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Tag Archives: Greece

H Έλενα Παναρίτη καλεσμένη στη Δημόσια Ραδιοφωνία “Η αρχή του τέλους για το Ευρώ”

5 Jun

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https://www.youtube.com/watch?v=zE_dr6AZB_I&feature=youtu.be

Elena Panaritis : “Bruised and confused: why Greeks voted against the gods of Europe” (The Guardian)

2 Jun

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http://www.theguardian.com/commentisfree/2014/jun/01/greeks-electorate-voted-against-europe-eu-austerity

Elena Panaritis

Bruised and confused: why Greeks voted against the gods of Europe

Ravaged by austerity measures and caricatured as lousy managers and born tax evaders, the Greek electorate went left and right in their efforts to say no to the EU

In last month’s elections a majority of Greeks – now routinely depicted by the gods of Europe as lousy managers and born tax-evaders – reacted by shunning the pro-EU parties. They made the anti-European and populist left and far-right parties the rising stars at the polls. Even Syriza, the radical (though not so radical any more) leftwing party that secured 26.6% of the votes did not do as well as expected. Once very anti-austerity and ready to go up against Brussels, it has since watered down its tactics.

Analysing the results via ideological labels is perhaps less important than seeing beyond the political shake-up to the bruised reputation of a very proud people. The Greeks now often feel like unwanted guests at the EU table.

Add to this feeling the economic realities: the imposed never-ending austerity, GDP reduced by 30% and nearly wiping out the middle class, and the grim future Greek people face with youth unemployment running at over 60% (28% overall).

From the start of Greece‘s economic crisis, most of the richer EU members were emotional and openly angry, blaming the Greeks for all their woes when in fact it wasn’t a problem of household private deficit and overspending, but of public sector mismanagement and bad governance.

The crisis was the end result of an overly bureaucratic and cumbersome system that became even more bureaucratic because of additional European directives. A lack of transparency facilitated the mishandling of government and public budgeting.

What was so much needed was reform and simplification, allowing for transparency to build trust. This is the missing ingredient with the national government, and now EU governance.

Ironically the Greeks, in contrast with many other Europeans, have long been pro-integration since the Treaty of Rome in the 1960s. They adopted the euro – putting to rest the drachma, the oldest currency in the western world – with optimism. Compare this reaction with, say, France, where prices are still printed in both euros and old French francs. And when the troika of the European Commission, the European Central Bank and the IMF arrived in Athens to help the country put its financial house in order, they were widely welcomed. Most Greeks believed the troika could fix a broken system.

Instead, Greece’s “bail-out” packages, initially at high interest rates, were perceived clearly to be only money transfers for the Greek state to pay back its debt. Persistent austerity and fiscal measures eroded further some of the healthy forms of governance that remained (police and judiciary included). This allowed for the rise of the far-right ultra-nationalist Golden Dawn, especially in urban centres.

Not surprisingly, then, the troika’s welcome was short-lived. Those who are suffering the consequences of bad governance and politics are the middle class, the low-income earners, the pensioners receiving just ¤600 a month and now unable to cover their basic needs. They feel insecure and unprotected. Meanwhile, those who took advantage of the old ways of bad governance seem not to be touched that much. In short, the euphoric pro-European mood soured and turned into a silent vote of dissatisfaction and a clear: “Thank you, EU, but no thank you.” What did for the EU in the elections is the serious lack of leadership it has shown in tough times. The euro crisis, for instance, was persistently not seen as such, but blamed as a Greek crisis for its first three years.

More specifically, the stubborn unwillingness of Brussels to use its powers to make quick decisions and avoid the spreading of the crisis constituted a supreme error.

Instead, decisions were offloaded on to the national parliaments. The same parliaments were never asked to approve European subsidies on common agricultural policy or regional harmonisation policy.

The reality was a non-handling of the crisis. We observed the lack of any leadership and responsibility. This created two very different forms of punishment. The first, from the markets, spread the euro crisis and credit “downgrading” of several countries, including France (the second pillar of the Union with Germany). The second punishment, carried by grassroots anger, came from the people, demanding a change of the EU, as seen in last month’s elections

So, in the case of Greece, this is a response to the blind following of austerity which prolonged recession and created a great depression – as well as producing greater inequalities and making a recovery difficult to see.

In the north (France, Germany, Austria), the Eurosceptics are gaining for different reasons. The people are tired of being asked to give more to the south and to those “lazy and irresponsible Greeks” especially since they have their own domestic issues to address.

Leaders are asked to take brave decisions – these still haven’t been taken in Europe, and quite frankly I do not think they will be taken soon because Europe has become a big bureaucratic elephant with a life of its own. Large entities like this are not known for their ability to be flexible or adapt to the reality on the ground. I fear things will become worse before they start getting better.

A growing number of Greeks and other Europeans are now tired. They do not see any light at the end of the tunnel. Positive political statements about the end of the crisis mean very little to them. In general, the EU has disappointed the Greeks. Instead of making decisions, the EU postponed them. There was a lot of talk, endless meetings in Brussels; kicking the can down the road every time only prolonged the pain. This created anger, discontent and impatience.

Europe is no longer the club of the elite (De Gaulle and Adenauer, Mitterrand and Kohl) and these elections made it clear. Last month’s vote reflects this change. The bottom line is that the euro crisis game was played out in Greece, and the European vision has been lost in Brussels.

Elena Panaritis is an economist who has worked at the World Bank and was a Pasok member of the Greek parliament from 2009 until 2012

CNBC: Elena Panaritis comments on EU elections results – Is greek coalition still strong?

26 May

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Elena Panaritis comments on EU elections results

Euro Crisis Leads to Scepticism About the Future of the European Union

20 May

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http://www.huffingtonpost.com/elena-panaritis/euro-crisis-leads-to-skep_b_5062259.html?1396271779

 

Elena Panaritis

The Eurosceptics have moved from blogs, to op-eds, to political campaigns. A new wave of populist politicians who oppose greater European Union integration or question the raison d’étre of the EU are vying to make big wins in the upcoming European Parliament elections in May. The first signs come from French Municipal Elections in France. About 19 cities turned to the National Front party lead by Marine Le Pen. A serious Eurosceptic party of the far right.

Without a doubt, the outcome of the elections will be the most divisive since direct elections for Members of the European Parliament (MEPs) were first held 35 years ago. Of course, it remains to be seen how the 300 million voters in the 28 member states of the EU will vote on Election Day. What is certain, however, is that Brussels is to blame for the growth of Eurosceptic parties across the EU.

The rise of the Eurosceptic parties, which are united in a deep distrust of anything coming from Brussels, is the result of the increasingly irresponsive organisations and institutions of the European Union. One example is the EU’s inability to address the troubles of one small country – Greece. For the first couple of years, the Greek crisis was treated as just that – a crisis of the lazy, corrupt and inefficient Greeks. Then, the crisis was perceived as a wider problem of the southern Europeans dubbed as the PIGS (Portugal, Ireland, Greece and Spain). It seems the EU preferred to make decisions based on these scenarios creating divisiveness, rather than addressing the structural problems of the Union fast.

The truth is that the European Union was not fast enough to react to market distortions and inefficiencies in its Member States. Instead, the EU allowed the debate to turn into a witch hunt – looking for someone to blame, rather than dealing with the underlying issues like the inefficiencies of the EU’s Single Currency and the fiscal union.

Ironically, it is the Union’s handling of the Eurozone crisis that lead to the rise in populism and the backlash against the leadership of the 28-member bloc.

For the first time in the history of the EU, an unprecedented number of voters from across the 28-member bloc will vote for parties that are strongly questioning the effectiveness and even the relevance of the EU. The southern voters may unfortunately lead the way since they feel they have been punished by the EU reforms of severe austerity. Who wants to continue calling oneself a Europhile when they feel they are being punished?

The irony of the situation is that the European Union has itself created a strange incubator of criticism and inflexibility. The question now What type of Europe we want and how will the Union EU turn things around?

Is There Growth or Is it Just Plain Wishful Thinking?

20 May

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http://www.huffingtonpost.com/elena-panaritis/is-there-growth-or-is-it-_b_4956096.html?1394717898

Elena Panaritis – Christopher Pissarides

High-profile European officials are playing up the fact that Europe is expected to see positive growth in 2014. But what they don’t like to talk about is the fact that it will be miniscule compared to the United States and much of the rest of the world. They also rarely talk about how deeper the recession in Europe has got since the global financial crisis erupted in 2008. It is so deep that Europe still needs a lot more time to get back to where it was in 2007, when advanced countries reached their pre-recession peak.

- Today, domestic output in the Eurozone as a whole is still very low (3% below what it was in 2007), a gap that is not expected to close in 2014.

- The rate of unemployment in the Eurozone is 12%, compared with 7.5% in 2007.

In the United States, output is almost 7% higher than its level in 2007, even though the rate of unemployment remains somewhat higher, climbing to 6.7% this month from a five-year low of 6.6%.

For us southern Europeans, the facts are rather depressing. When discussing the situation today our European leaders fail to mention that there is an unequal distribution of the rewards from growth. It is not without irony that the relatively rich north is getting richer and the relatively poor south is getting poorer.

Germany’s domestic production, for instance, is currently running at about 3% higher than in 2007. In Greece, it has fallen by more than 27%. As for the rate of unemployment in Germany, it is just 5.2% – this is 3.5 percentage points lower than when the crisis started. In Greece, the rate of unemployment has soared to a high of 28% – this is 20 percentage points higher.

If one probes deeper into these unemployment figures, they will be confronted with yet another horror story: youth unemployment. In Germany, the rate of unemployment for men and women aged between 15 and 24 has actually dropped from 12% to 7.8%. Not so in Greece, where youth unemployment has risen from 22% in 2007 to a staggering 58% in 2013. Meanwhile, in the Eurozone as a whole (where EU heavyweight Germany is the biggest member), the rate of youth unemployment increased from 15% in 2008 to 23.7%, according to the latest available figures.

In addition, the serious mishandling of the Eurozone crisis has highlighted a dangerous lack of leadership that would inspire European citizens, which in turn has created a growing and very angry outburst of populism.

This is in stark contrast to how previous world crises were handled and is causing further erosion of confidence in the EU and in the proposed solution packages. A pertinent example of a previous economic crisis is Germany’s need for reconstruction after World War Two. The United States provided generous assistance through the Marshall Plan without any recourse to US taxpayers for their views. The leaders at the time had a forward-looking vision, realising that a prosperous Germany was better for the West than a bankrupt one. In the first economic crisis of the 21st century, however, we have a popularized leadership that sometimes makes financial decisions not on the basis of sound economic argument but on the basis of whether or not voters want to pay higher taxes now (ignoring future benefits that might accrue).

Positive growth in Europe does not mean that the Eurozone crisis is over, or that the Euro will survive.

The austerity policies that the EU adopted in 2010 and continues to implement are unsustainable and quite frankly harmful. One of the most difficult lessons learned as far back as the Great Depression of the 1930s is that austerity cannot reverse recession. The situation in Greece and Spain is not all that different from the one that the United States and other advanced countries had to deal with in the 1930s, but the lesson does not seem to have been learnt. Another example of the damage that austerity can do is from the austerity that the Allies imposed on the Weimar Republic after the First World War. It merely served to fuel political extremism. This is something that we are starting to see in Greece.

The root of all the problems of the Eurozone is structural and manifested in overly complicated and burdensome rules and regulations that are unfriendly to entrepreneurship, new ideas and innovation. This has ultimately resulted in large debts and an over-expanded inefficient banking system. These problems have to be fixed first before austerity can be effective.

What is needed is some serious productivity improvement that is supported by innovation and entrepreneurial activity and that will open up new sectors of economic activity and will lead to much-needed job creation. Europe desperately needs more investment – not more austerity which in the end serves to stifle demand and create more problems than intended to solve.

It is futile to expect a population to go through the pains of structural reform without the promise of immediate rewards.

There are no immediate rewards under austerity because the implementation of such reforms is put at risk and even if successful, there is no demand for the products of new enterprises and there can be no growth.

The usual response to a plea like ours is to ask “What about the debt?” and “Won’t an abandonment of austerity lead to more and even less sustainable burdens of debt?”

Indeed, this is the case in countries like Greece that have a very large debt to GDP ratio. But low debt is neither necessary nor sufficient as a safety valve against default. Even if debt is low, default can still occur.

This is what we experienced in the 1990s when many Latin American countries defaulted with a much lower debt to GDP ratio than the eurozone periphery has today. For example, Argentina defaulted with a debt of about 60% of its GDP, much less than the eurozone average (96%). The countries of Latin America that defaulted managed to exit their crisis thanks to serious structural reforms coupled with macro adjustment. Some Asian countries underwent a similar solvency crisis and adjustment period. What all this means is that austerity-induced debt reduction in Greece is no guarantee against default.

But there is no doubt that structural adjustment is easier to achieve when the debt burden does not weigh heavily on people’s shoulders. In this respect, Europe can learn from the experiences of Latin American and Asia. In these crises, as well as in Eastern Europe after in the 1990s, debt forgiveness played a key role in recovery. For this reason we suggest that in order to give structural reform a chance to succeed, debt forgiveness must first be seriously considered in the case of Greece and be given priority over other assistance initiatives.

The Eurozone partners need to take stock of how far the union has come and what kind of union do they really want for the future.

The high debt levels can at least partly be blamed on badly-designed Eurozone institutions. Some reforms have been implemented, but we are still a long way from the necessary banking union – not to mention a fiscal union of some kind. Instead of a Latin American-style default, we believe there should be a mutualization of European debt in order to facilitate structural reform and recovery which will transform the Eurozone (almost overnight) into a true union of equal partners. Mutualization can easily be achieved in a number of ways. The most obvious is the issuing of freely traded Eurobonds by the European Central Bank, which can be used to service sovereign debts. This seems to us to be preferable to defaults, or even to a break-up of the union, which will merely disrupt the European economy even more. Europe needs to take more firm action and it needs to do this fast in order to get out of the vicious cycle of austerity-recession-austerity-recession. This is the only way to rescue an entire generation from sinking deeper into an abyss of oblivion.

Elena Panaritis on Bloomberg Television’s “Countdown ” 18/06/2012

18 Jun

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Elena Panaritis speaks about the greek elections