Τρίτη, 25 Ιουνίου 2013

Do We Need More or Less Europe to Escape the Crisis? Chapter Two: Watchdog of Last Resort

The thing is, we are not good at managing our own affairs. The Greek administrations of the past 40 years or so have been spending profligately, in order to maintain their ties to groups of voters and special interests; the spoils system in hirings at the public sector, which even a constitutional amendment in 2001 failed to curtail, was a prominent way of exchanging public money for votes. Another actor was the system of public work contractors, who also happen to control most of the media and have a lot of influence in the banks operating in Greece - they were not to be deprived of their share of the public purse, either. These factors, combined, meant that each Greek administration had to somehow justify new public works and overlook the faults in those already under contract, tilt the bidding procedure in favor of its "allies" and find ever more original excuses for more hires in the public sector. Conversely, there was no reason to shut down agencies or foundations funded exclusively by the State - quite the opposite.

This situation created a barrier, where even the democratic procedure in itself led to distorted results, as voters were selecting parliament deputies with their mind on short-term gains and complete disregard for the long-term implications of their choices. The result was Greece's huge debt and deficits and subsequent inability to borrow from the markets at reasonable interest rates. Although Greece was bound by the Stability Pact, according to which no European Union member-State was allowed to have deficits exceeding 3% for more than 3 years in a row, falsified statistics meant that the pact's enforcing mechanism, which would be the European Commission, failed to take any remedial actions. When it was finally announced that the greek deficit had exceeded 12% for the year 2009 (it was later readjusted to 15.5%), Greece had to resort to a new international mechanism (an ad-hoc lending contract between Greece, the other euro-zone countries, the European Central Bank, and the International Monetary Fund) to achieve some sort of cash-flow and avoid immediate bankruptcy. Needless to mention that such a novel approach meant that a way to assure that the money Greece borrowed through this process would paid back, that is that the calamities that befell the Greek economy would be avoided. That meant that Greece had to establish its own, independent statistical authority/ agency and be subject to strict controls by the representatives of the lenders (the so-called troika) in its implementation of measures that would drastically reduce the deficit and, hopefully, the debt.

So Greece got under the strictest scrutiny of its finances since World War II. Many unpopular measures were passed under the threat that the next disbursement of the loan money would not be made. For the first time the data sent out to Greece's lenders were considered reliable; and for the first time in a long time the Greek government was held accountable for its actions and omissions: no pain, no gain (i.e. payment of the disbursement). When, following Greece, other euro-zone members required similar intervention, similar controlling mechanisms were established, where fiscal or other targets were set and the  payment of the assistance was dependent upon those targets having been met. One would say, therefore, that in Greece a precedent was set, that the lenders of last resort would be the watchdogs of last resort. What's more, this precedent (along with Eurostat's gross failure to understand that the greek government was feeding it with false statistics for decades) made the European Commission wake somehow up and start asking more questions to all eurozone and European-Union member-States, in order to examine their compliance with the Stability Pact and other fiscal obligations.

What became apparent was that a fiscal watchdog, unrelated to the internal goings-on of each and every State and unaffected by the way politics was mingled with the way the government operated was necessary. For Greece, at least, where putting our accounts in order is definitely a prerequisite for exiting the crisis, the assumption by the European Commission of the watchdog role in earnest is definitely a step in the right direction. So one would welcome a greater degree of european intervention -or, in simpler terms, more Europe (and, correspondingly, ceding the necessary authority on the part of Greece and other member-states), in order to get our domestic accounts straight and stop spending. In the absence of a European enforcement and watchdog mechanism, Greece would probably return to the days and ways it used to conduct business and, thus, create another crisis.

Τρίτη, 28 Μαΐου 2013

Η φιλοευρωπαϊκή κριτική

Οι  μεταρρυθμίσεις σε μια κρατικιστική χώρα συνδέονται με περισσότερη ή λιγότερη Ευρώπη; Και τι στάση πρέπει να τηρήσει απέναντι στην Ευρώπη ένα κόμμα που θέλει να εκπροσωπήσει το μεταρρυθμιστικό χώρο; Ερωτήματα που συζητήθηκαν στο πρόσφατο συνέδριο της Δράσης, με την παρουσία ενός Ευρωβουλευτή, του κ. Θεόδωρου Σκυλακάκη, καθώς και του τέως Πρωθυπουργού του Βελγίου και εκ των επικεφαλής του ALDE, κου. Guy Verhofstadt.

Το ερώτημα τίθεται σε μια χώρα, όπου τα αντιευρωπαϊκά αισθήματα πλέον είναι πολύ έντονα, καθώς στην Ευρωπαϊκή Ένωση χρεώνεται ότι δεν έκανε περισσότερα, για να βγάλει την Ελλάδα από την κρίση. Η λαϊκιστική ρητορική, κατά την οποία η Ευρώπη σχεδόν οφείλει να εξαγοράσει το ελληνικό χρέος και να το χαρίσει, ήταν σε μεγάλη έξαρση μέχρι πρόσφατα. Δεν βοηθά και το ότι αποφάσεις για οριζόντιες περικοπές επίσης αποδίδονται εσφαλμένα στην Ευρώπη - και, φυσικά, δεν μπορεί να παραβλεφθεί ότι στην Ευρώπη οφείλονται πολλές από τις μεταρρυθμίσεις που ξεβόλεψαν βολεμένες συντεχνίες.

Αποτέλεσμα αυτού του κλίματος είναι η Ευρώπη να είναι ο εύκολος λαϊκιστικός στόχος και οποιαδήποτε κριτική κατά αυτής να δίνει εύκολους πολιτικούς πόντους. Επίσης, η επισήμανση οποιασδήποτε αδυναμίας στις δομές ή τις λειτουργίες της Ευρωπαϊκής Ένωσης να παρέχει αφορμές για εύκολα αιτήματα περί αποχωρήσεως από την Ευρώπη και την ευρωζώνη. Υπό αυτό το πρίσμα, επομένως, είναι σκόπιμη η κριτική απέναντι στην Ευρώπη από μεταρρυθμιστική σκοπιά, όταν υπάρχει το ενδεχόμενο να γίνει εκμετάλλευση αυτής με σκοπό τη λαϊκιστική καλλιέργεια ακόμη περισσότερων αντιευρωπαϊκών αισθημάτων;

Η απάντηση είναι ένα αναμφίβολο και ξεκάθαρο ναι. Αγαπάμε την Ευρώπη, κατ' αρχήν, σημαίνει ότι αναγνωρίζουμε τις αδυναμίες της, τις επισημαίνουμε και προσπαθούμε να τις διορθώσουμε. Δεν είναι μυστικό η υπερβολική κανονιστική δραστηριότητα των Βρυξελλών, ούτε το δημοκρατικό έλλειμμα. Ακόμη περισσότερο, γνωρίζουμε ότι πολλές φορές οι κανόνες παραβιάζονται για λόγους πολιτικής σκοπιμότητας ή κακώς νοουμένης συνεννόησης. Δεν μπορούμε να υπερασπίσουμε αποτελεσματικά την ευρωπαϊκή ολοκλήρωση, αν δεν αναγνωρίζουμε κάτι που μπορεί πολύ εύκολα να μας επισημανθεί από τους αντιπάλους της Ευρώπης. Επίσης, δεν μπορούμε να εργασθούμε αποτελεσματικά για την ευρωπαική ολοκλήρωση, όσο δεν προσπαθούμε παράλληλα να διορθώσουμε τις αδυναμίες στη λειτουργία της Ευρωπαϊκής Ένωσης.

Και, φυσικά, αυτή η στάση παρέχει σε μια μεταρρυθμιστική δύναμη τη μαρτυρία της αντικειμενικότητας. Μπορεί πολύ πιο εύκολα να προβληθούν οι μεταρρυθμιστικές πτυχές της ευρωπαϊκής ολοκλήρωσης, μπορεί πολύ πιο πειστικά να τεθεί το ερώτημα: πόσες από τις μεταρρυθμίσεις της τελευταίας τριακονταετίας στη χώρα μας, από απελευθερώσεις μονοπωλίων μέχρι την ελεύθερη ραδιοφωνία και τηλεόραση, δεν οφείλονται στην Ευρώπη; Ή, εξ αντιδιαστολής: πού θα ήμασταν σήμερα, εάν δεν είχαμε ενταχθεί στην Ευρωπαϊκή Οικονομική Κοινότητα;

Έτσι, πρέπει να ασκούμε καλόπιστη κριτική στην Ευρώπη. Θα προβάλουμε πιο εύκολα το φιλοευρωοπαϊκό επιχείρημα, αλλά και θα βοηθήσουμε την Ευρώπη, ώστε να πλησιάσει περισσότερο σ' αυτό που ονειρευόμαστε να είναι.

Τετάρτη, 22 Μαΐου 2013

Austerity Is Neither a Choice Nor an Option

The current (and fashionable) universal anti-German sentiment stems from the belief that Chancellor Merkel is singlehandedly imposing austerity measures on struggling European economies. That is, of course, a fallacy, insofar as what is presented as austerity is, actually, the reduction of deficits to viable levels, which requires a reduction in government spending combined with higher tax rates. Such reduction is not the result of outside pressure, but rather the consequence of the unsustainability of these economies' enormous foreign debts.

It seems that very few people realize that governmental benefits and a large part of what was considered the welfare state were financed by domestic taxation and external loans and not by money growing on trees. There always exists a roof on the amount of money a government can extract through taxation and, of course, one cannot find willing lenders, when one has a history of overspending. Therefore, the money sometime ends - that is not austerity by choice, particularly when it comes to States that no longer possess a national currency and can no longer print inflationary money, as they did in the past.

So, the demand actually is for Germany and other economies that have managed to bring their finances in shape either to consent to the creation of a Euro-bond (that is some pan-european instrument of lending) or to lend money themselves to the struggling economies, purportedly in order to sustain demand and thus avoid recession. The actual effects of such an action are quite the opposite of what its proponents would have hoped for, as Greece demonstrated. With government spending soaring, with deficits consistently higher than 5% of the GDP, Greece enjoyed only anemic growth. In fact, in the last two years before the official crisis (2008 and 2009) Greece had deficits of 8 and 15% respectively but was already in serious recession (0,5 and 3%). Therefore, the amount of government spending was not indicative of the growth rate of Greece and the continuing recession of the Greek economy cannot be attributed to (supposedly) limited government spending.

Therefore, not only can the european economies sustain a high level of deficit spending, it is also unwise for them to do so. Never mind that it is the newer generations that shall bear the burden of repaying the loans their parents and grandparents took for a false sense of prosperity; eventually it is even other people's and nations' money that will run out.

(first published at the sister blog, Reporting from Athens)

Κυριακή, 19 Μαΐου 2013

Seeking a unified European fiscal administration for all the wrong reasons

French president Mr. Francois Hollande is a (relatively recent, insofar as I can remember) proponent of a unified European tax system and the mutualization of the sovereign debt of the eurozone countries. France was always the nation that wanted to be exempt from most European rules. From the empty-chair crisis, because they could not get their own concerning farm subsidies, to their failure to keep under the 3-percentage limit for deficit in the early 2000's, they shunned rules when they saw appropriate and had the political clout to persuade the European Commission to avoid any disciplinary action against them.
That's why such a proposal sounds somewhat peculiar, coming from the French, as it does. Remember that France has a huge public sector, many privileges for the public-sector employees, generous retirement schemes and high tax rates. It's only natural that France is facing significant deficits and that its competitiveness is very much diminished. So, instead of reforming and raising his own country's competitiveness, the French president aims to have Germany share the French sovereign debt and limit smaller nations' potential to attract investment and raise their own competitiveness through smaller tax rates. In other words, France is essentially seeking to impose its own, failed model, all over the eurozone.
If the French have their way, Europe will just go down the path as France today. The French public sector will be financed from other nations and, of course, this model will prove unsustainable. It will signify a triumph of a bureaucratic state preserving its privileges at the expense of everyone else, both within the same country, and internationally as well. On the other hand, if the implementation of the Stability Pact were to be put in the hands of an authority which would not be subject to political pressure (as is the European Commission), perhaps some actual limits to government profligacy might be put into effect [imagine something like this with an obligation of all states for balanced budgets!]. Of course, that would be anathema for the French, their current enthusiasm for centralized fiscal control notwithstanding.


Σάββατο, 11 Μαΐου 2013

Do We Need More or Less Europe to Escape the Crisis, Chapter One: Is Europe to blame for the Greek crisis?



Austerity measures have created hardships for many Greeks. And this is not some abstract concept, like the general standard of living having fallen; many people have lost their jobs, their clientele, they cannot afford pay their rents, their social security contributions, their taxes, in some cases they are even unable to bring food to their families' table. A lot of those people were in no way beneficiaries of the excesses of the period leading to the crisis, so they fail to grasp how they turned out to be victims.

Victimization needs a scapegoat, of course. In a country where nationalism is almost official State policy, the finger could very easily be pointed at foreigners. The bail-out terms imposed by Greece's creditors, including the States of the Eurozone, but mostly these terms' purported implementation by the governments through horizontal slashing of salaries and pensions and without hurting or in any way affecting privileges of several groups with special ties to the political system, led to accusations against other European nations. This anger was very convenient for a large part of the political system, that had actually brought the Greek economy to its knees through excessive spending and borrowing and was only to happy to shift the blame elsewhere.

At the same time, a liberal criticism against the Eurozone emerged. Its aim was both on the bail-out (which was all but strictly forbidden in the Treaties), and the cheap credit and the flow of European money Greece received since adopting the Euro. The influx of a lot of money gave successive administrations the opportunity to exercise ever-increasing control over the economy. This hold would presumably cease in the event of an abrupt end to the flow of cash, since the government would have nothing to distribute. Since the bail-out brought in even more money, the criticism goes, a golden opportunity was lost for a drastic severance of the ties between government and the economy. For these calamities Europe was to be blamed.

This criticism is focused on the means, rather than the actors themselves. It works under the assumption that the opportunities and the potential afforded by cheap credit could result in nothing but a bloated public sector. It is almost like blaming guns for murders or cars for road accidents. Moreover, it ignores previous practice, when Greece still had a national currency: in the place of cheap credit, the government would typically resort to printing inflationary money to distribute.

Brought to its extremes, the argument against Greece enjoying the benefits of a steady currency (through its association with the European Union and the Eurozone) would lead to an absurdum, implying that sound fiscal policies would have to be avoided at all times, since an administration could always take advantage of a surplus in order to allocate it among its supporters, special interests, etc. It also avoids the actual point of political participation, which is necessary in order to achieve the purpose of reducing the extent of government intervention in the economy.

Yet, there are some things to be said, as far as the role of the european institutions is concerned. The Commission and the European Central Bank were supposed to exercise oversight on the fiscal and banking policies of the eurozone members, but failed to to so effectively. Eurostat very easily accepted the false data provided by the greek statistical authority. Up and until late 2009 everyone assumed that the Greek economy was emerging from the global financial crisis of 2008 unscathed, maybe even stronger, as a result of its low exposability to toxic bonds. But the main responsibility still rested with the side providing the false data, and that would be the Greek authorities.

In conclusion, the majority of blame for the crisis Greece is currently facing must fall on the domestic political system. The question to be answered in the next and final installment on Europe and the Greek crisis that follows is how European institutions can, or are required to be, part of the remedy.


Πέμπτη, 9 Μαΐου 2013

9 Μαΐου - η ημέρα της Ευρώπης που ξεχνάμε στην Ελλάδα

Σήμερα είναι η 63η επέτειος της Διακήρυξης του τότε Γάλλου Υπουργού Εξωτερικών Robert Shuman. Η διακήρυξη αυτή θεωρείται η έναρξη της διαδικασίας της ευρωπαϊκής ολοκλήρωσης μετά το Δεύτερο Παγκόσμιο Πόλεμο. Λίγοι θυμούνται ότι λόγοι αναγκαιότητας και φόβοι για αναγέννηση της Γερμανίας οδήγησαν στην απόφαση για έλεγχο του άνθρακα και του χάλυβα από μια Ανώτατη Αρχή, η οποία θα είχε υπερεθνικό (και όχι διακρατικό) χαρακτήρα. Αλλά και ότι πίσω από αυτή τη μικρή, αρχικά, εκχώρηση κυριαρχικών δικαιωμάτων κρυβόταν η προσδοκία ότι η οικονομική ένωση της Ευρώπης θα οδηγούσε στην πολιτική ένωση σταδιακά και η τελευταία θα εξασφάλιζε την ειρήνη σε μια ήπειρο, στην οποία έχαιναν ακόμη οι πληγές από το δεύτερο καταστροφικό πόλεμο μέσα σε τρεις δεκαετίες.

Η επέτειος αυτή δεν μας φαίνεται σημαντική, παρά τις τεράστιες αλλαγές που έχει φέρει στη ζωή μας. Από τη διακήρυξη αυτή καταλήξαμε να έχουμε ένα ενιαίο νόμισμα, πολύ πιο σταθερό και αξιόπιστο από τη δραχμή. Αποκτήσαμε το δικαίωμα να εργαζόμαστε σε όποια χώρα θέλουμε μεταξύ των 27 που σήμερα συγκροτούν την Ευρωπαϊκή Ένωση (σύντομα 28), άνοιξαν νέοι δρόμοι για τις σπουδές μας. Το κοινοτικό δίκαιο εν πολλοίς απελευθέρωσε την οικονομία της χώρας μας, όσο γινόταν και με δεδομένη τη μόνιμη αντίδραση του εγχώριου πολιτικού συστήματος. Πολλοί από εμάς, χάρη στην πορεία προς την ευρωπαϊκή ολοκλήρωση, μάθαμε ότι τα πράγματα γίνονται κι αλλιώς, ότι η επιχειρηματικότητα δεν είναι μόνο κρατικοδίαιτη, ότι οι υπηρεσίες δεν παρέχονται μόνο από τα κρατικά μονοπώλια.

Όλα αυτά τα ξεχάσαμε, όταν άρχισε να ρέει το ευρωπαϊκό χρήμα. Μεσογειακά ολοκληρωμένα προγράμματα, πακέτα Ντελόρ Ι και ΙΙ, πακέτο Σαντέρ, ΕΣΠΑ, αγροτικές επιδοτήσεις στο πλαίσιο της Κοινής Αγροτικής Πολιτικής και όλα τα κιλά, όλα τα λεφτά. Ξεχάσαμε το όραμα της ενωμένης Ευρώπης, της συνεργασίας μεταξύ των λαών, της απελευθέρωσης της οικονομικής δραστηριότητας. Για μας Ευρωπαϊκή Ένωση ήταν κάτι κουτόφραγκοι που τους κλέβαμε τα χρήματα δήθεν για να κάνουμε έργα υποδομής και να αναβαθμίσουμε τη γεωργική παραγωγή. Αντ' αυτού, γεμίσαμε με διαπλεκόμενους νεόπλουτους και αγρότες με Porsche. Και, όταν παράλληλα με τα χρήματα αυτά, τελείωσαν και τα δανεικά, όταν αποκαλύφθηκε ότι λέγαμε ψέματα ως προς το έλλειμά μας και παραβιάζαμε όχι μόνο κάθε κανόνα του Συμφώνου Σταθερότητας, αλλά και στοιχειώδεις κανόνες συνεργασίας με τους εταίρους μας, αυτοί είναι που συμφώνησαν να μας δανείσουν, μαζί με το Διεθνές Νομισματικό Ταμείο, τεράστια ποσά.

Όμως τότε η Ευρώπη μας έφταιγε. Παρ' όλο που, παρά τις προβλέψεις των συνθηκών, 16 ευρωπαϊκές χώρες πήραν χρήματα των φορολογουμένων τους (σε αρκετές περιπτώσεις με μικρότερο κατά κεφαλήν εισόδημα από εμάς) για να τα δανείσουν στο κράτος μας, η Ευρώπη έγινε εχθρός. Μας έφταιγαν οι άλλες χώρες επειδή είχαν καλύτερα οικονομικά από εμάς. Ακόμη και τη συμμετοχή μας στην ευρωπαϊκή ολοκλήρωση την ονομάσαμε επέκταση του γερμανικού ζωτικού χώρου, ξεχνώντας τα όσα μας είχε προσφέρει.

Κάτι τέτοιο, βέβαια, δεν πρέπει να ξενίζει. Αφ' ης αντικαταστάθηκε το όραμα για μια ενωμένη Ευρώπη, μια Ευρώπη της ειρήνης, της ελευθερίας, μια Ευρώπη των ευκαιριών με μια ρηχή αντίληψη για ατελείωτη τροφοδοσία των μωροφιλοδοξιών μας, κριτήριο για το πόσο θα ποθούσαμε την ευρωπαϊκή ολοκλήρωση έγινε το πόσα χρήματα θα παίρναμε. Πιο πριν τα χρήματα ήσαν τόσο πολλά, που αντιστάθμιζαν ακόμη και την εκχώρηση μέρους της εθνικής μας κυριαρχίας προς τις Βρυξέλλες. Μόλις όμως τα χρήματα στέρεψαν, θυμηθήκαμε τα περί απώλειας της εθνικής κυριαρχίας, ανακαλύψαμε προδότες και ανθέλληνες,  ταυτίσαμε τους φιλοευρωπαίους με τους σφετεριστές της Ορθοδοξίας και των παραδόσεών μας.

Έτσι, ξεχάσαμε την επέτειο της 9ης Μαΐου. Απορροφημένοι στην αίσθηση της σπουδαιότητας και της μοναδικότητάς μας πώς θα μπορούσαμε να τιμούμε μια επέτειο που σηματοδοτεί την ένταξή μας σε ένα ευρύτερο πλαίσιο κρατών και εθνοτήτων; Είναι στοίχημα να ξαναδούμε την πορεία προς την ευρωπαϊκή ολοκλήρωση γι' αυτό που είναι: η θεμελίωση μιας πιο ανοικτής κοινωνίας, μιας πιο ελεύθερης οικονομίας, χωρίς τεχνητά σύνορα και με ευημερία και ειρήνη για τους κατοίκους της Ευρώπης. Όχι η στήριξη με ξένα χρήματα μιας κρατικοδίαιτης ελίτ, αλλά η απελευθέρωση από τις εσωτερικές διαπλοκές και το άνοιγμά μάς στον κόσμο.

Δευτέρα, 6 Μαΐου 2013

Do We Need More or Less Europe to Escape the Crisis? - Introduction: Do We Need More or Less Europe Overall?


Do we need more or less Europe to escape the crisis? This depends on what “more or less Europe” means and who “we” are. For the purposes of the current and the next couple of posts, let us assume that “we” are the Greek people and more Europe means more powers to the institutions of the European Union as opposed to national ones (i.e. to those of the Hellenic Republic). And let us begin by a general inquiry on whether more or less Europe is desirable, overall.
An instinctive liberal response would be that we need less of any form of State intervention, be it on a national or a european level. But anyone living in Greece the last 3 decades would realize that Greece's participation in the European Economic Community and the European Union was, on balance, positive for economic freedom. State monopolies were abolished and many regulations were ditched in compliance with european regulations and directives. The opening of borders, the freedom of movement for persons, capital, goods, and services which were the hallmarks of the common market, all these brought financial and educational opportunities hitherto unthinkable for Greeks. Moreover, the adoption of a common currency meant that local politicians lost the power to print inflationary money, in order to be able to make good on promises to their favored interest groups.
There was a downside, of course; many things could be said about farm subsidies and the way they were allocated, about bureaucracy and the democratic deficit. However, the late Baroness Thatcher's claim, that she did not wish to see socialism creep in through the back door from Brussels, after Britain had gotten rid of it under her administration, would have no merit in Greece, where the economy was much more statist before Greece entered the European Economic Community. Moreover, the European Convention on Human Rights and Fundamental Freedoms, which the Lisbon Treaty has officially rendered a part of the acquis communautaire, and the judgments of the European Court of Human Rights were vital for the recognition and the substantive protection of property and other fundamental rights in Greece.
Last but not least: the liberal tradition has a much more solid footing in Europe than in Greece. Its ideas have affected all parties, even those that are nominally not liberal. This is in sharp contrast to Greece, where the word liberal has very negative connotations. Therefore, if a liberal were to choose a forum for political debate, Europe would present a much better field than Greece. In other words, it is much easier to convince the plurality or majority of Europeans of the value of liberal proposals, than it would be for Greeks. This means that a Greek liberal would welcome the opportunity to present their ideas and policies within the framework of European institutions, rather than national ones.