A Very High Stakes Election In Turkey

The vicious slugging match that passes for a Turkish general election is mercifully coming to a close this Sunday, June 12. The stakes on the outcome are very high. The overwhelming consensus is that Prime Minister Tayyip Erdogan’s Justice and Development Party (AKP) will once again win enough votes to form a government.  But the critical issue is just how large that majority will be.

Prime Minister Erdogan has played every political card in his hand: aggrieved nationalist, offended statesman, religious beacon, economic miracle worker, populist demagogue and many more in an attempt to win a large enough victory to enable his party to change the constitution as it sees fit. A key part of this change would be to transform the existing parliamentary system to a strong presidential system similar to the one in France with Erdogan, naturally, becoming the first president. AKP currently has 340 seats in the 550-member parliament. A huge victory that would increase their seats to 367 would give the party the right to change the constitution by itself. A smaller victory that gave them 330 seats would give them right to draft a new constitution and submit it to a national referendum. Either scenario would guarantee that political and social tensions remain high.

Much of the campaign rhetoric has focused on the increasingly illiberal nature of the AKP’s idea of democracy and the prime minister’s complete inability to take any sort of criticism or understand what freedom of the press really entails. The Economist magazine had the temerity to suggest that for the sake of improved checks and balances in Turkey it would be useful if people voted for the main opposition party, the Republican People’s Party (CHP). This created a firestorm of protest from Erdogan and his henchmen who accused the magazine of interference in Turkey’s internal affairs and being completely ignorant about Turkey. The Minister of Finance, a former security analyst at Merrill Lynch in London, went so far as to say that he would no longer ‘follow’ The Economist on his Twitter account. I’m sure the magazine’s editors were shocked and dismayed at this decision. The fact that the comment about the Turkish elections was mild compared with the ridicule the magazine has dished out to French President Nicholas Sarkozy or the utter contempt with which it treats Italian Prime Minister Silvio Berlusconi was ignored by the ‘deeply’ offended AKP officials – most of whom probably had never heard of the magazine until this story was printed.

One of the key post-election issues concerns Turkey’s restive Kurdish population. Will the Kurds try to emulate the Arab Spring and demand more autonomy? Will they resort to violence or mass civil demonstrations? How will any Turkish government react to these developments? The answers to these questions will become clear fairly quickly after the elections.

Perhaps the biggest lack in this entire campaign was any discussion of looming risks facing the Turkish economy. The prime minister is swept away with the high growth story and continues to come up with one grandiose development scheme after another – without ever mentioning just how they are going to get financed. More serious commentators point to issues like the soaring current account deficit or the real estate bubble that threaten to derail the Turkish economy.

The Current Account Deficit (CAD) was 2.5% of Turkey’s GDP in 2003 just after AKP took over. By 2010 it had climbed to 6.6%, and this year it threatens to hit the red zone of 8% of GDP. This might not be a problem if this deficit were financed with long term inflows. But it’s not. It’s financed with hot money that can change direction at any second. Furthermore the CAD has become a chronic and structural problem in Turkey, and because of the structural nature of the problem the faster the GDP grows the higher the CAD grows.

Murat Gulkan, a fund manager at Arma Capital Management in Istanbul, says that “eight years of an overvalued currency have led to this situation where Turkish industry relies on imports rather than the Turkish supply chain for its raw material and machinery.” For example, according to the Turkish Treasury, machinery imports in 2003 amounted $16 billion. In 2011 these imports are estimated at $40 billion. A 2010 Central Bank study highlights this trend and notes that Turkish industry as a whole relies about 70% on imported material. Turkish exports may be growing rapidly, but the Turkish value added content of those exports is very low because of the high import content.  “When the world becomes less willing to finance the Turkish deficit there will be a big problem,” Gulkan adds.

“There is no coherent white paper from the government on how to deal with this problem. They’re going to have to accept a recession and fiscal tightening with higher rates, but the prime minister does not want to hear any of this. He is in a growth mode. The odds are 95% that there will not a happy ending to this story – only a variety of unhappy endings,” said one of the leading economic analysts in Istanbul.

One European banker in Istanbul points to potential problems in the booming real estate sector.

“We are in real bubble territory, and the state banks are very deep into real estate lending. There is a vast oversupply of residential housing, and there are some estimates that sales of new builds are off 30%. They have learned nothing from the problems in the United States. They (the government) have got to get some heat out of this economy and slow things down. We’re looking at another 10% - 12% depreciation of the Turkish lira by year end.” This would be quite a change because the Turkish currency has slid just 2.6% so far this year according to Central Bank statistics.

“On top of the economic problems there is a growing sense that prime minister has gone too far, and has become a full blown autocrat. His own advisers are afraid to contradict him. If he gets his 367 seats we should pack up our bags and go,” he adds only in half in jest.

Clearly the punters in the Istanbul Stock Exchange are keeping their powder dry until the political and economic situation is clarified after the elections. After a few years of high growth the market index, measured in US dollars, is down just under 6% for the year, and given the economic uncertainties only a very brave person would predict much of an improvement this year.

Given the long list of social, economic and political challenges facing Turkey the next government is going to have its hands full maintaining the country’s strong forward momentum.

Rewards Of Leaving The Beaten Track

We checked the chart carefully. We entered the correct coordinates into the GPS. We knew the entrance to Vathi on the island of Kalimnos was just south of the bay of Paleonissos where we had stopped a few days previously. Still, we passed Paleonissos and no sign of the entrance to Vathi. We uttered the cry known to sailors around the world. “It’s got to be here somewhere!” But where exactly?

Finally, a slight crack appeared in the otherwise solid cliff wall. Our first reaction was disbelief. “A seagull couldn’t get in there. How in God’s name is our boat going to fit?” As we got closer the entrance opened up a bit more and we could see what amounts to the fjord of Vathi widening just enough to allow a few boats to tie up – very carefully – to the town quay in front of a couple of tavernas.


The Entrance to Vathi Seen From The Harbor

In addition to the dramatic setting the small town has a very basic boat yard filled with traditional caiques getting ready for the season. These were the classic, heavy wooden ones built to withstand the sometimes heavy winds and nasty chop of the Aegean. The workmanship on these old boats was beautiful and they clearly would be sailing for many more years.


One Of The Traditional Caiques

As Rod Heikell notes in his invaluable guide to the East Aegean, Kalimnos has long been known as the home of sponge fishing although, these days, only a handful of boats leave Kalimnos for sponges as the Mediterranean stocks have been severely depleted. According to Heikell, most of the sponges you see today do not come from Greece, but are shipped in from the Philippines, the Red Sea, and the Caribbean.

Sponge Stall

Nonetheless, towns on the island each have their sponge salesman who will grudgingly admit that while they have a few local sponges most of them are imports. Still, they make nice gifts. In addition to the boat yard and the sponges there were the inevitable goats and gypsies selling strings of huge fresh garlic bulbs. The only thing different about these goats was that they were perched on the side of sheer cliffs, and we had no idea how they got up or down – but they did.

As we made our way out of the ‘fjord’ back toward Kos the next morning I couldn’t help thinking about the changes in Greek and Turkish tourism in recent years. For as long as I can remember Turkey was cheaper than Greece and the unspoiled Turkish coast was a match for any place on the Aegean. Now the situation is reversing. Not only is Turkey becoming more expensive than Greece, but much of the previously unspoiled coast is now vastly overdeveloped. While unspoiled places like the Datca Peninsula with the beautiful bays around Hisaronu or the northwest corner of the country near Troy and the Dardanelles Straits remain pristine much of the rest has been spoiled by thousands of new, identical homes and hideous resort hotels. One reason is that Turkey, unlike Greece, faces huge pressure from a large population that wants access to the lovely coast. While that is understandable, it would be nice if this development could have been done with some sensitivity to the natural environment.

The Dodecanese Island are a special case in that most of them, with the obvious exception of Rhodes and Kos, by accident of geography as much as anything have been spared the worst of holiday development – either domestic or foreign. They are a long ferry ride from the Greek mainland, and only a few of them have airports that can handle international charter flights. We went north from Kos, but could just as well have sailed south to the volcanic island of Nisiros, Telos, or Simi, with stops at some small bays on the southern side of Datca and experienced the same natural beauty and tranquillity.

But these islands are just one part of what Greece has to offer for travellers willing to go even slightly off the beaten track. If the very thought of sailing makes you slightly ill, go to the soaring mountains of northern Greece and visit Metsovo or Ioannina with its lake and palace of Ali Pasha. Or head south to the rugged Peloponnese where you can visit the haunting ruins of the ancient Byzantine city Mistra where the last emperor of Byzantium, Constantine XI Paleologos was crowned on January 6th, 1449. While the Ionian Islands on the western side of Greece in general are very popular tourist destinations there are a few smaller ones like Ithaca – the home of Odysseus (and my father-in-law’s family) – that have escaped the overdevelopment of their neighbours and retain the traditional island charm and mystique.


The Pindos Mountains Of Northern Greece

In short, the land and seas of Greece have withstood centuries of political and economic mismanagement, and yet this wonderfully varied country continues to offer enough beauty and history for years of exploration.

Far Removed From The Maddening Crowds

We cleared the narrow opening to the main harbour on Leros and raised our sails in the light north west wind as we headed north to a small group of islands well off the normal tourist routes. The larger islands of Lipsi and Arki actually have small towns, but most of the others are uninhabited islets populated mainly by migrating birds. Lipsi has a beautiful large, well protected bay with a few moorings for visiting yachts. This bay also has one of the better tavernas on any Greek island.

Our destination today was Marathi, a very small island off Arki, itself a very small island, that is now part of a wildlife refuge. Several moorings are placed in the bay at Marathi rather than have yachts use their anchors and potentially damage the fragile sea bed. As you enter the bay lined with a brilliant crescent of sand you see a couple of tavernas, a small hotel, a few houses, and a lovely blue-domed small church on a low ridge. When we came two years ago there were electricity poles but no electricity. By now the electricity had finally been connected, but that was about it for mod cons.



Marathi's Taverna

 Once you get the mooring sorted out and sit back in the cockpit the first sound that hits you is the tinkling of small bells as hundreds of goats make their way purposefully from one side of the island to the other. They all follow the leader and it is almost as if they are coming down to the beach for their afternoon swim, but then they turn up to some abandoned stone buildings on top of a small ridge and settle in for the night on top of the walls or among the ruins.



The Church Of St. Nicolaos On Marathi



One Of The Local Residents

It is worth the effort to climb the small hill to the church of St. Nicolaos in the evening as the sun sets brilliantly into the sea. Even the goats seem impressed as they calmly gaze out to sea westward toward Patmos.

The one taverna open at this time of year is run by Michalis who has been there forever and looks very much like an extra from Johnny Depp’s Pirates of the Caribbean with the bandana and cut off trousers. The menu features several varieties of goat and chicken or whatever fish was caught that day accompanied by ouzo or wine. Then the trick is to get back in the dinghy and return to the boat aided by the pale light of a waning moon without falling in.

Marathi is a wonderful destination for anyone seeking absolute peace and quiet away from the pretentious glitz and head splitting thump thump of high decibel techno music that infects so many places on the Aegean coast of Turkey or some of the better known Greek islands. Small ferries come to the island daily from Leros or Patmos and there is a very nice, small hotel with its own pier. The only problem is that once you spend even a few days there the re-entry into the ‘real’ world can seem a bit harsh.


Pier Of The Hotel On Marathi

Following a lazy morning – there really are no other types of mornings of Marathi – swimming, wandering around the island, taking photographs and visiting the charming little hotel just getting ready for the season we hoisted anchor and set off for Patmos just a few miles to the west.

Patmos is known primarily for the 11th century Monastery of St. John the Divine and the cave where, according to legend, the Book of Revelations was written. The reality, or lack thereof, of this claim doesn’t seem to matter much to the thousands of tourists that descend from the enormous cruise ships to visit the cave, the monastery and the Monastery Treasury. No one seems to have told them that there are many, many steps involved in this trek. By the time these visitors have panted their way up to the monastery many of them look like they would much rather sit under a tree with a cold beer and rely on a postcard to prove that they had been there. For those that don’t mind the exercise, the Treasury is well worth a visit, as is the small whitewashed town of Chora perched on the hillside just outside the monastery. The effort of getting up the hill and wandering around the monastery can be rewarded with a good meal at Jimmy’s Balcony where you get a spectacular view of Patmos as well as Samos, Fourni, and Iraklia in the distance as you go through some of Jimmy’s delicious small dishes, meze.


Monastery On Patmos With The Town Of Chora

Unlike the other islands we visited Patmos is very busy, and with boats tied up right next to the main street you are serenaded with the whine of motorcycles all night. We were fortunate the next morning to be able to leave without having to extract our anchor from the anchor chains of several other boats. With the usual very strong cross wind sometimes it can be interesting trying to reverse neatly to the quay and simultaneously be careful where you drop the anchor. But we managed a smooth departure and looked forward to returning to less crowded islands. Our destination, after another stop on Leros, was a small, narrow bay – almost a fjord – cut into a cliff on the island of Kalimnos. More on this later.

One Island Not To Be Overlooked

Leros, tucked away in the south eastern corner of the Aegean, is often overlooked by Greeks and foreign tourists alike. That’s a shame. In addition to having the safest harbour in the Aegean the island offers rich architecture, good food, and fascinating – if somewhat bizarre – history. For one thing, walking through the main town of Lakki you get the strange feeling that you’re on an Italian movie set.




Approaching Lakki

 Like every island in this part of the world, the history and legend go back thousands of years, and the island was sacred to Artemis, goddess of the hunt. The remains of a small temple to Artemis can be found on the northern part of the island. A more stunning reminder of the complicated history of this region is the large castle built by the Knights of St. John of Jerusalem in the 14th century that still stands high on a hill overlooking the small fishing village of Pandeli. The Knights gave way to the Ottoman Turks in the 16th century who stayed around until 1912 when it was the turn of the Italians to run the islands. Why the Italians? They were awarded the Dodecanese Islands as part of the spoils of war when the defeated the Turks in 1911. The Italians stayed until 1948 when the Greeks finally reclaimed these islands.

The Italians took advantage of the large harbour to make a base for their Aegean fleet, and in the process decided to create a new town that they called Portolago, since renamed Lakki by the Greeks. In the 1930s this town was created with wide, tree-lined streets and several classic art-deco buildings. After the war many of these buildings were left to decay, but fortunately their architectural value was finally recognized and they are gradually being restored. You half expect Federico Fellini to walk out of one of them as you stroll around the town. The grounds of the naval base itself have been given over to a psychiatric hospital, but you can still see the magnificent house that Mussolini sometimes used as a summer residence. Italian tourists still maintain a close association with the island, and many of them own houses or keep their boats there.

The island suffered badly during World War II when it was bombed in turn by the Royal Air Force and later by Luftwaffe when Britain tried unsuccessfully to recapture the Dodecanese Islands in the fall of 1943. The tunnels prepared by the Italians to store ammunition served a much better purpose during the battles by sheltering citizens of the islands from the worst of the carnage. One of these tunnels now serves as museum dedicated to the Battle of Leros. The other major reminder of that conflict is the immaculately maintained British War Cemetery by Alinda Bay that contains the remains of 179 British, Canadian, and South African soldiers, airmen and sailors killed in the battle. Those interested in the ill-fated attempt to recapture the Dodecanese should read Churchill’s Folly by Anthony Rogers.

While slowing gaining in popularity the island is by no means over-run with visitors, and many of those come on boats that use the marina in Lakki or anchor in the small bay across the island in Panteli. Wherever you stay the best way to see the island is to hire a motor scooter to get around. The roads are fine, and many of them are lined with high eucalyptus and pine trees. As you leave Lakki head up the hill to Platanos, the capital of Leros, and then down to Aghia Marina along Alinda Bay and enjoy the combination of traditional village and neo-classical architecture that dominates these two towns.




Easy Rider Returns

 One of the real pleasures in Aghia Marina is to sit at cafe on the quay munching what are among the best sweets in all of Greece and sipping a decent espresso or an iced cappuccino. You quickly fall into the pleasant routine of those around you and spend a great deal of time doing essentially nothing other than sipping coffee and taking in the beautiful scene around you. When you eventually do get up you feel oddly refreshed and ready for the next adventure – dinner.



Waterfront in Aghia Marina

 If you’re tired of the usual taverna fare of Greek salad, over-cooked meat or chicken, or pasta that is definitely not al dente head to Dimitris O Karaflas (Dimitri the Bald One) in Vromolithos. If nothing else, the setting high on a hill overlooking one of the island’s many bays makes this a worthwhile trip. But the real treat is Dimitris himself who is passionate about food and goes out of his way to use local ingredients to create original, delicious dishes. The best thing is to forget the menu and put yourself in his hands. He will tell you what he has prepared that day and bring you a steady succession of dishes from baby shrimp, to marinated tuna, to pork in a red wine sauce that melts in your mouth, and on and on. By the end of the evening we could just about waddle out to get a cab back to the boat. It was interesting to note that this sumptuous meal was three times cheaper than the dinner we had in Turkey the previous evening. It used to be the other way around. Now Turkey is much more expensive than these islands.



Dimitris The Bald One

The next day was clear with a decent wind, and we headed off for a small group of islands even less well known than Leros where the main entertainment was the tinkling of goat bells and the insistent call of the local rooster.

The True Cost of Greek 'Austerity'

The polemics about Greek economic problems tend to treat the country and its people as some sort of bloodless, technical, laboratory experiment, far removed from the deep human cost of the so-called ‘austerity’ programs foisted on the Greek people. Austerity, by itself, is not enough. There has to be some promise of better days, some hope of a better future. So far this is lacking in the heated debate of ‘What to do about Greece’, a debate that tends to focus more on bank balance sheets than on real people. Our good friend Evangelos Aretaios, now a journalist in Brussels, recently visited his home town of Athens and kindly sent this report that demonstrates better than most items I have read the true human cost of ‘reforming’ the Greek economy.



A Different Stroll Through Athens
Evangelos Aretaios©, 31/05/2011

Our vehicle tries to find its way between dozens of African teenage prostitutes
scrambling on Patission avenue, one of the main road axes of down town Athens,
and a melancholic female voice fills the car with “Stop the watch’s movement”,
an old Greek popular song of the 60’s.

“I would give anything to be able to stop the watch’s movement, to go back to
the old days”, sadly says Nikos, an old friend from  university while
he smoothly drives his car in an Athens I don’t recognize anymore, an Athens I
had never imagined could become like that.

We reach Victoria’s square an old area, very posh during the 60’s and the 70’s
and then one of the low-middle class orderly neighbourhoods of central Athens --
until the recent arrival of thousands of illegal immigrants living by dozens in
appallingly small apartments.

Nikos checks unconsciously the security of our doors and the car enters
Aristotelous Street, a once-famous street in Greece. Almost fifteen years
ago, while serving the second half of my military service, I had lived for
around nine months in a small and old fashioned, cozy apartment on Aristotelous, and
I used to love strolling around this wider area of down town Athens during the
nights.

Now, suddenly I feel oppressed, almost scared and I look with freezing amazement at
the strange and broken faces of the people on the streets.

“We don’t come down town anymore, it’s the first time in more than a year that I
come over here”, I can hear Nikos’s gloomy voice. He has loved this area
as much I had, maybe even more. His first love was with a girl living just
behind Patission avenue.

“Everybody is afraid now in Athens. The immigrants are afraid of Greeks, the
Greeks are afraid of the immigrants. One day all this will explode, Athens is a
besieged city, from the inside not from the outside”.

A few days ago three illegal immigrants literally slaughtered a Greek man on his
way to take his pregnant wife to the maternity hospital and sold the digital camera they
stole for €120. Over the next few days, far right-wing gangs staged real pogroms
against immigrants in these out-of-state-control vast areas.

“Almost half of Athens is like a huge island of lepers and its growing fast.
It’s an inhuman jungle for every one living there and everybody pays the
terrible price of constant fear and violence. The other half of the city is
either sleeping in order to avoid seeing what is really going on or tries
desperately to deal with austerity and lack of money in every day basis, waiting
for a miracle that will never come”, says Nikos, a once very happy and talkative
guy, and he slips into silence until he brings me back home.

A few hours before our drive to central Athens, Nikos had signed with his twelve
colleagues a document confirming a 7% wage cut for them. Some months ago they had
already signed another document announcing a 10% wage cut and now came the
further 7%. This broke them down financially and morally.

“I don’t know where all that will lead us, maybe the company will close down and
then…”, Nikos did not go on. As if he was afraid to put in words in all these
things he was thinking about the future and the future of his two kids.

Next day, in my parents’ house, my father, my mother and I were all glued in
front of the TV for the evening news, like every Greek household these days. Tax
rises, wages cuts, strikes, privatizations, street violence, cacophony from
Brussels, shameful immaturity from politicians in Athens…

My father was never a talkative person, but these last months he is slipping
further in his silence and he watches TV with the eyes of a man staring at the
gradual but irreversible end of the world. Of his world that he had never
imagined would end up like that.

Later that evening I go out with some old friends to a small bar in the
northern, posh suburbs of Athens. Until late midnight I only listen to stories
of wages cuts, unemployment, thoughts about immigrating abroad, rage and
contempt for the politicians.

“Alright, today I do have a job but tomorrow I may not”, says a friend with a
top managerial job in a big company who seriously thinks about leaving the
country. With two kids and all the extra money we all have to pay for the so-called free
education and the so-called free health, soon it will be impossible even for me
to keep up, and imagine all these people who are already in a worst state than us
and they cannot keep up until the end of the month”, he says with a voice full
of irony and rage.

Next morning I am with Fay, an old friend. She’s a psychologist in a posh area
of Athens and she has lost almost half of her patients. Her husband lost
his job a year ago and he can’t find anything. They have three children.
“We have to learn to live with less, much less, money. The social contract that kids live
better than their parents is over in Greece and it is hard for us, parents, to
accept it”, she says sadly and she adds with a voice filled with poignant
determination: “For the kids we are buying only second hand clothes otherwise we
couldn’t clothe them anymore”.

The last night before I fly back to Brussels where I live, I am driving again in
downtown Athens. Alone this time, trying to put an order in my mind and in all
these unthinkable things happening in Athens, the city where I was born and raised.

And it proves difficult because even if my eyes and my ears are watching and
listening to all things happening, somewhere deep in me there is still a whisper
saying “no, all this is not possible”.

But I know that I am wrong, that all these unthinkable things are only the
beginning. And I suddenly feel that a part of me is vanishing forever.