Ask the Author
New Yorker writers answer readers’ questions.
June 11, 2012
Live Chat: John Lanchester on the Euro Crisis
In this week’s Comment, John Lanchester writes about Greece and the euro crisis. On Tuesday, Lanchester answered readers’ questions in a live chat. A transcript of the discussion follows.
JOHN LANCHESTER: Hello everyone, it’s good to have the chance to chat with you.
QUESTION FROM ALEC MALLY: Read your article, but it seems to me you gloss over the failure of the Greek side to implement structural reforms in any meaningful way. I am in Athens, and was a former economic attache at the US Embassy, so I am looking for real responses, not a short sound-bite. Why should the Troika keep paying for non-reform in Greece’s decrepit economy and state administration?
JOHN LANCHESTER: Hello Alec. It’s in the nature of 1,000 word pieces that you can’t say everything, and you’re right, there’s been no real movement in the area of structural reform. That more than anything else seems to be what’s driving the Troika nuts.
QUESTION FROM JOE: So how is the Greek bailout different from Spain’s? Why doesn’t Spain have to deal with new austerity measures?
JOHN LANCHESTER: Joe, the Spanish are
implementing quite a few austerity measures already—but you are right
that this is an issue for the countries which have already had bailouts
from the EU, meaning not just Greece but Portugal and Ireland. One thing
in particular which catches the eye is that the capital in Spain’s case
looks as if its going to be injected straight into the banks. But that
didn’t happen in other cases and in ireland what happened was that the
banks went broke, then the state stepped in to guarantee their debts,
and now the state is broke too. If EU money had gone straight to the
banks it would look a little different—so there’s going to be a lot of
close attention given to the specifics of the Spanish deal.
QUESTION FROM PHIL: Even if Greece and the E.U. do come to terms, what’s to prevent the same crisis from happening again…especially if, as you say, Greece doesn’t make anything anymore?
JOHN LANCHESTER: Phil, that’s a big issue. It is hard to see how the Greek economy can grow while government spending is being cut so hard that their economy is, as I said in the piece, in the sharpest decline anywhere since the Great Depression. Without growth, in turn it’s hard to see how they are going to repay the money already borrowed. (As I keep stressing, the bailouts are loans, which have to be repaid.) There are conspiracy-theorist versions of what’s happening now which see it only as a way of buying time for a repetition of the crisis which would involve Greek exit not now but in the future.
QUESTION FROM ANN: How bad is it right now for the average Greek citizen?
JOHN LANCHESTER: Ann, for many Greeks it is really very bad indeed—the example I quote of people rummaging through garbage cans for food was not hypothetical. There are some who are less hard hit, either because they have hidden assets, or because they are outside the formal economy, in strongly agricultural rural areas, for example. But many people are bleeding and the apparent suddenness of the reversal is particularly hard. For young people too, there is a huge impact in that many of them have plans for the future that are now suddenly unfulfillable.
QUESTION FROM ALEC MALLY: I am not advertising, but a number of us got so fed up we started a blog called Reform Watch Greece which covers what isn’t happening. Google will find it for you.
JOHN LANCHESTER: Noted. I think I’ve seen it. The reform issue is absolutely crucial and its failure to happen so far is what has made the crisis especially acute. If there had been genuine structural reform, the Troika would be in a different place in its attitudes.
QUESTION FROM JONAH: John—Is there any possibility that the ECB and the IMF along with members of the EU follow the model that the US created by increasing spending and trying to kick-start the economy during our financial crisis, instead of all these austerity measures? At the very least, stimulate the economy then create reforms/austerity measures after a recovery, right?
JOHN LANCHESTER: Jonah, I wish that were the case, but on the face of it, there are no signs that the EU is going to do the obvious thing and copy what the US has done. The first glimmer of possible change has come with the election of Francois Hollande in France, because he campaigned on the basis that a growth strategy for Europe was essential, and he brought the topic up, apparently with considerable force, at his first meeting with Chancellor Merkel. So far, though, Merkel has been insisting on an austerity-first strategy, one which on the evidence looks as if it is doing a very good job of making a bad situation worse. The historical analogy would be with the strategic mistakes which turned the stock market crash into the Great Depression.
QUESTION FROM GUEST: I agree with your commentary that politics, rather than straightforward economics is the main problem—some are even calling for early elections in Italy, the new focus for today. What do you think of the prospect that the Eurozone will simply stumble into a Greek default—which might shock the rest into a closer fiscal union?
JOHN LANCHESTER: I think that stumbling-intto-default scenario is all too possible. It is made more likely by the fact that everyone is so angry with each other—the Troika with Greece’s non-reform, and Greeks with what they see as the hypocrisy and bad faith of the creditor countries. A default might well lead to a close union among the rest but not without a period of great and scary turbulence in the interim. It isn’t too hard to see a more closely aligned Europe emerging from this, but wow, it sure is going to be a bumpy ride.
QUESTION FROM ELIAS: I am a university professor in Greece and my only means is the salary I get paid. My monthly wage has been cut by 30%. On top of that there are various extra taxes imposed by troika’s “mnimonio”. All salaried Greeks pay their taxes and continue to do so at an increased rate. What the so-called structural reforms did was to hit unjustly wage-earners. I think it would be better to specify what structural reforms we are talking about otherwise there is a risk of pushing Greece over the precipice.
JOHN LANCHESTER: Elias, yes, as you know better than I do, the structural reforms have fallen more or less entirely on the sector of the population who are salaried. This means that they aren’t really structural reforms at all, but simply increased taxes on the people who were already paying tax. The reforms that are needed are to do with opening access to jobs and professions and ending the clientelistic structure brought in by the main political parties over the last decades. And as I think said in the piece, the single most important reform would be to do with tax collection, which is a different thing from just increasing taxes on the people who are already paying them.
QUESTION FROM SARAH: One thing I’m curious about: have property developers in Spain who walked away from projects pocketed large sums while leaving the banks with the toxic debt? Have heard that was the case in Ireland. Also, is it not primarily German banks who aggressively loaned to these countries in the first place? Are there banking reforms in the works or are they hoping to be able to make back their losses with further risky trading a la JP Morgan?
JOHN LANCHESTER: Sarah, I’m not sure about the property story, but it would be surprising if that weren’t the case, because developers heading for the hills before the bubble bursts is one of the oldest stories in the world of money. As for the banks, yes, and that is one of the bases for charges of hypocrisy. One example from Greece is that the country was the world’s fourth-largest spender on weapons. Why? No sane reason, and therefore you might wonder why they were being leant this money to buy the arms they didn’t need, and whether they would ever be able to repay those loans.
QUESTION FROM ALEC MALLY: I am happy to come back in professor Elias. Where are the investment-stimulating measures to open the economy? Why not close the Ministry of Development completely so it can not extort favors for permits? Why not perform the civil service evaluations Minister Reppas stalled on? Why not eliminate non-performing public organizations as Greece promised? Where is the privatization? Why not close part of the state media empire as ordered?
QUESTION FROM TERRI: It seems that the issue of corruption will remain intractable in Greece. Leads me to believe default may be the only option, depending on the election outcome this weekend, despite the chaos it will create.
JOHN LANCHESTER: It’s the three c’s, as identified by George Papandreou when he was Prime Minister: corruption, cronyism, and clientelistic practices. These things are hard to change, especially when the public knows that the system is not fair. James Surowiecki wrote about this last year when he talked in the magazine about ‘tax morale’, and about how hard it is to recover the sense that people should pay their taxes, once that idea has been lost.
QUESTION FROM ELIAS: Hi Alec. I don’t think the Greek economy is a closed shop. Look at all those multinational companies operating in Greece—often in very favorable terms (perhaps paid for through corruption). Yes there is corruption and this is the driving force behind the huge electoral shift recorded in May’s (and rest assured) June’s elections. But, to come to John’s point, clientelism is really a misnomer for what happens in Greece. In reality the main problem is cartelization of an oligopolistically organized political power. This is the true problem and not the pluralistic clienteles implied by the notion.
QUESTION FROM TOM: Many prominent economists and commentators argue that the austerity measures being implemented are dramatically shrinking the economy further reducing the ability of the country to repay the troika loans. Some argue that the agreed measures are actually leading to eurozone exit since the agreed bailout targets are totally unrealistic and will not be realised. What is your opinion on this and if you agree do you agree with those who argue that based on this its better for GReece to unilaterally drop the bailout terms and pursue another course?
JOHN LANCHESTER: Tom, I basically agree with the people you are citing. The trouble for Greece is that it is a horrible choice between carrying on with unsustainable cuts—a strategy which in my view offers no chance of growing the economy so that Greece can start to change and pay back its debt—and on the other hand an exit which constitutes a terrifying leap into the unknown. Sure, countries have defaulted and devalued before, but there is no analogy for a developed country leaving something like the Euro. I can see why Greeks are strongly tempted by this option and are looking hard at the example of a country like Argentina, which defaulted in 2003 (I think), was told it was doomed, and has since then been the fastest-growing country in a fast-growing continent. Whether a Greek exit from the Euro would look like that, though, is hard to answer and it would be a hell of a risk. A surely less dangerous course would be what many Greeks want: an amended mnimonio which gives the economy a chance to grow, coupled with the reforms to the economy and political system for which the Troika are howling.
QUESTION FROM ALEC MALLY: Thanks Elias, No disagreement with the political analysis. But I do think the clientelistic feature in regards to hiring got the Public Sector where it found itself in 2010.
QUESTION FROM KAHINA: I think that the whole EURO ZONE is a pure joke. I don’t understand how can we put at the same level, under the same impositions; countries that are totally different. I mean economically different. How can we put giant German industries at the same level with the little fisherman from Portugal? Why doesn’t Europe face its failure with the EUROZONE project rather than dragging the rest of the world into a deeper crisis and allow Chinese forces to rise!
JOHN LANCHESTER: Kahina, a lot of people today are agreeing with you about the Eurozone begin a joke. I was told the other day by an economist that the politicians who wrote the treaties were repeatedly and explicitly warned that the new currency had critical flaws, along the lines you describe, built into it from the beginning. It seems to me that the Eurozone can in effect be retrofitted with the institutions it needs—but whether the political will to do that exists, in the face of resistant from angry electorates, I’m less sure.
QUESTION FROM ANDREW: Extremism can arise from turmoil. Do you see this election turning ugly?
JOHN LANCHESTER: Andrew, it already has, with the election to the Greek parliament in the last round of elections of the Golden Dawn. This is the first time this motley assortment of far-right extremists have gained seats in Parliament; as for what they are like, one of their spokesmen the other day threw a glass of water over one woman, then hit another one three times, all on live tv, before then going into hiding to avoid an arrest warrant.
QUESTION FROM DANIEL: Are there any accurate figures for the number of Greeks who have fled their country over the past year? I live here, and it seems like anyone who could go, did. It seems to be the unemployment numbers should take these people into account. Twenty-plus percent unemployment among young people is atrocious, but if you factor in the number who are no longer here, who have abandoned the country and their families, the numbers are actually far worse.
JOHN LANCHESTER: Daniel, I haven’t seen figures, but I bet they make unhappy reading. Something very similar has happened in Ireland; in countries with a history of emigration, these developments, and the thought that a whole generation of young people will be lost, are profoundly upsetting.
QUESTION FROM JOOP: I live in Holland and I’ve been taken aback by the aggressiveness of the mainstream press in Holland when covering the Greek sovereign crisis right from when it started in 2010. The majority of the Dutch population believes the behaviour of the average Greek to be the cause of the entire Eurozone crisis. The language of most politicians also reinforces this feeling. Who benefits by creating such a narrative which permeates the whole society?
JOHN LANCHESTER: Joop, I’m not clear who benefits, but it is absolutely the cast that the coverage of the Greek crisis in Northern Europe has been ferociously moralistic and personalised. This is dangerous for a number of reasons but one of the main ones is that it makes it much harder to address the underlying problems of the entire Euro, indeed of the EU itself.
QUESTION FROM HANNAH: Is there any way to change the overall mindset of the people? Just watching the protests and reading up on it, you see how the majority of the Greeks refuse to change their lifestyle to accommodate the their economic troubles. Not that they are alone in this regard (a lot of other Eurozone counties as well as the US are guilty of this as well). But how can we expect anything to change when no one wants it? Yes having the EU and the IMF force restrictions on them well make some impact but what’s needed is to get the people behind the idea that they must re-examine their entire lifestyle if they wish to remain a prominent nation. Can this be done?
JOHN LANCHESTER: Hannah, I think it’s to do with expectations. People grew accustomed to one set of them, and the idea of cutbacks and job losses and tax rises and ‘austerity’ stretching for years, perhaps for a decade, into the future—they wonder when it was they signed up for that, and who warned them it was likely to come. People resent being told how easy and good a time they had, when they don’t feel they were having all that easy a time at all. This issue isn’t going away, because it isn’t clear that a government delivering the kind of austerity packages many of them are trying to implement can stay in power.
QUESTION FROM ELIAS: Thanks Alec. Just one point. If you look at the figures you will see that in terms of personnel the Greek public sector is just below EU average. So this is really not the source of all evil, as often implied. Also, the last electoral results show that public sector workers turned their back on their assumed historical “patrons”. i.e., Nea Dimokratia and Pasok. So the clientelistic hypothesis, even in this case, stands in some need of restating.
QUESTION FROM ALEC MALLY: John I heard the same thing from British advisors to their Maastricht negotiators, and that’s why they stayed clear.
QUESTION FROM SAMANTHA ODEGBARO: But isn’t one of the problems still with Greece that it has not done the reforms needed for a competitive mark in the 21st century. It still has a bloated civil service & what has it sold in terms of asset sales? The politicians say and do what Europe (the Germans) want to hear but as the command goes further down the line the Greeks just sit on it and no change comes.
QUESTION FROM ALEC MALLY: Hannah since I live in Greece I must add that cutbacks are significant and the economy is responding. Its not all party central, shops and clubs are closing, at an accelerating pace as cash reserves are depleted.
QUESTION FROM ELIAS: It remains to be seen whether Golden Dawn will hold on to its May votes. The spokesman’s detestable behaviour could perhaps be read as an attempt to polarize voters through spectacle. But, there is a deeper concern here; namely, the Dublin agreement which has led to the estrangement of hundreds of thousands of immigrants in Greek soil. This has created an explosive situation upon which Golden Dawn makes political capital.
JOHN LANCHESTER: Elias, let’s all hope they don’t hang on to those votes.
That’s all we’ve got time for, I’m sorry to say. My apologies to those of you I haven’t had a chance to answer. Thank you very much.
QUESTION FROM PHIL: Even if Greece and the E.U. do come to terms, what’s to prevent the same crisis from happening again…especially if, as you say, Greece doesn’t make anything anymore?
JOHN LANCHESTER: Phil, that’s a big issue. It is hard to see how the Greek economy can grow while government spending is being cut so hard that their economy is, as I said in the piece, in the sharpest decline anywhere since the Great Depression. Without growth, in turn it’s hard to see how they are going to repay the money already borrowed. (As I keep stressing, the bailouts are loans, which have to be repaid.) There are conspiracy-theorist versions of what’s happening now which see it only as a way of buying time for a repetition of the crisis which would involve Greek exit not now but in the future.
QUESTION FROM ANN: How bad is it right now for the average Greek citizen?
JOHN LANCHESTER: Ann, for many Greeks it is really very bad indeed—the example I quote of people rummaging through garbage cans for food was not hypothetical. There are some who are less hard hit, either because they have hidden assets, or because they are outside the formal economy, in strongly agricultural rural areas, for example. But many people are bleeding and the apparent suddenness of the reversal is particularly hard. For young people too, there is a huge impact in that many of them have plans for the future that are now suddenly unfulfillable.
QUESTION FROM ALEC MALLY: I am not advertising, but a number of us got so fed up we started a blog called Reform Watch Greece which covers what isn’t happening. Google will find it for you.
JOHN LANCHESTER: Noted. I think I’ve seen it. The reform issue is absolutely crucial and its failure to happen so far is what has made the crisis especially acute. If there had been genuine structural reform, the Troika would be in a different place in its attitudes.
QUESTION FROM JONAH: John—Is there any possibility that the ECB and the IMF along with members of the EU follow the model that the US created by increasing spending and trying to kick-start the economy during our financial crisis, instead of all these austerity measures? At the very least, stimulate the economy then create reforms/austerity measures after a recovery, right?
JOHN LANCHESTER: Jonah, I wish that were the case, but on the face of it, there are no signs that the EU is going to do the obvious thing and copy what the US has done. The first glimmer of possible change has come with the election of Francois Hollande in France, because he campaigned on the basis that a growth strategy for Europe was essential, and he brought the topic up, apparently with considerable force, at his first meeting with Chancellor Merkel. So far, though, Merkel has been insisting on an austerity-first strategy, one which on the evidence looks as if it is doing a very good job of making a bad situation worse. The historical analogy would be with the strategic mistakes which turned the stock market crash into the Great Depression.
QUESTION FROM GUEST: I agree with your commentary that politics, rather than straightforward economics is the main problem—some are even calling for early elections in Italy, the new focus for today. What do you think of the prospect that the Eurozone will simply stumble into a Greek default—which might shock the rest into a closer fiscal union?
JOHN LANCHESTER: I think that stumbling-intto-default scenario is all too possible. It is made more likely by the fact that everyone is so angry with each other—the Troika with Greece’s non-reform, and Greeks with what they see as the hypocrisy and bad faith of the creditor countries. A default might well lead to a close union among the rest but not without a period of great and scary turbulence in the interim. It isn’t too hard to see a more closely aligned Europe emerging from this, but wow, it sure is going to be a bumpy ride.
QUESTION FROM ELIAS: I am a university professor in Greece and my only means is the salary I get paid. My monthly wage has been cut by 30%. On top of that there are various extra taxes imposed by troika’s “mnimonio”. All salaried Greeks pay their taxes and continue to do so at an increased rate. What the so-called structural reforms did was to hit unjustly wage-earners. I think it would be better to specify what structural reforms we are talking about otherwise there is a risk of pushing Greece over the precipice.
JOHN LANCHESTER: Elias, yes, as you know better than I do, the structural reforms have fallen more or less entirely on the sector of the population who are salaried. This means that they aren’t really structural reforms at all, but simply increased taxes on the people who were already paying tax. The reforms that are needed are to do with opening access to jobs and professions and ending the clientelistic structure brought in by the main political parties over the last decades. And as I think said in the piece, the single most important reform would be to do with tax collection, which is a different thing from just increasing taxes on the people who are already paying them.
QUESTION FROM SARAH: One thing I’m curious about: have property developers in Spain who walked away from projects pocketed large sums while leaving the banks with the toxic debt? Have heard that was the case in Ireland. Also, is it not primarily German banks who aggressively loaned to these countries in the first place? Are there banking reforms in the works or are they hoping to be able to make back their losses with further risky trading a la JP Morgan?
JOHN LANCHESTER: Sarah, I’m not sure about the property story, but it would be surprising if that weren’t the case, because developers heading for the hills before the bubble bursts is one of the oldest stories in the world of money. As for the banks, yes, and that is one of the bases for charges of hypocrisy. One example from Greece is that the country was the world’s fourth-largest spender on weapons. Why? No sane reason, and therefore you might wonder why they were being leant this money to buy the arms they didn’t need, and whether they would ever be able to repay those loans.
QUESTION FROM ALEC MALLY: I am happy to come back in professor Elias. Where are the investment-stimulating measures to open the economy? Why not close the Ministry of Development completely so it can not extort favors for permits? Why not perform the civil service evaluations Minister Reppas stalled on? Why not eliminate non-performing public organizations as Greece promised? Where is the privatization? Why not close part of the state media empire as ordered?
QUESTION FROM TERRI: It seems that the issue of corruption will remain intractable in Greece. Leads me to believe default may be the only option, depending on the election outcome this weekend, despite the chaos it will create.
JOHN LANCHESTER: It’s the three c’s, as identified by George Papandreou when he was Prime Minister: corruption, cronyism, and clientelistic practices. These things are hard to change, especially when the public knows that the system is not fair. James Surowiecki wrote about this last year when he talked in the magazine about ‘tax morale’, and about how hard it is to recover the sense that people should pay their taxes, once that idea has been lost.
QUESTION FROM ELIAS: Hi Alec. I don’t think the Greek economy is a closed shop. Look at all those multinational companies operating in Greece—often in very favorable terms (perhaps paid for through corruption). Yes there is corruption and this is the driving force behind the huge electoral shift recorded in May’s (and rest assured) June’s elections. But, to come to John’s point, clientelism is really a misnomer for what happens in Greece. In reality the main problem is cartelization of an oligopolistically organized political power. This is the true problem and not the pluralistic clienteles implied by the notion.
QUESTION FROM TOM: Many prominent economists and commentators argue that the austerity measures being implemented are dramatically shrinking the economy further reducing the ability of the country to repay the troika loans. Some argue that the agreed measures are actually leading to eurozone exit since the agreed bailout targets are totally unrealistic and will not be realised. What is your opinion on this and if you agree do you agree with those who argue that based on this its better for GReece to unilaterally drop the bailout terms and pursue another course?
JOHN LANCHESTER: Tom, I basically agree with the people you are citing. The trouble for Greece is that it is a horrible choice between carrying on with unsustainable cuts—a strategy which in my view offers no chance of growing the economy so that Greece can start to change and pay back its debt—and on the other hand an exit which constitutes a terrifying leap into the unknown. Sure, countries have defaulted and devalued before, but there is no analogy for a developed country leaving something like the Euro. I can see why Greeks are strongly tempted by this option and are looking hard at the example of a country like Argentina, which defaulted in 2003 (I think), was told it was doomed, and has since then been the fastest-growing country in a fast-growing continent. Whether a Greek exit from the Euro would look like that, though, is hard to answer and it would be a hell of a risk. A surely less dangerous course would be what many Greeks want: an amended mnimonio which gives the economy a chance to grow, coupled with the reforms to the economy and political system for which the Troika are howling.
QUESTION FROM ALEC MALLY: Thanks Elias, No disagreement with the political analysis. But I do think the clientelistic feature in regards to hiring got the Public Sector where it found itself in 2010.
QUESTION FROM KAHINA: I think that the whole EURO ZONE is a pure joke. I don’t understand how can we put at the same level, under the same impositions; countries that are totally different. I mean economically different. How can we put giant German industries at the same level with the little fisherman from Portugal? Why doesn’t Europe face its failure with the EUROZONE project rather than dragging the rest of the world into a deeper crisis and allow Chinese forces to rise!
JOHN LANCHESTER: Kahina, a lot of people today are agreeing with you about the Eurozone begin a joke. I was told the other day by an economist that the politicians who wrote the treaties were repeatedly and explicitly warned that the new currency had critical flaws, along the lines you describe, built into it from the beginning. It seems to me that the Eurozone can in effect be retrofitted with the institutions it needs—but whether the political will to do that exists, in the face of resistant from angry electorates, I’m less sure.
QUESTION FROM ANDREW: Extremism can arise from turmoil. Do you see this election turning ugly?
JOHN LANCHESTER: Andrew, it already has, with the election to the Greek parliament in the last round of elections of the Golden Dawn. This is the first time this motley assortment of far-right extremists have gained seats in Parliament; as for what they are like, one of their spokesmen the other day threw a glass of water over one woman, then hit another one three times, all on live tv, before then going into hiding to avoid an arrest warrant.
QUESTION FROM DANIEL: Are there any accurate figures for the number of Greeks who have fled their country over the past year? I live here, and it seems like anyone who could go, did. It seems to be the unemployment numbers should take these people into account. Twenty-plus percent unemployment among young people is atrocious, but if you factor in the number who are no longer here, who have abandoned the country and their families, the numbers are actually far worse.
JOHN LANCHESTER: Daniel, I haven’t seen figures, but I bet they make unhappy reading. Something very similar has happened in Ireland; in countries with a history of emigration, these developments, and the thought that a whole generation of young people will be lost, are profoundly upsetting.
QUESTION FROM JOOP: I live in Holland and I’ve been taken aback by the aggressiveness of the mainstream press in Holland when covering the Greek sovereign crisis right from when it started in 2010. The majority of the Dutch population believes the behaviour of the average Greek to be the cause of the entire Eurozone crisis. The language of most politicians also reinforces this feeling. Who benefits by creating such a narrative which permeates the whole society?
JOHN LANCHESTER: Joop, I’m not clear who benefits, but it is absolutely the cast that the coverage of the Greek crisis in Northern Europe has been ferociously moralistic and personalised. This is dangerous for a number of reasons but one of the main ones is that it makes it much harder to address the underlying problems of the entire Euro, indeed of the EU itself.
QUESTION FROM HANNAH: Is there any way to change the overall mindset of the people? Just watching the protests and reading up on it, you see how the majority of the Greeks refuse to change their lifestyle to accommodate the their economic troubles. Not that they are alone in this regard (a lot of other Eurozone counties as well as the US are guilty of this as well). But how can we expect anything to change when no one wants it? Yes having the EU and the IMF force restrictions on them well make some impact but what’s needed is to get the people behind the idea that they must re-examine their entire lifestyle if they wish to remain a prominent nation. Can this be done?
JOHN LANCHESTER: Hannah, I think it’s to do with expectations. People grew accustomed to one set of them, and the idea of cutbacks and job losses and tax rises and ‘austerity’ stretching for years, perhaps for a decade, into the future—they wonder when it was they signed up for that, and who warned them it was likely to come. People resent being told how easy and good a time they had, when they don’t feel they were having all that easy a time at all. This issue isn’t going away, because it isn’t clear that a government delivering the kind of austerity packages many of them are trying to implement can stay in power.
QUESTION FROM ELIAS: Thanks Alec. Just one point. If you look at the figures you will see that in terms of personnel the Greek public sector is just below EU average. So this is really not the source of all evil, as often implied. Also, the last electoral results show that public sector workers turned their back on their assumed historical “patrons”. i.e., Nea Dimokratia and Pasok. So the clientelistic hypothesis, even in this case, stands in some need of restating.
QUESTION FROM ALEC MALLY: John I heard the same thing from British advisors to their Maastricht negotiators, and that’s why they stayed clear.
QUESTION FROM SAMANTHA ODEGBARO: But isn’t one of the problems still with Greece that it has not done the reforms needed for a competitive mark in the 21st century. It still has a bloated civil service & what has it sold in terms of asset sales? The politicians say and do what Europe (the Germans) want to hear but as the command goes further down the line the Greeks just sit on it and no change comes.
QUESTION FROM ALEC MALLY: Hannah since I live in Greece I must add that cutbacks are significant and the economy is responding. Its not all party central, shops and clubs are closing, at an accelerating pace as cash reserves are depleted.
QUESTION FROM ELIAS: It remains to be seen whether Golden Dawn will hold on to its May votes. The spokesman’s detestable behaviour could perhaps be read as an attempt to polarize voters through spectacle. But, there is a deeper concern here; namely, the Dublin agreement which has led to the estrangement of hundreds of thousands of immigrants in Greek soil. This has created an explosive situation upon which Golden Dawn makes political capital.
JOHN LANCHESTER: Elias, let’s all hope they don’t hang on to those votes.
That’s all we’ve got time for, I’m sorry to say. My apologies to those of you I haven’t had a chance to answer. Thank you very much.
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