Monday, July 29, 2013

A failed economic experiment with very human costs

By Ross Cameron 

 

We must admit that European currency union was a dumb decision, fuelled by the misty-eyed vanity of the Left.

 Photo: We must admit that European currency union was a dumb decision, fuelled by the misty-eyed vanity of the Left. (AFP: Frank Rumpenhorst)

The euro is a straight jacket, with Europe's productive north forced to pick up the tab for bailouts and the poorer south unable to return to growth through devaluation, writes Ross Cameron.

Of the great policy blunders since WWII, a single currency for Europe is among the worst.

This is a self-flagellation cult, daily tearing flesh from bone. It has replaced friendship with tension, turned peers into debtors, and is now causing a haemorrhage of southern Europe's most precious resource - its people.

Australia's leading voice at the OECD, economist Adrian Blundell-Wignall ("ABW" for short), special adviser to the OECD secretary general on financial markets, this week posed the question, "Why did Europe press the serpent of currency union to its own breast?"

ABW was addressing the Sydney Ideas Forum, hosted by Sydney University. His main topic was the causes of the recent Atlantic economic crisis (there was no crisis in the Asia Pacific) and the adequacy of the responses adopted to stop it recurring.

The OECD's view is that the global banks are smarter, wealthier and more powerful than the regulators supervising their conduct, so they continue to operate at imprudent ratios of lending to deposits.

ABW is especially worried about easy credit creation to exploit high-risk derivatives and synthetic securities - which cop the blame for the last crisis. He implies that the power imbalance between the poachers and gamekeepers is so great (especially in Europe) that German chancellor Angela Merkel wouldn't pull her Audi off the autobahn for a drive-thru coffee without permission from Deutsche Bank.

This leads into the structural inflexibility of the European economy after currency union. Failure to learn from history means repeating the mistakes of currency union between unequally yoked powers, i.e. the "sterling zone" union between the United Kingdom and Ireland from 1840-1927.

England was positioned to extract the fruits of the Industrial Revolution, while Ireland was largely bypassed as an undercapitalised, rural, subsistence economy. Over the 80 years under the sterling zone, the GDP of the UK grew by 620 per cent, whereas Ireland's GDP struggled to grow by 40 per cent. As the value of the British pound appreciated to reflect English industrial power, the Irish were unable to bring goods and services to market that were attractive to buyers when priced in sterling.

The logical remedy for a country in Ireland's plight was to devalue its currency, making its exports cheaper (as Japan has just done), but the sterling zone was a straight jacket. The preferred option of the Irish became exodus. Ireland's population halved from 6.4 million in 1841 to 3 million in 1925. The Irish diaspora was a blessing to the rest of the world but a disaster for Ireland. Restoration of the Irish pound in the 1920s applied a tourniquet to the outflow of the Paddys and Siobhans, but the structural damage was done.

Europe is now split into a productive north - nicely placed to sell turbines, satellites and Volkswagens into the Asian century - and a poorer farming, tourism and welfare economy of the south, which must compete against Asia to sell T-shirts and homestays.

None of the extant choices are easy. The north is growing weary of subsidies and bailouts. "Internal devaluation" means a painful reduction of your own prices and wages.

ABW supports creation of a "Charlemagne currency" for northern Europe, while releasing the PIGS (Portugal, Italy, Greece and Spain) to return to their own, presumably devalued, pre-union, escudo, lira, drachma and peso. (Joblessness in Spain, Greece and Portugal is 18-20 per cent).

The status quo approach is to repeat the Irish exodus. In 2012, after growth since 1946, Spain and Greece each suffered net decline of 200,000 people. This is an inflection point, hastened by abysmal birth rates, from which those countries will never recover.

So how did sane people get into this mess? The "European idea" gained momentum after two world wars (the first could be described as a European civil war) under the influence of well-intentioned people like Jean Monnet, and others, trying to avoid future intra-European conflict and build a counterweight to the US dollar.

I take no pleasure in the suffering and waste of human potential we are now witnessing. I accept that Australia has been a complacent beneficiary of its mineral wealth, now under Labor, with one of the lowest rates of productivity growth in the OECD. But we must admit that European currency union was a dumb decision, fuelled by the misty-eyed vanity of the Left. It was a failure to understand how human beings actually live and work and flourish - or fail. Hard-headed leaders in Sweden and Denmark dodged the bullet, as did the UK. And how lucky they are feeling now, as continental neighbours squirm and twist in agonies of their own making.

I think back to the abuse heaped on Margaret Thatcher and her Chancellor of the Exchequer, Sir Brian Howe, for their plucky resistance to Britain swapping the pound for the euro. They were described by British Labor as reactionary, parochial, lacking a "progressive" instinct, xenophobic, isolationist.

Barely concealed was a view among the Left that British Conservatives were just too dumb to recognise the great windfall that currency union offered. "We are the world, we are the children ..." was their rallying cry. They wanted to throw off tired notions of national sovereignty that had served the world well since the Treaty of Westphalia in 1648.

Support for full European integration was central to that most dangerous, expensive and self-serving belief - the moral superiority of the Left. There are parallels to Australia's Labor-Green alliance unilaterally dismantling John Howard's Pacific Solution but, unlike Europe, we will claw back the losses over a generation (we will never recover a thousand floating corpses in the Indian Ocean or the damage to relations with Indonesia and PNG).

Statecraft is not a Game of Thrones for credulous undergraduates sporting nose studs, fawning like suckers before every trending meme. The decisions of the few have ended the hopes of the many in Europe, and a clutch of once great nations are now grieving the end of their stellar role in the human story. Let us hope that Australia's leaders can do better.

Ross Cameron is a former federal Liberal MP. View his full profile here.

A failed economic experiment with very human costs - The Drum (Australian Broadcasting Corporation)

Sunday, July 28, 2013

Taki: A fascist takeover of Greece? We should be so lucky

20 July 2013

 

Members and supporters of Golden Dawn Photo: AFP/Getty

Members and supporters of Golden Dawn Photo: AFP/Getty

I am about to leave for karate camp in Thun, Switzerland, four days of double sessions lasting one hour and 45 minutes each, with 300 black belts from all over Europe and North America attending. I’ll give you all the details next week once I’m safely back home and on my way to the Greek islands. I know, I know, it’s a tough life but I deserve it. After all, given that I’m a self-made man it is right and proper for me to enjoy my golden years in comfort. (And if you believe that, you probably deem rap an art.)

Unlike the British foreign minister, I am not about to apologise for calling some Greek woman writing out of London for the world’s most boring newspaper stupid — mind you, it’s a bit unfair, the International Herald Tribune is a better read than Double Glazing News, but life is, after all, unfair — but please, oh Lord, protect me from female Greek lefties seething with revolutionary fervour and banging on about inequities in the home of feta cheese and olive oil. The stupid one raged against the closing of the state broadcaster ERT, as leftie as the BBC but ten times as bloated and patronage-ridden.

ERT embodied where Greece went wrong. Lifetime jobs for people who hadn’t bothered to show up for years, pensions ditto, and other such outrages handed out by successive governments in return for votes. The two parties now in power were the ones that nurtured the rotten system, but Greeks forget easily and then tend to go to the beach. When I speak with my countrymen and women, they all complain about the EU’s harsh terms for bailing out the country. But when I tell them Greece should never have got into the macabre business in the first place, and should have left the euro the moment the gun was pointed at our temple, they say no, we belong in Europe and the euro is our only hope. It is a typical Greek reaction. We want both our cake and so on.

Well, I haven’t lived in Greece in some 70-odd years except for long visits, so I tend to see things differently. What Greece needed back in the Forties was less communism and more electrolysis. What she needs now is less EU and more private enterprise. The public sector is what sank the Greek economy. That and corruption by the two main parties, the very same two parties now putting the squeeze on poor people in order to satisfy the EU crooks. But the voices one hears whining about the loss of jobs are the voices of those who played a big part in sinking the country, those of civil servants crying over the loss of their sinecures. (Like that stupid woman writing in the IHT and warning against a fascist takeover of Greece; no such luck, I’m afraid.)

p53-cartoon

If I hear one more warning against the impending takeover by Golden Dawn I will go up to the Acropolis and do a Morosini, the Venetian general who fired a canon into the Turkish ammunition dump and blew up the world’s greatest temple. (Leave it to the Turks to turn the Parthenon into an ammo dump.) Golden Dawn came into being because of PC, poor Greeks at times getting fewer benefits than African illegal immigrants. Then GD became very popular with certain poor Greeks while it defended them from being mugged by Albanian criminals and drug dealers, and for safeguarding older folk after bank withdrawals. No, Golden Dawn is not house-trained, and many of its members tend to use rough language and get physical. None of them went to Eton, and none of their parents was my playmate when I was a child. But if they were lefties and railed against capitalism they would be treated like heroes, the way Bono, Bianca Jagger and other such untalented rappers and phonies are. Golden Dawn members might need some lessons in social etiquette, but what the bien pensant need much more is to get off the pot and their double standards. Golden Dawn members are mostly labourers, martial artists, cops, security personnel and good old-fashioned patriotic Greeks.

About four or five years ago I was cheered at a meeting when I walked in accompanied by two young women, and I thought it was because of something I had written. Not at all, as it turned out. They cheered because I’m old and the two companions were young. Very politically incorrect, but very Greek, I’m afraid. Polly Toynbee, Maureen Dowd and other old hags would have been appalled. Too bad, young women enjoy older men with boats, especially during the hot summer months. And I did mange to see some of my old karate students at the convention. They are all still in security, but very, very poor. So the next time you read some leftie old hag banging on about the fascist evils ready to take over in Greece, use their newspaper writings in the smallest room in your house. You know what I mean. If only my buddy Jeremy Clarke had had some of those columns with him while suffering from dysentery in the Serengeti, they would have finally been of some use.

But to more serious matters. Until the shutdown of ERT, not a single government employee had been fired by the present government: 128,000 had been retired, with their benefits intact, which is not the same thing. The government lies, the austerity terms get harsher, and the loans have failed to turn the economy around. See you on Paxos.

This article first appeared in the print edition of The Spectator magazine, dated 20 July 2013

Taki: A fascist takeover of Greece? We should be so lucky » The Spectator

Greece's Golden Dawn Party Plays Nazi Anthem 'Keep The Banner Flying' Outside Central Athens Offices

By DEREK GATOPOULOS 07/24/13 03:56 PM ET EDT AP

Golden Dawn nazi anthem

Members of the extreme-right Golden Dawn party hold shields with their party symbol on as they guard party supporters during a gathering on May 26, 2013 in Athens, Greece. (Photo by Milos Bicanski/Getty Images)

ATHENS, Greece -- An extreme-right political party in Greece played a Nazi anthem during a charity event Wednesday that authorities had attempted to ban.

A Greek version of the Horst Wessel song – known as "keep the banner flying" in Greek – was played on loud speakers outside the central Athens offices of the Golden Dawn party, where members handed out bags of food and clothing.

A video of the event, including the sound of the song, was posted on the party's website.

The song remains banned in Germany, along with Nazi symbols.

Party members distributed the food parcels after checking recipients' identity cards to insure that non-Greeks were excluded.

Golden Dawn, which has campaigned aggressively against illegal immigration and Greece's international economic bailout, has seen a surge in support during the financial crisis and its dramatic rise in poverty and unemployment.

The party won nearly 7 percent of the vote in general elections last year, with popular support continuing to rise, according to opinion polls.

City authorities and the Greek police had banned Golden Dawn on Wednesday from using a nearby square to stage the charity event and set up a large police cordon to prevent possible protests against the decision. But large crowds of supporters gathered outside the party building chanting, "Foreigners out of Greece."

"The crime we committed was that we wanted to hand out food to Greeks only. If we'd handed it out to Pakistanis and blacks, there would have been no problem," party leader Nikolaos Michaloliakos told supporters.

Wednesday's event was held on the 39th anniversary of the restoration of democracy in Greece, following the collapse of a 1967-74 military dictatorship.

"We didn't choose this day by coincidence," Michaloliakos said. "They say they are celebrating the return of democracy. But they are really celebrating state thievery, scandals, and treason."

The government strongly condemned the choice of date, with Public Order Minister Nikos Dendias early Wednesday describing Golden Dawn as a "pathetic copy of Nazi totalitarianism." Officials from the government declined to make any further comment.

Panos Skourletis, a spokesman for Syriza, the main left-wing opposition, called Michaloliakos' comments and the playing of the Nazi anthem a "provocation to democracy."

"They are trying to align problems that people face in Greek society with their own message of hatred and Nazism," Skourletis told The Associated Press. "Golden Dawn will only be weakened when the causes of (Greece's) deep humanitarian crisis are addressed and stopped."

___

AP writers Nicholas Paphitis and Rafael Kominis in Athens, and Geir Moulson in Berlin contributed.

Greece's Golden Dawn Party Plays Nazi Anthem 'Keep The Banner Flying' Outside Central Athens Offices

Friday, July 26, 2013

Refugees in Greece face identity struggles

 Ali M Latifi Last Modified: 25 Jul 2013 12:14

Church offers services to Afghan and Iranian migrants, but some worry they're a smokescreen for proselytising.

Some churches in Greece provide food and language lessons to asylum seekers [EPA]

Athens, Greece - During Sunday mass in Athens, a small but spirited segment of a 40-person congregation sing “glory unto your pure soul, o God! Glory unto you! Glory unto you father!”
Every now and then the singing, backed by a Yamaha keyboard and a zarb, goblet drum, is interrupted by feedback from the microphone and the static caused by adjusting cables connected to a large black amplifier.
“For the past two weeks we’ve been having audio difficulties. It would seem someone doesn’t want us to sing, but we will continue because our hearts are full of God,” Reza, one of the three men leading the hymns says.
The simple room - plain white walls in place of stained glass, rows of plastic chairs where pews would be and giant dark brown curtains used to conceal the inside from view - is in stark contrast to the mediterranean architecture of the many Greek Orthodox churches that line the city.
The congregants too, are anything but the average site at a house of worship in the only nation where the Eastern Orthodox Church is recognised as the state religion.
Of the more than three dozen men, women and children gathered at the nondescript centre, little more than a handful are Westerners born into Christianity. The rest are Iranian or Afghan asylum seekers, all born into Islam.
The layout of the gathering still mimics some Islamic practices. Women, many still donning hijabs, largely sit by themselves with their children in the back. Shouts of “Amen!” are replaced with the Islamic “Amin” as men and women raise their opened arms into the air.
Though the first three rows of 18 chairs are full of people who sway their hands and ebulliently sing along to the hymns translated into Persian, the majority of those in the back simply stare at the lyrics written out in Persian characters.

The few signs of Christendom - a tapestry of deep reds, browns and blues depicting various stories from the Bible, a black-and-white poster with illustrations of the life of Jesus Christ as told in the Bible and the cross on the wooden podium upon hich Reza and others preach.

“I am certain God loves this place because you all come with good hearts,” a woman in her mid-thirties with dark brown curly hair and a cropped black shirt says in Farsi as she prepares to read a verse from the enjil Isa Masih, Bible of Jesus Christ.

Fear of retribution

Speaking to Al Jazeera on condition of anonymity, due to fear of retribution from far-right groups or angry family members back home, those who attend the Sunday Mass and other similar gatherings at the centre say they come for a variety of reasons.

“Why should it be odd, it’s a house of God,” Ahmad, an Afghan asylum seeker in his mid-twenties says when asked if he feels any sort of tension in such an environment. 

“It’s a house of God”, he repeats.

Just because Khomeini says something stupid or because the Taliban blow people up in Afghanistan does not mean you should abandon your faith.

Amin, asylum seeker in Greece

Staring out on to the alleyway directly in front of the centre’s now open door, Ahmad solemnly says “we are fed here”.
For asylum seekers, who say they can make no more than 10 euros per day by doing manual labour, the centre is a vital source of sustenance.
Rami, 17, wearing a bright yellow t-shirt, looks up from his plate and says: “I listen, but it all goes in one ear and immediately out the other.”
Though he says “it’s all about the food”, Rami also points to another feature that sets this centre apart from the estimated 10 others like it around the Greek capital – the Christian pastors are Iranian.
As the religious service ends, the chairs are quickly rearranged around plastic foldout tables and groups of Afghans and Iranians cluster around to reminisce and joke in their common language.

In this group of people often left with nothing to do but wait for kachakbar-ha, smugglers, to provide them with an exit plan, the sense of community is evident.

For people constantly fearful of attacks by fascist groups the sense of togetherness in a protected and enclosed area is a rarity.

“What can we do? This is our life. I have to feed my family somehow,” Massoud a slightly bearded man in his late thirties says in a Kabuli accent.

But for some, the religious preaching proves to be too much.

Ali Raza, 24, from the southern Afghan province of Kandahar, says when he first arrived in Athens three weeks ago, he went to two similar centres.

Unlike this centre, which was started by an Iranian convert to christianity now living in Italy, the ones Ali attended were run by Americans.

“They would give you food. Sometimes up to twice per day and even help you with your English.”

Food and anger

But for Ali, a Shia who spent several years in Pakistan and Iran, the kindness of the food and language lessons were betrayed by the rhetoric of the volunteers at the centre.

“They would say ‘what religion do the Taliban practice?’ ‘What religion do they use as their basis for their attacks?’ ‘When they blow themselves up, they say Allahu Akbar.’”

Fed up by his second visit, Ali decided to confront the volunteers in his broken English. “Tell me, what insufficiencies does Islam have and how is Christianity any better?” he asked on his second and last visit to such a centre.

Reza, who at 28 leads the congregation, is not naive to the fact that many of those in attendance are lured by the promise of food.
“For me it is not important if people come for food or Masih, Christ. I am here to serve God.”
Reza says Christ gave him “freedom” and made him “anew” after years of suffering from an “intense” addiction to heroin.
In fact, so deep was his respect for Christ that in 2009 Reza went to the UNHCR to retract a statement he made two years earlier that could have helped him gain entry into Canada.

In front of an astounded panel of UN workers Reza said simply “I lied”.

“The statement I made in 2007 that I was a Christian and facing difficulties in Iran because of it was a lie. I only said it to go to Canada. Having now truly accepted the mercy of Christ, I cannot in good conscience travel to Canada on a lie.”

The UN workers, who told Reza they had just completed a two-year-long process to gain him entry into Canada were at a loss.

“‘But you are a Christian now. It’s not a lie now’”, they told him, fearful he was throwing away two years of effort.

Unwilling to budge, Reza, who had been caught by Turkish police en route to Italy in 2007, was sent back to Iran. It was there that he said his devotion to Christ was tested for nearly a year.

“People said kill him. Burn him. But God is more great than any fear,” Reza said of the threats he faced in the Islamic Republic.

Of the reaction by his deeply religious family in Iran, he said: “my father has been to Mecca more than 10 times”. Despite their deep-seated devotion to the Shia faith, Reza said his family in Tabriz “see that Christ has delivered me [from a life of addiction]”.

Though Reza maintains that he still has faith in Islam and that his preaching is in no way meant as an affront to the religion of his birth, 19-year-old Parwiz has a different view of the religion espoused by the Islamic Republic.
After five months of attendance, Parwiz said “the truth” became evident to him. 

“If you read the works of Khomeini you will think all Islam is a joke,” Parwiz, who has been in Greece for two years, said. 

But Amin, 17, who sits across from Parwiz, wearing a green and white striped shirt, said it’s not that simple.

“Just because Khomeini says something stupid or because the Taliban blow people up in Afghanistan does not mean you should abandon your faith. The Taliban and Khomeini are not Islam,” Amin says as he continues eating the large plate of pasta in front of him.

In Greece, things move fast – except justice for Kostas Sakkas

Hara Kouki and Antonis Vradis guardian.co.uk, Thursday 4 July 2013 22.26 AEST

Behind the anarchist's hunger strike is the tale of his illegal detention. It would have sounded unbelievable in the recent past

A banner before the stage reads, immediate release of Kostas Sakkas, who is on hunger strike

A banner calls for the immediate release of Kostas Sakkas, who is on hunger strike following his illegal imprisonment. Photograph: Nikolas Georgiou/Corbis

What's in a month? Thursday 4 July marks one calendar month since Kostas Sakkas – a 29-year-old anarchist arrested in Athens in December 2010 and held in prison without a trial since – started a hunger strike, demanding an end to his detention. According to Greek law, pre-trial detentions can extend to 18 months, or 30 in exceptional circumstances. On 4 June, having already reached his legal maximum time in pre-trial detention, Sakkas had it extended by another six months by an Athens court of appeal.

One full month on hunger strike: compared with the pace of wider social developments in recent years, Sakkas's story looks slow-paced, sluggish even. After all, it took only a few hours for the Greek government to order and then execute the closure of ERT, the state broadcaster. Its decision to lower the gross monthly minimum wage to €586 was equally rapid, along with the selective introduction of a six-day working week and significant cuts to disability benefits – all bringing a lowering of the standard of living for thousands of people. Before that, it took an equally short period of time to cancel out the reform of the 2010 Greek citizenship law that had provided potential access to citizenship for second-generation immigrants, or to begin the Xenios Zeus operation, cracking down on suspected undocumented immigrants and sending them to newly established "holding centres" across the country.

Sakkas had been originally detained as part of the wave of arrests targeting the Conspiracy of Cells of Fire group. While clearly stating his own anarchist convictions, both Sakkas and the group itself have denied his active participation. But whether Sakkas was indeed a member is no longer the question, nor do the juridical authorities seem to care. Sakkas has been held in custody for what is a national record after a series of convictions of Greece by the European court of human rights in 1996 precisely for this type of violation; Epaminondas Korkoneas, the special guard who was eventually convicted for the death of teenager Alexandros Grigoropoulos that sparked the December 2008 riots, was temporarily released during his trial as his own pre-trial maximum had expired.

There may be no rational explanation behind the extension of Sakkas's pre-trial detention, then. Yet by now this looks like one more exceptional event in the sea of exceptions that make up everyday reality here in Greece. Since May 2010, the majority of austerity-led cuts and redundancies (even if meticulously prepared for in the media discourse) have been announced and executed at a pace that would make it all but impossible for most of those affected to follow them, to express any concerns or, woe betide, dissent against them. Getting used to such a wave of attacks might seem normal; resisting this new normality could even appear to be meaningless, or futile.

What might the motive be that drives the Greek authorities' decision to trample over the rights of a single dissident, to order the shutdown of its own broadcaster, or to sack public servants overnight? Sakkas's absurd story may highlight something more alarming than a mere "tough stance" on a self-confessed enemy of the state. In a statement responding to a parliamentary dialogue concerning Sakkas's case, New Democracy (the main government coalition party) not only didn't try to defend this unprecedented breach of legality, but instead lashed out against the leftwing main opposition Syriza for defending "any sort of accused who are charged with anarchy and terrorism". This would have sounded incomprehensible in the very recent past, as would have been the case with the call by Vyron Polydoras, an experienced New Democracy former cabinet member who explicitly called for his party to co-operate with the Nazi party Golden Dawn.

Sakkas's case encapsulates precisely the nature of the injustice that reigns over daily life in Greece – and further afield. Across Europe, stories of police violence, governmental injustice and intrusion into citizens' lives are rapidly turning into a banality; an alienation, even an outright rupture between state and society is building up fast. In our fast-moving times, a month feels like a lifetime. For Sakkas, it has become precisely that: he has now put his own life on the line.

In Greece, things move fast – except justice for Kostas Sakkas | Hara Kouki and Antonis Vradis | Comment is free | guardian.co.uk

Fascism in Greece: we needn't say goodbye to Athens quite yet

 Jon Wiltshire

Jon Wiltshire guardian.co.uk, Monday 8 July 2013 00.00 AEST

Greece is in crisis and fascism is on the rise, but it still falls far short of the 1930s Berlin chronicled by Christopher Isherwood

Tourists rest beneath a Greek flag atop the hill of the Acropolis in Athens

Tourists beneath a Greek flag on the Acropolis in Athens. Photograph: Yorgos Karahalis/Reuters

Christopher Isherwood's Goodbye to Berlin chronicles (and partly fictionalises) his time hanging out in the city between late 1930 and early 1933. Towards the end of the book, he urges a friend not to take Nazi death threats too lightly: the Nazis, says Isherwood, are "capable of anything. That's just why they're so dangerous. People laugh at them, right up to the last moment."

Fascism is on the rise in Greece. It's the most perturbing political consequence of the current crisis. Golden Dawn, a far right party whose supporters are accused of violent and sometimes fatal attacks on immigrants, is now polling third. Many Greeks had never heard of them before the crisis. And, like the Nazis, those who knew them once thought them laughable.

I work in Athens and often hear the comparison. At its most pervasive, even Antonis Samaras, Greece's prime minister, likened Greece to the Weimar Republic in an attempt to guilt-trip German policymakers into giving Greece more time to meet the conditions on its loans. Perhaps Goodbye to Berlin's anecdotes from 1930s Germany match my own anecdotal experiences; what can rereading it in today's Athens tell us?

Golden Dawn could well be in Isherwood's book: thuggish beatings, big red flags with black (Hellenicised) swastikas, torch-lit marches, and paramilitary attire. I was recently at a rally of theirs in central Athens (on a church square) and for a party that denies any links with nazism, they do a pretty good job of giving off a neo-Nazi impression. The party uses immigrants as a scapegoat for Greece's problems, and bases its politics on the "ethnic purity" of Greeks (organising "Greek-only" blood donations, for instance).

Golden Dawn has tapped into flourishing anti-EU sentiment in a way that mirrors 1930s German resentment of the punitive treaty of Versailles. And, like the Nazis of the 1930s, Golden Dawn are accused of being in cahoots with the police. In 1932, walking down a busy street after a nearby Nazi rally, Isherwood witnesses two SA brownshirts (the Nazi paramilitaries later superseded by the SS), viciously stab a young man in a doorway in plain sight of the police, who "disregard" the attack.

Maddeningly, Golden Dawn are accused of operating with a similar impunity because, according to Nils Muižnieks, Council of Europe commissioner for human rights, as well as other human rights organisations and rough polls from the last election, the fascist party are supported by a sizeable faction of the police force.

The fearful atmosphere created by a deep economic crisis has, as in 1930s Germany, opened up the political field. Isherwood's landlady is introduced as typical of Berlin's now "bankrupt middle class". Like her, a once-comfortable Greek middle-class has been dragged into economic difficulties, if not into poverty. There's 27% unemployment, with 64% youth unemployment. And from most people you'll hear distressing stories. Golden Dawn has managed to turn some of this distress, and a good deal of fear, into votes.

So, on the surface, the comparison seems frightfully apt. Yet, the details clearly show that Athens is a long way yet from 1930s Berlin. Isherwood's book also chronicles the rise of the extremist left: lines of hand grenades hidden inside communists' overcoats; plans to strategically mount machine guns on rooftops, anticipating the Soviets' arrival; and so on. 1930s Berlin was polarised between anti-democratic extremism. Greece is not.

Golden Dawn acts in an anti-democratic way, yes, but Syriza (the coalition of the left currently polling a close second), is radical, not extremist, and thoroughly democratic. Although the once-mighty centre-left party, Pasok, is more or less finished (despite being in the coalition government, it's polling around 7%), the other ruling centrist party, New Democracy, remains popular. Unlike the end of the Weimar Republic, there hasn't been a complete decline in the popularity of traditional parties.

And unlike Germany, Greece is integrated with the rest of Europe through membership of the EU and the euro. It's tied, for better or for worse, to the fate of everyone else. 1930s Germany was, by contrast, isolated, and Europe was dogged by the threat of war which is, quite obviously, nonexistent today. Despite the suffering of so many ordinary Greeks, the stakes were higher in the 1930s.

Greece is undeniably in crisis. A walk around central Athens will give you a glimpse behind the numbers. And comparing Isherwood's Goodbye to Berlin with today's Athens serves as a useful analogy, teaching us a simple lesson about economic malaise and its direct link with extremist politics. But Greece is not at the brink. To directly compare Greece with the Weimar Republic is, as things stand, misleading. Isherwood left Berlin because the Nazis were seizing power. If he were in Athens today, he wouldn't be saying goodbye; not for a while yet.

Fascism in Greece: we needn't say goodbye to Athens quite yet | Jon Wiltshire | Comment is free | guardian.co.uk

Syrian refugees find little to cheer in Greece

Helena Smith in Athens guardian.co.uk, Thursday 25 July 2013 20.00 AEST

Since March 2011, 20,000 Syrians fleeing the war have entered Greece, which is ill-equipped to deal with the influx

Greek police patrol the border with Turkey

Greek police patrol the border with Turkey. The erection of a fence on the Greek/Turkish border has forced Syrian refugees to try to enter Greece by sea Photograph: Reuters

Like so many Syrians fleeing their war-shattered country, Mohamad Alkhalil did not think it could get any worse.

In the space of two years, the 26-year-old had survived a bullet in his foot, severe shrapnel wounds and a long stint in hospital in Turkey and pursuit by the security forces from whom he had defected to sign up with rebel fighters in the Free Syrian Army in June 2011.

"In that time, I have lost 46 members of my family, all in bombardments of our village near Hama," he says, showing pictures on his iPhone of a succession of relatives, some old, some young, who have died since the start of the conflict.

"My brother Noor was killed on 20 January 2012," he adds, pointing to man with slicked-back hair standing in front of a Cadillac. "My cousin," he continues, pointing to a tousled-haired youth in a body bag "was killed a few months later. We were close and, after that, I decided my best option was to go to Europe."

Alkhalil's father, a long-time opponent of the Ba'athist regime, had lived in Brussels for years. As Alkhalil lay on a hospital bed in the Turkish city of Antalya, he plotted the journey that would take him to Europe and the embrace of relatives. But that, the Syrian now believes, is where his real problems began. Sneaking into Greece across the Evros river last summer the reception was anything but warm.

"I thought I was coming to Europe but Greece isn't Europe," he says. "The police immediately detained me because I had no papers and then I was put on trial. The first thing the judge asked is 'why did you defect and join rebel forces? Why did you make such a mistake?' I was just so shocked."

For 10 months, Alkhalil found himself being moved from prison to prison across northern Greece. "I was jailed in Alexandroupolis, then Xanthi, then Serres," he says, noting that at least his experiences had given him the chance to learn Greek – the language in which he tells his story. "After being released last month I've been trying to get to Belgium the legal way."

Alkhalil is far from alone in experiencing such hardship in crisis-hit Greece. Since the onset of their country's war in March 2011, some 20,000 Syrians have entered Greece, mostly from neighbouring Turkey, according to the Community of Free Syrians Abroad in Athens. After a fence was erected on the Greek-Turkish land border last year, growing numbers have made sea crossings instead, attempting to reach the eastern Aegean islands of Lesvos, Samos and Chios in dinghies and rickety boats.

"In recent months we have seen a lot of women and children making the journey alone," said Ashraf Hasno, the community's general secretary. "Families are being split up in Turkey. It is a heart-rending sight."

Human rights defenders and immigration experts monitoring the situation in Greece report that Syrian refugees have been repulsed by the Hellenic coastguard, or detained, or summarily deported or refused asylum if they manage to make such a request in the first place.

"Not until 9 April 2013 was there a police decision to release detained Syrian asylum seekers and cease repatriations of Syrians," says Martin Baldwin-Edwards, who heads the Mediterranean Migration Observatory in Athens. "Many still remain held in custody." He estimates that some 2,187 Syrians were detected by the coastguard and police in the first five months of 2013.

With its chronically disorganised state apparatus and debt-stricken economy, Greece is not only ill-equipped to deal with the influx but has been widely accused of acting out of blatant disregard for international conventions. "Basically Greece does not believe it has any international obligations under the Geneva convention and doesn't see why it should host refugees," says Baldwin-Edwards. "It's a big mess."

In the chaos, it has fallen to Syria's exiled community to provide support. "Almost every Syrian sees Greece as a transit route to Germany or Sweden or some other place in Europe," said Hasno. "They soon find out how difficult it is and want to leave."

Alkhalil is the first to agree. "In Syria the situation is very bad," he says. "But when you get to the country of your dreams and discover there is no freedom, that is even worse."

Syrian refugees find little to cheer in Greece | World news | guardian.co.uk

Monday, July 22, 2013

The heavy price of Greek gold

Jim Wickens Halkidiki Sunday 21 July 2013

The birthplace of Aristotle is being laid waste by a vast mining project, opening a rift in a cash-strapped society

Shadowed by security guards who film his every move, Giannis Verginis gazes out over the slope of Mt Kakavos, listening to the whining of chainsaws in the valley below.

“We used to come to this area with my family and children,” says Mr Verginis. “Up until a few months ago it was a beautiful place and we used to have fun. Now the entire area is deforested and if my children were here they would cry seeing this.” 

The large-scale clearance on this remote mountain-side in north-eastern Greece is only the preliminary part of a gold mining project green-lighted by the country’s cash-strapped government; a development that will see open-pit mines and several huge tailing dams built within a concession that spans over 31,700 hectares of ancient forest and farmland.

The peninsula of Halkidiki is the birthplace of Aristotle, a timeless landscape where bee hives stand amidst flowering gorse bushes, overlooking the glistening ripples of the Mediterranean sea. But with plans for the mining development firmly under way, the people living on this sleepy headland now find themselves dragged into the harsh economic realities of modern-day Greece, and at the centre of a bitter struggle over the direction the country should take in order to lift itself out of bankruptcy.

Despite harbouring an underground treasure trove of precious metals estimated to be worth as much as €15.5bn  (£13.5bn), the Greek government sold the Skouries concession in Halkidiki in 2003 for just €15.3m, in circumstances that remain unexplained. 

It is now owned by Hellas Gold, a Greek subsidiary of Eldorado Gold Corporation, a Canadian mining company. Eldorado plans to exploit the gold, copper and silver hidden under the surface. Despite the potential loss of forest and farmland that the mining scheme involves, it has easily gained traction in the depressed economic climate that Greece finds itself in today, as it offers jobs and investment in a rural backwater beset by unemployment and starved of financial assistance.

In Stratoni, a community nestled along the coastline of Halkidiki, elderly men play cards, talk politics and drink ouzo, It is one of the few villages in the area to support the mine, as Zagorakis Nikos, the village president, explains. “We welcome the investor as long as they follow the rules: environmentally-friendly mining, contributing to the local society, reducing the [local] unemployment rate from 40 per cent to zero. It means that our region will recover and there will be work for everyone,” says Mr Nikos.

Further along the coastline, Costas, a local fisherman agrees. He wearily ponders the prospect of the mine as he guts the night’s catch on the quayside in the early morning light. “If they do it properly, then it should be done, because we’re talking about lots of jobs. It’s a matter of life and death. Without development there’s nothing. We can’t all become ecologists. We need food too”

Travel closer to the site of the proposed mine however, and attitudes change. Ioannis Stahoris is a worried man. A successful entrepreneur, his feta cheese factory employs 22 people, buys milk from 103 local farms and exports cheese around the world. But all this could be about to end, he says.

“I believe that our final product will greatly deteriorate, as well as our name and our region. We’ll no longer have what we have right now, the pure milk, the pure product that people ask for in unpolluted areas. I believe this gold investment will destroy our water, the air we breathe.”

He is not alone. On the roads that surround Skouries, banners hang across lamp posts demanding that “Eldorado go home”. The protesters are a coalition of local people and businesses, alongside academics, anti-austerity advocates and environmentalists.

Scrambling up the Kakavos mountain in Skouries, Annie Vasileiou guides us to a river valley deep in the forest that is due to be destroyed. It is an area of breathtaking beauty, with crystal-clear streams and mossy timbers nestled within the deep gorges that are carved into the mountain here. The forest in this region straddles several protected Natura sites and is home to otters and migrating birds. But activists say much of the forest in Skouries is set to be destroyed.

The mines are scheduled for construction close to a seismic fault line, on a mountain that supplies water to thousands below, opening up the possibility of water contamination.

The area’s gorges will be blocked and built over to construct tailing reservoirs whose function is to hold mining waste. The tailings are likely to include arsenic, mercury and possibly cyanide.

“We’re talking about arsenic … an element that kills humans and then follows them to the grave and then comes out again to continue killing other humans too,” said Theocharis Zagas, Professor of the Natural Environment at the University of Thessaloniki. “Even hearing these words should frighten us.”

Overlooking a tumbling stream on the Skouries mountain, Ms Vasileiou reflects on the situation for communities nearby: “People in the region are very angry that we’re on the receiving end of this bitter medicine to help rejuvenate the Greek economy. Mining activities worldwide come in and destroy ecosystems. People in small-scale tourism, people who make honey, people who make a living cultivating fields, who fish for a living, people are put at threat if this goes ahead. Yes you are creating 1,300 jobs, but how many are you taking away?”

Protests against the mining site in recent months have been met with tear gas, and running battles have ensued between riot police and protesters. Rania, a grandmother who did not want to give her second name, says she now suffers constant pain after being dragged from her car and stamped on by a police officer whilst attending one such protest.

She is one of a growing number who question the Greek government’s commitment to the mining project.

“For what reason do they show such interest in this investment, why do they chase us, why do they beat us, why so much violence in order to defend this investment which doesn’t offer anything to Greece?” she said.

In recent months tensions on both sides have escalated following arson attacks on temporary construction offices and vehicles linked to the mine in February.

“While we respect the right of individuals to voice their opinions in a safe, legal and responsible manner we fully condemn any activities that put the safety of our employees, contractors and assets at risk,” said Paul Wright, CEO of Eldorado, in a statement released in response to the attack.

The police response to the attack has seen entire villages searched and schoolchildren as young as 15 forced to give DNA samples. An all-women protest on Mother’s Day this year ended in mass arrests. A fresh round of protests erupted this week.

Reams of razor wire now snake across the forest alongside guard dogs and blacked-out cars carrying private security guards, who film journalists and local residents alike, following their every move.

“You feel that the mountain doesn’t belong to you any more, doesn’t belong to the state any more, you feel that it’s under occupation,” Rania says.

What perplexes many bystanders in the debate around the mine is that despite the riches that lie underneath the soil – and despite some media reports – the Greek government will not receive royalties from the new mine.

It is a sentiment shared by the European Commission in Brussels, which ruled that the sale of the Kassandra mining complex – as it was then known – for just €15.3m in 2003, took place below market value and without an open tender of valuation of the mine’s worth, in breach of EU rules.

In a further twist to the legal confusion surrounding the mine, when the commission ruled that the amount underpaid, plus interest, be returned to the Greek state, it was the Greek Environment Minister who appealed to the court in an effort to try to quash a ruling that would see the private investors pay millions back to the cash-strapped government. The appeal has yet to be heard.

Critics claim that the economic crisis is being used as an excuse to press forward with controversial projects across Greece, from hotel developments in protected areas through to planned deep sea drilling in sensitive marine habitats.

They point to a Europe-wide trend of weakening environmental laws from governments who are desperate to attract external investors and kick-start sluggish economies through get-rich-quick development projects.

“What we are seeing in Greece is actually a small part of a much bigger picture. What’s happening right now in Spain, in Portugal in Italy … [shows that] there’s a real environmental rollback taking place”, says Demetres Karavellas, CEO of the environmental group WWF Greece.

On the mountain of Kakavos, Annie is moved to tears as she gazes into the clear waters of the stream.

“Economics or the environment? For me it’s a false question. Can we think and talk before we act? ‘No, no time, there’s an economic crisis,’” she mocks. “It’s definitely a tragedy in the making”.

Both the Greek environment ministry in Athens and Hellas Gold turned down the opportunity to comment on this story.

This article was reported in partnership with the Investigative Fund at the Nation Institute.

The heavy price of Greek gold - Europe - World - The Independent

Greeks plan protests against Sunday trading

Helena Smith in Athens guardian.co.uk, Monday 22 July 2013 02.14 AEST

Conservative-dominated government argues that deregulation of trading hours will help combat recession and cut unemployment

Greek protesters

Greeks protest: demonstrations against Sunday opening are planned this week in Athens and Thessaloniki. Photograph: George Kampolis/Demotix/Corbis

It has been called a sin by the church, a human rights violation by unions and "totally nonsensical" by shop owners themselves.

Now, to show they mean business, this unlikely triumvirate has pledged to put thousands of people on to the streets as opposition mounts in Greece to government efforts to further liberalise the market by allowing shops to open on Sundays.

"This is a casus belli for the Orthodox Church of Greece," said Bishop Seraphim of Piraeus. "Any MPs who support this will … have stepped on the law of God."

Under pressure from international creditors propping up the debt-crippled country, prime minister Antonis Samaras's ruling coalition has drafted legislation lifting the ban on Sunday shopping – to date perhaps the clearest sign of one of Europe's most closed economies.

The conservative-dominated administration has argued that deregulation of trading hours will help combat recession and record levels of unemployment – at nearly 27 % the highest in the euro zone.

"It will help boost competition and create 30,000 new jobs," said the development minister, Costis Hatzidakis, unveiling the new law ultimately giving local authorities the ability to decide whether to allow Sunday shopping.

With the exception of big chains, most Greek stores follow a sporadic schedule of working three late shifts a week and a half-day on Saturday. Shops are also permitted to open two Sundays a year in the run-up to Christmas – a timetable that to the bewilderment of many, consumer groups have long supported.

Greece's powerful church has played a major role keeping it that way.

Politicians contemplating extending shop trading hours have been leaned on to abandon their plans in what has become a classic case of resistance to reform.

Small shop owners – until the crisis, the lifeblood of the Greek economy and an important interest group – insist that liberalisation will only favour bigger stores at a time when few can afford to hire extra personnel. More than a third of store staff have not been paid in months, according to the association of private employees, citing the country's sixth straight year of recession and chronic lack of liquidity.

"Keeping shops open 52 Sundays a year makes no sense at all," said Kostas Hanzarides, head of the trade association of Thessaloniki, which has called for mass demonstrations on Tuesday.

In Athens, where protests are also planned, retailers say the law will mean the end of family-run businesses already hard hit by higher utility bills and a barrage of new taxes.

"You want to be done with us," quipped Giorgos Kavvathas who presides over the general association of Greek artisans. "Are 120,000 store closures over the last three years not enough?"

The militant communist-backed union Pame, which is capable of mobilising thousands on to the streets, has denounced the move, saying it will benefit major business groups "who want to increase their profits and the exploitation of workers".

Greeks plan protests against Sunday trading | World news | guardian.co.uk

Saturday, July 20, 2013

We Germans don't want a German Europe

 Wolfgang Schäuble

Wolfgang Schäuble The Guardian, Saturday 20 July 2013 04.00 AEST

Germany has no taste for shaping others in its image – but we want a European Union that can compete

Schäuble visit Athens

'Too often public discourse about the crisis is dominated by mutual recriminations and populist commentary.' Protesters march towards the Greek parliament, following Wolfgang Schäuble's visit. Photograph: George Kampolis/ George Kampolis/Demotix/Corbis

Where do we in Europe stand today? Three years after the start of the first assistance programme for Greece, and about three months after we agreed on a programme for Cyprus, the picture is mixed. On the plus side, there are many encouraging signs from the crisis-hit countries in the euro zone. Labour markets and social security systems are being reformed; public administration, legal structures and tax regimes are being modernised. These efforts are already bearing fruit. There is more competitiveness. Economic imbalances are shrinking. Investor confidence is returning.

Institutional improvements in Europe have increased the likelihood of sound budgets in future years. We have introduced more binding fiscal rules, brakes on national debt and a robust crisis-resolution mechanism that gives us time to pursue the necessary reforms. The next step is the banking union, which will further reduce risk, both for the financial sector itself and for taxpayers. Our efforts to regulate financial markets will ensure that those who make high-risk investment decisions are liable for any ensuing losses. In other words, we are restoring the link between opportunity and risk.

But there is also a negative side. There is widespread uncertainty among people in our countries. Young people in parts of Europe face a dearth of opportunity. People are losing their jobs because their country is undergoing a profound economic transition. And too often public discourse about the crisis is dominated by mutual recriminations and populist commentary. National clichés and prejudices, which we believed to be long overcome, are rearing their ugly heads again.

This debate is full of contradictions, not least where Germany's role in tackling the crisis is concerned. There is little consensus in Europe, either about what Germany is doing or about what it should be doing. Some commentators even claim that the notorious "German question" is back. It has been said that Germany is "too strong" to fit in, but also that it is "too weak" to lead the continent. Germany has been simultaneously accused of wanting to reshape Europe in its own image and of refusing to show any leadership. And even those calling for more German leadership seem to be doing so for contradictory reasons. Some want Germany to drop its resistance to debt-financed stimuli, claiming that this would help us to overcome the crisis. Others want even more fiscal solidity in exchange for Germany's solidarity.

The views on Germany's actual policies are no less contradictory. For example, voices outside the country have called for Germany to relax its "draconian" austerity policies while, in Germany, the government has been accused of not saving nearly enough, or even at all. As is so often the case, the truth is somewhere in between. We are working to achieve a reasonable degree of consolidation, to build confidence and thus to lay the foundations for sustainable growth in Germany and in Europe as a whole.

The idea that Europe should be – or even can be – led by a single country is wide of the mark. Germany's restraint does not just reflect the burden of its history. The truth is that the unique political structure that is Europe does not lend itself to a leader–follower dynamic. Europe signifies the equal coexistence of its member states. At the same time, however, Germany does feel a special responsibility towards the mutually agreed strategy for resolving the crisis in the euro zone. We are taking on this leadership responsibility in a spirit of partnership, especially with our French friends. Like the other countries in the euro zone, both big and small, we know how fundamentally important it is to co-ordinate our efforts closely if we want to overcome the crisis.

From the very beginning of the crisis we Europeans have pursued a joint strategy. This strategy aims to achieve the overdue consolidation of public budgets. But even more, it aims to overcome economic imbalances by improving the competitiveness of all euro zone countries. This is why the adjustment plans for countries that are receiving financial support call for fundamental structural reforms that aim to put them back on track towards long-term growth and thus secure sustainable prosperity for all. Sound public finances create confidence.

But sound public finances are not enough to ensure sustainable growth. In addition, we need to reform and modernise our labour markets, our welfare state, and our legal and tax systems. We have to make sure that all citizens of Europe enjoy working and living conditions that are not based on artificial growth bubbles.

These reforms will not take effect overnight. We Germans know this better than anyone. Ten years ago Germany was the "sick man of Europe". We had to tread a long and painful path to become today's engine of growth and anchor of stability in Europe. We too had extremely high levels of unemployment, even long after we started to adopt urgently necessary reforms. But without these reforms there can be no sustainable growth. Stimulus programmes based on even more government debt will only shift higher burdens on to our children and grandchildren, and will have no lasting benefits.

To create new jobs in Europe, we need businesses that offer innovative and attractive products that people want to buy. European companies can do this only if governments create the right conditions to help companies to achieve success in our increasingly globalised world. That applies not just to German businesses, but to French, British, Polish, Italian, Spanish, Portuguese and Greek companies as well.

The idea that Germans want to play a special role in Europe is a misunderstanding. We do not want a German Europe. We are not asking others to be like us. This accusation makes no more sense than the national stereotypes that lurk behind such statements. The Germans are joyless capitalists infused with the Protestant work ethic? In fact, some economically successful German regions are traditionally Catholic. The Italians are all about dolce far niente (delicious idleness)? The industrial regions in northern Italy would not be the only ones to bristle at that. All of northern Europe is market-driven? The Nordic welfare states, with their emphasis on social solidarity and income redistribution, certainly do not fit this caricature.

Those who nurture such stereotypes should look at recent surveys that show a clear majority of people – not just in northern Europe, but also in the south – in favour of combating the crisis through reforms, public spending cuts and debt reduction.

The Germans themselves are the last people who would want to put up with a German Europe. We want to put Germany at the service of the European community's economic recovery – without weakening Germany itself. That would not be in anybody's interests. We want a Europe that is strong and competitive, a Europe where we plan our budgets sensibly, and where we do not pile up more and more debt.

The key task is to create conditions that are conducive to successful economic activity, in the context of global competition and demographic trends that pose a challenge for the whole of Europe. None of these things are German ideas. They are the tenets of forward-looking policies.

Sound fiscal policies and a good economic environment are the only ways to gain the confidence of investors, businesses and consumers and thus achieve sustainable growth. All international studies confirm this, as do the European Central Bank, the European commission, the OECD and the International Monetary Fund – organisations headed, incidentally, by an Italian, a Portuguese, a Mexican and a Frenchwoman respectively.

And the policies of European governments are geared towards these objectives. Those European countries currently grappling with complex adjustment processes deserve our highest appreciation for the way they are reforming their labour markets and social security systems, modernising their administrative structures, legal systems and tax systems, and consolidating their budgets. We should have the deepest respect for the efforts they are making. Our reward – everyone's reward – will be a strong and competitive Europe.

We Germans don't want a German Europe | Wolfgang Schäuble | Comment is free | The Guardian

Friday, July 19, 2013

Greece: hate figure Wolfgang Schäuble succeeds with unlikely charm offensive

 helena

Helena Smith in Athens guardian.co.uk, Friday 19 July 2013 07.58 AEST

German finance minister – loathed for the austerity he has personally prescribed – pulls off a stellar performance in Athens

German Finance Minister Schaeuble in Athens

German finance minister Wolfgang Schäuble (left) shakes hands with Greek finance minister Yannis Stournaras in Athens. Photograph: Pantelis Saitas/EPA

It was Otto von Bismarck, Germany's first chancellor, who said politics was the art of the possible.

In Athens, pushing his wheelchair along craggy pavements and the dark corridors of the Orwellian behemoth that is the finance ministry, Wolfgang Schäuble, the German finance minister, would have made Bismarck proud.

In Greece Schäuble is a hated man; loathed as much for the austerity he has personally prescribed as the manner with which it has been handed out. No one is more identified with the twin ills – runaway unemployment and rising poverty – now bedevilling the county than he. To pretend otherwise is to play a fool's game.

But on Thursday Schäuble pulled off a stellar performance doing just that as he made his first visit to the country since the eruption of Europe's debt crisis in Greece in late 2009.

The political opposition may have declared him persona non grata. And riot police may have turned Athens into a garrison town, its roads sealed off in one of the biggest security cordons thrown around the capital in living memory.

But responding with a charm attack few would have thought possible for a politician more usually associated with irascibility, in meeting after meeting Schäuble pressed home the message that he was "happy" to be in Greece – and even better, delighted with the progress its debt-stricken economy had made.

"This visit is an expression of our confidence in, and support for Greece," he enthused. "I have not come as a teacher to give lessons."

The assembled press pack – including his retinue of German reporters – looked on bewildered.

"He's actually smiling," said one photographer as Schäuble joked with his Greek counterpart Yannis Stournaras at the end of a press conference. "I didn't know he had it in him."

The trip, barely two months before federal elections in Germany, was aimed at sending a "message of support to Greeks", Stournaras said.

"He is here to talk to the Greeks and to listen to our views," the minister insisted. As a sweetener, Schäuble had pledged €100m in loans to kick-start business activity in an economy stripped of liquidity.

But on the streets of a capital that resembled a ghost town for most of the day, there were few – if any – who believed him.

Almost four years into their country's worst crisis in modern times, Greeks are numb with fatigue, exhaustion and fear.

Even officials in the governing coalition who in private say Schäuble has been nothing but "rude and aggressive" were hesitant to support the German on Thursday.

Instead, they admitted that Greece was locked in an economic death spiral – its indicators going from bad to worse – as a result of the punitive medicine Berlin was determined to mete out.

"This is nothing but a PR campaign, an attempt to say Greece is a success story and the euro zone crisis is over," a senior prime ministerial aide confided.

"And we all know that is not the case because it's only now, in the coming months, that we will even begin to see the results of the measures."

The decision to lay off 25,000 workers from the public sector – cuts which Schäuble has backed assiduously – could, officials fear, be the last straw.

With unemployment approaching 27%, about 1.3 million people are already out of work.

The devastating figure comes on the back of Greeks already having seen their salaries slashed by 25% and taxes increased tenfold.

As parliament debated the cuts this week, the radical left main opposition party warned that the country was not only "under German occupation" but heading for civil war.

"We no longer have an audience. Greek people have given up believing there is an alternative that could be worse," said another insider with close access to the political elite. "They believe this is the worst case scenario and that's scary."

The German finance minister may have pulled off the impossible but he had done so in a country that remains a minefield in the euro zone.

Greece: hate figure Wolfgang Schäuble succeeds with unlikely charm offensive | World news | guardian.co.uk

Greece, Portugal and the euro: In the dumps

Jul 20th 2013 | ATHENS AND LISBON |From the print edition

Two bailed-out countries still struggle to stick to their programmes

ONCE again a fragile Greek government has pushed delayed reforms through parliament at the behest of the European Union and the IMF even as angry protesters in the square outside demand its resignation. At stake was a desperately needed €6.8 billion slice of Greece’s bail-out. The vote on July 17th to cut 15,000 civil-service jobs and overhaul the tax system was close, mainly because Antonis Samaras, the centre-right prime minister, has seen his majority cut to just five seats after the small Democratic Left party pulled out of his three-party coalition.

Mr Samaras had to produce a last-minute ace to win over dissidents. Hours before the vote, he announced that an unpopular 23% value-added tax on restaurants, cafés and bars would be temporarily cut to 13% on August 1st. If this produces more revenue, as the finance ministry predicts, it will stay. The EU and IMF are sceptical but ready to try it. The announcement came just before Wolfgang Schäuble, the German finance minister, visited Athens to urge the Greeks to stick to reforms and to unveil a German-Greek fund to back small Greek companies.

Mr Samaras’s slimmed-down coalition of his New Democracy party and the PanHellenic Socialist Movement (Pasok) under Evangelos Venizelos, who is now deputy prime minister and foreign minister, may prove more forceful than its predecessor. Mr Venizelos is busy preparing for Greece’s turn in the EU presidency in the first half of 2014. Kyriakos Mitsotakis, the public administration minister, must sack 4,000 public employees this year and another 11,000 in 2014. First to go will be 2,000 state-television staff, followed by municipal police officers, hospital workers and vocational-training teachers. The old life in the civil service, with higher salaries and fewer hours than in the private sector, is over. “The game has changed for good,” says Mr Mitsotakis.

Yet there are few signs of an economic recovery. IOBE, a think-tank, says GDP will shrink by as much as 5% this year, worse than its earlier forecast of 4.6%. Unemployment is expected to rise from 26.9% today to 30% next year. And privatisation receipts are disappointing: Greece will miss this year’s target by a wide margin.

The picture is only a little better in Portugal, where the costs of two years of unremitting austerity have pulled Pedro Passos Coelho’s ruling coalition apart, triggering a political crisis. The latest twist came when President Aníbal Cavaco Silva intervened ineptly to ask the two coalition parties and the centre-left Socialists, the main opposition party, to hammer out a “national salvation” pact. Yet the gulf between the centre-right ruling parties and the Socialists is so wide that the chances of their meeting a self-imposed deadline of July 21st for an agreement are small.

The president’s aim was to give investors and Portugal’s lenders—the “troika” of the EU, IMF and European Central Bank—some guarantee that the mainstream parties, supported by about 80% of voters, remained committed to the country’s bail-out programme and that future governments will stick to fiscal discipline. Yet the danger is that, after prolonging Lisbon’s political crisis for a few more weeks, it could produce nothing at all, leaving the country as it was: ruled by an unstable coalition and facing the threat of a snap election with unpredictable results.

Portugal’s borrowing costs have surged, and the latest central-bank forecasts suggest that the economy will barely recover in 2014 after three years of deep recession. Instead of the promised turnaround, the bank now expects only 0.3% growth next year. The main culprit is bigger-than-expected cuts in public spending that were necessary to keep the bail-out on track. This forecast is hardly likely to strengthen confidence in Portugal, Greece or across the wider euro zone that austerity is working. Nor will it support the fond hopes in Brussels that Portugal was safely pulling away from Greece and would follow Ireland by getting out of its bail-out programme. Just now, neither country looks anywhere near ready for graduation.

Greece, Portugal and the euro: In the dumps | The Economist

Tuesday, July 16, 2013

Greece May Prosecute Former Finance Minister

 

ATHENS--Greece's parliament was expected to recommend late Monday that a former finance minister face criminal prosecution for his handling of a list of 2,000 wealthy Greeks with Swiss bank accounts.

The case, surrounding the so-called Lagarde List, caps a months-long investigation in parliament into the actions of former minister George Papaconstantinou, who is a step away from being the first senior Greek politician in decades to face a special court for breach of trust.

The majority of Greece's 300 lawmakers were expected to recommend that Mr. Papaconstantinou, who was finance minister from 2009 until mid-2011, face two criminal charges that could land him jail: tampering with evidence on the list of potential tax cheats and breach of trust.

Parliamentarians were also expected to agree that Mr. Papaconstantinou be charged with the misdemeanour offense of dereliction of duty. However, the final decision as to whether the former minister, seen as the architect of Greece's unpopular austerity program, will face trial will be made by a five member judicial council.

At issue is the so-called Lagarde List, named after International Monetary Fund chief Christine Lagarde, which was drawn from data obtained by former employees of the Geneva branch of HSBC, who had electronically copied details of 24,000 clients.

The information wound up in the hands of French tax authorities in 2008, as well as those of Italy and Spain. All three countries started investigations to recover unpaid taxes.

In late 2010, Ms. Lagarde, then the French finance minister, passed the data to Mr. Papaconstantinou to help Greece investigate potential tax evaders. However, the original list--contained on a CD--was passed among various officials and was eventually lost, according to a testimony given by Mr Papaconstantinou in Parliament.

Another version resurfaced late last year and was published by a Greek journalist. After being compared with a fresh version of the list re-sent from France, Greek authorities determined that several bank accounts held by Mr. Papaconstantinou's relatives had been deleted, according to public prosecutors.

Mr. Papaconstantinou, along with his relatives, has repeatedly denied the allegations.

This case has stoked public anger in Greece, which is stumbling through a sixth straight year of recession and where unemployment is close to 27%--the highest rate in the European Union.

Greek authorities have yet to complete investigating any names on the list despite holding on to it for several years as the country struggles to gather tax revenues due to the fast shrinking economy.

Many Greeks feel that the austerity program has fallen disproportionately on the poor. Greece's international creditors have set combating rampant tax evasion high on a priority list that includes a host of other fiscal and structural overhauls.

In an attempt to show crisis-hit Greeks that steps are being taken to fight tax evasion, Greek prosecutors issued charges earlier this year against two former ministers for failing to disclose family assets on their income statement.

Prosecutors said they are seeking misdemeanour charges against former Finance Minister Yannos Papantoniou--who helped engineer Greece's entry into the euro zone--and former Merchant Marine Minister Giorgios Voulgarakis, after a parliamentary committee accused them of making false statements during their terms as deputies. They both deny any wrongdoing.

http://www.nasdaq.com/aspx/stockmarketnewsstoryprint.aspx?storyid=greece-may-prosecute-former-finance-minister-20130715-01050

The Greek far right: Racist dilemmas

 

Greece wants a more robust anti-racism law

Inky-fingered Dawn

IN AN ugly recent exchange in Greece’s parliament, Ilias Kassidiaris, spokesman for the neo-Nazi Golden Dawn party, denied that the Holocaust had happened. Vassilis Economou, from the Democratic Left party, said that in Germany the penalty for denying the Holocaust was five years’ jail. Democratic Left and the PanHellenic Socialist Movement (Pasok), the two smaller coalition parties, want a new law against hate speech and racism. A draft bill from Antonis Roupakiotis, the justice minister from Democratic Left, aims squarely at Golden Dawn, proposing to ban an association if one of its members is found guilty of a hate crime, including Holocaust denial.

Since entering parliament a year ago with 18 deputies, Golden Dawn has been a steady third in opinion polls, with about 11% of the vote, behind only the New Democracy party of Antonis Samaras, the prime minister, and the far-left opposition Syriza party. Its anti-immigrant rhetoric, swastika-like party emblem and torch-lit parades led by young men in black T-shirts horrify many Greeks. Golden Dawn supporters are blamed for an upsurge in racist violence. One was arrested in April for shooting at a group of immigrant strawberry-pickers demanding back pay.

Yet banning Golden Dawn could be counterproductive, insist critics of Mr Roupakiotis’s bill. They say it would simply regroup and run under another name. Human Rights Watch, a campaign group, says the proposal “is hard to reconcile with the right to freedom of association”. New Democracy says the existing anti-racism law needs tweaking, not rewriting. It suggests two amendments: outlawing neo-Nazi groups and making Holocaust denial a crime. A stronger anti-racism law might, it fears, merely win Golden Dawn a sympathy vote from other right-wingers.

Greece’s latest political convulsions may now put off any new law. Delay is unhelpful. Whatever form an anti-racism law takes, it will not now reach parliament until after the summer. Meanwhile Golden Dawn has come up with a bill to ban “racism against Greeks”. Mr Roupakiotis is not amused.

The Greek far right: Racist dilemmas | The Economist

Wednesday, July 10, 2013

Euro zone throws Greece a €3bn lifeline

Ian Traynor in Brussels The Guardian, Tuesday 9 July 2013 05.23 AEST

Meeting of euro zone finance ministers decides on €2.5bn in loans this month plus a further €500m in October

Ioannis Stournaras and Christine Lagarde

The Greek finance minister, Ioannis Stournaras, talks with the IMF managing director, Christine Lagarde, before the meeting of euro zone finance ministers in Brussels. Photograph: Xinhua/Sipa USA/Rex Features

Greece's euro zone creditors threw the battered country a summer lifeline on Monday evening, deciding to give Athens €3bn (£2.58bn) between now and October to prevent a fresh eruption of the sovereign debt crisis, while piling the pressure on the government to further slash jobs and spending.

Greece is to get a new €2.5bn in loans this month plus a further €500m in October, a meeting of euro zone finance ministers decided. In addition, the European Central Bank is to return €2bn in profits earned from Greek bonds while the International Monetary Fund is expected to supply €1.8bn in August .

With ultimatums and deadlines being set by the euro zone in advance of Monday evening's meeting of finance ministers of the 17 countries, last-minute negotiations resulted in a tentative green light to release more bailout funds.

Talks over the weekend between the Greek government and the troika of officials from the European commission, the European Central Bank and the International Monetary Fund resulted in a last-minute agreement on a new package of spending cuts, job losses and fiscal reforms in Greece in return for the bailout funds.

But Germany wanted to increase the pressure on Athens, hold it to benchmarks on the implementation of reforms and calibrate the release of bailout money to tangible results.

While Pierre Moscovici, the French finance minister, went into the meeting expressing his confidence that new loans would be disbursed, his German counterpart, Wolfgang Schäuble, made no mention of money, emphasising that first the ministers would need to study the fine print of the latest troika-Greek government deal.

Schäuble said: "It will remain difficult for Greece." He added that the latest report on Greece from the troika would be "very precisely assessed."

The Europeans and the IMF have long been at odds on the terms and targets of the Greek bailout, worth €240bn in total, the world's biggest, with the IMF worried that Greek national debt levels will remain unsustainable.

Analysts and officials expect the EU-IMF frictions to worsen later in the year, while the Germans are unlikely to soften their hard line until general elections in September. A troika statement following the negotiations with the government of Antonis Samaras said there were "prospects" that Greece, in its sixth year of recession, could return to growth next year. But "the outlook remains uncertain."

Under Monday's agreement, Athens has to get to grips with a painful programme of public sector job losses mainly affecting education.

Some 6,500 teachers or education ministry staff are either to be fired or put on a "reserve" and sacked at the end of next year if no alternative work has been found. This makes up more than half of the 12,500 public sector jobs on the line, which also include 3,500 police posts. Police officers anxious for their jobs staged protests in Athens at the weekend.

Under the agreement, expectations of privatisation proceeds are also being scaled back by €1bn following last month's failure to sell the state-owned Depa gas enterprise.

Illustrating the Samaras government's narrow room for manoeuvre, the troika blocked Athens's push to reduce VAT rates on restaurants, aimed at stimulating consumption during the summer tourism months.

"Policy implementation is behind in some areas," said the troika. "The authorities have committed to take corrective actions to ensure delivery of the fiscal targets for 2013-14 … The income tax, property tax, and tax procedure codes are being reformed, and the autonomy and efficiency of revenue administration is being strengthened.

"The authorities have also committed to take steps to bring public administration reforms back on track, such as by completing staffing plans by end-year, placing staff in the mobility and reallocation scheme, and meeting the agreed targets for mandatory exits."

As the euro zone ministers wrestled over whether and on what terms to help the Greeks, all the signs were of a resurfacing of the brinkmanship between Berlin and Athens that has bedevilled the world's biggest bailout since its inception in 2010.

Euro zone throws Greece a €3bn lifeline | World news | The Guardian

Tuesday, July 9, 2013

Greek public sector workers protest 'bail-out' layoffs

Agencies 3:13PM BST 08 Jul 2013

Thousands of Greek municipal workers and state school teachers took to the streets of Athens on Monday to protest against the public sector layoffs that the government has promised its international lenders in exchange for bailout funds.

Greek public sector workers protest 'bail-out' layoffs

Municipal policemen during a rally by local government workers, against the public sector reforms and layoffs Greece has promised its international lenders, in Athens on July 8. Photo: Reuters

Eurozone finance ministers were due to decide on Monday how to keep Greece afloat and had threatened to delay the latest €8.1bn (£6.97bn) payment to Athens to put more pressure on it to enact unpopular reforms.

Earlier, Greece's debt inspectors reached an agreement with the cash-strapped country on reforms needed for the release of the next batch of its vital bailout loans, although they warned of an "uncertain" economic outlook.

While the country's international creditors noted that progress has been made in some sectors, they said more needs to be done - particularly in trimming the size of bloated civil service - if certain economic targets are to be met.

They added that the Greek authorities have "committed to take corrective action" to get the austerity process back on track.

The latest review of Greece's economy by the European Commission, European Central Bank and International Monetary Fund, known as the troika, will be presented later Monday at a meeting in Brussels of the finance ministers of the 17 euro countries, who will decide whether Greece gets the next payment of its bailout loan.

Ahead of the meeting, more than 6,000 local administration workers, among them guards and uniformed municipal police on motorbikes, marched to the Administrative Reform Ministry in central Athens, waving black flags, honking horns and sounding sirens.

 

 

 

 

 

 

 

 

 

 

 

Police detain students who tried to disturb a meeting of the board of management at the University of Athens. Photo: Getty

"Take your memorandum and get out of here!" the workers chanted, in the first protest since the lenders completed their latest review of Greece's cost cutting efforts on Sunday, a sign of the resistance the government may face.

"They won't succeed - we will fight it," said POE-OTA, the federation of local government unions, which held a 24-hour nationwide strike. The largest public sector union ADEDY also staged a work stoppage in Athens.

Greece has struggled to convince the "troika" of lenders from the European Union, European Central Bank and International Monetary Fund that it can deliver on its pledges and shrink its spendthrift public sector, widely blamed by many Greeks for the debt crisis.

Public sector layoffs are a taboo in Greece, where a sixth year of recession has made one in four jobless and eroded living standards.

After missing a June deadline, Athens agreed to put 12,500 state workers into a "mobility scheme" by September, meaning they will be transferred or fired within a year. Around 3,500 of those will be municipal workers and another 2,000 will be teachers, government officials have said.

A second wave of 12,500 staff will be placed in the scheme by the end of the year. The government has also promised to fire 4,000 state workers this year.

State broadcaster

Public broadcasts are to resume in Greece later this week, a minister said on Monday, nearly a month after the government caused an uproar by pulling the plug on state television ERT to save money.

Manolis Kapsis, the deputy minister in charge of public television, told Athens public radio: "Yes, it will be a broadcast of necessity."

The government intends to run a temporary programme until it can hire staff for a new broadcaster by autumn.

The government turned off ERT on June 11, claiming the historic broadcaster was hopelessly inefficient and ate up €300ma year. The shutdown caused over 2,600 layoffs.

Greece's top administrative court later ruled that ERT's shutdown was within the state's rights, but it told the government it still needed to have public broadcasts in some form as soon as possible.

Top-selling Ta Nea daily on Monday said the temporary broadcasts will resume by Wednesday and will mainly feature movies, serials and documentaries.

ERT's demise caused a major political crisis and nearly brought down the government, which was accused by international media groups of authoritarianism.

ERT staff refused to accept their dismissal. They took over the station's headquarters north of Athens and have maintained a rogue broadcast since June 11, with assistance from the European Broadcasting Union.

Mr Kapsis added that steps to set up the new state broadcaster, which will have fewer staff, "will be decided during the summer".

"There is a general timetable of three to four months," the minister said.

Under the terms of its EU-IMF bailout, Greece has to axe 4,000 state jobs this year.

Greek public sector workers protest 'bail-out' layoffs - Telegraph

The man with Greece’s toughest job - the taxman

 Colin Freeman

By Colin Freeman, Athens 4:45PM BST 06 Jul 2013

For the millions of Greeks keen to see their country clamber from its financial black hole, Haris Theoharis, the taxman, is there to extend a helping hand.

Thousands of Greeks have protested against the austerity measures placed on them by their government and Europe Photo: Getty Images

His grip, however, is very firm indeed, and has a habit for delving into private places where many would prefer it did not go.

Appointed this year as the country's new "secretary-general for public revenue", Mr Theoharis has the task of filing what is probably the biggest back-tax demand in history – the whopping €40 billion that his fellow citizens have run up in unpaid dues over the decades.

Getting them to cough up is one of the conditions that Greece's international creditors have lain down for continuing Athens' €240 billion bail-out programme. But in a country where tax-dodging has long been likened to a national pastime, that makes Mr Theoharis as much a public enemy number one as a would-be national saviour.

"I get quite a few heckles, with some people saying, 'Soldier on', and others saying, 'No, we've had enough, stop sending us tax bills'," said the quietly spoken 42-year-old, who goes on Greek television talk shows to preach the cause of "compliance".

"Half the perception is that we are going after people who can't afford to pay, and the other half is that we are harassing the rich too much. Mixed messages, though, are probably a sign that we're doing it about right."

Greek tax collectors forced to write off more than two-thirds of unpaid taxes

One broadcaster that he is unlikely to be appearing on for much longer is the state-run ERT, Greece's answer to the BBC, which was abruptly closed down last month as part of government efforts to trim the massive public sector. Following a public outcry and a walkout by a faction in the ruling coalition, it went back on the air again – for now at least.

But it illustrated the problem that Mr Theoharis wants Greeks to face up to: if they wish such services to continue, taxpayers must foot the bill, not foreign creditors.

It was with that message in mind that his post was created last January, partly under pressure from Athens's European Union and IMF bankrollers, who only last week said that Greece was still not doing enough to balance its books. They gave the government until tomorrow to show what extra efforts it is making, on pain of delaying handovers of further bail-out tranches.

On paper, Mr Theoharis's credentials are limited for his powerful new role, having previously worked as a finance ministry IT manager rather than as a tax expert. Then again, "paper" is something that Greece's 19th century-based tax system could do with rather less of. One of Mr Theoharis's main challenges is to create a computer database from its vast archives of dusty files, without which many past tax crimes may never be uncovered.

Indeed, as he freely admits, most never will be. Staggeringly, more than two-thirds of the €40 billion owed has been deemed "uncollectable" – that is, owed by companies or individuals who are defunct, deceased or bankrupt.

"It is just debt on the books, and there is nothing we can do," said Mr Theoharis, a self-confessed "techie" who studied software technology at Imperial College in London. "But the rest we have to tackle. There is no way out of the financial crisis for Greece without the tax administration increasing its efficiency."

To hammer this home, Mr Theoharis also maintains a Twitter account, called IT Monkey, where he does his best to educate a wayward public in the basics of tax law, and congratulates those who occasionally tweet back to say they have completed their returns. Such a high profile is unusual in a profession that is normally a byword for lofty, bureaucratic anonymity. A certain charm offensive is essential to overcome the average Greek's legendary disdain for the taxman.

Tax avoidance first became part of the culture here during Ottoman rule, when it was seen as an act of patriotic resistance. But the practice has persisted thanks to a hugely over-complex system that until recently practically incentivised dishonesty.

Penalties for non-payment were almost non-existent, and courts took up to a decade to bring prosecutions. A rampant bribery culture among inspectors meant that compliance was seen as only for the very poor or the slightly naive.

Tax-dodging also acquired a new-found political legitimacy because of the appalling value for money that taxpayers got from their heavily unionised, massively overmanned public services. Until as recently as two years ago, non-payment and under-declaring cost the Greek government up to a third of tax revenue.

To rectify the idea that only "little people" pay up, this year tax officials have stepped up an aggressive campaign towards big companies and wealthy individuals, including bankers, media moguls and even former ministers.

They are armed with a new law under which anyone suspected of dodging more than €10,000 in taxes can be put in jail pending charges. With this tactic, the glacial speed of the Greek court system is for once an asset: given that a prosecutor can take up to 18 months to decide whether there is a case to answer, many suspects simply prefer to pay up.

Earlier this month, that get-tough campaign claimed an elegantly coiffeured scalp in the form of Lakis Gavalas, a flamboyant fashion-designer famous for extravagant parties at his villa in Mykonos. For 18 months he languished in jail over an unpaid €17 million tax bill, but on Tuesday he finally bought his way out by handing a large amount of his property to the government.

Mr Gavalas, who was taken to jail wearing a €2,500 outfit, and who passed his time inside sifting through the prison's second-hand clothes supply for vintage fashion items, was unavailable for comment. But Giannis Pagoropoulos, his lawyer, told The Sunday Telegraph that he had been made a "scapegoat".

"His lifestyle was a challenge to the current Greek standards of living," he said. "This was public revenge against a man who had everything," Such claims bring a smile from Mr Theoharis, who sees Mr Gavalas not as the Greek fashion world's first political prisoner, rather just a "bit of a whiner".

When it comes to moaning, he also has a fight on his hands with his own staff, a number of whom are likely to lose their jobs as the service is dragged into the 21st century.

A visit by The Sunday Telegraph to a neighbourhood tax payment office in central Athens showed just how antiquated things were. In sweltering heat, hundreds of people lined up to make cash payments for income tax and other levies that in most European countries are now done largely by computer. "I sign about 1,500 papers a day," sighed one sweating official, gesturing to a foot-high pile of printouts. "By the time I go home, my hand hurts."

The more assertive stance on tax collection also puts such offices in the front line of public anger, and there have been incidents of collectors being threatened with guns, butchers' knives and whips.

"One director of an office resigned recently because he was getting five or 10 incidents of trouble every day," said Ioannis Pappas, a tax-collectors' union official.

The following day, the union called a two-day strike over working conditions and proposed office streamlining, meaning even less tax was likely to be collected than usual. While Mr Theoharis says that changes always encounter resistance at first, others say the vested interests in his own ranks are probably his biggest challenge.

"He has great ability, but he needs to get rid of a lot of people, which is very difficult in Greece," said Diomidis Spinellis, from Athens university, who worked with Mr Theoharis at the finance ministry. "I am not sure the government will give him the political support he needs."

Even Mr Pagoropoulos, the lawyer, who has 10 other wealthy clients accused of tax fraud, doubts Mr Theoharis has what it takes. "He is too gentle, and you need a killer for this job, seriously," he said. "Tax-dodging is in the Greek DNA."

For the time being, though, the man from the IT department will continue his reboot of the Greek financial system, trying to put the fear of God – or at least the taxman – into fashion designers, politicians, and ordinary Greeks alike.

If he succeeds, like Mr Gavalas's haute-couture clothes, paying one's taxes may one day become the height of fashion.

The man with Greece’s toughest job - the taxman - Telegraph