The Euro – A Greek Tragedy?

A day in the life of the Greek Euro!  How to create a Euro-Sceptic out of a Europhile?  Well, not quite!

Angela Merkel states that the Euro is the principal means of cohesion in Europe, and need to be saved at all costs. Euro skeptics do not believe that.

While BBC Journalists (http://www.bbc.co.uk/news/world-europe-14445979) wax lyrical about the hardy Islanders of Greece, and their continued heroic stand against adversity, is that what we have found in our journey on foot across the country? Not really, in fact not at all.

Grant aid to the Southern areas of Europe is one of the topics of irritation among the most developed EU members.  Reports of corruption, misappropriations, absent monitoring of funds and projects abound – and our own observations in Southern Italy would confirm all of those concerns.

What does grant aid say about the European central financial system – or indeed about the South? What does it say about the North and our way of life?

After walking for one day across the area of Northern Greece entering the Anatolian Greek area, I counted in my head the sums claimed as grant aided from the EU.  Normally the announced percentage is 80 percent from the EU and 20 percent for the infrastructure projects funded,. Every single part of the landscape seems to bear a blue metal board with huge sums enumerated, proudly with their source.  The North Greeks do like the European Community, and the EU flag flies more commonly here than anywhere else I have seen.  In my one day of metal reckoning walking I could 1.6 Billion Euros in grants – mostly on road improvement and then some rather obscure projects.

I decided to photograph every board for one day, and see what that looked like.  Obviously I am ignoring the frequent signs to the Egnatia, which is the main motorway of Greece, and include just one!  We have seen signs indicated spends of 16, and 22 billion Euros of central funding – which rather dwarfs the current austerity funding for the collapsed Greek public finances on it’s own.

Here are the one day pics! There are rather a lot of them.

So what is to be made of this huge level of funding? What should outsiders think of it?

I can find two versions of the situation  –

1. The heroic Greeks, having struggled with a desperate recent history, being funding to bring them up to the European standard.  The EU after all is one brother and sisterhood, and funds should naturally flow form the most wealthy to those least able to pay.  A little spillage of funds into private pockets is inevitable, but excusable in the circumstances. Debt should actually be pooled among the EU states, with the most able paying the debts of the least able.  (i.e. Germany paying Greek, Irish, Portuguese and Italian debt)

2. A Greek political class without rigour, a populace which does not like to pay tax, or indeed for anything that is not directly for themselves.  A government without a credible tax system, and without the will, knowledge or ability to put one in place. A society where cheating the public purse is normal and beyond criticism?  A society where Greeks stash away money (often offshore) for their own use, while expecting the government to pay for everything else – or failing that the EU or the Germans? A Greece where most people in the Northern areas of Greece work 20-25 hours a week, and yet then preponderance of large and expensive cars is out of keeping with the official income structures.

What evidence do I have!?

Several accounts from knowledgeable and experienced Greeks who speak quietly of bogus applications to the EU (apply late when the Grant Officers are desperate to offload funds, and increase “outturn” to keep funding budgets for the following years), with Greek grants officers ending up wealthy with kick-backs, chains of contractors in equally dubious relationship, grants applications for unnecessary projects to keep up contractor workloads, and poor quality, little economic assessment etc.

My own eyes!  We have seen unnecessary projects.  An EU oil industry visitor centre, lavishly finished – but completely disused. Does Kavala Oil need EU funding, or a visitors centre?  mmm…actually not.

After Ofrinio – an improved mountain road,  then a new 4 lane highway, and then a new motorway!  All competing for the sparse traffic?  The whole lovely valley which contained the ancient Via Egnatia is despoiled, and its environment wrecked. The railways are more or less discarded…  I’m sure some kid government (or even EU) “economist” recommended and worked up a model for each new scheme.

So many road projects simply incomplete and abandoned – such as the 4 lane highway West of Thessalonica (between Pella, Ghiannitsa and Chalkidhona and, where the abandoned works are given away by the peeling EU funding boards).  Tens of millions of wasted Euros, in a world full of poverty and need.

…and the many projects, where it really is quite hard to see what has been done with the funds. These are very large sums of public money.

One blooper close to my heart is the work to make a public footpath out of the ancient Roman Via Egnatia at Kavala.  The amazingly complete original ancient surface has been uncovered from the edge of the modern town and heading out towards the modern hospital and then on for many miles.  Lighting has been provided at low level.

One small problem  – a massive and devastating EU funded road project cuts the ancient route for several hundred yards – no footpath or signage is provided – and the route across the road is lethal. The lighting infrastructure is provided on the route leading out of town, but is incomplete – and cut entirely by the mess of fast roads, and remains incomplete. The armoured cable has been cut and taken away in places, and the lighting either wrecked or never installed.  Something which should be of World Heritage status has been destroyed without archaeological investigation (as far as I can discover) or much of a thought.   It may be the same surface that St Paul would have been taken along on his journey to Rome.

On the positive side – looking at the Motorway, named after the Roman Egnatia, it does seem to be a real economic artery and to have created real opportunities in NE Greece.  It is relatively clear that the previous Greek Road system was narrow, winding and unfit for fast road journeys. 24 Billion Euros?

When crossing into Turkey, the vast West of the Country is clearly relatively disadvantaged, with similar environment and I guess social structure.  The Turks work longer hours, shops are open as you might expect in the day. It is clear that whatever it has been used for, and however it has got into people’s pockets, the money has had an effect on the Greek economy.

However, on consideration, the evidence in general is that EU funding is poorly aimed, relatively unstructured and badly planned.  Environment is not considered, and the whole process is open to corruption at every stage.  Mr. Papandreou Sr. organised this didn’t he?  Greece the bastion against communism etc,?  Greece needed more and more EU money or it might turn elsewhere?

The Greek populace is not responsible for these debacles though….or the waste of money, environmental damage and wrecked landscapes – or is it? Several people have confided that there is no condemnation of corruption, and all too willing participation. That “Greeks one fault is that they think only of themselves” (from an ex-German dwelling Greek).  These are harsh and general accusations, which I can neither deny nor confirm.

Certainly it is hard to understand Greek work patterns. In the North of Greece shops are not generally open in the afternoons.  One owner told me that a 25 to 30 hour working week is normal.  Counting, it would seem to be 20-25 hours. The very hot summer climate and perhaps unemployment rates amongst the young – reportedly up to 40 % in places, does mean that the towns are full late into the evening and night.  Few shops are open when a Britain might expect to shop – except the newer, out of town centres.  That competition is changing things a little, but in smaller towns there are more closed shops than in France, which is saying something! Farmers work in the heat and whatever conditions prevail, as they do everywhere, but if with poor fields and small scale productions in many areas.  There is much that could be said about the agriculture and its quality… oh and the industry, the trains.

I always point out the rise of China and the Asian tigers, and enquire how Greece will respond. I have yet to receive one.

In my efforts to understand I have sought opinions wherever it is possible.  The most critical opinions come from Greeks who have left for a period to find education or employment opportunities in the North of Europe – usually meaning Germany!  The most interesting have come from educated Greeks with an eye to the history and state of the nation.

Greece is in this estimation the product of its history. A part of the Byzantine and then Ottoman Empires – with their ultimate and remote authority strangling individual and collective creation for a millennium and more.  Only those who worked the system were successful?  After the 1820’s there was an effort to create a proud separate identity.  In terms of work – and effectiveness, there is that collective shrug of the shoulders.  This is the South.  People here want to enjoy their lives, and the good weather.  The long hours are for the North.

Is there not a point here?  Do our huge hours and hard work patterns help us in the North?  The promises of technology reducing work, increasing leisure and well-being have hardly materialised.  Are we not simply jealous of the more languid South, and it’s better life?   Maybe so!

However, Greeks doubtless expect to keep their money, and have the infrastructure paid for by someone else – the EU.  There is no shortage or nice housing or expensive cars, commensurate with the discussed financial debacle? Like others, the Greek Banks may be keen to take some of their over-lent investments, by accounts.

For the young of Greece though, the situation is very different.  A lack of work means unemployment, or migration like the 1960’s.  Even then, talking to so many Greeks, there is no concern about debt, little about the EU, and less about the young.  Most of the time we have come to the conclusions, crisis, what crisis?

In conversation it has become pretty clear that many Greeks regard the EU bailouts as further grant-aid.  It will never be paid back!  The debt is not significant and not a concern.

What’s to be done?

The Chinese model of joint venture intrigues. A cooperative enterprise of equal effort? Is this not a better model than the European grant aid model of the centre left?

I think it would be a wakeup call here if the EU created an investment holding Company to run the European-wide infrastructures  – such as the Egnatia.  The grant-aided infrastructure could be taken back into EU ownership, and management contracted in the CCT model?  Tolls – the gates were installed but not used.  Indeed, road pricing could be used to keep the old roads clear, and reduce the booming traffic levels. Infrastructure is not free  – and if it is seen as thus, it is not appreciated. The environmental cost of the new road networks is clear – and equally the sidelining of public transport.  This is surely the wrong policy at the wrong time.

Then, there is a need for a genuine economic plan, run by a competent government and civil service. Market liberalisation must happen. An efficient at-source tax system like PAYE, which ensures revenue and fair payment, and then the creation of a competent administration to run it!  Greeks shrug, and say it will never happen! Then what will?

I think there should be no more free money for Greece – or anyone – except where it can directly reduce poverty by the creation of ongoing, positive enterprise and community. That would mean a smaller amount of squandered money in this world of need.

While I think the South needs to consider its own contribution and even work hours, the North might look at the South and wonder if a country like the UK should be able to opt out of maximum work hour limits – the Working Time directive.

Maybe, despite the rise of the East, we need to consider some happy medium?  In the North, we need a life too!  The South needs to do more.

The World is changing very fast indeed, and everyone needs to consider what they do and how they do it.  Keep the best of the old, and bring in the best ideas and reforms for the future?

What shape should society take?  How do we pay for that?

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6 Responses to The Euro – A Greek Tragedy?

  1. Dan-Eric says:

    Very interesting observations! Hope your journey is going well. I’ve stopped in Ankara to take of some stuff for a few days.

    //Dan-Eric, the Swede cycling to Kenya.
    http://www.twowheelssouth.emulsionen.org

  2. Robert says:

    Hi Ian. Great to see you’re making such good progress. From what you’re saying about Greece it sounds like the whole place resembles a gigantic sink estate full of duckers and divers relying on welfare – in the form of EU handouts. I think the Euroland countries are stuffed whatever they do. Theoretically, scrapping the Euro and returning to their old currencies might look to be beneficial in the long term, but in practice would cause economic chaos and financial collapse. Alternatively, though creating a centralised European Superstate would yield the benefits of central planning, collective economic policy, micro and macro, including uniform taxation and government spending policies, this would fail big time in the short to medium term because of the massive disparities between the regional economies, e.g. Greece and Germany. They’re trying to pretend it’s all not happening by continually bailing Greece out, but that can’t go on for ever. The only other way out is to inflate the debts away by printing money, which will wipe out people’s savings, discourage saving altogether and create a massive pensions crisis instead, as well as discouraging investment and thus leading to poor economic growth.

    Sooner or later the system will implode taking all of Euroland and the UK, which is standing too close to the fire not to get burnt, with it. To use another metaphor, we’re all in a boat that is so close to the waterfall that whichever way we steer it it’s going over the top. Enjoy Istanbul.

    Robert

    • Hi Robert

      Yes, I am tending to the view that the current system will not survive, and does not fit who we are now and who we can be – the will to reform is not there, and possibly neither is the talent in places. In Greece and Southern Italy, no one expects to reform except that minority who can see a better time. Isn’t it always so?

      In Turkey – the greater industry is notable, although development very uneven. Of course there are many other problems here, and the history equally unfortunate.

      Now we need to begin to learn from all the experience, ask what we want from Europe in the future, (and indeed a future society) and begin to think about better systems where people have the space to grow and be. It needs to be a little more about responsibilities, rather than rights and then punishment?)

      Still very warm in the days, but the night last night was quite cool…

      Ian

  3. BBC Today

    “On Monday, adding to the tensions, the general secretary of German Chancellor Angela Merkel’s junior coalition partner suggested that Greece could leave the eurozone.

    “In the final analysis, one also cannot rule out that Greece either must, or would want to, leave the eurozone,” Christian Lindner, the general secretary of the Free Democrats (FDP), said in a television interview.”

    Crunch – out go the Greeks……

  4. Hilarious to see Mr Baroso, from debt ridden, over-spending, little working Spain – propose that all of the Euro Nations should guarantee the debt of the Southern Countries! A blank cheque for the 20 hour a week nations to spent what they want, with the Germans etc picking up the bill!

    Hilarious indeed….

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