Tuesday, June 16, 2015

The Case of Greece (updated)


Greece has been in the headlines du jour -- in Europe, at any rate -- over what, on the surface, is a complex economic matter, a re-run of what we have seen before, involving  the IMF and a potential rééchelonnement of sovereign debt tranches …..
(ZZZzzzzzzzzzz …. Oh, have I lost you?)
What deeper waters this narrative might tap into, I have little idea, since I do not follow Greece;  taceo igitur;  the point here being merely to notice the oddly canted perceptual stance of Americans in regard to Greece, victims of distance and history.

What occasioned this reflection are the final chapters of Robert D. Kaplan’s outstanding travelogue/history, Balkan Ghosts (1993).
In this slender book, he quite consciously follows in the steps of Rebecca West (“Dame Rebecca”, as he gallantly denotes her), whose massive memoir of a trip to Yugoslavia on the eve of World War II, Black Lamb & Grey Falcon (published 1941) is among the truly great works of the twentieth century.   Knowing that he could not hope to outdo her magisterial historical survey, he treads more lightly but more widely, his final footsteps reaching as far as Greece, where he resided, with his wife, for seven years, during the reign (for “reign” it was) of a very strange figure indeed, Andreas Papandreou. 

The first thing you notice is the very presence of Greece in a book about the Balkans.  Granted -- once you come to think of it -- that country is indisputably geographically a part of the Balkan Peninsula;  Kaplan’s point is that it belongs with the other, Slavic or semi-Slavic countries of the region, spiritually and sociologically as well.
Very few Americans think of Greece in those terms, nor indeed in any terms at all except what we half-remember from school, limited to the Athenian Golden Age, several centuries B.C.  It is as though you were to try to conceive Germany in terms of what had been going on in the primeval forests of that time -- or America, as were it a continuation of its own prehistory of open plains, speckled here and there with miscellaneous blemmyes and buffalo, and otherwise largely empty.

It’s strange how little I knew of the tale that Kaplan tells.  It’s not as though I hadn’t yet come of age during the 1980s;  I did read newspapers.   But perhaps the reason for this ignorance had partly to do with the Western press, which had assimilated just one new Greek stereotype since the Age of Socrates:  the Medi-hippie world of “Never on Sunday” and “Zorba the Greek”.   Indeed, the English Wikipedia entry is astonishingly airbrushed:

    http://en.wikipedia.org/wiki/Andreas_Papandreou

I had to blink, to ascertain that this wasn’t an account of his more conventional father George.  (Someone seems to be curating his memory.)

Andreas knew well how to exploit the “Never on Sunday” sort of nonsense.  He appointed its star, Melina Mercouri (who played, one might say, a ταίρα  both onscreen and on the political stage) to his cabinet -- and re-appointed her again and again, while other underlings came and went.  It was a true Société du spectacle: 

In Papandreou’s name, Culture Minister Mercouri organized “human peace chains” around the Acropolis, even as Greek state companies were selling arms to both sides in the Iran-Iraq war, and to the two warring African states of Rwanda and Burundi.
-- Robert D. Kaplan, Balkan Ghosts (1993), p. 269

Likewise an eye-opener were Papandreou’s ties to a raft of morally quite unanchored chevaliers of terror:  PASOK and the November 17th Movement;  Abu-Nidal; Qaddafi’s hit-men, and on.  These, like such later ultraviolent inscrutable groups as Boko Haram and the central African Lord’s Resistance Army, cannot be understood terms of determinate ideology or even calculated, cynical self-interest;  it is not as though they have well-defined ends (whether good or bad) and merely overdo the means.   It seems to be more a matter of the morbido, and of metastatic narcissism.

None of this is part of the general American understanding of Greece.  “Cradle of Democracy” it must be for ever and aye.  For, our brains have only so much bandwidth.  Even in cases where party or interest do not preclude comprehension, we are apt, by acedia, to sink back into the Lay-Z-Boy of our early training and first impressions.  Cognitively, we settle for very little.



[Footnote]  Rather random but -- by way of counterbalancing the overall “down” of Balkan Ghosts as regards Eastern Europe:  there is a truly wonderful chamber ensemble called “Munich Artistrio”, though they seem to be Slovene.

Brahms (truly magisterial):
https://www.youtube.com/watch?v=N-L3UgoYvdA
(In particular the third movement, Adagio.)

Schubert (transcribed):
https://www.youtube.com/watch?v=nqv_-ll_LpE

[Update (alas) 9 III 15]  Greece threatens to flush its cisterns upon the rest of Europe:


Our notes upon this topic ici.



[Update 16 June 2015]   The above was originally posted back in January.   Blink;  five months go by;  and the headlines around the world  are still the same:  Bras de fer entre la Grèce et le FMI.    And now we have two new hippogriff words to toy with, of the sort that Europeans love to coin:  Brexit and Grexit -- British exit (from the EU) and Greek exit (from the Eurozone).  Greece, insolvent,  is trying to blackmail is creditors with a curious threat:  Lend us even more money or we won’t pay you back what we owe you.  Or in other words:  Throw good money after bad, or we’ll hold our breath till we’re blue in the face.  And the ultimate menace:  the dreaded GREXIT.

Re-reading the original essay, a riposte suggests itself:  Fine.  Tant mieux.  Rejoin your Balkan buddies.  Have a nice life.

 
[Update, 20 June 2015]  A pragmatic contrary view, from Lawrence Summers:

Make no mistake about the consequences of a breakdown. With an end to European support and consequent bank closures and credit problems, austerity will get far worse in Greece than it is today, and Greece will likely become a failed state, to the great detriment of all its people and their leadership. Once Greece fails as a state, Europe will collect far less debt repayment than it would with an orderly restructuring. And a massive northern out-migration of Greeks will strain national budgets throughout Europe, not to mention the challenges that will come as Russia achieves a presence in Greece. The IMF is looking at by far the largest nonpayment by a borrower in its history. True, there are good reasons to think enough foam has been placed on the runway to prevent financial contagion. Yet, this was asserted with respect to Long-Term Capital Management, subprime mortgages and the fall of Lehman Brothers.



Riposte:

Summers is an economist, and  on that turf  deserves all respect.  But:

(1) The introduction to his essay (not here quoted), compares the potential post-default events to the advent of World War I, the default being a kind of Sarajevo.    But -- wait, sanity check -- though much of post-WWII history, many nations of Europe were not using the Euro.  In fact, for most of that time, the Euro hadn’t even been invented.  Were Europeans walking around clad only in barrels?  Indeed, at press-time -- and this might surprise you, if all you are going on is Summers’ piece --  certain European countries  much more important than Greece  are still not members of the Eurozone:  Notably, Switzerland and the U.K. 
Nor are those countries  clamoring to join.  Indeed, Great Britain is on the brink of heading the opposite way, with a Brexit.

(2)  Has the accession of Eastern countries to the Eurozone or the E.U.  been a benefit to western Europe?  According to the Eurocrats, abundantly.  According to the citizens who have had to actually suffer through it, not so much.

(3)  Moral hazard.  (Bailing out Greece yet again  dangles poisonous carrots before Ireland, Spain, …)

(4)   Whether Summers sincerely has the best interests of America and Wesgtern Europe at heart, we do not know;  but he is certainly in tight with the big bankers.  And Summers’ argument really reduces to “too big to fail”.  We have seen, repeatedly, where that takes us. -- Sorry, banker-guys, time for a haircut.



That was the view from the Western side.  But what would be in store for Greece -- the equivalent of the first World War, as Summers would have it?  -- The closest recent historical was Argentina’s default on debt, in December 2001, described as “the biggest debt default in history”.
http://www.telegraph.co.uk/news/worldnews/southamerica/argentina/1366218/Argentina-makes-biggest-debt-default-in-history.html
This, in mid-depression.  It was followed by … a return to roaring growth.  Argentina did just fine out of it.  But a minority of private lenders -- the kind of people Summers hangs out with --  still want their pound of flesh, and have launched various lawsuits.
La Grèce au bord de la faillite, l'exemple argentin
http://www.medi1.com/infos/ch_eco/

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