious monks!

As for me,  I'm an atheist (not a cowardly atheist, i. e. an agnostic that Christians righty abhor) and although I identify as Leftish most of the time (unless I have to listen to one speak for a great big time) I can never forgive Greek Left for in the past taking a page from the most pseudo-scientific and dishonest European books in order to vilify Byzantium ! Oh yes! They loved Ρωμιούς but hated Ρωμαίους!

Incidentally, did you know that briefly but passionately during the 19th century the Church of the Greek Kingdom also spat on Byzantium, wanted to cut ties with Constantinople and turn itself essentially into Protestants?

In the end! Rejoice! We're much more resilient, cosmopolitan, complicated and interesting than you previously thought!

PS> Why not try also that old but always good:


To: Lykinos:

From the pdf you provided I take the following points:

1. Roman army during the late stages of western Roman empire mostly German composed.
2. Greeks inherited the eastern Roman empire ("Eventually pared down to the Balkans and Anatolia, the Empire finally consisted mainly of Greeks, or at least Greek speakers, as well as Armenians, Albanians, Vlachs, etc. Conquered and humiliated by Rome, the Greeks inherited Romania and subsequently always called themselves Rhômaioi"). This, of course, is incomprehensible unless one understands the meaning and consequences of the Constitutio Antoniniana, let alone Christianization. As such, it is well over the horizon of popular culture, much academic culture, or Hollywood -- to whom the history of "Byzantium" is like something from science fiction, if even that. I cannot say that there has ever been a "Byzantine" Emperor represented in a Hollywood movie -- or a Constantinople that was not already Istanbul.
3. Anatolians (presumably Greeks) recolonized mainland Greece. ("The money, as it happens, came from Anatolia, which, although raided regularly by the Arabs, was in much better shape than the Balkans or Greece, where Slavic migration had broken all the way into the Peloponnesus -- Greece had to be resettled with colonists from Anatolia. The paid military would eventually draw recruits from Russia, Sweden, Denmark, Norway, Iceland, and England. Meanwhile, the libraries and the Classical art of Constantinople might leave one wondering if very much had changed at all in the passing centuries, while visitors from the impoverished West or barbarian North were left to gape in awe at the bustle, wealth, architecture, and sophistication of a place unlike any other in Christendom.")

So as long as we speak of Christendom, this is another way of saying Rome and Greeks are but a minor player in all this?

I think we are coming to the same conclusion when I say that the Eastern Roman Empire was an anti-Greek concept, even though it had some Greeks in it.

Because from what you provided, I cannot possibly conclude that East Rome or New Rome had anything to do with Greeks other than the mainly Greek population of Anatolia which was better preserved from barbarian invasions of mainland Greece and mainly Greek-speaking (Ionians of Athens, which the Turks today call Yunans i.e. Ionians).


To: Lykinos

I am very interested in your reaction to this Cyprus Mail opinion piece, making a direct charge against the role of the orthodox church:

"During Ottoman rule (1571-1878), Cyprus may have, in theory, been ruled by the Bey, appointed by the Pasha but in reality it was ruled by the Archbishop with the clergy. The former was responsible for the imposition and collection of taxes and his leadership role was indisputable. We should therefore not be surprised by the zeal showed by every archbishop to maintain the status quo and fight any display of insurrection. Why would he not fight it having become the natural ally of the Turkish oligarchy?

He was, in short a nenekos (collaborator of the occupier). There were, admittedly, some Greek Cypriots that participated in liberation initiatives, before and during the Greek war of independence of 1821, but as the researcher Giorgos Giorgis explains in his book, ‘The Cypriot Contribution to the Revolution of 1821’, no parallel revolutionary activity took place in Cyprus. He wrote: “… there was disarmament of the island, there was compliance of the residents to the calls of the Pyli (Ottoman government) and the archbishops were making efforts to prevent the outbreak of any anti-regime action by the Cypriots.

How do we explain the turn towards Greece, with the arrival of the British to the island in 1878? The change in regime was an immense shock for the Church of Cyprus. Suddenly, the whole world was turned upside down by the creation of a secular state by the British. The economic privileges enjoyed by the Church were abolished. The Church was no longer exempt from taxation for land ownership, but was also obliged to pay taxes. In addition to this, members of the clergy that violated civil law, were now tried in civil courts instead of church courts.

The only way for the Church to regain its lost privileges would be through Enosis, a concept unknown in the 19th century. The choice of Enosis at the start of the 20th century was the most ‘advantageous’ because in Greece there was never separation of State and Church. While the option of independence, in contrast to that of Enosis, was an attainable target it was not discussed because of the power of the Left which controlled the municipalities of all towns (except Nicosia’s) as well as the trade unions. In the event of the Left taking power, in an independent state, there would be complete secularisation, which was anathema to the Church.

Faced with the prospect of the marginalisation of the priests, the Church cultivated through education over which it still exercised some control, the yearning for Enosis and inspired, organised and financed the armed struggle. Unfortunately, for the Cypriot people, the Church leaders could not, because of ignorance, short-sightedness and narrow-mindedness, understand that this objective, especially with an armed struggle, was clearly unattainable and would end in national tragedy.

Kyriacos Matsis, the Eoka hero, had told Governor Harding, with regard to the Eoka uprising, that “we are not staging the struggle for money.” I doubt that any of the high-ranking priests of the time could have said this, with his hand on the bible, without removing ‘not’ from the sentence.

I would not be surprised if some are taken aback by the conclusions of this article. After all the books on the history of Cyprus were written by the ruling class, the Church. And as Marx said, "analysing economic determinism, the dominant ideas of every period were the ideas of the ruling class."


To: Dean

I see you’ve reached a rather selective interpretation of your reading material and I think I can guess why.

Judging from the passages you cited, you place great importance on how much if any Greek “blood” remained untainted by intermarriage with the invading “Barbarians”. Apparently they couldn’t keep their mongrel hands off pure-bred Greek beauties and … vice versa! Barbarians are sexy! If I misunderstood, please disregard everything that follows.

I’m not an anthropologist or a geneticist or whatever, nor do I care to find out about the matter because it doesn’t matter. Identity and nationality are not transmitted by blood like venereal diseases! One of the great many strengths of Hellenismus but also Romanitas / Romiosyne is their assimilating power. For example, the pseudonym I use is a Hellenized variation of Loukianos, the already Hellenized name of the Syrian also known as Lucian of Samosata, who wrote in the 2nd century AD in the most finely tuned Atticist prose (but also occasionally leaning towards Koine) that even your beloved 5th & 4th century Athenians could ever have hoped to achieve, a monumental series of always laugh-out-funny satires and parodies that draw upon and offer knife-sharp insights on the best of what centuries-spanning Greek philosophy (mainly stoic and epicurean), rhetoric and philology had to offer ( Indulging occasionally his mean streak he found it a tremendous good time to make fun of the honest folk of Syria, Phoenicia, Palestine, Egypt and environs who having perfected or even just started to learn Greek couldn’t wait for even a generation to pass before going about boasting to be descendants of Pericles and Aspasia or the great great great … great grandsons of some obscure Marathon fighter! What’s better, he made mercilessly fun of the concept of Divine Providence, and yet Christians adored him! ( He is one of the most copied and better transmitted ancient authors by the Byzantine monks, who apparently enjoyed a good laugh after of course having stated loud and clear for anyone interested that what the old master says is true only for his own, long dead Gods and in no way for baby Jesus and Panagia and, after all, they’re reading him only for the betterment of their Attic Greek, for science and so on and so forth and what have you… Another of their all time favorites was Aristophanes.

On a more serious note, the idea that the Nation is a Community of Blood didn’t appear but in the end of 18th and the beginning of the 19th century closely related with the already nefarious notion of racial history, both almost as by-products of the emerging concept of the Nation / Nation-State. Your everyday Pre-Alexander Greek despite having a vague idea akin to Herodotus’ Όμαιμον, would have struggled greatly to understand it, not only because he associated blood purity almost exclusively with noble bloodlines, but also because he lacked the very notion: his equivalent word “ἔθνος” was much more loosely and fluidly defined, so that one could speak of ἔθνη ἑταίρων or λαῶν, meaning band of comrades or body of men and safely use it to refer to swarms, flocks and other animal populations; he could also tell you of the various ἔθνη of Greeks before later designating the various Ἔθνη as opposed to Greeks who are not one (cf. Jews and Gentiles). Same problems arise with the term: “γένος” who doesn’t quite fit its nowadays usages. Don’t get me wrong! He was Greek all right and he was acutely aware of it because he lived in one of the many and varied Greek communities; in more modern speak, his identity was much more a matter of society than of biology and certainly it had nothing to do with any hematological analysis or pedigree. After Alexander happened were the one asked an intellectual he would have looked even more perplexed and he would have you know that only Greek παιδεία could make a Greek out of you, sir! As for Romans, you are of course right bringing up Constitutio Antoniniana since for them it was full citizenship that gave you the privilege to be Roman. And yes, that was a world-changing development that Caracalla probably unintentionally caused!

And if all that seem fastidious and convoluted to you just think that the Northerners that came up with the equation pure: “blood makes a pure nation” where most of them imperial or feudal subjects stemming from people as bastardized as any on our old continent. Nowadays any honest Englishman knowing what came to pass on his island at about the turn of the first millennium (and also much earlier and quite some time afterwards) would laugh thinking about the unmixed Englishness flowing through his veins. Also the Prussians who united Germany kicking and screaming were famously often faced with the accusation reserved to them by their German brethren that they - the Prussians - are nothing but Germanized Slavs! The horror! And since we’re also talking about names, the general designation Romans tended to attribute to people and tribes living east of the Rhine and north of certain parts of the Alps, i. e. Germani (whereas Greeks initially preferred calling them Γότθους, Goths) no matter how completely different they may have been one from another, was a source of great confusion and anxiety for modern Deutsch when trying to determine who they were so that they can unite themselves – certain very esteemed and influential practitioners of this “blood science” concluded that almost all of Western and Northern Europe (but not the Slavs!) were indeed Germans but they had simply forgotten it! Public opinion followed suit... You don’t want me to remind you what they thought of us! Or, should I bring up Fallmerayer… Are you sure you wanna cast your lot with them?

By the way, and provided I haven’t misunderstood you, do you consider yourself also American? And what about your children? How do they feel?

To be continued with why language matters when being Greek or / and Ρωμιός!


To: Lykinos

In short, I do consider myself an American and my children even more so because they find my attempts to defend the motherland really odd and somewhat entertaining. So, don't worry my feelings about Greece will die with me (like the Last of the Mohicans) and there will be no more problems in this regard.

As to your didactic approach, I honestly feel somewhat naked, tied in the public square and you delivering lashes on my body with certain kindness intermixed with a stern message, which makes the whole experience surreal. Can I be so wrong in my beliefs and why? Where did I miscalculate?


If there are additional exchanges between Dean and Lykinos, they will be added here.

Sunday, March 18, 2018

Prof. Sinn Agrees With President Trump!

In an interview on German TV, Prof. Hans-Werner Sinn made the following comments:

* the EU blames Trump for starting a trade war. The truth is the opposite.
* import tariffs on American cars in the EU are 10%; in the US cars from the EU carry import tariffs of 2,5%.
* the EU applies protective tariffs to favor certain EU lobbies. The price for that is paid by EU consumers, by American consumers and by the Third World.
* the prices of EU agricultural products are roughly 20% over world market and over prices in the US.
* the cost of food stuffs is dramatically lower in the US than in the EU.
* in a normal duty-free exchange, EU consumers would benefit dramatically, particularly low-income groups.
* this is the responsibility of the EU which pursues protective trade policies. The Americans have now had enough of that. That is why Trump is saying: "If you don't stop doing that, we will put a tariff on your cars."

Well, well, well. I look forward to seeing the political backlash which Prof. Sinn will get from politicians after this interview.

Wednesday, March 14, 2018

Crazy Iwan

Those who have seen the movie "The Hunt for Red October" will remember that a "crazy Iwan" was the maneuver by which Russian submarine captains attempted to check whether they were followed by another submarine. The whole world now knows that there is an Iwan in Greece who is being followed by 4 bodyguards. The pictures of crazy Iwan storming the soccer field in Thessaloniki with a gun at his hip and surrounded by 4 big time bodyguards have made it even into regional newspapers in Germany and Austria and elsewhere!

I have written about Iwan Savvidis on several occasions. Examples are here, and here and here. There is one question nobody seems to answer: Why does a "vulture oligarch" whose wealth does not seem to be very extraordinary at all, why does this man need 4 big time bodyguards to protect him?

This man has done incredible damage to Greece's reputation, and I would suspect that he has also done quite significant damage to Greece's wealth: he acquired Greek assets through shady deals and 20 MEUR of his tax debt were forgiven.

Alexis Tsipras and SYIZA have obviously invited Savvidis into their bed some time ago. They obviously did not check him for contagious diseases before doing that. They have now been infected by Savvidis and it will be most interesting how they plan to cure that disease.

Thursday, March 8, 2018

"The More Tax Evasion, The Higher The Bill For Tax Payers!"

Thomas Wieser's claim to fame is that he headed the Eurogroup Working Group (EWG) from 2011 until January of this year. The EWG ist the staff unit which does the technical work for consideration/discussion in the Eurogroup of Finance Ministers. Neither of the two entities are provided for in EU treaties.

Wieser gave the Ekathimerini an interview which the Ekathimerini titled "Greece should have been granted debt relief in 2010". My guess is that Wieser was not very happy when he saw that title because it refers to only a minute part of the interview and it is taken out of context. Moreover, the interview includes some very powerful messages whose weight is diminished by a misleading title. Messages such as:

"One thing that strikes me is that the more a country and the people, institutions and media in a country ask themselves how did we get into this mess, the more successful they emerge out of the crisis. This for me is the big difference between Greece on the one hand and Ireland, where there has been very intensive analysis and debate on what we the Irish did wrong in order to get into this mess. This has been quite intensive in Spain and not quite so in Portugal, but it is largely missing in Greece" - this is a very diplomatic way of what more straightforward commentators have called the "lack of ownership". In the early years, one hoped that ownership would eventually take roots but that it would take some time. Perhaps, but it certainly has not taken roots so far.

"The more I have dealt with crises in member states, I have come to see that indebtedness is always the result of governance problems and Greece has the most challenges into its internal governance system" - that's a point which I have made ad nauseam in the early years of this blog (my phrase was always: "Debt is the derivative and the underlying is the economy. One cannot fix the underlying by playing around with the derivative."). Debt is ALWAYS a symptom. High debt may be a blessing when the borrower has a track record of making profitable investments. Or, high debt may finance operational deficits in which case it is a symptom of doom. From the beginning of this blog I have argued that debt was not the major issue of Greece. Among others because a sovereign debt problem can be solved by a few dozen people in a conference room who agree amongst themselves. The major issue of Greece was/is the underlying, the economy, and, regrettably, that cannot be solved by a few dozen people in a conference room.

"There was a huge number of inefficiencies from the Greek side but quite a number of inefficiencies from the creditors’ and the institutions’ side as well" - another evidence of Wieser's diplomatic strengths (I once proposed that the "inefficiencies from the creditors' and the institutions' side" would call for "A Nueremberg Trial for EU elites").

"Out of the 19 member states, with Greece, 18 were deeply upset and I would say there were two, maximum three, countries who were like, “let’s have another try, give them one more chance.” But I think virtually all other countries were like, “you cannot go on like this. This is the end.” The Germans had a paper on it, but in different forms and content, and with slightly different terminology I would say that 16-17 member states were joining on this approach. Don’t forget that" - this is a very disappointing revelation because it suggests that 16-17 member states were happy to hide behind Schäuble's determination, i. e. sharing that determination but not having the courage to say so publicly.

"Ηow well a program has functioned is also related to how much a country has engaged in soul-searching and asked itself how it got itself into that mess and not some nasty foreigners. If I may interject, the way the former head of the Greek statistical authority [Andreas Georgiou] has been treated points to a rather complete lack of understanding of what led Greece into the crisis" - no further comment necessary!

"I am not sure that this Greek government, and the next Greek government and the government after, in the next 20 years will be doing the right things. We can only hope for it" - Wieser radiates optimism for Greece here...

"The more tax evasion you have due to clientelist behavior or other reasons, the higher the tax bill is for those who do pay their taxes" - this is really the punchline of the interview! If only Greek politicians would hammer this thought into the minds of their voters!

Friday, March 2, 2018

Enforcing Austerity Does Not Suffice???

Theodore Pelagidis and Michael Mitsopoulos have written a book titled "Who is to blame for Greece?" and they published a short summary thereof in this article. Here is a key paragraph:

"So maybe simply enforcing austerity does not suffice. Maybe the way day-to-day economic and social activity is organized, from licensing to policy debates, from the rule of law and court decisions to the protection of the freedom of the press, are more important after all. They determine the extent to which people take initiatives, create economic activity, and thus generate taxable income."

A simple (and rather convincing!) narrative had developed early on in the crisis: reckless overspending had kicked Greece's cost/price competitiveness out of the water and the way to repair that was to re-establish cost/price competitiveness. In the absence of the devaluation tool, it had to be internal devaluation. In short: austerity.

That might have worked if lack of cost/price competitiveness had been the only (or even the major) problem of Greece; if institutional strengths, regulatory efficiency, judicial efficacy etc. had otherwise functioned well.

I have always argued that the Troika should not be misinterpreted as an institution out to help Greece. Instead, the Troika was/is a creditors' committee watching the interests of creditors and to expect more from them is an illusion.

However, there WAS a vehicle whose task it would have been to help Greece in the process of reforming the country. That was the EU Task Force for Greece which in its mission statement listed the following noble objective:

"The Task Force is a resource at the disposal of the Greek authorities as they seek to build a modern and prosperous Greece: a Greece characterized by economic opportunity and social equity, and served by an efficient administration with a strong public service ethos."

Even Alexis Tsipras (and SYRIZA) in his early days spoke romantically of the New Greece he and his party were going to work towards: "Meritocracy, transpareancy and equal opportunity will be the trademarks of the New Greece", Tsipras promised in February 2015. And, he added, "We are building an effective public administration with respect to the citizens and the taxes they pay.

It pains to remember all those noble objectives when looking at the actual result. At least so far, the actual result was pain, only without the New Greece that would have justified the pain. Or as the Dutch Ambassador to Greece recently phrased it:

"We need meritocratic decision-making in Greece, be it by left- or right-wing governments, and both in the public and private sectors. More than debt relief, Greece needs meritocracy. This is not something that we can translate into a specific prior action. This is not something that you can order from the Eurogroup. This is something about a political and governance culture of responsibility and a mentality that needs to continue to be developed. Many Greeks have suffered during the economic crisis. The price they paid should not be for nothing."

Saturday, February 24, 2018

EU - The Transfer Union

To all those who claim that the EU should become a transfer union, the graph below shows that a lot of transferring/redistributing is going on already. The figures represent per capita Euros (2015). Net receivers are on the left side (gray) and net payers are on the right side (red).

A Decade In The Life Of A Current Account

It was the year 2008 which will reserve Greece a spot of distinction in the world's history of absolutely shocking current accounts. In 2008, the Greek economy spent 105 BEUR outside its borders compared with only 69 BEUR which it earned outside its borders. In consequence, the external deficit of the Greek economy was 36 BEUR in that year. These numbers assume their real significance when comparing them to the 2008 GDP of 241 BEUR, as reported by ELSTAT: the external deficit was 15% of GDP (!). Perhaps not a world record but probably close to it.

Now, a decade later, Greece can reserve another spot of distinction, this time in the history of dramatic current account improvements. For 2017, the Bank of Greece reported an external deficit of 1,5 BEUR, or just about 1% of GDP. The significant figures of this development, as published by the Bank of Greece, are summarized below:

Current Account (in BEUR)
2017 2016 2008
Revenue from abroad
Exports 27,9 24,5 21,9
Services (e. g. tourism) 28,3 25,0 34,2
Other income 6,1 5,9 9,0
Current transfers 1,9 1,8 3,4
------ ------ ------
Total revenue from abroad 64,2 57,2 68,5
Expenses abroad
Imports 46,3 41,1 66,3
Services (e. g. tourism) 10,9 9,7 18,5
Other expense (e. g. interest) 6,0 5,9 16,6
Current transfers 2,5 2,4 3,7
------ ------ ------
Total expenses abroad 65,7 59,1 105,1
Net foreign deficit (current account) -1,5 -1,9 -36,6
Trade balance -18,4 -16,6 -44,4
Services balance 17,4 15,3 15,7
Other balance 0,1 0,0 -7,6
Current transfer balance -0,6 -0,6 -0,3
---- ---- ----
Net foreign deficit (current account) -1,5 -1,9 -36,6
Non-oil and non-shipping exports
2017 2016 2008
Exports "Other Goods" 19,9 18,2 17,0
Imports "Other Goods" 34,3 31,8 46,9
---- ---- ----
Balance of goods excluding oil and ships -14,4 -13,6 -29,9
Ratio: Imports vs. Exports 1,7 1,7 2,8

A truly meaningful analysis of the above development would require statistics at a level which the BoG does not publish (it might be a recommendation for the BoG to provide such a meaningful analysis!). Nevertheless, the following observations can be made with general accuracy.

1) "Exports", "Imports" and "Trade Balance" confuse in the case of Greece because these figures include large and widely fluctuating figures from oil and shipping trade. Still, overall exports went from 22 BEUR to 28 BEUR during the decade while overall imports declined from 66 BEUR to 46 BEUR. That represents a turn-around of 44 BEUR for the decade!
2) "Other Goods" are included in the overall exports/imports and they represent those categories which could be considered as regular trade. Here, exports went from 17 BEUR to 20 BEUR and imports declined from 47 BEUR to 34 BEUR, representing a turn-around of 16 BEUR for the decade!
3) Unclear is what happened to "Services" as revenues in this category declined from 34 BEUR to 28 BEUR. It certainly was not a decline in revenues from tourism (which actually increased from 10 BEUR to 15 BEUR). Instead, the main trigger was a decline in revenues form transportation from 14 BEUR to 9 BEUR.
4) The "Other" category declined on the revenue side from 9 BEUR to 6 BEUR but much more significantly on the expense side from 17 BEUR to 6 BEUR (!). The latter was primarily due to a reduced interest expense.

Last but not least: the import overhang ratio (imports vs. exports) in the category of "Other Trade" had been an incredible 2,8 in 2008, i. e. imports amounted to almost 3-times the volume of exports! It is now down to 1,7, still a high ratio in normal circumstances but certainly defendable in an economy with high services revenues (e. g. tourism), such as Greece.

One could be inclined to see only good news in the above development because the numbers do not show the methods employed in order to achieve them. The 'sledgehammer' was the most important method (i. e. strangle domestic demand so that less money is spent abroad). The risk inherent in that is that as growth returns - without other structural changes - money spent abroad will increase again in line with increased domestic demand. 2017 might already represent a negative omen: growth returned and while exports of "Other Goods" increased, too, imports of "Other Goods" increased much more significantly.