Posts Tagged 'imf'

No one-size-fits-all policy for the crisis

By Harry van Versendaal

When Latvia was hit by a financial crisis in 2008, the government had few qualms about embracing cost-cutting measures and structural reforms, while keeping its national currency pegged to the euro.

Now in the waiting room for eurozone membership, due in January 2014, this Baltic nation’s decision makers appear undeterred by a rather skeptical public and the woes dogging other eurozone countries, most prominently Greece.

In an interview with Kathimerini English Edition during his visit to Athens this week, Latvian Foreign Minister Edgars Rinkevics said he sees his country’s euro entry as a further step into the West by the former Soviet republic after it joined the European Union in 2004.

Notwithstanding Latvia’s portrayal by several Western policymakers as a poster child for austerity that could serve as a roadmap for other troubled economies, Rinkevics is reluctant to draw parallels with Greece, stressing instead the economic and cultural particularities of each country.

The eurozone is in crisis but Latvia still plans to join in January 2014. Haven’t you been deterred by the difficulties faced by countries using the single currency?

I really do not believe that the problems are caused by the single currency. We have seen – and also our own experience between 2008 and 2011 has shown – that the currency has had no direct effect on the crisis. It’s about the economic and financial policies of the country in question. Keeping this in mind, we see eurozone membership as an opportunity to boost trade relations with other countries in the euro area. Membership however is also a geopolitical choice. By signing the accession treaties here in Greece 10 years ago, we joined a political and economic union. But we still have to integrate more in terms of the financial system, transportation and energy. In a way, it completes the move away from the former Soviet Union to a more European union.

Is the close presence of Russia also a geopolitical incentive?

It’s more about the economic and financial security of the country. It’s more about deeper integration in the EU. Given that, I would not say that joining the eurozone is specifically against somebody. It’s about boosting our own standing when it comes to politics and the economy.

Polls show that only one in three Latvians wants to join the euro. Why is the figure so low and is this enough support to give the government’s decision legitimacy?

First, our public reads what is happening in the eurozone. Two or three years ago, newspapers, Internet media, TV and radio were full of doomsday scenarios that the euro is going to crash and that the eurozone is finishing, which is not what we see now. We actually see that the eurozone is well and alive. Secondly, it’s also an emotional issue. Our currency, the lat, was reintroduced after Latvia gained independence back in 1993, and for 20 years the currency has been very stable. We had a very strong monetary policy by the Bank of Latvia; we did not devalue even when probably it could have been a possible course of action back in 2008 and 2009. So there is a very strong emotional attachment to the currency and even if people understand that there can be gains, they still find it hard to say good bye.

How to tackle this [public skepticism]? I think the only way is for the people to see that nothing bad happens. Money is money, what you call it does not really say much. It is going to take about six months to a year for people to see the effects and to understand that actually nothing bad happens.

How will the Latvian people react if the country has to contribute to eurozone crisis funding after it joins?

That’s something that certainly people really don’t want to do. But this is about solidarity and we also remind ourselves that it was the IMF and the EU that actually saved our country back in 2009 by providing loans. Solidarity works both ways.

Are you worried about growing Euroskepticism in Europe?

Yes, although as far as Latvia is concerned, the recent Eurobarometer poll showed an interesting picture. Ten years after joining the EU, 57 percent of the general population believe that membership has benefited more than caused problems, against an average EU rate of 54 percent.

Decision making

Within a European Union where the power to make decisions appears to be increasingly concentrated in the hands of a small group of member states, what role is there for smaller countries like Greece and Latvia to play?

I think that with things being delegated to Brussels – particularly economic and financial issues such as banking union and more regulation of financial institutions – we still have an opportunity to use instruments like the Council, where we can work with like-minded countries to change or influence decisions that are not really in our interest. We had a very good experience when discussing the so-called Friends of Cohesion group, where Athens and Riga worked together to make sure that countries that receive European funds – including Greece and Latvia – prevent drastic cuts to the European budget.

There are some areas, like EU foreign policy, where I would like to see a more unified approach. We have a lot of success stories, like the EU standing on Syria, the EU standing on Iran. But then you have the Middle East peace process, where you have three different groups. Similarly, the EU policy on Russia has not always been unified.

Do you see any areas where it would be possible for Greece and Latvia to help each other?

Certainly. As we join the eurozone we are interested in working more closely with Greece on reform and development of eurozone policies, banking and financial regulations. Secondly, I think we have common interests and will work together because our presidency is in the first half of 2015, and then there is the Eastern Partnership initiative. I also expect that your presidency is going to address EU institutional issues – there can be a discussion about some changes in the institutional framework and this is something that small countries are particularly sensitive about.

As far as NATO is concerned, we are both members of this alliance and we have already worked quite closely also on issues that are related to, for instance, Article 5 operations and exercises [Article 5 requires NATO member states to come to the aid of any member state that comes under armed attack]. Greece is currently participating in a NATO exercise in the Baltic area. Also, we understand your concerns about immigration policy, so there are plenty of issues of common interest. And, of course, economic cooperation, which is probably not reaching the highest level and there is room to expand, and tourism.

Crisis response

What would you say were the main reasons for Latvia overcoming its crisis? What kind of austerity measures were involved?

It seems to me that each country has to tackle the crisis in its own way, taking into account its own history, traditions, structure of society, economy and so on. But we basically did three things. One was to introduce very severe cuts to public spending. These had been implemented by the end of 2008, and by the end of the crisis we had cut our public sector on average by 25-30 percent. All ministries suffered very severe cuts, the Ministry of Foreign Affairs lost about 30 percent of its employees. The remaining staff had their salaries slashed by about an average 30 percent. Operational budgets were also cut. Second, we did our best to keep programs that were co-financed by the EU. That was almost the only stimulus package for our economic growth. And third, while we were cutting our public expenditure, some taxes were raised, such as personal income tax and VAT.

Now, in the third year of economic growth, we are actually going back to reducing some taxes. People need to feel the crisis is over. Yes, on a macroeconomic level everyone considers we are out of the woods, but on a personal level, it is only now that people are probably starting to feel a modest increase in their salaries.

You say every country has to deal with the crisis in its own way. Does Latvia then not vindicate the tough approach taken in bailing out countries like Greece and Portugal?

Latvia, as well as Estonia and Lithuania are sometimes mentioned as good examples of how you do things. At the same time, we live in the north and that makes a difference. The root causes of our economic and financial crisis were different from those here in the south. We had an enormous real estate problem. After joining the EU, salaries skyrocketed in many areas. And, of course, they then went down like a stone. Public perception of what happened and who was responsible was also different. The new government that came in in 2009 was able to convince people that things had gone wrong because of bad polices introduced by a couple of governments before, and people actually acknowledged this. Our prime minister is in his fifth year in power, which is kind of a record for our country, where we tend to change governments and prime ministers quite often – even in good times. There was a general understanding among the public regarding the austerity policy. It was bad, but it was the right thing to do.

Did the Protestant culture in your country play a part in helping your country adjust? Did the fact that your country had been occupied for so many years also have an impact on how people accepted the measures?

It certainly worked, I think you are right. It was part of the solution. But, let’s face it, another part – which is now also an issue in Greece as far as I know – was that a lot of people left for jobs and opportunities in the UK, Ireland and other countries.

Government critics have said that high emigration was used to mask Latvia’s unemployment problem.

It helped mitigate the social effects. However, if you look at figures from the good years following EU accession in 2004, emigration was already in full swing as people were now free to move abroad for studies or work. Interestingly, we are starting to see that some of these people are starting to return as they are being offered competitive jobs [in Latvia].

What are the other major problems caused by the cuts you pursued?

Certainly one issue is the quality of public services after a lot of people left the government. Some cuts have been too severe and we need to rebalance. Another is how to get our demographic problems solved as birthrates dropped during the crisis years, in fact, for the second time – the first was in the early 1990s when the Soviet Union collapsed and we had to change our whole economic and social system. Demography is a problem for most EU countries and is closely connected to the issue of social security reform. We had to raise the retirement age from 62 to 65 and to severely cut social security programs including unemployment benefits.

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For Greek mainstream parties, it’s still business as usual

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By Harry van Versendaal

It almost defies reason. Six years into a wrenching recession and amid heavy speculation of a snap election next year, Greece’s mainstream parties are still locked in a self-destructive business-as-usual mode.

The survival of the power-sharing government seems to depend upon support from a critical mass of disaffected – albeit moderate – middle-class voters who are wary of the implications of an anti-bailout SYRIZA administration. And yet New Democracy and PASOK coalition politicians continue to dangerously indulge in the bad old partisan habits that are, at least in part, responsible for the nation’s current woes.

“This is all path dependence. It is not really rational, but this is what they know well, what they have been doing all these years,” says Elias Dinas, a political scientist at the University of Nottingham, ahead of a Greek Public Policy Forum conference later this month on Crete which is set to discuss the impact of the euro debt crisis on national party politics and the European project.

The Greek Cabinet primarily consists of MPs who are picked on the basis of preference votes. “This creates personal obstacles for the implementation of reforms. You need a large stock of support to enter into seemingly painful negotiations with specific professional sectors,” Dinas says.

The abrupt closure of Greece’s public broadcaster ERT earlier this summer, traditionally seen as a political fiefdom of the ruling party, raised some hopes among pro-reform centrists that – notwithstanding the questionable legality of the move – Prime Minister Antonis Samaras was finally prepared to build on a clean sheet and break with a long tradition of corruption and political patronage. Those expectations were soon defeated by a number of less-than-transparent appointments at ERT’s successor, DT, and a very messy launch that has been a cause of constant embarrassment for the government.

“The logic that has prevailed in this administration is a minimum-cost logic. This is clearly a very risk-averse government, primarily aiming at maintain marginal support and sacrificing reforms that might potentially harm this fragile equilibrium,” says Dinas, an expert on the development of partisan preferences.

The government has largely shied away from much-hyped structural reforms aimed at unlocking growth and creating jobs. The most common response to pressure from Greece’s foreign lenders – the European Union and the International Monetary Fund – has been haphazard, horizontal measures designed to meet nominal staff reduction targets in the country’s sizable public sector.

Samaras, who has been premier since June 2012, has heralded Greece as a “success story,” but the numbers tell a very different one. Unemployment is stubbornly stuck above 27 percent. A stunning 58.8 percent of under-25s are out of work. Over 20 percent live beneath the poverty line. The number of live births has declined by 10 percent since 2009, while suicides have soared.

Many analysts say that it is realistic to expect the debt-wracked nation to need further support from the eurozone before it can return to the markets. It is estimated that Greece will need around 10-11 bullion euros for the second half of 2014 to stay afloat next year and in 2015 – a prospect dreaded by euro-area governments faced with an increasingly skeptical public opinion.

The big shake-up

The crisis has radically transformed the two-party political system which was established after the collapse of a seven-year military dictatorship in 1974. A long-lasting tradition of nepotism gives the impression that Greece’s fate is in the hands of the same people who created the mess.

“But we must not forget that after the May 2012 election, PASOK has seen its vote decrease to unprecedented levels while New Democracy is still a key player only because of a record increase in party system fragmentation,” Dinas says. Last year’s vote still has the record of all inter-election volatility indices among established democracies, comparable only to the very first and formative elections of new democratic regimes.

Used to sweeping more than 40 percent of the vote, PASOK is now polling around 7 percent. A Public Issue survey published last week suggested that the conservatives have slipped behind SYRIZA, although a majority of respondents still consider Samaras a more suitable premier than opposition leader Alexis Tsipras.

“I cannot see a clear solution to the crisis in the foreseeable future, which means that a SYRIZA government might at some point become inevitable,” Dinas says.

However, the big shake-up of the Greek political system came with a self-destruct button. Neo-Nazi Golden Dawn is now polling at 13 percent, almost double the figure for PASOK.

The party with the swastika-like emblem already controls 18 seats in the 300-member House after winning nearly 7 percent in the May elections. Its members have been repeatedly connected to violent attacks on immigrants, gays and political opponents. In the latest assault, nine members of the Communist party (KKE) were hospitalized last week after suspected Golden Dawn supporters wielding metal clubs and poles set upon them while they were putting up posters in Perama, near Piraeus.

The response from New Democracy – which only provided a belated and rather vague condemnation of the Perama assault – has been uncomfortably cynical. Party spinmeisters and conservative pundits have tried to play the polarization card by investing heavily in what is known as the theory of the two extremes. The idea is to discredit SYRIZA by playing up abusive language and rowdy behavior on the left and equating it with far-right violence.

At the same time, Samaras’s hard-line approach on illegal immigration combined with a political credo animated by emphasis on devotion to the nation, Orthodoxy and traditional values aspires to hijack Golden Dawn’s strongest catchment area. Studies show that four in 10 Golden Dawn voters in the May ballot came from the New Democracy camp.

Bridge building

All this polarized multipartism is unsustainable in the long run, Dinas says. One way to ease the pressure on the political system would be to reduce the number of parties in Parliament, now seven – an unlikely prospect given that all of the newly formed parties have more or less held their own since the last election. To avoid implosion, Dinas thinks, Greece’s political system must rather aim to build bridges between the pro- and anti-bailout camps, mainly by priming issue dimensions where there is room for consent, or, equivalently, potential for within-group divisions.

“This is the strategy that Abraham Lincoln used to win the 1860 US presidential election, introducing slavery as a new cleavage cross-cutting the existing cleavage structure and dividing the Democrats internally,” he says.

For Greece’s post-1974 system, the predicament is an existential one: Golden Dawn’s threat to democracy must become the glue for political action.

A lot will have to change. Until the May election, the political class was simply too busy with its own survival to grapple with the rise of Golden Dawn, as the grouping made its crucial early steps by operating as the typical local mafia branch, Dinas says, describing a protection industry that used conventional – and often illegal – means to provide services in the state’s stead.

Since then, Dinas says, the picture is similar to the contrast between guerilla and incumbent warfare in civil wars. Golden Dawn employs grassroots practices that are specifically targeted at local communities, such as – Greek-only – food handouts, blood drives and neighborhood patrols. Mainstream political parties, on the other hand, try to challenge the party through their discourse in the media. The problem, as several surveys demonstrate, is that the mainstream media – like most of the country’s other institutions – are heavily discredited in the eyes of angry voters. The elite message easily plays into the hands of the anti-systemic party.

“For Golden Dawn supporters, any criticism coming from the main parties against their own party is not going to change their sentiments; if it does, it will probably be in the opposite direction,” Dinas says.

The political system, he says, needs to adopt a different strategy – one that is built around the idea that representative democracy cannot tolerate its enemies.

“What needs to be done is to challenge Golden Dawn using its own means. You need a strong state that is prepared to take legal action against any deviation from the law in order to confront the problem,” says Dinas while also stressing the need to invest resources in creating strong social disincentives for the party’s supporters, in schools, the working environment and universities.

“One of the reasons Golden Dawn has been successful is that it provides a clear and unambiguous identity; everyone needs to belong somewhere. There is a whole socialization process,” Dinas says. For a state that managed to mobilize support for the criminal regime of former Yugoslav President Slobodan Milosevic in the 1990s, a similar anti-fascist mobilization should be a doable task, he says.

“Otherwise, Golden Dawn can only fall if it tries to embrace the political system,” says Dinas, pointing a finger at other radical right parties in Europe – such as the Freedom Party of Austria and Geert Wilder’s Party for Freedom in the Netherlands – that lost most of their appeal once they entered government coalitions.

“To be sure, this is not a prospect that we should be looking forward to.”

The genealogy of violence

By Harry van Versendaal

When Dimitris Stratoulis, a leftist lawmaker, was assaulted by alleged far-right extremists at a soccer stadium last month, many in Greece found it hard to disguise feeling some degree of Schadenfreude.

It appeared that the tables had finally turned on Greece’s main SYRIZA opposition party, which has in the past failed to provide a convincing condemnation – some would say it in fact silently condoned – similar attacks on its political opponents.

Greeks have traditionally been more accustomed to social unrest and political disobedience than their European Union peers, but the meteoric rise of Golden Dawn, a neo-Nazi party that was comfortably voted into Parliament for the first time last year, has spawned a local Historikerstreit, a contested debate among politicians and pundits about the causes and the nature of violence.

Ideological hegemony

Interestingly, some critics have gone as far as to blame Golden Dawn’s shocking surge on the country’s left, which, despite losing the civil war, went on to win the ideological hegemony. Public tolerance of left-wing radicalism in the years following the end of the military dictatorship in 1974 – what is commonly referred to in Greece as “metapolitefsi” – allegedly laid the ground for Golden Dawn’s violent extremism in providing some sort of social legitimacy.

“Only blindness or bias would prevent someone from noticing the connection between public attitudes regarding the violence of the extreme left and the rise of the violent extreme right in Greece,” said Stathis Kalyvas, a political science professor and an expert on the subject of political violence at the University of Yale.

“If public attitudes vis-a-vis leftist violence had been different, the extreme right would have been much more constrained in its use of violence today,” he said, stressing however that there is no casual relationship between the violence of the two political extremes.

Blogger Konstantinos Palaskas, a contributor to the liberal Ble Milo (Blue Apple) blog, says that the antics of left-wing and anarchist troublemakers during protest marches and university and school occupations over the last 30 years, and the public’s acceptance of them, have significantly influenced the players of the new far-right.

“The left’s violent interventions, its disregard for the law, and the acceptance of its lawbreaking activity by a section of society – combined with the state’s tolerance of all this – were a lesson for people at the other end [of the political spectrum],” said Palaskas.

The habit forms at an early stage. The governing of universities has for years been hijacked by political parties and youth party officials. The country only recently scrapped an asylum law that prevented police from entering university campuses, hence allowing left-leaning activists to rampage through laboratories and lecture theaters.

Despite incidents of rectors being taken hostage, university offices being trashed and labs used for non-academic purposes, many Greeks remain uncomfortable with the idea of police entering university grounds and more than a few support SYRIZA’s promise to repeal the law if it forms a government.

Beyond the universities, left-wing unionists – like the Communist Party (KKE)’s militant PAME group – traditionally organize street blockades and sit-ins at public buildings as a form of protest. Mass rallies, interpreted by many as a sign of a vibrant democracy, regularly turn violent and destructive. Groups of hooded youths carrying stones and petrol bombs ritually clash with riot police, who respond with tear gas and stun grenades. Public property is damaged, banks are set on fire and cars are smashed, but arrests and convictions are surprisingly rare.

Serious injuries and fatalities were also rare, until May 2010, when three people were killed as hooded protesters set fire to a branch of Marfin Bank in central Athens during a general strike over planned austerity measures. Demonstrators marching past the burning bank shouted slogans against the workers trapped inside the building. No arrests have been made in connection with the murders, which many leftists have blamed – like other similar incidents – on agents provocateurs.

A few months later, Costis Hatzidakis, a conservative heavyweight who is now development minister, was beaten up by unidentified protesters before being led away bleeding on the sidelines of a demonstration against the then Socialist government’s cost-cutting policies.

The reaction of SYRIZA, a collection of leftist, even militant groupings, to such incidents has been rather ambiguous as the party – which denies links to violent groupings – has repeatedly fallen short of providing a clear-cut condemnation of violence.

“We condemn violence but we understand the frustration of those who react violently to the violence of the memorandum,” SYRIZA chief Alexis Tsipras said of the painful bailout agreement signed with the European Union and the International Monetary Fund. Critics responded by accusing the left of giving in to ethical relativism, by seeking to differentiate between “good” and “bad” violence as it sees fit.

A few months ago, SYRIZA refused to vote for a motion by the Parliament’s ethics committee that condemned violence, arguing that the text should refer to “racist violence” and not just “violence.” Party officials appeared concerned that the motion could be used to sabotage acts of popular struggle versus the injustices of the state. KKE, as is its wont, chose to abstain from the vote.

When the residents of Keratea, a small town 40 kilometers southeast of Athens, fought, often violently, with police forces for three months over the planned construction of a huge landfill in the area, Tsipras hailed the “town that has become a symbol for the whole of Greece.”

But nowhere has social tolerance of violence been more evident than in the case of domestic terrorism. November 17, a self-styled Marxist urban guerrilla group, assassinated 25 people in 103 attacks from 1975 until it was disbanded in 2002. One of the reasons the terrorists managed to remain elusive for so long, many analysts believe, was that its actions, mostly targeting American officials and members of Greece’s wealthy “big bourgeois class,” did not enrage the mainstream public, fed on years of anti-American rhetoric from long-serving socialist Prime Minister Andreas Papandreou.

“Public opinion, as recorded in several surveys, viewed terrorists either with sympathy or indifference. There was hardly any mass mobilization against this group,” Kalyvas said.

In an opinion poll conducted a few months before the dismantling of November 17, 23.7 percent of respondents – nearly one in four – said they accepted the organization’s political and ideological views, although most said they disagreed with its practices. Only 31.3 percent said they wanted the guerrillas to put their guns down and turn themselves in to the authorities. Later, many on the left slammed the government’s anti-terror law as an attempt to crack down on civil liberties.

For Kalyvas, in a public arena saturated with rhetorical violence – for example the increasingly frequent calls for hanging or executing traitors, especially during the Indignant protest gatherings in central Syntagma Square in the summer of 2011 – it was perhaps predictable that the violence of the extreme right may strike a large number of people as a quasi-legitimate political weapon.

“How surprising can it be to see the public responding in this way, after four decades of being consistently told that political violence can be justified?” he asked.

The rise of populism

Vassiliki Georgiadou, a political scientist at Panteion University in Athens, agrees that the tolerance of violence may have played a role in the rise of Golden Dawn. But there was nothing particularly left-wing about the displays of lawlessness, she points out.

“Sure, the law was often not enforced, there was an anything-goes mentality, a sense that people stand above the institutions,” Georgiadou said.

“But this was not an exclusively leftist outlook. It was more the outgrowth of a populist outburst that swept across the left-right spectrum. And it was a PASOK creation. PASOK was the creator of populism in the post-dictatorship era,” she said.

But it was not just the populism. Like other analysts, Georgiadou attributes Golden Dawn’s soaring influence to popular disillusionment with the country’s crumbling institutions.

“It was the discrediting of political institutions, of the political class, and of the operation of democracy that allowed anti-systemic, far-right extremism to flourish,” she said.

When Golden Dawn spokesman and MP Ilias Kasidiaris repeatedly slapped Liana Kanelli, a long-serving Communist deputy, in the face on live television last summer in a fit of frenzy, many, instead of being shocked, saw the move as an attack on the country’s bankrupt status quo, despite the Communist Party not having ever risen to power in any election. In contrast to most analysts’ expectations, Golden Dawn’s ratings rose following the incident.

The trend did not occur overnight. For more than a decade, public surveys have found Greeks to have among the lowest rates of trust in political institutions when ranked with their European counterparts. Only 11 percent of Greeks are satisfied with the way democracy operates in the country, a December Eurobarometer survey found, against 89 percent who said the opposite. A scant 5 percent said they have trust in political parties, while a slightly higher number, at 7 percent, said they have trust in the Greek Parliament.

Journalist Xenia Kounalaki readily points a finger at the obvious culprits: the nation’s mainstream political parties, PASOK and New Democracy, who have between them ruled Greece since 1974.

The daughter of a veteran Socialist politician, Kounalaki speaks of “the corruption, the entanglement between media owners and state contractors, and the sense of impunity,” which, she says, pitted a better-connected, privileged chunk of society against the disenfranchised lot that were left out of “the system.”

If the Greek left has something to regret in the surge of the far right, Kounalaki says, it’s that it chose to hold the moral high ground on the issue of immigration instead of articulating a more pragmatic alternative.

“Its stubborn anti-racist rhetoric was hardly convincing among the lower-income groups living in depressed urban centers, lending it a gauche caviar profile,” she said of the nation’s left-wing intelligentsia who preached multiculturalism from the safety of their suburban armchairs.

Greece’s porous borders, combined with the rather unworkable Dublin II convention, which rules that asylum applications must be heard in the first country of entry, made sure that the country became a magnet for hordes of unregistered migrants who eventually get stuck here in a semi-legal limbo.

Family resemblances

Like many others, Kounalaki may be willing to discuss any wrongs by the left in the rise of Golden Dawn, but she rules out any attempts to equate the radicalism on the two sides. Not only are such efforts unwarranted, she says, they are also dangerous.

“Equating the locking up of university professors with Greek neo-Nazi pogroms against migrants leads to relativism and, effectively, legitimizes Golden Dawn violence,” she wrote in a recent publication on violence.

The Hamburg-born journalist, who became the target of anonymous threats on the Golden Dawn website after she wrote an article critical of the party, thinks that equating the two types of violence amounts to a relativism that effectively legitimates far-right violence.

Others are not so sure. When a protest supported by members of Golden Dawn against the staging of Terrence McNally’s “Corpus Christi” led to the cancellation of the “gay Jesus” play’s premiere at the capital’s Hytirio Theater in October, several critics were quick to point to a similar incident in late 2009, when self-styled anarchists burst into a theater and damaged the stage at the premier of Michel Fais’s “Kitrino Skyli” (Yellow Dog), a play inspired by the hideous acid attack on Bulgarian labor union activist Konstantina Kouneva. The anarchists said they were against the theater cashing in on the woman’s ill fortune.

The fact is that left-wing activists have in the past prevented the screening of movies and forcibly interrupted speeches and book presentations.

“Golden Dawn’s hit squads are no different from the groups of left-wing activists that like to blockade streets, assault lawmakers or interfere with academic proceedings,” Palaskas said, adding that violence lies at the heart of both ideological doctrines, which, under certain conditions, treat force as a necessary means to a superior end.

“Attacking a student who collects rubbish around his university dorm, or a professor because he holds different views than you do is no different, from a humanitarian perspective, to attacking a migrant trying to make a living in this country,” he said, referring to a recent feud between students at Thessaloniki’s Aristotle University and leftists supporting striking municipal cleaners when the former tried to clean up growing heaps of rubbish on the campus.

But it is hard to see how such acts, illegal as they may be, can be compared to organized attacks against fellow humans.

“The violence of Golden Dawn carries a very specific ideological weight: discrimination on the basis of skin color or sexual orientation,” Georgiadou said.

“It’s a violence which is directed against individuals. It seeks to deny their universal rights in the most extreme manner and, on top of that, it involves an extreme form of physical abuse,” she said.

The United Nations High Commissioner for Refugees (UNHCR) and other groups recorded 87 racist attacks between January and September last year in Athens, Piraeus and Patra. In 50 of those incidents, the victims suffered serious bodily harm. In 15 of them, victims accused police officers of using violence against them. Many immigrants are reluctant to report such abuses because they don’t have documents or mistrust the police.

Those who put the two types of violence in the same bag seem to suggest that scrapping leftist violence of its social legitimacy would make it easier to combat far-right violence. However, says Giorgos Antoniou, a historian at International Hellenic University, it’s hard to see why one thing would lead to the other.

“Despite the political and social consensus to deal with far-right extremism, this has not been enough to curb [the phenomenon], a fact which underscores the complexity of the situation,” he said.

Part of the system

Perhaps it would be more interesting to examine why Greek society is not willing to condemn violence in general. Part of the explanation can be found in its modern history. During the Second World War, the country suffered massacres and famine in its fight against the Nazis. The specter of the 1967-74 dictatorship also hangs heavy over the country’s modern politics. Far-right violence has bad historical connotations for it is associated with memories of the so-called right-wing “parastate,” the junta and torture.

“Although leftist violence has its origins in equally anti-systemic reasons, motives and objectives, it would be hypocritical not to acknowledge that, for better or worse, it benefits from having been absorbed into the country’s political culture,” Antoniou said.

“The purportedly anti-systemic violence of the far left is in a way at the same time also systemic because a big chunk of the political system and society has accepted it as an integral part of Greek political culture,” he said.

Each time activists used Facebook and other social media to organize peaceful demos against violence in the recent years, these only drew very sparse crowds.

As part of the national narrative, Antoniou says, this type of violence is seen as less of a threat to the nation, thus “undermining democracy in the long run.”

However, should attacks by ultranationalist thugs spread and diversify, people like Stratoulis may eventually come to develop a more inclusive understanding of violence, condemning it in every form: whether racial, sexual or political.

Samaras: too small for his boots?

By Harry van Versendaal

“A foolish consistency may be the hobgoblin of little minds,” R.W. Emerson said, but — as Antonis Samaras has found out — too much inconsistency can be politically damaging.

In 2009, the 61-year-old conservative politician took over a broken New Democracy party promising to rebuild it around the idea of “social liberalism.” It was an exclusive concept that moved the party further to the right on Greece’s political spectrum by embracing such values as national pride, Orthodoxy and skepticism of the markets. Awkwardly echoing Bismarck, the Greek politician claimed he could hear the distant hoofbeats of history.

A few months later, ND came out against the bailout deal that George Papandreou’s Socialist government signed with the European Union and the International Monetary Fund. Samaras went on to oust Dora Bakoyannis, the centrist former foreign minister who had earlier challenged him in the party leadership race, for backing the aid package in Parliament. Bakoyannis, in turn, formed her own pro-bailout splinter party, taking some of her ND colleagues with her. Strangely, Samaras had done the same in the early 1990s, as he left ND to form his own party, Political Spring, bringing down the government of Constantine Mitsotakis, Bakoyannis’s father, in the process.

As a result of his tactics, Samaras drove away the party’s middle-ground supporters who had been key in handing his predecessor, Costas Karamanlis, victory in two parliamentary elections.

His opposition to the memorandum was short-lived. Faced with bankruptcy, Greece earlier this year had to sign a second bailout deal worth 130 billion euros to keep the country afloat until 2014. In his most controversial U-turn, Samaras asked his MPs to support the aid package. The decision prompted a great deal of controversy in the right-wing anti-bailout camp inside and outside the party as epithets ranged from “flip-flopper” to “traitor.” Some 20 deputies refused to back the deal in the House and were as a result expelled from the party. One of the rebels, Panos Kammenos, went on to form the populist anti-bailout party Independent Greeks, sucking a great deal of support from ND on the right. After turning his back on the political center, Samaras had now disaffected a large portion of the right.

ND’s role in the power-sharing government that followed Papandreou’s clumsy exit from the driver’s seat only gave voice to Samaras’s critics. Although pledging to support the implementation of the bailout deal, he undermined it at every step of the way while constantly bleating for a snap election.

On May 6, Samaras finally got what he wished for. But, in yet another instance of political miscalculation, the outcome of the ballot was a far cry from what he had hoped for. His party came first in the vote, but the result was a Pyrrhic victory as Samaras had spent a good part of the campaign calling for a clear conservative majority. The numbers were painful. Samaras had inherited the worst support in the history of ND — Karamanlis’s 33.5 percent in 2009 — and managed to drive it even lower, scoring an embarrassing 18.8 percent. The party lost more than a million voters in less than three years, during which it was not even in government.

Like a pupil resitting exams again and again, the poor marks have prompted Samaras to rebrand his politics. Now he wants to build a “grand center-right front.” The results of his overture have been mixed. Most of the smaller liberal parties, including the pro-reform Drasi, turned down the offer. Ironically, it was his bitter political rival Bakoyannis that was this week duly welcomed back into the fold as the two announced they were joining forces in a “patriotic, pro-European front.” And as his acceptance of defectors from the disintegrating nationalist LAOS party into ND demonstrate, there is hardly any ideological or quality filter to Samaras’s attempts to broaden his party’s appeal.

As conservative ideologues would be the first to admit, the political horse-trading of the past few days smacks of unscrupulous opportunism. As it happens, cliches have their place. A true leader must be proactive, he must shape events and not just be blown about in different directions by them. But if the ability to inspire a unifying national vision is a safe measure of a politician’s greatness, then Samaras has proved to be a political pygmy.

ND may well recover by June 17. But Samaras will only have SYRIZA to thank as the leftist party’s fuzzy economics and pie-in-the-sky rhetoric is making many people afraid that Alexis Tsipras’s vision of a bailout-free utopia will lead the country out of the eurozone.

Unlike his new archrival, however, the ND boss lacks an ideal — and that may prove to be his undoing. Samaras may have changed his political tune one too many times for Greek voters to give him the mandate he so desires.

Moderate, pragmatic and unloved: Greece’s liberal parties

By Harry van Versendaal

“In Greece, a liberal is called a ‘neoliberal’ and is perceived as a ‘neoconservative’,” says Constantinos Alexacos, an architect who ran as a candidate with the Drasi party in the May 6 elections.

Big shocks change perceptions but the spectacular meltdown of Greece’s two-party system, dominant since the end of the military dictatorship in 1974, has failed to shake off at least one: mainstream distrust in liberalism.

Socialist PASOK and the New Democracy conservatives suffered a drubbing on Sunday, seeing their combined share of the vote sink to an all-time low of 32 percent. Nevertheless, none of the country’s liberal parties — Democratic Alliance, Drasi (which merged with Liberal Alliance ahead of the vote), or Dimiourgia Xana (Recreate Greece) — won enough votes to make it into Parliament. The three garnered a combined 6.5 percent, or 411,536 votes, as a huge chunk of support went to the anti-bailout parties away from the center of the political spectrum.

The poor showing has prompted a fair deal of frustration and soul-searching among self-described liberals in this debt-wracked nation. If there is one thing they all agree on it’s that their doctrine is a perennial victim of bad publicity. For a wide range of reasons, liberalism is still a dirty word for many, particularly those on the left.

“Like capitalism, liberal ideologies in Greece have been defined by their opponents, not their supporters. We’ve allowed others to tell the Greek population what we are, what we believe, who we are aligned with,” says Emmanuel Schizas, editor of the LOL Greece blog.

“Essentially, if you call yourself a liberal, the reasoning goes, you are pro-war, pro-monopolies, a corporatist, unfeeling and uncaring, and have a casual tolerance for corruption, inequality and the suppression of political rights,” adds Schizas.

It’s quite an exasperating situation for people who have traditionally espoused such values as individual freedom, rule of law, active but accountable government, free but responsible markets, and mutual toleration.

Most liberals have called for a smaller government, fewer civil servants, privatizations and further deregulation of closed professions. But the fact that liberal parties chose to back the deeply unpopular austerity policies attached to the EU-IMF bailout deal didn’t do much to promote their ideas. Worse, some liberal commentators say, the parties paid the price of endorsing ideas that were not, in fact, related to their political religion.

“Most liberals around the world have strongly opposed policies like those included in the memorandum,” says Tilemachos Chormovitis, a contributor for the liberal Ble Milo (Blue Apple) blog. “You can’t solve a debt crisis by accepting more loans. Instead of putting forward their own program against the tax-heavy policies of the memorandum and the stubborn statism of the left, liberals tagged along with the worn-out parties that backed the program,” he says.

To be sure, allergy to liberal ideas goes further back and has systematically been fed by the system of nepotism, clientelism and corruption that took hold of Greek society after populist PASOK rose to power in 1981. Any attempts to contain the country’s gigantic and profligate state ran against the interests of the ruling parties and their voters. Over time, liberal reforms were seen as coming together with a self-destruct button.

“There comes a point on the road to serfdom where so much of a country is dependent on government subsidies, government-sanctioned rents and government-upheld false economies, that liberalizing it will simply kill it,” says Schizas with a mention of F.A. Hayek’s 1944 classic.

Implementing liberal economic reforms, he says, was bound to take a hefty toll on the well-being of hundreds of thousands of people — at least in the medium term. “In an aged and inflexible society such as ours, people don’t bounce back from such setbacks; they stay down,” he says.

It’s hard to miss the uncomfortable truth at the core of the liberal creed: “The liberal parties are in the business of pointing out trade-offs; telling people they can’t have everything. That’s been a widely unpopular way of thinking in Greece since the ‘change’ of 1981,” says Schizas, referring to the late Andreas Papandreou’s famous campaign slogan which heralded the massive, but often misguided, program of wealth redistribution which was to follow.

The trade-off idea is a far cry from the populist, pie-in-the-sky idealism that has animated Greek parties seeking to appease an audience that had grown increasingly spoiled during the past 30 years. Furthermore, this cold, instrumental approach to politics, observers say, is out of synch with the all-too-human qualities of politicking. “Politics is not engineering. It’s chaotic, it does not follow a straight line. Just like life,” Kathimerini commentator Nikos Xydakis says, acknowledging SYRIZA leader Alexis Tsipras’s deft timing and political opportunism. “Politics requires Machiavellian ‘virtue,’ the ability to adapt to any given situation by doing whatever is necessary,” he says.

Wrong leaders, wrong audience

Analysts also voice reservations over whether Drasi leader, veteran politician and ex-minister Stefanos Manos and former New Democracy heavyweight Dora Bakoyannis, who now heads Democratic Alliance, are the right people for the job.

The biggest handicap, journalist and urban activist Dimitris Rigopoulos suggests, is that the vast majority of voters see them as part of the problem, not the solution. “Manos and Bakoyannis are both associated in the collective consciousness with Greece’s discredited political establishment,” he says.

Parallel to this, experts say, there’s an issue with the audiences that these parties have chosen for themselves. Drasi, which likes to see itself as the ‘orthodox’ libertarian party, tanked outside the main urban centers while drawing a disproportionate share of the vote from the alumni of elite schools. One of the most common criticisms against liberals is that they are haughty and elitist.

“You get the impression that many of these people feel unfortunate to have been born in Greece and often treat their compatriots with disdain. Naturally, they have failed to identify with the masses and the biggest chunk of support comes from posh districts like Filothei or Kolonaki,” Chormovitis says.

Meanwhile, most of the support for Democratic Alliance appears to come from the reservoir of voters connected to Dora Bakoyannis’s family — which includes her father and ex-Premier Constantine Mitsotakis and her late politician husband Pavlos. “If we’re being charitable, it would be best to say that not all of them care about liberal this and liberal that; they have personal loyalties,” says Schizas.

Still far from tipping point, but…

Some observers are rather reserved about the future of Greece’s liberal movement. “Greeks — at least those who did not vote for the leftovers of the old system and those who didn’t abstain — voted for sterile reaction and conservatism,” says journalist and blogger Thodoris Georgakopoulos.

The ballot, he says, shows that Greece’s creative minority — those who find solutions to the challenges, which others then follow — is still far from reaching what writer Malcolm Gladwell calls “the tipping point” – “that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire,” bringing about disproportionate change in society.

“If Greece’s creative minority had really reached the tipping point, the country wouldn’t have gone bankrupt in the first place,” Georgakopoulos says.

But true to their creed, liberals remain optimistic about the future. For Rigopoulos, a journalist with Kathimerini and founding member of the Atenistas citizens’ group, Greece is for the first time witnessing the conditions for the emergence of a genuinely liberal, reformist movement.

“Until five years ago, the so-called liberal front was reduced to a mostly isolated, demonized faction inside New Democracy plus a few scattered voices inside PASOK — the legacy of Costas Simitis, as it were,” he says in reference to the former modernist-minded premier. As intense polarization fades, new forces are being unleashed — “for better or for worse,” he says.

But unless they decide to join forces, liberals will find it hard to reach the tipping point. Ironically, although they are proud of their pragmatism and consensual habits, Greek liberals were in these elections represented with three distinct groupings. While bigger parties are struggling to form a unity government, liberal party officials have over the past few days been in talks to cooperate ahead of possible new elections. “Working with other people and parties has always been part of the solution as far as Drasi is concerned,” says Alexacos.

Others are less sure about the prospect. Chormovitis, for one, questions whether a liberal coalition would in fact succeed in even amassing the combined 6.5 percent won by the three parties on May 6.

“I am not so sure that Bakoyiannis’s election base in Crete or Evrytania would vote for a liberal coalition party that would not feature herself as leader, or that the fans of Manos and Tzimeros would throw their weight behind one of the most worn-out politicians of the post-1974 period,” says Chormovitis in reference to Thanos Tzimeros, the young advertiser who led Dimiourgia Xana, the surprise package among smaller parties.

Schizas insists parties should call on their supporters to discuss and approve a common platform first. “The liberal parties have never tried to develop a potential common policy platform and are instead focusing on horse-trading among themselves,” he says.

But whether they choose to cooperate or not, Schizas says, Greece’s liberals must above all reach a point where they are defined not by association, but by their actual program. “As long as we are the pro-banker people, the pro-gay people, the pro-bailout people, the pro-privatization people, the anti-minimum-wage people, we are easy prey.”

A dose of the right medicine for New Democracy

By Harry van Versendaal

Some three months since ousting a veteran MP for suggesting that “extremist right-wing droplets” had infiltrated the party, New Democracy leader Antonis Samaras last week welcomed two far-right politicians into the fold.

Makis Voridis and Adonis Georgiadis were both expelled from the ultranationalist Popular Orthodox Rally (LAOS), the junior partner in Greece’s coalition government, for supporting the terms of Greece’s loan deal with the European Union and the International Monetary Fund. The perennially ambivalent LAOS rejected the deal and withdrew its support from the government. Meanwhile, Samaras, who had vehemently opposed the first loan deal in 2010, ousted 22 deputies for turning down the second aid package.

Analysts have interpreted the recruitment of the two politicians as an attempt to offset the damage of losing the 22 MPs and, on a more strategic level, as a bid to rally a party base disaffected by ND’s involvement in the coalition government.

“Damaged from his involvement in the coalition, Samaras wants to siphon votes from crumbling LAOS,” historian and political blogger Vasilis Liritsis told Kathimerini English Edition.

Going mainstream came with a hefty price for the party of Giorgos Karatzaferis, who saw its popularity tumble to 5 percent, from 8 percent during its heyday in 2010. Meanwhile, the neo-Nazi Chrysi Avgi (Golden Dawn) party has surged to 3 percent, hitting the threshold for entering Parliament.

“For ND, having the two far-right politicians on board is part of a bigger strategy to eat into rightist territory,” Liritsis said.

However, some observers point out, this is not an indiscriminate overture to the far right. The conservatives are only trying to woo politicians who backed the bailout deal.

“ND needs to show its electorate that the memorandum was not only supported by PASOK and other reformists but also by a section of the nationalist far right,” said Vassiliki Georgiadou, a political science professor at Panteion University in Athens.

“This is what brought Voridis and Georgiadis to ND,” she said.

Gray zone

Voridis and Georgiadis, who were both given portfolios in the coalition government led by former central banker Lucas Papademos, have repeatedly drifted into democracy’s gray zone by expressing nationalist and anti-immigration views.

Georgiadis, who resigned as deputy minister for development, competitiveness and merchant marine, has made a name for himself as a flamboyant telemarketer and publisher of pseudo-scientific patriotic literature. He has in the past called for the en-masse deportation of Albanian immigrants and, as a lawyer, he has defended historian and Holocaust denier Costas Plevris in court.

Voridis, who has kept his position as minister for infrastructure, transport and networks, was leader of the EPEN (National Political Union) youth group founded in the early 1980s by Greece’s jailed dictator Georgios Papadopoulos. A few years later, he was banned from the student union at the Athens Law School for engaging in extremist acts. A picture of Voridis taken around that time shows him walking down a central Athens street with a homemade ax. In the mid-1990s, he founded the nationalist Hellenic Front (Elliniko Metopo), modeled after Jean-Marie Le Pen’s National Front in France. Hellenic Front was absorbed by LAOS in 2005.

“Can you imagine any of them in charge of a ministry dealing with immigrants?” Liritsis said. “These are dangerous people.”

Voridis has gradually gone mainstream, adopting a crafted, airbrushed image. His public language habitually taps into popular concerns about crime, illegal immigration and law-breaking acts of leftist activists. His tough positions tread the limits of political correctness but usually not enough to alienate a mainstream audience.

“I was a political activist of the right,” said Voridis last week while labeling the conservatives as a “big patriotic liberal party.”

“ND’s ideology is tied to two central concepts that belong to the value system of the right: the nation and freedom,” he said.

Endgames

ND has historically had an ambivalent relationship with the far right. Faced with the prospect of election defeat in 1981, the party absorbed the royalist National Alignment (Ethniki Parataxi), although that was not enough to stop Andreas Papandreou’s PASOK from sweeping to power. In 2000, conservative leader Costas Karamanlis ejected Karatzaferis, who went on to form his splinter LAOS party. He still scored a comfortable victory four years later.

“When things are going well for ND, it likes to keep a distance from the far right. However, when they’re not and the party needs to galvanize support, it tries to embody the far right into its core,” said Georgiadou.

This is certainly one of those times. The tectonic plates of Greek politics are shifting as failure to grapple with the deepening financial crisis has sparked an unprecedented rejection of the two-party system that dominated Greece’s post-dictatorship politics, commonly referred to here as the “metapolitefsi.”

Brutal belt-tightening measures, soaring unemployment and a pervasive sense of precariousness and lost bearings are making Greeks responsive to bunker-ish rhetoric from the edges of the political spectrum.

Despite PASOK’s abysmal ratings in recent polls, ND is struggling to keep its head above 30 percent — not enough to form a government on its own. Meanwhile, combined support for the three leftist parties is at 42.5 percent, according to the most recent poll by Public Issue.

Centrifugal politics

Can people like Voridis and Georgiadis boost ND’s unconvincing ratings? Analysts are not so sure. Georgiadou says the strategy would work if it helped convince voters that ND was not drawn by PASOK or European leaders into backing the memorandum but rather did so out of conviction that doing so was in the national interest.

“But if the recruitment of Voridis and Georgiadis was to mobilize the anti-right reflexes of centrist and center-right voters, then any gains on the right could be offset by defecting centrist voters,” Georgiadou added.

That said, most of the damage to the center has already been inflicted by the very presence of Samaras at the helm of the party.

“Look at ND. It’s not just Voridis or Georgiadis,” Liritsis said, pointing at close Samaras associates such as Failos Kranidiotis and Chrysanthos Lazaridis — both members of the nationalist Diktyo 21 think thank. Kranidiotis, a ND hardliner, this week said that with Samaras in charge of ND, LAOS no longer served any political purpose.

“ND has completely lost the middle ground. It is gradually verging into far-right territory, turning more and more into a party reminiscent of the 1950s populist right,” Liritsis said.

The transformation certainly marks a big change from yesteryear, when Greece’s big parties battled for control of the center. PASOK climbed to power in the mid-1990s after Costas Simitis swayed the center, riding the hype of Third Way politics engineered by fellow social democrats like Tony Blair and Gerhard Schroeder. Again, hijacking the middle ground was key to conservative Costas Karamanlis’s success eight years later.

“The voices of people like Kyriakos Mitsotakis or Costis Hatzidakis are no longer heard,” said Liritsis in referrence to ND’s so-called liberal faction while lamenting the country’s drifting from consensual centrism.

“The sad truth is there’s no party left to express the middle ground anymore.”

Building the Rotterdam of the South

A container depot in Aspropyrgos west of Athens. Neglected for decades, the area lies at the core of a grand plan for an economic reboot of the debt-wracked nation. Photo by Harry van Versendaal

By Harry van Versendaal

ASPROPYRGOS – Under the pale winter sun, a yellow cargo truck rumbles by and turns into a narrow road filled with potholes. Nearby, a ragged scarecrow balefully stands guard over a scrubby patch of broccoli. A little further off, an immigrant pushes a supermarket trolley filled with scrap metal next to a herd of sheep grazing by a metal container.

Welcome to Greece’s main logistics hub, the Thriasio Plain. An ugly sprawl sandwiched between three mountains and the pungent Elefsina Bay, the land of Persephone has for decades hosted the bulk of the country’s heavy industry. Now the area — which contains the towns of Elefsina, Aspropyrgos, Mandra and Magoula — lies at the core of a grand plan for an economic reboot of the debt-wracked nation.

After signing a deal with the Greek government in 2010 to run part of Piraeus, the country’s largest port and strategic gateway for bringing Chinese goods into Europe and beyond, the China Ocean Shipping Company, or Cosco, is reportedly interested in acquiring a big chunk of land on the nearby plain of Thriasio to be used as a major freight and logistics center. Loaded with ambition, the project is expected to transform the entire peninsula.

But, alas, the reality on the ground paints a different story. A mishmash of divergent zoning plans — part industrial, part commercial wholesale, part “undefined” — Thriasio is scattered with warehouses, factories, scrapyards and legions of freight containers behind razor-wire fences. Connecting them is a labyrinthine set of unnamed narrow roads that frequently choke up, as cargo trucks must maneuver in limited space while street signs are mostly absent.

“It’s a joke. We call it an industrial zone, but there’s nothing that resembles one. When foreign investors visit the place, we turn red. There’s no roads, there’s no names, how can you expect to be taken seriously?” says Vassilis Argyrakis, a man in his early 40s who runs a family business that makes food products.

A black-and-white portrait of his grandfather who founded the company in the early 1920s hangs on the wall behind his desk. In 1980 the company moved from Piraeus to Aspropyrgos. “This was supposed to be a prime location, in close proximity to the the port, the capital, the railways and the national road,” he says at his office on the mezzanine of a gray cement building. More than 30 years later, Argyrakis tells a story of promises unfulfilled.

“For the past 30 years, no government ever took this place seriously. The state dumped all kinds of stuff here,” he says. Oil refineries, cement plants, steel factories and shipyards found a home here. Repeated environmental studies have found this to be one of Greece’s most heavily polluted areas. No surprise local newspapers regularly refer to Thriasio as Athens’s dumping ground.

Poor access is having an impact on the cost of services. Argyrakis says the cost of carrying goods from Piraeus to his company is higher than shipping goods from anywhere in the world to Greece. “It’s a waste of time, a waste of money. It’s totally counterproductive,” he says. His neighbors are not much help either. One of them keeps sending the police because noise from the factory interrupts his afternoon siesta, Argyrakis says with a smile. The police officer shrugs his shoulders, unable to do anything about it.

Bring the warehouses

Warehouses mushroomed along the northern side of the Attiki Odos ring road built here in 2003 to connect the capital with the coastal town of Elefsina providing a shortcut for northbound traffic.

“It was like they struck gold,” Andreas Papadakis, a young businessman, says of local landowners. “The price of land went up 1,500 percent almost overnight,” he says, as the area’s status was switched to “undefined,” giving the green light for the construction of warehouses.

As co-owner of a document storage firm, Papadakis has been renting one of those warehouses for the past six years. Thousands of cardboard boxes filled with A4 documents are stacked on rows and rows of metal shelving nearly to the top of the 20-meter-high structure. A forklift truck puts boxes into place as a company employee feeds data into a laptop computer. Sitting at the company’s headquarters at the foot of Mount Parnitha, he says running a business here has demanded a great deal of patience and adaptation. “We had to wait for six months to get a telephone line and even longer for a proper Internet connection,” he says. It took repeated calls to the local municipality before they eventually placed trash containers outside the company HQ, but a postman is yet to be seen.

Another problem is gangs stealing metal from the structures of the buildings, or even removing street drains, that they can then sell it on to one of the dozen of scrap merchants around here. Locals complain that burglars will break into a house just to take down the switchboard.

Beating the Leviathan

Municipal officials admit there are problems with the road network and anarchic construction. But they refuse to take any responsibility. Stelios Albandis is deputy mayor of Aspropyrgos which, thanks to the large number of businesses, is one of the wealthiest municipalities in the country. “The rot starts from the top down,” he says, blaming the mess on Greece’s Leviathan bureaucratic state that holds local government to ransom.

A blueprint to regulate development in Attica, also known as the Athens Regulatory Plan, which includes plans to construct new highways, has suffered numerous setbacks. Albandis says that giving greater jurisdiction to the municipalities would save time and accelerate growth. “Zoning plans for every single town, from Alexandroupoli to Gavdos, has to go through the central government in Athens. This is extremely time-consuming. Getting a formal approval could take up to 15 years,” he says.

Looking down from the slopes of Mount Parnitha to the south, you can see the mammoth orange warehouse, property of the Hellenic Railways Organization (OSE), and the space that is to host the new logistics center. On a clear day you can see the Bay of Elefsina and all the way to the island of Salamina, where in 480 BC the ancient Greeks beat the invading Persian fleet.

A notch to the east, on Pier 2 of Piraeus port, the Chinese mega-cranes are working at full throttle, like huge blue monsters bending their necks to lift blue, red and yellow lego bricks below. Last year saw a rise in container traffic in Piraeus, making this Cosco’s biggest container terminal in Europe and second only to Suez among the company’s biggest transatlantic terminals. Figures went up 73.5 percent in 2011, reaching a record 1,188,100 TEU against 684,900 TEU the previous year. The way of doing business here has radically changed. A local businessman, who wished to remain unnamed, describes how truck drivers used to bribe port officials at the gates and then again inside the loading area. “Or they would be kept waiting at the end of the line for hours,” he says. The Chinese have changed all that. “Truck drivers now simply swipe their access card to enter the dock, load the cargo and leave the place.”

Cash-strapped Greece, which currently depends on bailout loans from foreign creditors to stay afloat, craves the deep pockets of the Chinese, while for the Chinese Greece allows them to hasten east-west trade while getting a foot in the continental door. It is estimated that Piraeus saves them about a week of travel compared to the ports of Rotterdam, one of the world’s biggest, or Hamburg.

“Of all the southern ports, the one in Piraeus has the best potential for growth, situated in a country that the Chinese believe can be manipulated and controlled, with proximity to Central and Eastern Europe, and Turkey, which is growing faster than most northern and central EU countries,” says Nasos Mihalakas, a Washington-based foreign affairs analyst.

After taking control of the container terminal, Cosco has set its sights on OSE’s 600,000 square meter site in Thriasio where storing goods will be cheaper than on the coast. Tassos Vamvakidis, deputy commercial manager at Cosco’s wholly owned subsidiary, Piraeus Container Terminal (PCT), says the company would have to wait and see what the exact terms of the tender are before making a decision to bid for the project. “But [Cosco] would be interested on principle,” he says.

But some experts insist Thriasio is not necessarily essential in Cosco’s business strategy. “Space will be needed in order to make Piraeus the entry hub that the Chinese have been talking about, but Thriasio cannot be the only available space,” says Mihalakas, an expert on Chinese trade.

This is perhaps why Greek officials are reportedly trying to woo the Chinese with more carrots. A draft law approved last month allows the creation of free trade zones, which would permit the transfer and handling of goods in certain areas without the intervention of customs authorities.

Another crucial step is completing a long-delayed project to connect the port to the logistics hub via rail. The government last promised to complete the project by mid-2012. But according to transport expert Fotis Fotinos, this too is set to fail, putting the completion date “some time in 2013.”

Keep waiting

Repeated tenders for the Thriasio hub have been unsuccessful, as demands were deemed excessive in light of Greece’s economic conundrum. And, of course, there is a lot of government foot-dragging. Even though Athens decided to relaunch the tender in 2009, it took a year before it took place. Then OSE’s real estate arm, Gaiose, caused further delays by twice altering the terms of the tender.

“Precious time has been wasted, especially during the past couple of years. Today, no offers have been made,” says Costis Hatzidakis, who has served at the ministries of transport and development with the conservative New Democracy party, warning that if the logistics center is not operational by June, then Greece may lose crucial EU funding for the project.

Despite the setbacks, Hatzidakis still believes in the project. “The objective,” he says, is no less than “developing Greece into a major logistics hub in the Balkan area and Southeast Europe.”

Back in Aspropyrgos, some people voice similar ambitions. “If the plan came to fruition, this place could become a logistics center for the whole country, perhaps for the entire continent. I believe up to 90 percent of imports would travel through here,” the deputy mayor says. Booming trade, Albandis believes, would have a spillover effect, accelerating the transformation of the whole area, with big new roads and better town planning.

“Since we have nothing else to offer — like cheap labor, R&D or good universities — then we might as well sell our geographical position,” says Papadakis, who is confident the Chinese are here to stay. “Hopefully, this will one day become the Rotterdam of the south,” he says.

Until that happens, entrepreneurs will have to put up with the grim reality. At the Aspropyrgos food company, Argyrakis jokes how a group of German inspectors had to spend the night at a dodgy love motel after failing to locate his business.

Thriasio, he says, will not change before Greece’s bankrupt state does. “The civil servants who make up the state mechanism are never subjected to any assessment. Our politicians are elected whereas our civil servants are permanent. The former hesitate to take any measures because they do not want displease the latter,” says Argyrakis. “It’s the same old story. But these things don’t only happen here. Aspropyrgos is just a microcosm of Greece.”


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