Monday, 26 January 2015

Will Greece Become Venezuela -- But Without The Oil

One can only say ‘Well Done’ to Syriza after running an energetic campaign promising the long-suffering Greek people a return to the good old days and an end to the struggle, however muted, of dragging the country into the 21st century with much-needed structural reforms. He successfully kept voter attention focused on the hated word ‘austerity’ instead of ‘reform’.  Something no one seems to want. By comparison, the former leading party New Democracy was effectively absent-without-leave during the campaign and ceded all the high, self-righteously indignant ground to the insurgent Syriza. As one observer noted New Democracy seemed tired, worn out, and basically conceded the election before the campaign even began.

            Winning the election is one thing. Transforming the rhetoric into reality is quite another. The Greek treasury is essentially empty. It is not altogether clear just how Syriza’s bold election promises will be met. The glow of victory could quickly fade once the next prime minister, Alexis Tsipras, has to deal with the twin problems of intractable creditors and an extremely fractious party whose more radical elements view the election as revenge for losing the civil war almost 70 years ago. Memories die hard in Greece. Will he be able to tame the parts of his own party that want to replicate Argentina and rip up the debt agreements and repudiate all of Greece’s debt? It’s much too early to tell.

Syriza leader Alexis Tsipras
            His campaign was filled with promises to renegotiate Greece’s debt burden, restore pensions, roll back structural reforms, and essentially remove the influence of the creditors on Greece’s internal policies. By the way, all of this is supposed to happen with Greece remaining in the Euro. Crowd pleasing stuff. Exactly what the Greek people wanted to hear. Unfortunately it has the real impact of one hand clapping.

The creditors wisely remained largely silent during the campaign. It will be interesting to see how they react when presented with Syriza’s ‘demands’. Probably not all that well. There may be room to adjust terms at the margins – possibly extend maturities, be flexible on interest rates, etc. But I expect the creditors to remain firm, initially at least, on demands for continued structural reforms to free up protected professions and reduce the highly politicized over-stuffed bureaucracy that stifles any economic initiative.

The creditors, led by the Troika of the  IMF,  European Central Bank and the European Commission, should be careful, however, because Tspiras is very skillful at changing the nature of the debate and winning the critical public relations battle. The debate will no longer be about the serial failures of Greek policy makers over the last several decades. Their inability or unwillingness to create an economic system that relies on more than state hand-outs to favoured clients will be pushed aside.

Tsipras will no doubt attempt to turn the debt negotiations into grand statements about ‘Greek sovereignty’, the ‘will of the people’ vs. narrow-minded accountants. He will attempt to broaden the argument far beyond Greece and become the spokesman for all the ‘beleaguered, debt-ridden, down-trodden’ people of Europe. Nowhere will there be any acknowledgement that the ultimate responsibility for this current Greek tragedy lies squarely with the Greek political class, or that perhaps billions of Euros of loans just might come with a few conditions. All these unpleasant facts will be buried under tons of ‘anti-bailout’ rhetoric.

This strategy just might work. He knows his opponents’ weakness very well. The bureaucrats of the so-called Troika are not very good at public communications. They act like small woodland creatures caught in the glare of head lights when confronted with media attacks. They either become road kill or retreat rapidly behind bland, bureaucratic statements that Tsipras will tear apart as he backs them into a public relations corner. He will turn them into heartless accountants intent on stripping the hapless people of Greece of their last shreds of dignity and welfare. Hedge fund managers could possibly stand up to this onslaught. But European bureaucrats and political leaders are made of less stern stuff. They will be looking for a way out. They would undoubtedly cover their retreat by saying they acted to preserve the Euro and the concept of European unity. The Germans hate the idea of bailing out what they consider the ‘feckless Greeks’, but even they may wind up bending rather than be painted as the bad guys of Europe once again.

Unfortunately, the actual welfare of the Greek people could be lost in all this upcoming theatre where high-pitched melodrama replaces real substance. Tsipras has a real opportunity to lead Greece out of its quagmire and demonstrate just how he intends to kick-start the Greek economy to provide the jobs and income the people deserve. Can he change the mind set of his countrymen from relying on state hand outs that have a short shelf life? Will be do something like this? Or will he be content with the colourful theatrics of opposition? This is by no means clear.

Saturday, 10 January 2015

Enough Is Enough. No More Excuses. No More 'Buts'.

Finally, in the wake of the attacks in Paris, there is a significant change in response from some quarters of the Moslem community in Europe and in the Islamic world in general. Too often the extremist outrages have been greeted with a ‘Yes, but . . .’ response that usually winds up indirectly blaming the victims. Now, important voices in the Moslem world have said enough is enough, and we must look to answers within our own community. Yes, the West has not always been welcoming or kind in its response to Moslem immigration. But that type of moral equivalence to justify the jihadi violence is beginning to break down

            Whatever one may think of Egyptian President Abdel Fattah el-Sisi, he  recently delivered some important home truths in a speech to Islamic scholars and clerics at the heart of Islamic learning, Al Azhar, in Cairo. He called for nothing less than a revolution in the teaching of Islam.

Egyptian President Abdel Fattah el-Sisi offers a few home truths
          “I am referring here to the religious clerics. We have to think hard about what we are facing . . . It’s inconceivable that the thinking that we hold most sacred should cause the umma (Islamic world) to be a source of anxiety, danger, killing and destruction for the rest of the world. Impossible!”

            He added that Moslem clerics needed to approach Islam "from a more enlightened perspective" -- and that this necessitates a "religious revolution." These are dangerous words for a Moslem leader, and he was quickly condemned by more radical Moslem groups. It is worth noting that el-Sisi is the first Egyptian leader, ever, to attend a Coptic Christian service in Cairo.

                      Former Turkish President Abdullah Gul  issued a strong statement condemning the Paris attacks.

Former Turkish President Abdullah Gul condemns 'barbaric acts'
“It is clear that this kind of violence is totally immoral and against the fundamental precepts of any religion, and indeed of  Islam.
“The perpetrators of this barbaric act not only betrayed and tainted Islamic values and principles, but also targeted millions of European Muslims who have nowhere to live other than Europe.”

Gül also called on the Islamic world and all Muslims to denounce “the inhuman attack and demonstrate solidarity with the people of France against religious extremism.

             This was a refreshing contrast to the current Turkish president, Tayyip Erdoğan whose default position to such attacks is to remind everyone that what he calls Islamaphobia is really responsible for such outrages.

                      Turkish journalist Ahmet Hakan wrote a powerful column saying “No More Excuses Left For Massacres.”
Ahmet Hakan: Beware the 'buts'
We are going through days when sentences containing ‘but’ have peaked.
‘I condemn this, but . . .’
‘Of course killing is horrendous, but . . .’
‘One would not support a massacre, but . . .’
‘I would never tolerate what has been done, but . . .’

Here’s how to understand these types of sentences. Disregard all of the words before the ‘but.’ Concentrate on what comes after the ‘but’, because the actual ideas are hidden there.

The benchmark is this

When our religion and our prophet are mocked, it is legitimate and acceptable to turn your face away. To protest and to show discomfort is acceptable. To oppose is acceptable. Even to say ‘This can not happen; this is unacceptable’ is quite fine.

However, to kill, attack, behead, strafe with a machine gun, massacre, bomb, or blow up . . .Such reactions are never legitimate and never acceptable.

Having to remind (people) of the very basic humane and Islamic benchmarks to such an extent, however, is simply humiliating, shameful.”

While it is refreshing to hear calls for a serious re-think in the Moslem community, it is also important to rebut the ridiculous claims about the “Islamization of Europe.” From a demographic point of view this fear is sheer fantasy. Take Germany with about four million Turkish Moslems. This is less than 5% of the German population. And the vast majority of Turks I have encountered in Germany identify themselves as Germans. They are widely represented across all professions and businesses. I make it a point of asking young German-Turks if they ever think of going ‘home.’ The vast majority look at me quizzically and say firmly that their home is Germany. They were born there, their German is better than their Turkish, they went to school there, they work there, and they are delighted to be German citizens.

Mouhanad Khorchide: A voice of reason
            If the short-term answer to this Moslem-extremist violence is better security, the long term answer is education. Too much of Islamic education is based on rote-memory of the Quran or listening to hate-filled sermons from semi-educated self-styled imams. Non-Moslems need to understand that Islam is more than the distortions of the jihadis. The New York Times did an interesting story about Mouhanad Khorchide, a professor of Islamic pedagogy at the University of Münster in Germany. His courses are intended to groom teachers who will teach Islam in primary schools and then secondary schools, putting it on a par with Christianity and Judaism. This effort to take real Islamic instruction out of the hands of the fanatics will take time, but it is the only way to reduce the attraction of the violent jihadi groups like Al Qaeda or ISIS who prey on the ignorant and the vulnerable.

Monday, 5 January 2015

The Greek People Deserve Much Better

The ancient Athenian dramatists would find plenty of subject matter in modern Greek politics. The only question would be whether Aristophanes or Euripides should write the play. There’s enough material for the comedies of the former or the tragedies of the latter.

            There is absolutely no question that the Greek people have been put through the economic and emotional wringer ever since the crisis began more than five years ago. The economy has almost ground to a halt, unemployment has soared, incomes have been slashed, the best and brightest young people are fleeing the country for greater opportunities elsewhere, and popular anger has reached a thundering crescendo. People are in the mood to roll a few heads.
            But whose? Therein lies the question. Unlike other troubled European economies such as Spain or Ireland, the problem, and any solution, go far beyond mere economics. Should they go after the entire Greek political class whose deceit, mismanagement and self-interest over the decades did so much to bring the country to its knees? Should they lash out at the current government that has very reluctantly started a half-hearted reform program? Better yet, should they vent their anger on the usual suspects – the perfidious outsiders who have the nerve to put strict conditions on the billions of Euros they have given Greece?

                That certainly is the position of the main opposition party, the left-tilting Syriza. This is where Aristophanes would have a field day. The main thrust of Syriza’s election campaign is promises to re-negotiate the bail-out agreement, force the creditors to take a bigger hair-cut, give free electricity to certain people, increase pensions, increase spending, do away with the real estate tax, raise the minimum wage, and, by the way, reinstate the €12,000 tax-free threshold. One would love to be in the room when these masters of Greek melodrama meet with the decidedly un-melodramatic German Finance Minister Wolfgang Schäuble to ‘renegotiate’ the terms of the bailout agreement. Good luck to them.

            While Syriza’s mishmash of proposals may sound contradictory and implausible to anyone with minimal financial knowledge they are consistent with the general anti-Western and anti-capitalist dogma of the Greek left that holds everyone except themselves responsible for the country’s problems. Rather than see the State with its old patronage system of politics as the author of many of Greece’s serial catastrophes many of the Greek left see the State – which they want to control – as the country’s salvation. There is not much room for private initiative in this resurrection of a failed system.

            So far the party has been relatively silent on its foreign policy objectives. This is understandable. Generally it has favoured anyone who has loudly resisted ‘Western imperialism’. But where do they turn now? The traditional international icons of the Greek left are fading past. Che Guevara and Hugo Chavez are dead. And the Castro brothers are competing to see who opens the first McDonald’s franchise in Havana. Even Iran is in serious negotiations with the Great Satan. Maybe they can turn to Kim Jong Un of North Korea. Or there’s always Hamas.

            Syriza maintains that it wants to remain in the European Union and the Euro. But it’s difficult to see how this goal is compatible with its demands of restructuring the bail-out package and back-peddling rapidly on even the small reforms that have been taken. What will Syriza do if the so-called Troika (European Commission, European Central Bank, and the IMF) refuse to budge? Will it stamp its feet and threaten to pull Greece out of the Euro? While the destabilizing effects of such a move are less than they were three years ago the thought of a member country leaving the Euro still makes people nervous. The idea of Greece back in the drachma may thrill the zealots. Others view it as collective suicide.
Syriza leader Alexis Tsipras: Backwards to the future?
            One hardened cynic in Athens says maybe it would be a good thing if Syriza wins. “Then,” he adds, “the Greek people will finally see that the Left has absolutely no answers. There is no money, no room for them to manoeuvre. There may be a fig of leaf of some debt rescheduling, but there won’t be any fundamental change in the conditions for further financial aid. Once the Greek people grasp the reality that there is no return to the old days they might just accept some serious reform.”

            Right now the election campaign seems locked in what The Wall Street Journal calls ResponsibleStagnation or Reckless Collapse. If Syriza represents the Collapse part of the headline, the government of Prime Minister Antonis Samaras represents the Responsible Stagnation. Indeed, the prime minister has never really pushed the reform agenda demanded by Greece’s creditors. He seems to present a picture of a weak person forced by unreasonable people into something he personally would rather not do. The result is that his opponents have been able to focus on the dreaded austerity instead of the much needed reform.  I haven’t heard anyone make a virtue out of the demands for reforms, and loudly proclaim that Greece has no choice. That the only hope for its young people is to break with the destructive old ways and build a new political and economic system.

Prime Minister Antonis Samaras: How much reform does he really want?

            Polls say the election will be very close. Syriza holds a small lead over New Democracy of Prime Minister Samaras, but many voters say they are undecided. The most likely outcome is a narrow victory with the winner forced to form an unstable coalition. There could well be another election this year before a stable government can be formed.

The stakes are huge, especially for the young generation of Greeks who would much prefer to remain in their native country rather than be forced to take their talents all over the world. There is no shortage of brilliant people in Greece. The real tragedy, suitable for Euripides, is that the existing political system does its best to reduce that brilliance to a weak candle glow. Time for things to change