Monday, 31 October 2011

Papandreou to go for a referendum

I’m currently reading Donald Kagan’s book, Thucydides: the Reinvention of History, which gives a lucid and sometimes brilliant account of the key issues, personalities and events of the Peloponnesian War. In particular, Kagan provides an excellent portrait of the personality and career of Pericles and his relationship to the Athenian democracy, which Kagan shows us working at its best and worst. At its worst, the Athenian democracy – like all democracies – was nothing more than mob rule, with the fate of the city (and its empire) in the hands of an ignorant and fickle mass, swayed by fears and prejudice and prone to bribery and flattery.

‘Trusting the judgement of the people’ or making critical decisions according to its ‘will’ is, therefore,  a very dangerous exercise and I’ve never been much in favour of it, regarding it as an easy way out for leaders that have lost the determination or know-how to govern; but the breaking news is that this is the path that Greece's PM Giorgos Papandreou has chosen to go down, having told Pasok MPs that the government is to hold a referendum on the debt deal reached last week in Brussels, in which Greece accepted a 50% haircut of its sovereign debt in return for pushing through economic and public sector reforms. I guess now we will see whether Greeks want to take the medicine prescribed to them by the EU, or whether, as Syriza, KKE and all the rest keep telling us, they are sick to death of austerity and tax rises and want to plot another path to exit the crisis.

*And here’s Nikos Dimitriou in The Guardian writing about what default and exit from the euro – which, presumably, a ‘no’ in the referendum on the debt agreement would entail – would mean for Greece. Essentially, it would mean chaos and violence to start with and then, since Greece is a fractious place with an ineffective state and a tendency to political thuggery, would mean even more chaos and violence to follow.

Sunday, 30 October 2011

The myth of Greeks as perennial revolutionaries

Unfortunately, I don’t live in Greece, which is the most compelling, heroic and beautiful country in the world, so it’s difficult for me to gauge how people are genuinely reacting to all the turmoil unfolding. All I have to go on is information gleaned from the web – newspapers, blogs, MEGA TV news (Yiannis Pretenteris makes me laugh, sometimes) – my instincts and some knowledge gained living, working and travelling in Greece, even though I haven’t been to the country for seven years.

Now, if I were to believe the Greek (and foreign) media, Greeks are in a state of such rage and despair that the country is on the brink of a popular uprising. However, I’m sceptical of such a scenario, since, however dysfunctional and iniquitous Greece has become, it is not Tunisia or Egypt; I’m aware that there is a vociferous Marxist minority in Greece that revels in notions of popular uprisings, sees them where they don’t exist, indeed has a vested interest in creating disorder and exaggerating disturbance; and, from what I know of Greeks and Greek society, I’m certain that the vast majority of Greeks aren’t interested in overthrowing global capitalism or abandoning the European Union and don't have any time for the minority that do agitate for these things.

Indeed, my feeling that the media and the Greek left – sharing an interest in the projection of violence and drama – are presenting a distorted picture of Greece and Greek public opinion, is borne out by the following poll, from today’s Vima on Sunday. It shows  that 35.7% of Greeks are in outright favour of last week’s haircut deal, while 58.9% say they are against it – and I wonder how many of those who say they are against it are just expressing opposition to austerity and tax rises rather than an opinion in favour of default and active ‘resistance’. Also, according to the poll – 48.8% of respondents regard the haircut deal as a blow to national sovereignty – which, undoubtedly, it is – though 29.8% of Greeks see it  as an unpleasant but necessary imposition in order for Greece to become competitive. Meanwhile, 72.5% of Greeks said they were in favour of staying with the euro, and only 19.5% want to return to the drachma. And asked to describe how they feel about the crisis affecting the country, 21% of Greeks said they felt pessimism and fear; 20.8% said they felt concern; 19.7% anger; and 16.9% hope.

Despondent, confused, maybe; a seething mass of revolutionaries prepared to overthrow the Greek state, strike a blow against capitalism and abandon the EU, no. Indeed, it seems that a large section of Greek society feels that the thrust of the measures being imposed on Greece, if not the measures themselves, are a necessary evil and that change in the country is long overdue.

Saturday, 29 October 2011

Cyprus celebrates Ochi Day, but without Christofias… thankfully

As the video from last night’s RIK news shows, things were a little calmer at the Ochi Day parades in Cyprus compared to the disruptions and cancellations that marred events in the rest of Greece.

Obviously, Cyprus isn’t experiencing Greece’s political, economic and social meltdown and doesn’t have the Syriza or trade union cancer to contend with; though, there is an unusual and widespread degree of contempt and disgust felt towards President Demetris Christofias, following his cowardly refusal to accept responsibility for the Mari disaster and resign.

Christofias has in the last few weeks emerged from his bunker to attend well-orchestrated events organised by his party, communist AKEL, but he was off the island yesterday – on his way to New York for some nonsense meeting at the UN with the Turkish Cypriot leadership – so we don’t know what kind of reception he would have got from people if he had attended the 28 October celebrations.

And if you want an idea of what a ridiculous and dangerous government Christofias is now leading, then mark the words in the video of Giorgos Demosthenous, Cyprus’ so-called minister of education, who talks about creating schools that promote ‘democracy’ and ‘social justice’.

Since when have schools been tasked to teach the virtues of ‘democracy’ and ‘social justice’? Neither of these concepts are givens in society, both are political constructs and will have different meanings to different people. Indeed, one can only imagine what they mean to a communist apparatchik like Demosthenous. Fortunately, Cyprus only has 16 more months to go before it can replace the despicable Christofias and his wretched government. Cyprus couldn’t endure any longer.

Friday, 28 October 2011

Hitler, don’t dare boast that you conquered Crete

Χίτλερ, να μην το καυχηθείς πως πάτησες την Κρήτη,
ξαρμάτωτη την ηύρηκες κ' έλειπαν τα παιδιά τη
στα ξένα πολεμούσανε, πάνω στην Αλβανία,
μα πάλι πολεμήσανε.

Hitler, don’t dare boast that you conquered Crete
you found her unarmed and its lads were away
fighting in foreign lands, high up in Albania
but they still fought.

The artists in the above video are Vasilis Skoulas, Manos Mountakis and Maria Soultatou. Below is an older version of the song, sung by Giorgis Koutsourelis.

Cyprus unfazed as Greece sinks further into the mire

Although Cypriot banks continue to be downgraded by ratings agencies due to their exposure to Greek debt and despite these banks effectively being denied access to international capital markets, Cypriot economists – at least the two I heard on RIK earlier today (Marios Mavrides and Alexandros Michaelides), both of whom seemed quite normal and sensible – appear calm about the situation, asserting that the Cyprus economy and its banking sector is just about healthy enough to survive the Greek haircut, and excluding the possibility of Cyprus going the same way as Iceland and Ireland.

However, I was struck by one thing Marios Mavrides said, which was that Cypriot banks, awash with money, decided at the beginning of 2010 – i.e. when Greece’s debt problems were the talk of the world – to invest their surpluses in Greek bonds. In 2010? How stupid was that? Surely, that wasn’t a business decision; surely, that was the Greek government telling the Cypriot government to tell the Cypriot banks to join in the national suicide, which, being patriotic Greeks, they duly did.

And as if we didn’t know already that Greece has still a long way to go before it reaches the bottom, today we saw the Ochi Day parade cancelled in Thessaloniki and disrupted in various other parts of the country by anti-government demonstrators. Apparently, in Thessaloniki, when retired army officers tried to march, they were spat at by anarchists.

According to the Washington Post: ‘The protesters included leftists, anarchists, neo-Nazis, people fed up with the government’s austerity policies, and fans of the local soccer club Iraklis, which was pushed out of the top division because of financial irregularities.’

Thursday, 27 October 2011

Yanis Varoufakis on Greece, the eurozone, the world

Having always been poor and devoid of sensible ideas as to how become rich, I’ve never taken much interest in economics, believing, anyhow, that politics and ideology were far more pertinent ways to explain human behaviour and society. However, since we live in times of economic crisis, this lack of interest and understanding has become a drawback and, given that I am a typical Greek, who strives for knowledge in order that I might have an opinion, I’ve been compelled to take a bit of a crash course in the subject.

In this regard, I’ve found the thoughts on global economics and the economic crisis by Yanis Varoufakis – professor of economics at Athens University – edifying and entertaining. Varoufakis is, from what I can tell – I haven’t read his books – somewhat of a Marxist (but not a dogmatic one) and therefore you have to take what he says bearing in mind his ideological inclinations, as you must bear in mind that he comes precisely from that generation and class of left-wing Greeks that has driven Greece towards the economic, political and cultural disaster it is currently enduring.

Still, Varoufakis has become somewhat of a media darling and you can’t avoid his pontifications – on Sky, the BBC, Russia Today and dozens of other global outlets. However, I enjoyed most listening to the  interview below, which Varoufakis provided to Hellenic Radio in Austin, Texas, because it’s quite long and gives the professor time to go into some detail regarding his theory on the global economic crisis and how this has affected the eurozone and Greece.

Tuesday, 25 October 2011

Prospect of offshore gas lifts Cypriot spirits

Below is an article by Tony Barber, reporting from Limassol, which appeared in today’s Financial Times.

After its most traumatic year since the 1974 Turkish military invasion, Cyprus is bubbling with excitement at the prospect of offshore gas riches so abundant that they will guarantee prosperity for generations to come.

Not one cubic metre of recoverable gas has yet been found in the Aphrodite field off Cyprus’s southern coast where Noble Energy, a Texan firm, began exploratory drilling last month.

But for a small country which lost more than half its electricity supply in July when an explosion destroyed its largest power station, and which turned to Russia this month for a €2.5bn emergency loan to protect its public finances, visions of stupendous energy wealth are irresistibly attractive.

As a result, the government of Cyprus is already examining the multibillion-dollar sovereign wealth funds of Norway and Qatar for ideas on how to operate an investment fund of its own, if and when the cash comes rolling in. “There’s a climate of euphoria in Cyprus,” confesses Praxoula Antoniadou, the island state’s industry minister.

The eastern Mediterranean caught the energy world’s attention last year when Noble announced that the Leviathan field, adjacent to Aphrodite and lying in Israeli waters, contained reserves so large that they held the potential to turn Israel into a gas-exporting nation.

According to the US Geological Survey, the Levant Basin, adjoining Cyprus, Gaza, Israel, Lebanon and Syria, may contain as much as 122,000bn cubic feet of recoverable gas, equivalent to 20bn barrels of oil.

The first indications of hydrocarbon reserves in what Cyprus terms its “exclusive economic zone” are expected in early to mid-December, Ms Antoniadou told a conference this month in the coastal resort of Limassol.

She promised that any wealth would be shared fairly between the Greek Cypriot population of the island’s south and the Turkish Cypriots of the north, whose breakaway state is recognised by no country other than Turkey.

Turkey itself takes the view that Cyprus should not be drilling for gas until negotiators settle the long-term future of the island’s two communities.

The persistent tensions that surround the island’s division are not, however, the only question on the minds of Cyprus’s political leaders as they prepare for a possible gas bonanza.

For a country with no experience of managing extensive natural resources, it is equally important to work out how to exploit the wealth – if it is there – in a sustainable fashion.

At the Limassol conference, Hans Jochum Horn, a Norwegian businessman with deep knowledge of the oil and gas sectors of Norway and Russia, had some blunt advice for Cyprus’s leaders.

“You have no time. You have to get the key issues on the table very soon and take some quick decisions. If you set the right framework at the beginning, you will not squander the riches,” Mr Horn said.

Cyprus may choose to create a national energy champion, as Norway did when it established Statoil in 1972, he observed. “If so, the company should be run like a private company. It should have independent directors and should be quoted on a major stock exchange.”

Mr Horn, who is deputy chief executive officer of the Renaissance Group, an investment company that specialises in emerging markets, said that if Cyprus set up a wealth fund, “everything you earn offshore should go into the fund and only a little bit should trickle out [for current expenditure]”.

Norway made a mistake in 2002 by deciding to take out 4 per cent of its fund’s annual revenues for current spending, Mr Horn said. A limit of 2 per cent a year should have been set.

Amit Mor, an Israeli specialist who runs Eco Energy, a consulting and investment firm, told the conference that “a transparent bidding and licence process” was paramount for the long-term success of a future Cypriot energy sector.

He added: “The resources belong to future generations. It’s very important for Cyprus to internalise this lesson.”

Monday, 24 October 2011

The price of Greek failure is EU rule

It’s maybe hard for Greeks who don’t live in Europe to appreciate, but, among those countries in the eurozone – and even among those in the EU and waiting to adopt the euro – there exists an almost irreversible trend to forge closer economic union, and that rather than the current crisis deflecting them from this goal, all it has served to do is convince them to accelerate the process.

This is why all this talk about Greece abandoning the EU and the euro and taking up the drachma again, is just pie in the sky. It’s not going to happen. What is going to happen is, in fact, the opposite, which is deeper economic integration and more supervision and oversight of national economies. Of course, having Brussels or Frankfurt telling Athens (and Rome, Madrid and so on) how to run its economy represents a massive surrender of national sovereignty; but, the truth is, that this is the price Greece is going to have to pay for its abject failure to reform its economy and society by itself.

Wednesday, 19 October 2011

Explaining Jack Straw’s Cyprus outbursts

Former Labour foreign secretary Jack Straw has made himself a Turkish favourite by calling, last November and again last week, for the partition of Cyprus. It used to be – going back to the anti-colonial struggle in the 1950s – that Cyprus could rely on the UK Labour Party for strong support, and this was the case right up until the period involving Neil Kinnock and Robin Cook. It’s only when we get to Tony Blair and Jack Straw that senior Labour politicians begin to express a fanatically pro-Turkish stance.

We recall Blair’s wife, Cherie Booth, earned millions from the Turkish government when she (unsuccessfully) defended their position in the Meletios Apostolides’ case; while I came across these (unsurprising) entries in Jack Straw’s Register of Members' Financial Interests that might go some way to explaining his Cyprus outpourings:

‘15 April 2011, received fee of £2,000 for participating in a Government of Turkey conference on foreign policy in Istanbul on 24 March 2011. I was accompanied by my wife. Our travel to Ankara and Istanbul and accommodation and meals from 23-28 March 2011 were paid by the Government of Turkey; total cost £2,910. Time taken, including travel and preparation, three days. (Registered 3 May 2011).’

And a few years earlier:

‘22-26 June 2006, to Istanbul with my wife, as guests of the Turkish Government who provided us with hotel accommodation. (We paid for our own flights; see Category 5 above). (Registered 5 September 2006).’

Sunday, 16 October 2011

Turks step up naval patrols around Cyprus… but so do Russia and France

Not satisfied with dispatching the decrepit seismic research vessel Piri Reis to waters around Cyprus in a risible assertion of Turkey’s hegemonic ambitions in the Eastern Mediterranean and a show of its desire to disrupt Cyprus’s exploration of its Exclusive Economic Zone, the Ottomans have now sent two frigates, two corvettes and a submarine to patrol the area.

Imminently joining them will be a Russian battle group led by the aircraft carrier Admiral Kuznetsov (pictured) and, indeed, if reports in today’s Cypriot press are to be believed, France will soon be making its naval presence felt in the Eastern Mediterranean.

France’s increased interest is thought to coincide with the news that the Cypriot government will, early next year, put up for auction the rights to explore the other 12 blocks in the 13 blocks that comprise the southern part of Cyprus’ EEZ. Currently, the US firm Noble Energy is conducting exploratory natural gas drilling in block 12, the Aphrodite field. Cypriot media has been reporting intense interest in the auction process from oil and gas giants from Holland, Norway, the UK, the US, China, Russia and France. Indeed, Phileleftheros reported that one scenario is that Russian companies – such as Gazprom and Lukoil – will be awarded the western blocks while French interests – Total S.A. – will be given permission to explore the eastern blocks, which border fields in the Lebanese EEZ, where Total, given France’s influence in Lebanon, will expect to be involved. In fact, Politis reports, the Cyprus government will use entirely geopolitical considerations when it decides the companies it will allocate 
EEZ exploitation licences to, in a strategy designed to isolate Turkey and neutralise its threats.

Wednesday, 12 October 2011

Turkey needs a Cyprus crisis, part two

Michalis Economides, professor of chemical engineering at Houston University, has written an informed piece on the practicalities – rather than the geopolitics – of the natural gas issue as it is developing regarding Cyprus and the Eastern Mediterranean. It was originally published here, and I’ve posted it in full below.

A point that emerges from Economides’ article relates to something I mentioned in the piece I posted a couple of days on the limited options available to Turkey in trying to stop Cyprus exploring for natural gas in its Exclusive Economic Zone.

In my post, I said Turkey’s claim that it would set up a rival drilling operation around Cyprus was laughable, partly because of the illegality and partly because Turkey lacks the resources and expertise.

Economides makes my point in this way:

‘There is almost a sadistic irony that natural gas of the size being contemplated can be so close and yet so far if the right decisions and the right knowledge are not evident. The size of the resource would require tens of billions of euros. The cost will involve the field development with very expensive wells and facilities and, especially, if LNG will be deployed. In all cases it will take huge companies to do it. Nobody should have the fantasy that the state should or could do it.’

Also in my post, I said Turkey was pushing Egypt (and Lebanon) to cancel its EEZ delineation deal with Cyprus; but I note today that Egypt’s foreign minister Mohamed Kamel Amr told his visiting Greek counterpart, Stavros Lambrinides, that Egypt would not go back on the agreement it has signed with Cyprus.

Both the above points give added weight to my original assessment, which was that Turkey’s most likely option regarding Cyprus’ EEZ is to escalate tension, in the hope that the US or EU will intervene diplomatically to stop Cyprus, or that Cyprus/Greece will be provoked into a military confrontation, which Turkey sees itself as winning.

Cyprus oil and gas, by Micahlis Economides
The January 2011 announced discovery of some of the largest offshore natural gas reservoirs in the world, 90 kilometers west of Haifa and not much further than that from Cyprus has created some understandable excitement among Cypriots. The potential for large hydrocarbon accumulations in the same Messinian geologic formation, underlain Cypriot economic zone waters, should now be considered as high possibility. Seismic evidence makes the Cypriot block, named Aphrodite, currently being drilled by Houston’s Noble Energy, to be at least as good and perhaps as much as 50% better than Israel’s Leviathan field. The latter has been confirmed as holding at least 17 Tcf of natural gas.

It is a dream of so many countries to find oil and gas deposits: easy riches the notion goes, a chance to even the field versus big and powerful nations. However, in spite of the occasional jubilation in some parts of the Cypriot and Greek press and thinly disguised wishful thinking by government officials and politicians a dose of reality is in order.

First, this is undeniably good news. The discovery in Israeli-controlled waters is a clear and positive sign. But what are often missed in the debate are two other important elements that turn the good news into not so good and even bad if countries are unprepared or inexperienced.

There is a big disparity between oil and gas in place in a geological structure and having those resources labeled as recoverable reserves. The latter implies technical and economic attractiveness. Hydrocarbons buried under 2,000 meters of water and then another 5,000 meter beneath the bottom of the sea are far more attractive when the price of oil approaches $150 per barrel as it was in July 2008.

Natural gas is even more cumbersome because it cannot be handled readily as oil can and, therefore, its exploitation is even more tenuous. To understand this issue one needs to realize that in the deep waters of the Gulf of Mexico and of more recently emerging offshore Brazil, while oil production has been prolific, virtually no natural gas deposits have been targeted. Gas associated with oil has been produced but in most cases it is used for re-injection to augment oil production and not for sales.

The second issue and one that is likely to prove challenging is that a pipeline from the area of discovery to e.g., Europe is highly unlikely because of the water depth and the underwater terrain. This means that the transportation of gas will have to employ conversion into liquid natural gas (LNG) and, in early time, perhaps compressed natural gas (CNG) transportation.

There is almost a sadistic irony that natural gas of the size being contemplated can be so close and yet so far if the right decisions and the right knowledge are not evident. The size of the resource would require tens of billions of euros. The cost will involve the field development with very expensive wells and facilities and, especially, if LNG will be deployed. In all cases it will take huge companies to do it. Nobody should have the fantasy that the state should or could do it.

There are also plenty of examples from afar to the neighborhood of the difficulty to match local resources with local needs. Trinidad in the Caribbean is a major source of LNG for the US but huge parts of the island have no access to gas. Egypt, a major new player in LNG is faced with increasing local discontent. Cairo and its almost 30 million inhabitants have no gas. If Cyprus wants to use natural gas for its electricity a very viable option would be to buy relatively cheap CNG from Israel.

Greece now gearing up for its own exploration program should take an intense interest in the Cypriot experience and learn from it. For Cyprus the tantalizing and difficult dilemma will emerge after all that gas is proven. The geopolitical re-alignment in Eastern Mediterranean will be a yet another issue and the subject of a forthcoming editorial.

Greece on way to Euro 2012

Just in case anyone missed it or is interested, above are the highlights and goals from last night’s match in Tiblisi between Georgia and Greece, the last in Greece’s qualifying campaign for Euro 2012.

Greece, who only needed a draw to win their qualifying group ahead of Croatia, went down early, but came back in the last 11 minutes with goals from Georgios Photakis and Angelos Charisteas to win 2-1 and book their ticket to next year’s finals in Poland and Ukraine.

It’s the third time in a row Greece has qualified for the European Championships, an impressive achievement. Nevertheless, I’m not that convinced by our team, they’re still stolid, but it’s hard to argue with results, the fact that since Fernando Santos took over from Otto Rehhagel, the boys have gone on an unbeaten 15-match streak.

Tuesday, 11 October 2011

Turkey needs a Cyprus crisis

Cypriot media has been reporting today that  initial investigations being carried out by Noble Energy in the Aphrodite field – Block 12 (of 13) in Cyprus’ Exclusive Economic Zone – reveal much larger deposits of natural gas than expected.

Even though this is still media speculation and official results of the drilling won’t be released until December, what is clear is that these finds, along with those in Israel’s EEZ, pose a threat to Turkey’s stated hegemonic ambitions in the Eastern Mediterranean.

Turkey is limited in what it can do to prevent Israel and Cyprus spoiling its neo-Ottoman dreams. International law is not on Turkey’s side, Israel is a powerful country with even more powerful allies, and Turkey’s overtures to Egypt and Lebanon to overturn EEZ agreements with Cyprus have, so far, proved unsuccessful and, particularly in the case of Egypt, are unlikely to yield results in the future.

Regarding Cyprus, Turkey has said it will not stop by force the natural gas drilling taking place; rather it will set up, in fields it has identified as belonging to its puppet state in occupied northern Cyprus, the so-called ‘Turkish Republic of Northern Cyprus’, rival drilling operations. To this end, Turkey has sent out the research vessel Piri Reis for hydrocarbon exploration in and around Cyprus’ EEZ and has also intensified its naval presence around Cyprus and in the Eastern Mediterranean generally.

Two points:
Turkey’s attempt to set up a rival drilling operation on behalf of the ‘TRNC’ is somewhat laughable. Turkey has neither the expertise or resources to explore for and exploit Cypriot natural gas. Turkey would need foreign firms to help it carry out any drilling; but it is unlikely that any significant player would want to be part of the illegal plundering of a sovereign government’s natural resources. Similar issues of cost and legality would dog Turkey throughout any export process.

The assumption has to be, therefore, that Turkey is not serious about ‘rival drilling’. Rather, its plan is to create an atmosphere of crisis in the Eastern Mediterranean, which would alarm the EU and US, scare off investors and put a stop to the drilling being conducted by the Cyprus government.

The problem for Turkey is that its attempts so far to engender a crisis have not had the desired effect, with the US government and the EU refusing to urge Nicosia to halt its activities. But having started down this road, Turkey will not turn back and is left with only one option, which is to intensify its efforts to cultivate a Cyprus crisis and escalate the potential for military confrontation.

Thursday, 6 October 2011

Greece’s problems analysed and solved in five minutes, by Aristos Doxiadis

If you want to figure out and find solutions for Greece’s problems, it’s a distraction to go on about capitalism, the banks, the troika, neo-liberalism and so on; or to attribute the country’s failings to some genetic predisposition Greeks have to corruption, laziness and conflict. Establishing and overcoming Greece’s woes has always been much simpler and well within the capabilities of contemporary Greeks. Thus, I believe the most lucid commentator I’ve so far encountered on Greece’s crisis has been Aristos Doxiadis, interviewed above. The interview is in Greek and I’ve translated extracts in English below. A long piece by Doxiadis on how Greece got itself into such a mess and how it can extricate itself from its predicament is here, in English.
‘One million people need to change employment. They need to leave from those inward-looking professions and go into industry, agriculture, tourism, technology and shipping. When these jobs are created, with investments and so on, then the economy will move forward.

‘We had a “bubble” different to those they had elsewhere. In Iceland, it was a bank bubble; it Ireland it was a property bubble; but in Greece we had a bubble of parasitical professions. That’s to say, people in the public sector being appointed even though there was no work for them to do; but also professions, such as doctors, chemists, lawyers, whose numbers are excessive. For example, we have 70,000 doctors, even though we could get by with 30,000 just as well.

‘Let’s not delude ourselves that we will be able to crack down on tax evasion quickly or easily, because the problem isn’t tax inspectors who don't have the will or means to do their job. The real problem is that we have large numbers of self-employed – 35% of the population in Greece, 4% in Germany. The self-employed throughout the world – in Germany and in the US – will try to avoid paying taxes. It’s very difficult to catch them.

‘[Returning to] the drachma is dangerous for us. Not just because of the problem of how we get from the euro to the drachma, but also because of what might happen when we have the possibility of printing money. We don’t have the political system that will handle such a scenario responsibly. I fear that once Greece regains its own currency, the money will be syphoned off to parasitic activities and the productive sector will once again be pushed to the margins.

‘[For Greece to reform] the current political parties are inadequate. There is a large section of society that is not represented today, that didn't feed off the state, that is involved in exporting, that insures its workers, that is healthy. No political party currently supports this section of society, which must find a way to express its views.

‘The people to reform Greece can’t be the ones from the current political system, “the pensioners”. They have to be young and daring, take responsibility for the unpopular but necessary measures and the parties must give them time. Change won’t come about in three months, but two, three years. And these new faces should be supplemented by people already in the political system, the two, three ministers from PASOK capable of carrying out reforms and similar personalities from New Democracy and the Left.

Tuesday, 4 October 2011

What’s been happening in Cyprus and Greece?

A quick update on things:

1. I said several times that the reason Greece will fail would not be because the economic remedies demanded of it by the troika are too stringent; but because the PASOK government lacks the ability and willpower to initiate measures and reforms to ameliorate the excesses of the troika-induced contraction and prepare the ground for Greece to emerge as a modern, dynamic European state and society. Tackling the closed professions, reforming the tax system and the public sector should not have been beyond the capacities of a creative and determined government but, through a combination of fear of the PASOK deep state and a peculiar form of incompetence – the role of politicians in Greece has not been to reform and progress society but to maintain the status quo through patronage and clientelism – Greece is now facing years of hardship and political upheaval, the outcome of which is not predictable.

2. The situation in Cyprus is just as discouraging. The government-appointed enquiry into the Mari disaster – that resulted in the deaths of 13 servicemen and firefighters and undermined an already faltering Cypriot economy – reported yesterday and said, in the most unequivocal fashion, that communist president Dimitris Christofias, through his actions and inactions, bore chief responsibility for the tragedy. The report, without calling for Christofias’ resignation, was so damning that, in any normal democratic society, Christofias would have quit on the spot; instead of which, Christofias – a virtual recluse since the July blast – retorted with a display of extraordinary vanity and impudence, insisting he was entirely blameless for the disaster, harshly condemning the author of the report – the respected lawyer Polys Polyviou – and declaring that under no circumstances would he step down – in these fraught times, the country could not do without his guiding hand. Christofias is a shameless coward, ignoramus and incompetent and every day he stays in power is a terrible indictment of Cypriot politics and society.

3. Cyprus’ natural gas deposits – exploration drilling for which has roused the Turks, who have resorted to their usual bullying and bluster – will, according to a report I saw on tonight’s RIK news – quoting Michalis Economides, professor of chemical engineering at the University of Houston – make Cyprus the richest country in Europe. Economides estimates that the finds in the Aphrodite field – one of 13 fields in Cyprus’ EEZ – and which is currently being investigated by US firm, Noble Energy, contains 50 times as much gas as the neighbouring Israeli Leviathan field. Regarding the Israeli fields, it’s worth pointing out that Israel will want to export its gas through Cyprus and Greece to the rest of Europe and this will inevitably draw the two Greek states into a closer relationship with the Jewish one.