Greece to be the New Phoenix

Greece to be the New Phoenix

Editor’s note: To honor the memory of Energy Tribune editor Michael J. Economides, we will be republishing some of his best articles this week. This piece was originally published on June 29, 2011.

Under enormous international pressure the Greek Parliament just passed an austerity package. The world can now breathe a temporary sigh of relief but it will not last too long. The problem will not go away.

It used to be that being a Greek had a cachet, a source of historical pride bordering on arrogance. “When our ancestors were building the Parthenon yours were living in caves.” The fact that Greeks are voted year after year as Europe’s best lovers did not hurt either.

But there is “something rotten” in Greece, that is putting an unsavory stop to all this even if my compatriots, as usual, want to blame foreigners who for some inexplicable reason hate, or are jealous of, the Greeks. The country is, in all but name, bankrupt and is certain to default no matter how many stop gap measures are taken. The only reason it has not happened yet is because of the fear of what misfortunes may befall other countries. There is also no precedent where a region, under a monetary union like the EU, can default. Would the United States let California go bankrupt? To some this is possible and tantalizing in itself and not far-fetched.

It would be hard and bitter but the possibility of letting the country fail may be the best thing that can happen. Phoenix is a mythical Greek bird that is re-born out of the ashes and it is becoming increasingly clear that its modern manifestation must be a new Greece itself. Fixing the unfixable is not the answer.

There is nothing implicit to the Greek nature with the current economic mess in the country. Greeks are damn good business people with a great love of education and upwards mobility, and they have done very well in their diaspora throughout the world. I am a Greek from Cyprus, akin to the analogy of a Hong Kong Chinese to the mainlanders. Cyprus, an independent Republic and a member of the European Union, in spite of the fact that 40 percent of the island is occupied by Turkey, has thrived and it is far off the malaise that has engulfed Greece. So it is possible.

The Greek problem started almost 200 years ago. At the time, what became eventually Greece and what it took 130 years to complete, was under the crumbling Ottoman Empire. I know that almost all Greeks and the vast majority of Europeans think of Turkey, itself a remnant of the Empire, as something alien to European ideals and values, exacerbated by the country’s Islamic religion. That may be the case but there is another truth. At its height, the Ottoman was one of the most tolerant, multi-ethnic empires in world history. The reason that the Greeks are still Orthodox Greeks and for that matter the Serbs and Croats, the Bulgarians and Albanians are still what they were (along with the modern problems that have arisen in their resurgent nationalisms) is because the Turks did not force them to become Turks, like other empires would have done.

Romantic notions of resurrected ancient glory of the enslaved Greece dominated European intelligentsia in the late eighteenth and early nineteenth centuries. Lord Byron died in Greece as part of that quest. American university Greek letter societies have their origins during that era, including a short-lived and in retrospect preposterous notion to make Greek the official language of the nascent United States, wanting to breach all ties with Britain.

A tiny patch of land was the first Greece in the late 1820s following the Greek war of independence. It took all the way until after World War II and a number of in-between wars for several regions and islands to be added to form what people know as Greece today. Ironically, this country is not the vision that Greeks would have had all the way into the 1920′s. Few people realize that even then the westernmost part of today’s Turkey was Ionia, Izmir was Smyrna, with a Greek majority. The Greek Grand Idea was to resurrect the Byzantine Empire with capital Constantinople, Istanbul, modern Turkey’s thriving city.

One would ask what would happen to the Turks? I am not sure that was something the Greeks and Europeans of the day thought much about, other than the Turks did not belong there. (Maybe Turkmenistan from where their ancestors set off 1000 years earlier?) The whole idea was another preposterous notion of a bygone era. After a catastrophic war the Grand Idea crushed to an end along with the birth of a new Turkey run by a major personality, Kemal Ataturk, and the expelling of one million Greeks, many of which became permanent public charges of Greece. The more educated and imaginative ones became the cores of the international Greek diaspora.

For 130 years, from 1820 to 1950, the attitude in Greece was one of entitlement. Europeans felt so, not unlike, the way they came to feel eventually towards Israel, garbed in post-World War II guilt. Greeks at the receiving end felt similarly, to the point that any time they sensed that Europeans would not espouse even the minute Greek predilection it would bring feelings of hostility and betrayal. How dare they not be on our side? We are the Gods’ truly chosen people.

Greece was the recipient of massive foreign aid for decades. During the Cold War, following a brutal civil war between communists, who had taken over the rest of the Balkans, and the nationalists, brought the United States at center stage, replacing the western European powers. Greece and Turkey became frontline countries in the region and recipients of massive US aid (with Greek complains directed at the American government thereafter).

Greece as a supported state lasted for another 40 years. The country, having entered the industrial revolution era way too late, never fully developed its economy, its business, its institutions. There were no echoes of, say, Italy even with its own peculiarities, let alone, The Netherlands or Norway. Foreign giveaways and tourism nourished the country. The population grew to depend on the state for everything.

Interestingly the society grew to actually frown upon private business and its inherent uncertainties, unless businessmen somehow found a way to be in bed with government. Even the shipping community, the world’s largest and most successful with press luminaries like Onassis did not excite common Greek citizens that much. Much of private business was mom and pop operation and if it could evade taxes that would make it all the more palatable.

On the other hand, a successful young man would do well in school, then go to a good department at the university, graduate at the top of his class only to be hired by the government with 14 salaries per year, many weeks of vacation and retire at age 57; much earlier if a married woman. Who would pay for all of this was never the issue.

Greece was the classic patronage state. Landlords formed many of the political families and political parties were fashioned along ideological lines but still tied with prominent persons. Governing was for the sake of governing. There was never really any effort to develop the country economically or industrially. Business was never encouraged. Greeks were supposed to be eternally admired by foreigners for their ancient contributions but the country was OK to be always poor. Greeks would not waste time to make the country prosperous. That would be too trivial and plebian.

Then came 1974. It was a fateful year for Cyprus and to a large extent also for Greece.

Cyprus, which had been a British colony since 1878, went through the process, like Crete, Macedonia and Rhodes before it, to unite with Greece. For the Greeks that was supposed to be the natural path. But this did not calculate the will of new Turkey nor the divide-and-rule attitude of Britain, something that has fomented again anti-Western complains by Greek nationalists ever since. After an insurrection by the Greek Cypriots against the British Administration in the 1950′s, the best the Greeks could muster in 1960 was the Republic of Cyprus, with a very heavy involvement of Turkey and a lopsided set of guarantees for the Turkish Cypriots.

In the meantime in Greece, at the height of the Cold War in a very contested region of the world, there was a constant sociopolitical struggle that is hard to explain to outsiders. First, there was the official pro-western position of the country, a member of NATO. This was supported by the royal family and much of the establishment that won the civil war. But Greek communists and, especially socialists, were on the opposite end of the spectrum. Certainly, the intellectuals in Greece were very heavily inclined towards the socialist left, not unlike American academic liberals. The father of the current Prime Minister George Papandreou, Andreas, himself a prime minister was a US citizen for years, a professor at the University of California, Berkeley who would have felt very much at home in the Obama Administration. Their adversaries, Greek nationalists, were not necessarily pro-western, feeling betrayed by the West in dealing with Turkey and in general not getting their due by being the real frontline country of western values.

In 1967, in a move that shocked Europe, a military junta took over in Greece, first presumably supported by the King, then disassociated, leading to the latter’s abdication. The junta run the country until 1974 when, after engineering a coup against the then President of Cyprus, Archbishop Makarios, Turkey invaded the island, causing an intractable problem ever since.
The junta, unable to counter Turkey, collapsed practically overnight and Greece declared itself squarely as part of Europe, ready to join, after the necessary process, the fledgling Union.

There were not very many second thoughts among most Europeans in the 1970s of whether Greece but also Spain, just getting rid of decades of the Franco dictatorship and Portugal, also at the end of military governments, should be part of the European Union. With little due diligence, looking the other way of the obvious structural differences with northern European countries, they were eventually allowed to accede to the group, a reward for their democratization. Their obvious shortcomings were papered over.

Greek problems are nothing new. Only their airing is new and only after a much ballyhooed monetary union brought the question of what happens when a country in default can no longer do what many had done before: print more money. But in some ways this creates an obvious way out. Let the country default and from the immolation Phoenix will emerge. That’s the only solution and it would serve as an example for the rest of the world to take measures to avoid its recurrence in other countries. The world may grow again to owe the Greeks another gratitude.

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