Tag Archives: Nicholas Sarkozy

Greece, a Baklava Republic

An interesting overview of today’s Greece, by Vanessa Andris for the Huffington Post.

It is not at all unreasonable that any intelligent person trying to make sense of Greece’s recent maniacal antics is now desperately asking, “What is this, a banana republic?”

Well my friend, no, not exactly. This is a Baklava Republic.

Welcome to a country stuck in its own syrup. A place where a prime minister, Mr. Papandreou, calls for a public referendum on a bailout deal without even notifying the finance minister who has spent months negotiating the deal with the lenders and his fellow Greek ministers. A republic where one egomaniac, Antonis Samaras, can autocratically hold an entire terrified nation and trembling world markets hostage by refusing to sign an agreement- which he publicly says he agrees to.

Greece, a country which a year ago seemed centuries ahead of the Arab Spring is now regressing so quickly into the most hideous practices of Baklava Republics that any kind of spring for them seems light years away.

The Greeks have exasperated their supporters and all but exhausted even the EU, the stakeholder with maybe the most to lose from their demise. They have displayed such primitive responses to difficulties that no one in the global community really wants to deal with them anymore.

In one year, and particularly in the last month of unpredictable counter-productive episodes, the Greeks have virtually alienated themselves from the civilized world they themselves fathered centuries ago.

If you think that what Sarkozy and Obama said about Netanyahu while their microphones were on was bad, imagine what they and the EU and IMF might rightfully be saying about the Greeks. And note the Baklava parallels between the Greek and Israeli leadership, starting with a lack of transparency and ending with complete impossibility.

Since the debt crisis began, we have watched our beloved Greece, dizzy with fatigue and despair, teetering on the fulcrum of its future, leaning first northwest like an insecure sophomore posturing to fit in with the polished seniors of the EU.

Then suddenly like all people under stress, reverting to her primal training on how to survive. Swooning now east to circle around the Mediterranean tragically re-identifying herself with cousins from ancient civilizations that have made minimal progress in their development; Turkey, Iran, Iraq, Syria, Lebanon, Israel, Palestine, Jordan, Egypt, and even Libya.

These are the Baklava Republics, a continuum of countries related by variations on one pastry, characterized by a pathetic lack of process skills, rule of law as it serves individual agendas, leaders incapable and disinterested in self-regulation, and proud of their willingness to destroy any and everything in the name of defending their dignity.

A string of countries differentiating themselves from the rest of world with a combination of primary commitment to face-saving, a need to create drama, and a defiance of reality so insanely illogical and destructive that people world-wide see them as nuts.

Not sure whether a given country could be considered a Baklava Republic? Here’s a litmus test: Are the leaders instantly insulted by anything that can be construed as questioning their honesty or good intentions? Is their best defense acting as if they have been monumentally offended? Do they regularly elevate issues to fight or flight dramas?

From Samaras to Ahmadinejad, we see the masters of Baklava Republic tactics regularly enact a predictable but no less maddening three-act drama.

Act One: Outrage: A question about duplicitous behavior is met with incredulous anger; “You dare to question me?”

Act Two: Arrogance: “You have insulted me and anyone who would be so ill-mannered is so far beneath me that they are unworthy of my cooperation.”

Act Three: Threat: “I am a victim, rightfully volatile now because of your behavior. Either provide me a face-saving way to get out of this or I will sabotage this process, set fire to the whole country, commit mass invasions, and/or make my child a suicide martyr. It’s dignity or death.” (Additional Baklava Republic specialty: Add concocted conspiracy theory and implication that the alleged perpetrator is evil, sinful, or crazy to Act Two).

To read the whole article click here.

The run-up to the Greek economic crisis (Part 2)

This is the 2nd part of Greek journalist Pavlos Papadopoulos’ article on the run-up to the current Greek economic crisis, published by “To Vima” newspaper (16/10/2011). To read the first part of the article, click here.

“George knew everything” admits to “Sunday’s Vima” newspaper a top government official. “Since February 2009, eight months before the elections, we knew that Greece was technically bankrupt. The actual bankruptcy was a matter of time”. In February 2009, there was a sudden increase in the difference of the interest rate (spread) between the Greek and the German state 10-year bond. That development, which panicked the Karamanlis administration, didn’t go unnoticed by the PASOK leader and his close associates.

After talking with Greek and mostly foreign experts (Economics Nobel Prize recipient Joseph Stiglitz and investor George Soros, to name but a few) Mr. Papandreou is said to have concluded that the dynamics of the public debt was so powerful that a catastrophic bankruptcy was certain. According to the same source, the PASOK chairman then thought the obvious thing: the states which are on the verge of bankruptcy address to the International Monetary Fund (IMF). However he realized that the capital which was necessary for Greece to avoid bankruptcy was five times more than what the IMF could offer. So he concluded that Greece needs an “international solution” and he started examining the initiatives that he could take.

“Our mistake was that we didn’t prepare the people” says the same party member, “and the Party either”. Mr. Papandreou underestimated the “domestic front” even though he knew that Greece was heading towards bankruptcy. He didn’t abandon his vision of “Green Development”, neither did he direct his Financial advisors to more “careful” declarations. In the summer of 2009, the total cost for benefits was 30 bn euros. A lot of the MPs have called 2009 as the “new ‘81”.

Mr Papandreou stubbornly insisted in a vague rhetoric. He reckoned that a combination of green development, institutional reforms and a (completely unspecified) international initiative would solve the debt problem without targeting the people. This is why the warning by George Provopoulos, Governor of the Bank of Greece, that the 2009 deficit would be a double digit figure didn’t mean much for the wannabe Prime Minister. What he actually believed was that Greece would go from over-borrowing to prosperity without walking the distance in between. And some accused him that, had he taken tough measures back then, he could have avoided the worse that followed.

There was no “socialist allergy” at the Finance Ministry when it came to austerity measures. The Minister often called confidential meetings. “Think of shock measures” was his request to his associates . He believed that the austerity measures were necessary to restore the international markets’ trust. One of his most radical and risky ideas that was heard in those meetings was the “10% haircut of the savings” for all the bank accounts which had more than 100.000 euros. They would implement it at the same time with the (French inspired) freezing of any account which would be instructed to send more than 100.000 euros abroad, in order to proceed to a tax details check.

These proposals, as many others, were triumphantly rejected. Mr. Papaconstantinou did not possess the political prowess to enforce a different policy, while he never recovered the control over the tax-collecting mechanisms. He was good enough abroad. Domestically he achieved the minimum while he didn’t avoid deficiencies and the equivocations which increased the insecurity and the uncertainty. The measures that were announced were like aspirins and even them were causing reactions. Like the reaction by Christos Papoutsis when they announced the freezing of salaries in the public sector for those whose paycheck was more than 2.000 euros (which was rejected by the Prime Minister too).

During the early period of his administration Mr. Papandreou visited Moscow and Paris in order to “surround” Berlin, since Angela Merkel didn’t want to accept, especially after her alliance with the Liberals, a “European solution” in co-operation with the IMF. Mr. Papandreou reckoned that, if he could convince Moscow and Paris, he could then take Berlin. Having his mind in an “international solution” he kindly avoided Vladimir Putin’s proposal of geopolitical significance for an interstate loan to Greece.

While waiting for the international solution to mature, it was preferred to flirt with Goldman Sachs and Deutsche Bank. According to banking sector sources, the Greek government appointed these two banks at the same time with the order to investigate the possibility of a 25 bn euros loan (private placement) from the markets. However the international practice necessitates that such orders are given only to financial institutions. At the end of 2009 Gary Cohn, CEO of Goldman Sachs, met Papandreou at the Pentelikon hotel in Kifissia suburb. At the beginning of 2010 the head of Deutsche Bank, Josef Ackermann, visited the Greek Prime Minister’s office. The players who were involved in these initiatives were having preferential access to the core of power. The initiatives failed. The two banks (and their middlemen) lost important commissions. And the markets’ lack of trust against the Greek government increased.

End of Part 2  – To read Part 3 click here.

Guy Fawkes forgot the Greek Parliament

Guy Fawkes, third from right

Remember, remember the Fifth of November,
The Gunpowder Treason and Plot,
I know of no reason
Why the Gunpowder Treason
Should ever be forgot.
 

Last night I had the privilege to attend the vote of confidence from the galleries of the Greek Parliament. I was hoping to tweet the details but, despite the Parliament Press Office’s reassurance, there was not wi-fi in the room and cellular networks were de-activated. Anyway, I must say that the theatrical play we all saw last night belongs as a genre to the theatre of the absurd. And it is indicative of how Greek society is functioning and also of how our collective memory is working.

This country is in its worst position for decades and, still, no one has been found responsible for it. No politician, no economist, no banker, no one. However this government was allowed to continue with its policies without the slightest moral problem. We just forgot, as citizens and as a society, to continue pressing for justice on this matter. It’s because we didn’t keep remembering long enough.

Similarly, yesterday everybody seemed to have forgotten how the past week has started. We have forgotten the irresponsibility of Papandreou calling a referendum that drove world markets and leaders crazy. We have forgotten that the question changed on Wednesday and the new question was dictated by the Merkozi couple. We have forgotten that yesterday, only a few hours before last night’s vote, Papandreou had almost resigned and then simply changed his mind. Last night he had the luxury to pose like a winner, because we didn’t keep remembering long enough.

And the result was that we saw 153 MPs voting a vote of confidence for a government that promised the absurd: to resign. Where on earth has such a thing happened before? In the previous days, several MPs have stated that they will vote NO if Papandreou wouldn’t promise to resign. So George arrived to the podium, at 23:00 and not at 20:00 as his office has leaked, and gave us the promise. The marginal majority voted YES. The socialist MPs, them and only them, have voted for their government to share the power (and blame) with the rest of the parties. The rest of the parties rejected the PM’s ideas with a negative vote but will be called today, or soon, to join the new national unity government. Papandreou won. He will resign. Apart from tragedy and chaos, paradox is also a Greek word.

We must finally understand that this government, together with the parties which will eventually co-operate to produce the next government of national unity, belong and represent the establishment which brought us here. This establishment cannot correct the situation, it cannot afford the metamorphosis. They are talking about the corruption, the clientelism, the debts, the wasting of public money as if they were phenomena from another planet. As a famous Greek blogger wrote, “Greece should not only be thrown out of the euro zone. Greece should be kicked out to another planet”.

Guy Fawkes, Guy Fawkes, t’was his intent
To blow up the King and Parli’ment.
Three-score barrels of powder below
To prove old England’s overthrow;
 

Papandreou also outlined all (his) policies that the new government of national unity will have to do. It’s our obligations toward the IMF/EU/ECB in order to continue receiving the bailout package’s installments. So not only he will resign, but his ghost will still haunt the next government. It will be a government committed not to the people’s verdict but to its predecessor’s policies. Speaking of inheritance, an emotional Papandreou said yesterday “From my grandfather, I inherited just a watch. From my father I inherited nothing but the name”. And the new government will inherit his policies.

By God’s providence he was catch’d
With a dark lantern and burning match.
Holla boys, Holla boys, let the bells ring.
Holloa boys, holloa boys, God save the King!
And what should we do with him? Burn him!
 

Epilogue. I respect Maria Houkli. She is one of the most serious persons in Greek tv today. She is the anchorwoman in ANT1 TV. When the marathon coverage of the political developments finished in the early hours of Saturday she came up with this farewell to the viewers:

“Goodnight and… what else can I say? Good luck to all of us.”

The referendum could be a big fat Greek farce

I just finished watching the developments from the G20 meeting in Cannes. So, the conclusion as it was reported by Greek media is that the now famous referendum will be on whether we wish to continue using the euro or not.

I feel very disappointed and, once more, I get the impression that this whole story about the referendum was nothing more but another political machination of the government. When George Papandreou first announced the idea of a referendum, a couple of days after the Brussels’ deal, we all thought that the referendum was going to ask the citizens whether they want the new bailout package or not. In the case of a Yes, the PASOK government would be able to continue with their policies. In the case of a No, Greece would probably go totally and disorderly bankrupt and would have to return to the drachma. Inevitably analysts were, already since Monday night, talking that we would ultimately vote about our participation in the euro zone. But when they were saying this they were having in mind that the phraseology would involve whether we want the latest deal and not whether we want to stay in euro zone. However, after the meeting with Merkel and Sarkozy, Papandreou said that the referendum will be about the euro!

What’s the difference?

  1. If you ask Greeks whether they want the Brussels’ deal, they will all rush to the polling stations and say No. I’d say for sure (otherwise nobody would panick after Monday’s night announcement by Papandreou).
  2. If you ask about whether we want to keep the euro Greeks will be blackmailed for a whole month that their savings, if any are left, will be devalued again and again until Greece becomes competitive. So the simple citizens will be tempted to vote to stay in the euro zone.
  3. In the case of an outcome that dictates our exit from the euro zone, the PASOK government will need to call for elections. There will be a relative chaotic period and after going back to the drachma we’ll see all those who got rich in the past decades through doubtful methods and have already taken their millions of euros in banks out of Greece, re-importing their euro-capital after the devaluations of the drachma in order to buy out everything for nothing.
  4. Another very possible scenario is that Greeks will realize the vanity of this referendum (if the questions is about the euro and not the Brussels’ deal) and decide to abstain en masse from the polling stations. If less than 40% of the electorate votes, the result will not bind the government to act.

So we are going to have a referendum about the euro and no-one is wondering the simple question… Why now? We were not asked about it at the end of 1990s when we were heading towards the European Monetary Union. Why are we asked now about exiting? Why now?

All these thoughts made me come to the conclusion that this whole referendum story is void. It’s nothing more but a farce.

Before we see what the exact question is, Papandreou must get a vote of confidence at the Parliament this Friday. In the meantime nothing at all is officially changed. As the Merkozi couple have reiterated in Cannes “Greece should follow its obligations” (i.e. what was agreed in Brussels last week). No matter what the referendum question is.

Update: I forgot to mention one more thing. This government has been telling the Greek people before the last round of measures that we have enough cash to keep us going until mid-November. There was a narrativen that we should do everything we can to satisfy the ECB and the IMF in order to cash their cheque for the 6th installment of the previous bailout package. Othewise we were in danger (or facing the certainty) of having no money to pay the salaries & pensions. This “accept all kinds of new measures or we’ll run out of money” blackmail did its job well (as in last June and as in May 2010). The EU/IMF has now announced that they will not disengage the installment until the referendum (planned for the 4th of December) takes place. If we don’t go bankrupt by the end of November, that will mean that the government was caught lying. Again. And this is probably the only good thing that could come out of this referendum story.