Hugo Dixon: Greece's reform job isn’t even half done

11 November 2013 | By Hugo Dixon

Greece’s reform job is not even half finished. The government hasn’t done enough to root out the vested interests that strangle the economy. Nor has it cracked down fully on tax evasion or pushed hard enough to privatise state-owned properties.

On the other hand, Antonis Samaras’ coalition is so fragile that it could collapse if the Troika - the European Commission, the European Central Bank and the International Monetary Fund - forces it to impose more austerity. That could lead to a new phase in the Greek crisis. The government’s best bet is to make a sharp distinction between structural reform and austerity - and persuade its lenders that it’s so serious about the former that more cuts and taxes aren’t required.

The atmosphere in Athens, which I visited last week, is tense. One reason is that two members of the ultra-right wing Golden Dawn party had just been murdered in a professional hit job. That followed the killing of a left-wing rapper by a member of Golden Dawn which, in turn, had triggered the arrest of the party’s leader. No one is quite sure whether this is the start of a cycle of violence which could destabilise the government, drive away tourists (the country’s main source of export revenues) and undermine business confidence.

The other reason for the tension was that the troika was in town for its latest review of Greece’s mega bailout. Going into the talks, the government’s lenders were hinting that a further budget squeeze of the order of 3 billion euros (more than 1.5 per cent of GDP) was needed to hit next year’s fiscal targets. Athens’ own view was that the “fiscal gap” was only 500 million euros.

One small party pulled out of Samaras’ coalition in the summer after he sought to close the national broadcaster in a ham-fisted way. As a result, his majority is wafer thin and backbench parliamentarians from both governing parties could rebel if they are asked to approve more unpopular measures.

It’s hard to predict what would happen if the government fell. But none of the main scenarios - a weak technocratic government, new elections leading to a hung parliament or a victory for the opposition Syriza party - looks appealing.

Although Alexis Tsipras, Syriza’s leader, has been toning down his fiery left-wing anti-troika rhetoric, he would struggle to control his party if he made too many compromises with Greece’s lenders. On the other hand, if he tore up Athens’ deal with the troika, Greece could enter a new vicious spiral ending in the imposition of capital controls and the country’s exit from the euro.

All this would be a tragedy given the sacrifices the Greek people have already made and the fact that some results are starting to show. The country is on track to have a primary budget surplus - before interest payments - this year and has also almost achieved a balance in its current account.

Meanwhile, the consensus view is that the economy, which has shrunk by a quarter during the recession, will grow a tiny bit next year.

These successes have produced something close to euphoria in financial markets. The yield on 10-year government bonds has fallen to 8.2 per cent from over 30 per cent in the middle of last year. Over the same period, the Athens stock market has more than doubled. Hedge funds have piled into Greek banks. International investors are sniffing around for bargains.

The government seems torn over how best to handle its discussions with the troika. Its initial inclination seemed to be to dig its heels in, refuse to take any more measures and use the threat of a Syriza government to blackmail its lenders into taking a softer line. Given the hostility in many European countries, especially Germany, to bailing Greece out in the first place, this would not be wise.

A better option is to argue that the Greek economy does not need more austerity but accept that it is crying out for reform. Apart from combating tax evasion and accelerating privatisation, the main priority is to liberalise the vast swathes of the economy that are clogged up with restrictive practices. For example, oil refining and petrol distribution is cartelised, while professions such as notaries have rigid centrally agreed fee structures.

The Organisation for Economic Cooperation and Development has just sent Greece a comprehensive report with detailed ideas about how to improve its business environment and so create growth. Although the OECD “toolkit” has not been published, three people who’ve seen it say it could provide the basis for a substantial reform effort.

Samaras may not be an instinctive reformer. And it wouldn’t be easy for him to confront vested interests. But embracing reform is his best chance not just of hanging onto power but also of being ultimately seen as a successful prime minister. If Samaras can pull off a “reform heavy, austerity light” deal with the troika, it could lead to a virtuous cycle. More investment will flow into the country. Samaras himself will be able to use the first half of next year, when Greece holds the European Union presidency, to promote the country’s rehabilitation. That could pave the way for the EU to lighten Athens’ debt load later in the year.

But to secure all this, Samaras will have to persuade the troika that he really is genuine about reform. They have seen too many Greeks bearing gifts to be easily fooled.

Hugo Dixon: Greece's reform job isn’t even half done | Columns | Breakingviews

At what price independence?

 

Omaira Gill (Debate) / 19 September 2014
Scotland’s referendum is close to Greece’s heart

There are many parallels that can be drawn between the Greeks and the Scottish. I’ve often heard Greek friends say that on visits to the United Kingdom, the only place they could understand the accent of the spoken English is in Scotland.

In books and CDs to teach yourself Greek, I’d often see instructions to pronounce one of the trickiest Greek letters for foreigners, chi¸ as the sound made at the end of the Scottish word Loch.

The Scots have the kilt, the Greeks have the fustanella which can still be seen worn by the elite guards at the tomb of the Unknown Soldier in front of the parliament.

Living in Greece as a foreigner is always a challenge, but somehow the Scots manage it a little better than others. The fiery tempers, zest for life, family ties, love of children and sense of pride are all familiar to them. Just the climates are different.

On a separate issue, the two populations also know what it feels like to be persecuted. The Greeks of today have not lived the hardships of the generations that came before them. They haven’t shed blood in their fight or gone through famine.

They didn’t watch the dance of Zalongo, where several mothers and children trapped by the advancing troops of Ali Pasha in 1803 chose to sing and dance themselves and their children off the steep cliffs of Zalongo in Epirus to their deaths rather than be captured.

The Greeks of today have not seen all of this, but they remember. Greek culture has a very strong history of remembering. Linguists and historians often point to Greece as an example of a remarkably resilient culture that came through a 400 year foreign occupation with their language, religion and culture entirely intact.

The stories of the hardships, the suffering and the fight for freedom have been passed down from generation to generation so vividly that you might as well have been there. These stories have woven their way into the DNA of the population. In moments when they feel particularly morose, the Greeks refer to their land as a bunch of rocks and pebbles drenched in blood.

It’s an exaggeration in some ways, and an understatement in others. The fight for Greece’s independence was a brutal one. It wasn’t until 1948 that the final Greek territory of the Dodecanese islands officially joined the country and the movement for independence was completed.

A history like that gives the Greeks an instinctive sympathy for any country that has been occupied by an outside force. For them, the fine line between the Yes and No vote in Scotland is baffling. As far as they are concerned, when you are being given your freedom on a plate, nothing less than an 80% vote in the direction of Yes is acceptable. Anything less would be a betrayal of the ancestors that died fighting for that freedom.

These, of course, are debates that could rage forever, and by the time this goes to press, Scotland’s future will already have been decided. From Greece to Catalonia and beyond, occupied or formerly occupied territories are watching the news and doing the math.

It’s never easy going it alone as any newly born nation will tell you. The economy will suffer for sure. The world will take its time to recognise you. You have to go it alone without the benefit of a powerful backer.

All of this is true, and all of it is worth considering and planning for. But if you ask the Greeks, you can’t put a price on freedom.

Omaira Gill is a freelance journalist based in Athens

At what price independence? - Khaleej Times

Rhodes villa built for Mussolini to be leased out by cash-strapped Greek government

By Nick Squires and Josephine McKenna 16 August 2014

Villa De Vecchi was built for Fascist dictator but he was killed before setting foot in it; now Greece is offering a 50-year lease on the dilapidated building to help pay off its debts

Graffiti is seen on the wall of a room inside the Villa de Vecchi Photo: Bloomberg

A once-magnificent villa built for Benito Mussolini on the Mediterranean island of Rhodes is to be leased by the Greek government as part of the country’s plan to rake in the billions of pounds needed to pay off its international debts.

The timber and stone Villa De Vecchi was built in 1936 by Count Cesare De Vecchi, a staunch Mussolini loyalist who was appointed governor of the Dodecanese islands, which had been seized by Italy from the Ottoman Turks in 1912.

Despite the islands forming part of Mussolini’s plan to carve out a new Roman empire - he envisioned using Rhodes as a naval base from which he could project Italian power into the Near East - the Fascist dictator never set foot in the villa.

^{Benito Mussolini (Rex)}

Nor did he live to see out his planned retirement on the idyllic island, which was owned by the Knights of Malta during the Middle Ages.

 

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Instead, after being caught trying to flee from northern Italy to Switzerland at the end of the war, he was shot by partisans and his body, along with that of his mistress, was strung up from a petrol station in an act of public retribution.

The villa was abandoned after the Dodecanese were ceded to Greece in 1947.

Now the government’s Hellenic Republic Asset Development Fund is offering a 50-year lease on the rundown two-storey villa to help pay off Greece’s monumental debts.

These days the Italianate-style villa, which sits high above the town of Rhodes and has panoramic views of the Aegean Sea, has fallen into disrepair and shows few signs of its former glory.

^{Villa De Vecchi (Bloomberg)}

Paint is peeling from the building’s walls, which are covered in graffiti and streaked with green algae.

The villa is one of 14 former hotels and hospitals that are being offered for conversion into boutique accommodation.

“Villa De Vecchi is a historic, two-storey building which was built by the Italian occupation authorities,” the development fund said. “It is of unique architectural value and is located in an an area of unique natural beauty, which constitutes a popular tourism destination throughout the year.”

De Vecchi’s high-handed rule over the Dodecanese made him deeply unpopular with Greeks, who were forced to learn Italian and subjected to many other humiliations.

“When the claxon sounded announcing the arrival of his enormous limousine, all other vehicles had to stop and, under threat of imprisonment, citizens were required to get out and stand to attention, making the Fascist salute as he passed,” wrote Denis Mack Smith, a historian of the Fascist regime in his book “Mussolini’s Roman Empire”.

“De Vecchi employed the Fascist methods of bludgeon and castor oil to such effect that even the Duce was moved to anger at his incompetence and inhumanity.”

The Dodecanese were an early part of an Italian colonial empire that eventually encompassed Libya, Somalia and Eritrea.

The Greek government is offering to sell or rent thousands of properties, including a castle on Corfu and a former US military base in Crete, in a bid to recover billions of euros to help pay off its debts to the European Union and the International Monetary Fund.

Earlier this year there were angry protests in Athens after public buildings and historic landmarks were added to the government’s fire sale.

While Rhodes and other Greek islands have attracted mass tourism for decades, the Greek government is looking to adopt a new strategy, encouraging higher-spending visitors with boutique hotels and unusual accommodation.

The Greeks recognise that they struggle to compete against other low-cost destinations such as Turkey.

A spokeswoman for the HRADF in Athens said the fund wanted to see the properties restored to their former glory but declined to discuss the tender process or the potential rental price.

Greece’s ambitious privatisation programme has been plagued with problems since the EU, the European Central Bank and the International Monetary Fund intervened in the country in May 2010.

After a public outcry that the country was selling off its cultural heritage, sales have been scaled back.

Rhodes villa built for Mussolini to be leased out by cash-strapped Greek government - Telegraph

Greece downgraded to 'emerging market' status

15 September 2014

S&P Dow Jones Indices has demoted the country to emerging market status.

The downgrade from S&P follows MSCI which lowered Greece's rating last year, 12 years after its promotion from the category. Photo: EPA

Greece has been downgraded to an emerging market by S&P Dow Jones Indices, in a blow for the country which was badly hit during the financial crisis.

The Greek market was assigned a weighting of 0.8pc by S&P Dow Jones Indices making it a relative minnow in the emerging market index compared to China which constitutes about a quarter (24pc) of the measure and Brazil and India which make up 11.3pc and 10pc respectively

The shift could mean that pension funds and more cautious investors will have to move out of the Athens stock index. Greek stocks opened yesterday down 0.4pc to 1,156 on the Athens stock exchange and the bond yield on Greek debt increased, meaning that investors view it as a riskier prospect.

The downgrade comes as Greek government officials held talks in Paris at the start of the month to demonstrate that its austerity measures are on track. The talks were organised ahead of a full sixth review of Greece’s austerity programme to be held by troika officials in Athens at the end of this month.

The Greek economy has to fix its finances under the terms of two bailouts worth a combined €240bn.

 

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The “troika” of the International Monetary Fund (IMF), European Commission and European Central that bailed out the Greek economy are waiting for further austerity measures before the IMF disburses a further tranche of €3.5bn in loans.

Athens is currently awaiting the final tranche of €1.8 billion euros from the European Financial Stability Facility.

Greece must also put forward proposals to the troika on how it will meet a projected €2 billion budget gap in 2015.

The index reshuffle was made to the S&P Dow Jones emerging markets BMI index and at the same time Qatar and the United Arab Emirates stock indices were promoted from frontier to emerging markets status with a weighting of 0.9pc and 1.0pc in the index respectively.

The reclassification by S&P Dow Jones Indices follows the move by the more widely followed MSCI and Russell Indexes last year who also downgraded Greece to emerging market status. The FTSE index has Greece on its developed market watch list.

The changes to the S&P Dow Jones emerging BMI index will become effective on September 22

Greece downgraded to 'emerging market' status - Telegraph

Golden Dawn visit dismays Australia’s Greek community

Helena Smith in Athens and Michael Safi in Sydney

theguardian.com, Thursday 28 August 2014

Greek Australians vow to stop neo-fascist party from spreading hate as extremist group steps up efforts to tap diaspora for support

The Golden Dawn party more than doubled its showing in May’s Athens mayoral elections and racist attacks have proliferated over the city’s summer. Photograph: Louisa Gouliamaki/AFP/Getty Images

A planned visit to Australia by members of the European parliament representing Greece’s neo-Nazi Golden Dawn party has been met with embarrassment and dismay by leading members of the country’s Greek community.

Days after the extremist group announced that former army generals Eleftherios Synadinos and Georgios Epitideios would visit Sydney and Melbourne in October, Greek Australians vowed to stop the organisation spreading its message of hate.

“Greeks in Australia oppose Golden Dawn,” Bill Papastergiadis, the president of the Greek Orthodox Community of Melbourne and Victoria, told Guardian Australia. “The visit by an anti-immigrant party is incompatible with the pluralist and multicultural society in which we live.”

More than 300,000 people of Greek descent live in Melbourne.

The forthcoming trip is the most concrete sign yet of the neo-fascists’ determination to extend their global reach. Emboldened by its unexpectedly good performance in recent local and European polls, the Holocaust-denying party, now the third-biggest political force in Athens, has stepped up efforts to tap the Greek diaspora for support.

Australia appears to have pride of place in that campaign. Ignatius Gavrilidis, Golden Dawn’s newly appointed Australia representative, told the ABC support for the group was soaring, especially among younger Greek Australians, despite a judicial inquiry in Greece that has unmasked the movement as a criminal organisation. Most of its leadership is detained in pre-trial custody as a result.

The visit aimed to raise awareness and funds, Gavrilidis said. He acknowledged that some ultra-nationalist Golden Dawn MPs admired Hitler – with its leader, Nikolaos Michaloliakos, keeping a portrait of the Führer in his home – but they neither espoused nor endorsed Nazi ideology.

“Yes they have admired the leadership of Hitler, just like we also admire the leadership of many strong leaders across the world,” Gavrilidis told the public broadcaster. “Vladimir Putin is a very strong leader. He’s got integrity. Benjamin Netanyahu is a very strong leader.”

A Golden Dawn party supporter raises his hand in a Nazi-style salute during a rally in Athens. Photograph: Yannis Kolesidis/AP

Supporters in Australia numbered in the “thousands” even if there were no more than 70 activists nationwide, Gavrilidis said.

But Greek community leaders denied the far-right group had any appeal. “Support for Golden Dawn is largely non-existent,” Papastergiadis said. “They have no profile whatsoever in Australia.”

Victorian Liberal MP Nick Kotsiras, a former minister in the state government, echoed that sentiment, saying Golden Dawn had minimal support among Australia’s Greek community.

“I am embarrassed by the existence of Golden Dawn. Golden Dawn does not represent me, it does not represent my family and does not represent the vast majority of Greeks living in Victoria,” he said. “But they are also not representative of Greeks living in Greece. They are the antithesis of what the Hellenic spirit is all about.”

The politician insisted that if the far-right MEPs were allowed into Australia it should only be after passing the character test automatically conducted on people trying to enter who are suspected of being associated with a criminal organisation.

In May, black-shirted Golden Dawn followers clashed with Greek Australians from the anti-fascist front during a protest in Brisbane that was also attended by supporters of the far-right Australia First party.

A Greek-Australian organiser with the Melbourne Anti-Fascist Initiative, Alex Kakafikas, said opponents of Golden Dawn were meeting to discuss their response to the MEPs’ visit, including a blockade of any events they held.

“The ultimate goal is to stop them from having their meeting,” he said.

Kakafikas said Golden Dawn maintained a “shadowy” presence in Melbourne and had only a few supporters.

“But one of the problems is that local Greek-Australian supporters are making connections with the far-right in Australia. Golden Dawn’s Australian leader has spoken at an Australia First meeting,” he said.

“It’s not that Golden Dawn will be able to muster enough energy for political influence here. Our concern is its ability to contribute resources [to the Greek branch] and to send people over there to work with the organisation,” he said. Australian members of the group had regularly travelled to Greece to take part in demonstrations and engage in “paramilitary training”, he said.

In Athens, leftist activists who maintain contact with the Melbourne-based “No to Golden Dawn” campaign pledged to help stop the party broadening its support base.

“Their aim, clearly, is to set up Nazi cells of hate in the Greek diaspora that would strengthen far-right forces that already exist in Australia and the United States,” said Petros Constantinou, a prominent campaigner with the Movement against Racism and the Fascist Threat (Keerfa).

“We will coordinate with our friends over there to stop them creating this black international of fascism. We will help and support their mobilisations in any way we can,” he said in Keerfa’s Athens office. “Diaspora Greeks, immigrants themselves, have been very vociferous in rejecting Golden Dawn’s message of hate.”

The party, whose insignia bears an uncanny resemblance to the swastika, has gone out of its way to soften its image as support for the organisation has risen on the back of Greece’s economic and social collapse. Both Epitideios, an erstwhile NATO commander and Synadinos, the former head of Greece’s special forces, are representative of Golden Dawn’s determination to replace boots with suits in an effort to expand its appeal.

But although the makeover appears to have paid off – with the far-rightists more than doubling the party’s showing in the Athens mayoral election in May – Golden Dawn MPs still face criminal charges for the brazen violence and hate speech they have directed against immigrants, gay people and Jews. Attacks against dark-skinned migrants and homosexuals by black-shirted assault squads have once again proliferated over the Athens summer.

Michaloliakos, who founded the party more than 30 years ago, and is accused of murder, extortion and assault, will stand trial with other MPs later this year.

Golden Dawn visit dismays Australia’s Greek community | World news | theguardian.com