POPULISM REACHES ITS LIMITS

Alexis Tsipras

Because of its Classical past as the founder of democracy, Greece was treated more tolerantly, than other countries would have been, when, during the nineteenth century, it defaulted several times on its commercial creditors.

That history created bad habits of mind. Now its creditors are the taxpayers of other countries, who are less tolerant, and less conscious of their intellectual debt to Plato and Socrates.

The present Greek debacle is the result of a clash of political cultures.

On the one hand is the culture of the European Union, where every decision has to be mediated through complex institutions representing 28 different countries, each with its own political culture, and then often has to win the assent of the European Parliament and of an independent European Central Bank. 

Theatrical gestures and moments of brilliant eloquence count for little in this world. Building a good track record, with good civil service staff work to back it up, is what counts in the EU political culture.

EU bailout decisions also have to be approved by the IMF, a global body, most of whose members and clients are far poorer than the Greeks. This creates an additional layer of interests which Greece must try to satisfy, as well as its EU partners.

In this setting, credibility and patience are vital to success. The new Greek government did not have patience, and soon it lost credibility as well.

In stark contrast with what was needed, it seems to me that the Greek Government is made up of people who come from a revolutionary tradition, where it believed that progress will come from a harsh rupture with the past, and whose proponents envisage a nationalist or socialist utopia, once that rupture is complete.

The Greek government are also people who have little or no previous experience of government, and who have thrived politically by agitating against the existing order, without the necessity of explaining how things would work after they had obtained power, and they had to survive and govern in the complex interconnected reality, that is the global economy of today.

That the Greek electorate would elect such people to office is explained by the desperation in to which they had been led by the irresponsible policies pursued by successive Greek governments since the 1980’s, who tried to win the votes of Greeks by promising them a standard of living that was not matched by their productive capacity, and by the mistaken decision to take Greece into the euro before the results of these bad policies had been properly rectified.

The problem is that the activities of the new government made things much worse than they were when they took office.

By creating doubt about whether they would honour the debts incurred by their predecessors, the new government created a crisis of confidence, and this loss of confidence led to a suspension of normal commercial activity. By looking for debt relief, before reforms were implemented they put the cart before the horse.

The underlying problem of Greece is a lack of productivity and export potential, but the Greek government, and to a great extent the EU authorities too, continue to ignore this. Greece’s productivity problem will take years to solve, not least because Greece is an elderly society. The structural reforms urged by the EU will help, because they will clear the clogged arteries of the Greek economy and allow talent to be reallocated to where it can do something productive. But the ageing of Greek society will remain an intractable problem.

As a result of the drama generated by their new Government, Greeks, instead of focussing on ways to invest to make more money, became in recent months obsessed instead with protecting what they already had. Whereas the economy was on a path towards modest growth, when the old government left office, it quickly plunged back into recession as money was withdrawn from the Greek banks, thereby further weakening Greece’s ability to meet its ongoing expenses, and to pay its debts as they fell due.

The timing of the Referendum, AFTER Greece has already run out of money, and on a proposal that has already been withdrawn, could not be worse. It compounds the panic and uncertainty. It is probably in breach of the Greek constitution. Apparently the Greek constitution does not allow referenda on fiscal issues, and the bailout offer contains many elements that are fiscal.

If ever there was a case study that shows how important it is to have political leaders who understand and face up to their responsibilities, and who deal with the world as it is rather than as they might wish it to be, it is to be found in Greece today. The lessons for Ireland are too obvious to require to be spelt out.

I wonder how Paul Krugman and others, who were so free with their advice to the Greeks in the early months of the crisis, are advising the Greeks to vote in the referendum on the 5 July.

A BIOGRAPHY OF A ROMANTIC EXPONENT OF VIOLENT NATIONALISM

Ernest Hemingway, a contemporary of Gabriele D’Annunzio, described the Italian Nationalist agitator of the early 20th century as a “jerk”,  because of D’Annunzio’s glorification of war.

D’Annunzio believed at the time that a recently united  Italy needed to shed blood, and  to conquer extra territory, so as to build a  shared sense of nationality among its diverse peoples.

Lucy Hughes Hallet has produced a major biography of D’Annunzio, entitled “The Pike, Gabriele D’Annunzio, Poet , Seducer and Preacher of War”. The book won the Samuel Johnson prize for biography in 2013.

As Ireland prepares to commemorate, between 2016 and 2022, the centenary of events set in train by a similar exercise in nation building through violence and death, it is well to reflect on the effect of a similar ideology in another country.

Like many of Ireland’s 1916 rebels, D’Annunzio was a poet, and a dramatist.

In 1915, he used his huge reputation in these fields, and his gift of speechmaking, to agitate for Italian entry to the First World War. As Hughes Hallet puts it     

“ He looked forward to the ensuing carnage without compunction for his part in involving his country in it. He referred blasphemously to his days of non stop oratory (in favour of war) as his “Passion Week””.

His speeches were incantatory, designed to work, not on their hearers intellects, but on their emotions.

That a dramatist would have such influence may be surprising, but it seems that in 1870, it is estimated that, while only 25% of Italians could read, 90% went to the theatre.

His theatrical approach to politics, was adopted with some success by Mussolini, and later by Hitler.

Although, in the war, Italy suffered enormous casualties in its battles against the Austrians, was militarily humiliated, and achieved little, D’Annunzio remained hugely popular after it ended, and was able, with impunity, to defy his own government, and to successfully  incite Italian troops to mutiny in pursuit of territorial claims against Yugoslavia.

He was the precursor of Fascism, and interesting in this respect, but one wonders if  he really deserves a biography of 644 pages!

LETTER TO EU HEADS OF GOVERNMENT

Along with other members of the “Friends of Europe” group, I have signed to following letter to the EU Heads of Government.  They need, I believe, to look beyond the immediate problems of the Union....The Greek crisis, Ukraine, Transatlantic investment  and the UK Referendum....and present a vision of the future of the Union. Only in that context can these immediate problems be solved.

Sir,

Discord between the European Union's member governments has been reaching a crescendo, with taunts exchanged not only between Athens and Berlin but almost routinely between some other EU leaders. 

A culture of recrimination and rebuke is growing to eclipse the commitment to intergovernmental solidarity and joint purpose that so successfully nurtured European integration over many decades.

Europe’s leaders would do well to turn to the spirit of the Schuman Declaration sixty-five years ago, for solidarity paved the way for the European Union.

In today’s terms, that means both North South and East West solidarity between member states, and between large countries and small.

Finger-pointing by national governments that are beset with their own particular political and

economic difficulties is understandable. But it is profoundly unhelpful. We Europeans face daunting longterm problems that can only be confronted and then overcome by a reaffirmation of unity, a fresh sense of common purpose and bold action.

The EU's structural challenges are well-known, but not given sufficient emphasis. In most countries of the Union demographic shrinkage is set to reduce active labour force; pension reform has made progress in a number of European countries, but much remains to be done, if we want both financial and social sustainability. Increased immigration could possibly be part of the the answer, but brings with it heightened social and political tensions that carry their own serious risks which the Union must formally and publicly confront.

Enhancing the quality of our human capital is another and crucial part of the answer, but currently we see an alarming disinvestment in education in a number of countries.

Many European governments now hope they see signs of economic recovery, yet the underlying trends are less encouraging. Our slowness in embracing new technologies is handicapping our productivity improvements - twenty years ago Europe's productivity improved at almost twice the rate as in America, and now it's about half that of the U.S. The implications for our international competitiveness in what is being labelled the 'Asian century' are not encouraging.

On the EU's home front, it is surely time that everyone with a hand in shaping Europe's future awoke to the implications of the continuing eurozone crisis. Disagreements between creditors and debtors are cloaking the more important issues of inadequate design and of the North-South gap within Europe.

The latter is widening fast, and unless checked could yet tear the European Union apart.

We believe that a sense of shared purpose between EU governments must be restored. To that end, we urge the European Council to take the opportunity of its next scheduled summit meeting on June 25 to publicly commit to a 'Doctrine of Unity'. This would see our national leaders pledging themselves to far more cooperation and mutual support because that's explicit in EU membership though decreasingly observed. This in no way implies “blank check” financial support for any particular member state, but it does seek to reinforce the links that are so essential to Europe.

What is needed is for the Union's heads of state and government to spell out the underlying weaknesses that cloud Europe's future. These should be the strategic threats we Europeans must all face up to, as distinct from short-term difficulties. It should put into their proper perspective the damaging public spats between some governments that have been doing so much harm to the EU and to the credibility of the single currency and the common foreign and security policy.

Such a declaration by the European Council would ring loud alarm bells within the EU, and would send an important signal around the world that Europe may be down but is far from out.

Yours,