Friday, 5 September 2014

Greek surplus could ease austerity

Greece this week announced that it has generated a primary surplus of 3.2bn euros over the first seven months of the year, trumping a 2.9bn euro surplus last year.

"This is a clear indication that public finances are settling into a pattern of primary surpluses, and this creates the basis for growth with social justice," said a statement from deputy finance minister Christos Staikouras on Wednesday.

Expectations are high among portions of the Greek media that Prime Minister Antonis Samaras will make significant policy concessions at his inaugural speech to the Thessaloniki International Fair on Saturday morning. The annual speech is traditionally a keynote for Greek prime ministers to foreshadow their economic policy for the year ahead, before the budget is presented to parliament by early October.

Two small concessions have already been made. Public transport tickets fell to 1.2 euros on Monday, down from 1.4 euros. And the government has in principle cleared the way for a reduction in property tax, introduced in August 2011 as an emergency revenue measure.

Further revenue measures introduced during the four-year Greek crisis include a VAT hike from 19 to 23 percent (2010), a 30 percent increase in heating oil (2012) and a solidarity tax amounting to a surcharge on income of between two and five percent (2011).

Samaras has been keen to ease the burden on taxpayers and especially businesses. Last year his government reduced VAT to 13 percent for restaurants and made an abortive attempt to reduce the price of heating oil. In April he announced that small businesses and the self employed will have VAT reimbursed at the end of this year for the first time.

Businesses and the self-employed are obliged to pre-pay 23 percent Value Added Tax on their turnover each month, or face hefty fines of at least 500 euros. In theory, the state reimburses much of that VAT at the end of the year, once businesses and traders have presented expenses in their tax statements. In practice, however, the state has failed to disburse the cash, holding it as credit against future tax obligations and sucking up liquidity.

Last September, during the annual Thessaloniki speech, Samaras said that one of the first goals of his tax policy would be to lower corporate tax rates from 25 percent to 15 percent.

Sunday, 20 July 2014

Cyprus divided, 40 years on

This article was published by Al Jazeera International.

There had been ample warning of a Turkish invasion: a buildup of 38,000 troops at the Adana military base in southern Turkey; a flotilla of ships that carried 160 tanks and armoured personnel carriers; and preparations to launch some 80 aircraft. Greek intelligence seems to have interpreted all this, and radar sightings of the fleet under steam on the morning of the invasion itself, as a mere exercise.

At dawn on July 20, Turkish fighter jets began to strafe Greek infantry billets, light artillery batteries and air force early warning stations on Cyprus’ northern shore. Moving swiftly inland, they laid waste to the Greeks’ main military camp in the capital, Nicosia. The 185th artillery battalion was scorched with napalm bombs as it moved out of barracks.

Cyprus effectively fell within days, but Turkish forces advanced well into August, long after the UN had ordered aceasefire, and stopped when they reached a line of division between ethnic Greek and Turkish communities suggested by the British in 1964.

It is along this Green Line, as it is now known, that Cyprus remains divided today, cutting across Nicosia to create the world’s last divided capital.

The invasion marks the only occasion when one NATO ally fought another.  Washington’s apparent acquiescence is attributed to the Nixon administration’s distraction with impeachment proceedings, but remains controversial. The ongoing occupation of northern Cyprus is the only occupation of EU soil and still marks the biggest obstacle in Turkey’s path to EU membership.  

Roots of division

Cyprus’ division marks a spectacular failure to graduate a European country from British rule to independence. The Turkish invasion was, at least nominally, a response to Greek-Cypriot nationalism. After the Second World War, a Greek-Cypriot lieutenant colonel, Yiorgos Grivas, set up EOKA, a guerrilla organisation, which attacked British troops and installations as part of its goal to merge Cyprus with Greece. Its battle cry was Enosis, or union.

In 1955, British governor John Harding offered the Greek-Cypriot community leader, Archbishop Makarios, self-determination after seven years. Makarios turned it down and condoned the EOKA campaign. It was then that Britain began to stoke Turkish interest in its ethnic community on Cyprus. From this point on, British policy saw any new arrangement as bi-communal.

The following year Britain presented the Radcliffe Plan, which allowed some self-government to the two communities separately. Prime minister Harold MacMillan went further down this path in 1958, foreshadowing the gradual division of Cyprus into two communities and possible partition. The plan could be enforced with either the Greek-Cypriot or the Turkish-Cypriot community separately. Like the previous plans, it was rejected by Makarios.

Cyprus was eventually given independence in 1960 on the basis of a power-sharing agreement negotiated by Greece and Turkey, not by the Cypriots themselves, which installed Makarios as president and a Turkish-Cypriot vice-president. However, Britain, Greece and Turkey retained power to intervene unilaterally if they felt their interests threatened.

By December 1963, this system of self-rule broke down. Turkish-Cypriots withdrew from the administration and Turkey declared the constitution of 1960 void.

The breakdown sparked the worst inter-communal clashes to date early the next year, leading Turkey to deploy troops along the highway between Nicosia and the northern port of Kyrenia, and depriving Makarios of control over parts of the island for the first time. The Turkish position, that Greek- and Turkish-Cypriots could not live together, seemed to have been amply demonstrated.  
Makarios was to turn down one last chance at Enosis that year: an American proposal would have unified Cyprus with Greece, allowing Turkey to lease a small military base for 50 years.

Still, it was a Greek blunder that would trigger the invasion. In 1967, a cabal of nationalist Greek colonels who had served in Cyprus in the 1950s and had become radicalised there, seized the reins of government in Athens to prevent a centre-left government from being elected. On July 15, 1974, they attempted to bring about Enosis by deposing Makarios in favour of their own man, Nikos Sampson, a former EOKA guerrilla. Makarios fled, denouncing the coup as an invasion, and inviting intervention.

The Turkish Republic of Northern Cyprus declared independence in 1983, but remains recognised only by Turkey.

Is the status quo permanent?

“I am not sure we can live with the Turkish-Cypriots,” says Christos, a banker raising a family with his wife, Anita, in a plush neighbourhood of Nicosia. Both grew up in an ethnically pure state since the invasion.

He is suspicious of Turkish motives in backing the talks, the first since Cyprus discovered large reserves of natural gas in its territorial waters. These could transform its economy over the next few years.

“It’s obvious that they want a share in the gas wealth. Frankly, I think that we should just let them have all the gas, in return for pulling out their troops. We don’t need the gas to prosper. We’re perfectly capable of building an economy out of our own labour. We just want to have our island back and to be left alone.”

Anita agrees, despite the fact that a reunification settlement could indemnify her at today’s property rates for luxury hotels her family lost in the invasion. “I just don’t think we should legalise the invasion,” she says. The word she uses means both to legalise and to render legitimate, and reflects Greek-Cypriots’ awareness of the fact that they are being called upon to surrender a moral high ground.

Christos’ and Anita’s skepticism echo throughout Greek-Cypriot society, and lies at the heart of a disastrous attempt to reunify Cyprus ahead of its last major invasion anniversary a decade ago.

In April 2004, four out of five of Greek-Cypriots rejected the so-called Annan Plan, named after then-UN Secretary-General Kofi Annan. It would have created a federal state that gave the Greek-Cypriot and Turkish-Cypriot communities powerful local governments.

Although two thirds of Turkish-Cypriots voted in favour of that plan, not all are so minded. Many Cypriots on both sides are now beginning to wonder whether they should accept the status quo as the lesser of many evils.

“For me there is no division,” says Osman Sakale, a Turkish-Cypriot shopkeeper who lives in northern Nicosia. “Turks are on this side living happily, Greeks are on the other side living happily. Any reunification by force won’t work.” He adds, “We Turks play artistic music, the Greeks play Western music and we don’t coincide.”

Sakale is not a native-born Tuyrkish-Cypriot, but a settler brought in over the last 40 years by Turkey as part of an effort to alter the demographics on the island. Greek-Cypriots currently number some 600,000, Turkish-Cypriots only 200,000 – and only an estimated 80,000 of those are indigenous.

One of those indigenous ethnic Turks is film-maker Mustafa Ersenal, who supports reunification. “We really do feel very claustrophobic in Cyprus; especially in northern Cyprus,” he says. “First of all, we all have to go to the army. It steals a year of our lives, it steals a year of productivity, it steals a year of our creativity, it steals a year of our future.”

Elena Tanou, a businesswoman who has organised a Greek- and Turkish-Cypriot business forum, agrees. The situation now with the economy brings us to a dead end. People in both communities feel that a solution – a political solution - will bring jobs, and the chance to restore the country again altogether.”

Mightier than the sword

Despite its effectiveness, the invasion increasingly seems to have become a millstone around Turkey’s neck. Keeping 40,000 troops on the island costs an estimated $480 million a year. Subsidising the TRNC’s budget costs hundreds of millions more.

Expelling some 200,000 Greek-Cypriots from their homes in the north is also becoming increasingly expensive. A landmark European Court of Human Rights ruling in 1996 awarded Titina Loizidou, a Greek-Cypriot teacher, $915,000 in compensation for the violation of her right to the “peaceful enjoyment of her property”, by preventing her from visiting and occupying her home in the north. Hundreds more cases have been filed, and the damages accrue for each year of the occupation.

In May, the ECHR  ordered Turkey to pay Cyprus more than $120 million (90 million euros) to the relatives of some two thousand people missing since the invasion, and to enclaved Greek-Cypriots in the north.

These mounting legal costs stand in contrast to the peace dividend Turkey stands to gain through re-unification. In 2010, the Peace Research Institute Oslo (PRIO), a think-tank, estimated the potential annual benefits to Turkey at over $16bn (12.3bn euros) – chiefly in travel, tourism, financial services and exports, in addition to some $7bn in savings. 

The potential benefits to Cyprus are even greater, the PRIO believes. “With a solution to the Cyprus problem, all-island GDP (at constant 2012 prices) would rise from just over 20bn euros [$27bn] in 2012 to just under 45bn euros [$61bn] by 2035… compared with around 25bn euros [$34bn] without a solution. In other words, the peace dividend over 20 years would be approximately 20bn euros [$27bn].” This would translate into per capita earnings of $38,000 a year for Cypriots, compared to $23,000 today.
Energy is the great new factor here. Gas fields found offshore Cyprus in 2010 are estimated to amount to at least 4.1tn cubic feet, with much exploration remaining to be done. 
Finally there are the diplomatic costs: Occupation has now become a major obstacle to Turkish hopes for EU membership.

This has helped Cyprus win diplomatic ground. In 2002, Greece persuaded the European Union to admit Cyprus divided, over Turkish objections. This underlined the legitimacy of the Republic of Cyprus and further undermined the TRNC. Nicosia alone may issue EU passports to members of both communities and disburse the bulk of EU funds. Turkey’s refusal to extend customs union with Cyprus, as with all other EU members, has led to the freezing of membership negotiations on several chapters. 

Placing all talks under UN auspices meant that UN resolutions calling for a complete withdrawal of Turkish armed forces have had to be part of any plan. Basic EU freedoms of movement and establishment are also considered inalienable, so Greek-Cypriots displaced during the invasion should be able to return to the north.

Potential diplomatic, legal and financial gains all advocate in favour of re-unification, but political trust still eludes the two communities. The occupation can be withdrawn, but can Cypriots overcome the separate Greek and Turkish nationalism that have nurtured them for so long?

Thursday, 10 July 2014

Greece’s wild east: How migrants' European hopes are dashed

This article was published by Al Jazeera International.

Azher Abbas’ capture reads like a classic fairy tale. “There was a knock at the door, and a voice outside said, ‘I am a boss, I have work; come out and work’.” 

It was the pre-dawn hour, when farmers in provincial towns drive around recruiting day labourers like Abbas. He opened the door of the flat he shared with two other undocumented Pakistani migrants.

“Policemen burst in and started turning the place upside-down. They asked us for our papers. They took us away.”

Abbas had spent 15 months as a farm hand in the town of Skala in southern Greece. He picked oranges and olives from dawn till dusk, or tilled land, for up to 25 euros a day. Once a month, he sent about 150 euros home to support his parents and three siblings.

It was paradise compared to what followed. He spent another 15 months at the Korinth detention centre, one of half a dozen camps police have created to sequester irregular migrants. An estimated 6,000 are held in such camps, and thousands more at police precincts.

“We were never treated as people,” says Abbas. One day he and his fellow-inmates complained about the chick-pea stew. “A bunch of policemen came and spat in the food and held batons over us and said ‘eat it now’.”

When a man in Abbas’ dormitory of 80 people caught scabies, a highly infectious skin disease, the men demanded he go to hospital. The response was swift. “They beat us so badly, that a lot of people simply went out of their minds with fear… No-one complained again, because we realised that if any of us got sick or died we just couldn’t tell anyone. We had no rights.”

Sickness and the threat of death became Abbas’ ticket out. Appalling hygiene conditions contributed to his contracting Hepatitis C. The Greek chapter of Doctors of the World diagnosed him and asked for his release. “You aren’t ready to die yet,” a policeman told him. “You still have some months to go. When you’re close to death we’ll let you out. You won’t die in here.”

Abbas was released in April. The Orthodox Church’s Athens diocese, which runs a charity clinic for the uninsured, provided him with the expensive medicine he needs to fight the disease; but his recovery is shaky.

Conditions are often appalling. Journalists are not allowed inside detention centres, but Doctors Without Borders’ Greek chapter photographed raw sewage seeping through the floors of the Komotini centre. Inmates are confined indoors 22 hours a day with nothing to do, the aid group says, reporting that some have tried to kill themselves.

These often inhumane conditions were at least limited to periods of up to 18 months. Now, Greece may be violating European law by extending detentions indefinitely by re-labeling them ‘restraint’, based on an opinion from the State Legal Council, an advisory body. The policy has already kept at least 300 people behind bars for longer than 18 months. 

A Greek Court of First Instance struck this opinion down last month, ruling that the restrictive measure imposed on the defendant is effectively tantamount to the extension of his detention,” and that detention beyond 18 months “does not have any basis in law.

The European Council on Refugees and Exiles, a grouping of 82 NGOs, agrees. The EU’s Returns Directive, which Greece has signed, “in no case authorises the maximum period defined in that provision to be exceeded”, it says, quoting the European Court of Justice.
Greek police tell Al Jazeera that detention beyond 18 months isn’t implemented in all cases. “If an immigrant refuses to co-operate with his deportation order, is a flight risk, isn’t recognised by his country’s consulate, and has no legal residence or the means to support himself, the competent authorities may … compel him to remain in his detention facility until he agrees to co-operate with his deportation order.” 
But the ECJ ruling applies “even where ‘‘the person concerned ... is not in possession of valid documents, his conduct is aggressive, and he has no means of supporting himself and no accommodation or means supplied by the Member State for that purpose.”
Police say they have deported 65,573 irregular migrants in 2011-13, and estimate that the number will exceed 100,000 by the end of this year; but not everyone agrees that they’re doing a good job.
The fact that Greek authorities weren’t able to [effect deportations] within the already generous 18-month period is a failure of this policy of pre-deportation detention,” says Alexandros Konstantinou, a lawyer with the Greek Council for Refugees, a non-governmental organisation offering migrants legal aid.
“Even nationalities who may not be deported because of the situation in their country, such as Somalis, Eritreans and Syrians, continue to be kept in detention. This is a strong indication that detention is not being used to facilitate deportation but has other aims, such as the discouragement of further migration,” says Konstantinou.

If true, such a detention policy would harken back to a time when the Greek immigration system as a whole seemed to act in a deterrent fashion. Police used to keep political asylum applications in process for years. Out of 89,575 applications between 2006 and 2011, Greece approved just one percent (929), against a European average of about one in five. Many economic migrants found the process a useful way to remain in Greece without proper residence permits.

Last year, under sustained pressure from the United Nations High Commission for Refugees (UNHCR), Greece established a dedicated Asylum Service. In its first year it efficiently processed 8,945 applications and approved 1,206 – about the same number as in the previous seven years combined. Almost all went to Palestinians, Syrians, Eritreans, Sudanese and Somalis, whose societies are in political turmoil.

To ensure that new arrivals could contact asylum authorities, Greece also established a string of First Reception Centres along the border, where migrants receive medical checkups and legal advice.

As Greek immigration authorities mature, attention falls on the European policy vacuum. “We are dealing with a problem that is not Greek, it is a European problem and that is why we are constantly asking for the support and solidarity of other EU countries,” says Panayotis Nikas, the First Reception Centres director.

Some of that support is necessarily financial. The First Reception service’s current budget is $6.6mn (4.9mn euros) for 2014, but it has applied for a further $30.8mn (22.6mn euros) in European funds, without which it says it cannot maintain its services and facilities, or build new ones.

Border control costs even more. Greece’s maritime border with Turkey is the gateway for nine tenths of irregular migration into Europe. Policing it cost $86mn (63mn euros) last year, and even though it is an external European border, the EU contributed just $3.9mn (2.9mn euros).

What worries the Hellenic Coastguard is that the rate of flow has doubled this year to about 1500 a month.

There are hidden costs, too. A research paper for the Database on Irregular Migration estimated the number of irregular migrants resident in Greece at 3.5 percent of the population by the end of 2011. The equivalent figure for the EU was just 0.7 percent. 

Even if the EU contributes more, money alone will not solve the problem, believes Efi Latsoudi, member of a volunteer group on Lesbos who help clothe and feed migrants. “It’s not only the [migrant] traffickers who are criminals, it’s also this European policy which is criminal,” she says. “When you know that people in need are escaping their country and they are forced to get into these boats to try and save their life and the life of their children and you let them, then we are also criminals.”

“I think we have gone through the point of talking about just financial support,” Nikas says. “We need to talk about issues such as relocation and a more comprehensive response from the European Union.” 

The European Union’s asylum rules, referred to as Dublin II, only allow people to apply in the country of arrival, and that burdens Greece disproportionately. “Ιt is obvious that we need to rethink Dublin ΙΙ with our European partners,” says Greece’s new citizens’ protection minister, Vasilis Kikilias.

The European Economic and Social Committee, an advisory body to the European Commission, agrees. “We have proposed places in safe third countries like Lebanon, Turkey, Algeria, Tunisia, where these asylum seekers could ask for the political status of refugees in Europe,” says Henri Malosse, its president. “We could open a legal way for them to come to Europe, rather than for them to be in the hands of a mafia and to die in the sea.” 

But the timing is off. Anti-immigration parties won their largest-ever bloc of seats in European Parliament elections last May. “It is a real scandal that we had to wait so long for one vision on immigration,” says Malosse. Europe may end up waiting longer, while more migrants suffer on the high seas. 

Tuesday, 10 June 2014

Sweeping reshuffle punishes ministers for lack of growth and hope

The Greek government announced a sweeping reshuffle on Monday, replacing the finance minister and seven other ministers, and retiring all but one.

The reshuffle comes in the wake of a poor showing in European Parliament elections two weeks ago, in which the left wing opposition topped the conservative and socialist coalition by four points.

It also comes almost exactly two years since the coalition came to power promising growth, but implemented cutbacks amid continued recession. The Greek economy lost about a tenth of its size in that period.

Prime Minister Antonis Samaras called the new cabinet a "completely new formation". Swearing-in ceremonies were planned on Tuesday afternoon.

The opposition left Syriza party issued a statement saying, "Nobody believes that the reshuffle will affect today's policy... what the country needs... is a government that will stop acting as a local enforcer of creditors' interests."

There was no immediate comment from the departed seven: finance minister Yannis Stournaras, development minister Kostis Hatzidakis, interior minister Yannis Mihelakis, education minister Konstantinos Arvantitopoulos, health minister Adonis Georgiadis, culture minister Panos Panayotopoulos and government spokesman Simos Kedikoglou. Public order minister Nikos Dendias was moved to development.

Stournaras was a technocrat whose departure to pursue the post of governor of the central bank was widely speculated upon. His tenure has been a success in terms of balancing the budget last year, and even producing a surprise 2.9bn euro surplus. He managed to oversee the first multiple-year bond sale in four years in early April. However the pain of squeezing enough taxes out of a recessionary economy to produce that result produced widespread criticism of the government.

Hatzidakis made no discernible impact as development minister - a liability for a government that came to power promising growth over austerity. His one legislative effort, a fast-track bill for starting new businesses unveiled with great fanfare in February, was put under wraps again following a period of public consultation and never re-emerged.

The Hellenic Federation of Enterprises, Greece's industrial chamber, found last February that Hatzidakis had done almost nothing to eradicate more than 171,000 laws, ordinances and regulations hamstringing free enterprise.

Growth is expected to return to Greece this year (the budget predicts 0.6 percent) but that is not attributed to Hatzidakis.

The post was a tough one to begin with. Greece has suffered a cumulative 25 percent recession in the last six years. Early figures suggest that the recession is slowing faster than expected, to -0.9 percent in the first quarter against a forecast -1.1 percent. And the Greek branch of Manpower, the recruiting agency, expects an eight percent growth in employment in the third quarter, the strongest forecast since 2008.

"The government at least recognises mistakes and injustices," wrote Vasilis Korkidis, president of the National Confederation of Greek Trade. "The government must address overtaxation, the settling of market debt, liquidity, social security, the restarting of a social dialogue and the establishment of a just and friendly business environment."

Georgiadis proved surprisingly competent in cutting healthcare and pharmaceutical spending by at least two billion euros over two years (about a third of the ministry's budget) without suffering a complete collapse of public healthcare, but long strikes by pharmacists and doctors led to shortages of medicines and long queues at clinics. During his tenure he managed to create a network of primary healthcare centres to relieve hospitals, but most of his energy was spent simply maintaining system functionality. His departure may have had less to do with inefficiency and more to do with his association with austerity.

Arvanitopoulos also oversaw an unprecedented reduction in education spending - amounting to 40 percent of the higher education budget alone - and was associated with austerity. He, too, was plagued by strikes by middle and high school teachers and almost daily demonstrations against cutbacks outside his ministry. But he also came in for criticism for an uneven implementation of a 2011 law introducing more transparent governance in universities and polytechnics.

Kedikoglou's fate was probably sealed on June 11 last year, when he announced the closure of public television. It has been seen as one of the government's worst mistakes, producing international criticism as a move against freedom of speech. The government eventually replaced the public broadcaster but it was months before it could produce current affairs content again. This, together with the prosecution of an independent publisher have tarnished the conservatives' image as pursuing a more closed society.

Dendias was initially seen as a success for clearing undocumented migrants off the streets and putting them into detention centres. Rising unemployment and crime attributed to economic migrants were seen as problems of the first order when the government came to power in 2012. He also oversaw the creation of an efficient new asylum service to cope with a stream of political refugees from war-torn regions in Africa and the Middle East. However, he is seen as the mastermind behind a conservative plot to destroy the far-right Golden Dawn politically by prosecuting them legally as a criminal organisation. If such a plot ever existed, it clearly failed. Golden Dawn raised its share of the popular vote by a third to take 9.4 percent in Euroepan elections. 

Whither the economy? 

Gikas Hardouvelis comes to the finance portfolio with crisis experience. He was the key economic advisor to prime minister Loukas Papademos in November 2011-March 2012, when politicians briefly lost control of the government and the former central banker was sworn in as premier. Papademos and Hardouvelis steered Greece through its darkest crisis period, when its exit from the Eurozone was at its most likely. They negotiated a 103bn euro writedown of debt in the private sector, and a second facilitation loan worth 170bn euros, of which 48bn was earmarked for bank recapitalisation. This job done, they handed power to an interim government which oversaw back-to-back elections in May and June. 

Hardouvelis was borrowed from Eurobank, where he served as chief economist for a decade. He now faces a new slate of problems. The International Monetary Fund said in its fifth review released on Tuesday that "a number of challenges remain to be overcome before stabilisation is deemed complete and Greece is on a sustained and balanced growth path." It listed those problems as weak exports, a "mountain of bad debts" in high street banks, fiscal gaps in state financing in 2015-16 and a public debt that "remains very high."  

In his last interview with Al Jazeera last September, Hardouvelis said that the debt acted as a deterrent to investment in an economy that was undercapitalised. He saw Greece's best chance of reversing this in a debt-equity swap. 

"We owe at this stage over $288bn to our European partners, and everybody is asking how to get rid of that wolf that scares investors. The best way to do it is to say, ‘let’s swap debt for equity, and come in and invest’. Land is the easiest thing to do… take a rocky island for 100 years... I don’t see any other solution." 

That debt has now risen to over $400bn. Paying it down would take a lot of land. 

Sunday, 8 June 2014

Violence mars Greek university education

This article was published by Al Jazeera International

Shortly after 10pm on April 2nd, an unidentified group walked onto the campus of the University of Macedonia in northern Greece. The group’s members, about a dozen strong, were carrying motorcycle helmets and short crowbars. They were looking for students from the conservative youth movement, who had earlier argued with a left-wing student over where to place campaign posters ahead of student elections. They found them barricaded in a store room.

“A female voice said ‘they’re in here’,” says Yiorgos, a second year business student, who was in the room. “One of them kicked the door open and the five of us boys heaved against it to keep it shut.” The attackers swung a bronze fire hose nozzle like a ball-and-chain to smash through four layers of drywall, and eventually broke into the room.

“They were shouting ‘we will kill you, we will slaughter you, you’re finished’,” says Antonis, another of the besieged students. “They hit us with crowbars and stockings filled with batteries, which they swung around like lassos.”

The attackers remained on campus for three quarters of an hour. Yiorgos suffered a fractured finger as he protected his head from the blow of a crowbar. Antonis suffered a fractured skull. A third student needed stitches to the back of his head and a fourth suffered a broken nose. What none of them can understand is why police refused to intervene.

Before the attack started, the conservative youth office on campus called the authorities. “They said they couldn’t enter the campus without an order from the chancellor,” says Antonis. “We then called the chancellor but he was in Scotland on a business trip. We then called the deputy chancellor and he called the authorities. By the time the police got here the perpetrators had gone.”

Police refused to comment on the incident pending the result of an official investigation; but it appears that they failed to follow the law.

Greek higher education campuses used to enjoy a legal status known as asylum. Police could only enter them following a joint invitation by the university chancellor, the head of administrative staff and the elected head of the student body. In practice, however, such invitations were extremely difficult to secure because student representatives, as a rule, boycotted the vote.

Asylum was abolished three years ago because campuses had become a haven for fugitives from justice, including petty criminals, drug addicts and undocumented migrants. Yet police are still reluctant to enter because their presence is deemed politically unseemly. Universities are still seen as society's counterweight to authoritarianism, so the law is not always applied.

The roots of sacrosanct status

The view of universities as sanctuaries from regular civil law enforcement goes back to 1973, when a military dictatorship then ruling Greece brutally suppressed an uprising at the Athens Polytechnic with tanks and armed police. Students had merely claimed the right to elect representatives to university bodies, but they shook the regime. Democracy was restored the following year, partly thanks to the student movement.

Like much of Europe, Greece lurched politically to the left in the early 1980s. The Polytechnic generation came to power with the socialist party in 1981. It swiftly established asylum as part of an education law that introduced the election of university chancellors by the student body – a level of democracy unheard of in most university systems.

“Instead of freedom we administered - or didn’t administer - our licentiousness, the tendency of most Greeks to feel free of the constraints of the law,” says Thanos Veremis, professor emeritus of political history at Athens University.  

Violence is usually political, and peaks at student elections or in the run-up to chancellorship elections.

“The people who take [violent] action belong to the extreme, non-parliamentary left,” says Sakis Ioannidis, the head of the conservative youth movement, ONNED, using an elaborate term for anarchists. He believes that such a mix of people attacked the movement’s students at the University of Macedonia, where victims heard their attackers shout “long live anarchy!” 

ONNED has since asked for the creation of a dedicated campus police force that will act preventively and liaise with police. 

Broader reform stymied

Such a force might stem much of the opportunity for violence but not the desire, believes Spyros Amourgis, professor of Architecture at California State University and the Athens School of Fine Arts.

“Violence occurs when there is no [student] satisfaction and no student culture,” he says. “Most of our students don’t study what interests them, but what will bring them money.”

Amourgis decries the utilitarian Greek attitude to education. “Our universities don’t develop personality. For the most part they are injections of knowledge,” he says. “When you’re interested in your studies, you care.”

The culture of disillusionment is perhaps most evident at the anarchists’ den in the basement of the Athens University of Economics and Business. A painted banner above it reads, “Welcome to the kingdom of the ‘competent’, where success is always written in euros.” Beneath is a gun shooting somebody’s brains out.

University reform has been a top political issue for a decade. Greek universities score poorly in international rankings; until a few years ago they had no external evaluation and did not qualify for European funding; the democratic measures introduced in the 1980s were quickly subverted - faculty appointments, chancellorship elections and even some student admissions became tightly controlled by parties.

A first reform wave in 2005-7 introduced external evaluation and scaled back party influence in chancellorship elections. A second law in 2011 introduced university Councils to manage finances and appointments transparently.

The latter hasn’t been properly implemented, says Vaso Kindi, a philosophy professor who sits on the newly formed Council at Athens University. “The law calls for a separate legal entity that will take possession of all the university’s assets, and which the Council selects a CEO to lead. The chancellors don’t want this entity to be formed,” says Kindi.

The result is that the university’s revenue from properties sometimes remains uncollected. For instance, the Athens University Council found uncollected rents worth $2.4million, in some cases going back to 2000. 

Athens University remains so opaque that the public administration inspector, a transparency watchdog, has asked the financial fraud squad to audit it. Prime Minister Antonis Samaras asked for all university discretionary accounts to be audited. “None of this has happened. No-one wants to disturb anything. That’s the bottom line,” says Kindi.

And the bottom line is indeed affected. “Who is going to donate money to a university that operates in this fashion?” she asks.

The ability to attract private donations is increasingly at issue. Last year, Greek higher education received $1.3bn from the state, a 40 percent drop over two years. That put higher education spending at 0.56 percent of GDP, compared to an EU27 average of 0.91 percent. The government shut down two regional universities and eliminated some 400 departments. Universities were allowed to raid up to 40 percent of their endowments to top up operating costs.

Public education funding is now set to drop again by almost a quarter over the next two years.

Even if transparency prevails and donations flow, enormous reforms remain undone, which hurt the economy as a whole.

Greece is the only European Union member that still doesn’t recognise other member states’ degrees automatically, dishonouring its signature on the Bologna Accords.  Re-qualifying in Greece can take years, and sends many of the brightest Greek graduates back overseas.

Greece is also the only EU member that doesn’t recognise degrees issued by non-state colleges or by the franchisees of EU universities on Greek soil. Article 16 of itsconstitution preserves higher education as an exclusive object of the public sector and doesn’t allow fees in public institutions. 

The result is a public university system that shuns innovation and an atrophied private college system that is shedding jobs McKinsey, the consulting firm, estimates that Greece is losing $9.5bn in seven key sectors, including potential education exports, because of its rigid laws. 

Even Greeks seem to be running away from their universities.  They make up the third-largest nationality of EU students in British universities after the German and French, but the largest by far in proportion to population.

Some progress in governance is due this month, when the last remaining chancellors elected under the old, party-dominated system are to be replaced; and prime minister Antonis Samaras announced on May 7 that he will pursue a constitutional amendment to recognise non-state university degrees.

Will this succeed? His deputy, socialist leader Evangelos Venizelos, is the man who torpedoed that very reform in 2007. Even if Samaras prevails, he needs bipartisan support and the left is invested against reform.

Vasilis Vasilopoulos, a fourth year IT student at the Athens University of Economics and Business, is loyal to EAAK, the United Independent Left Movement, a non-parliamentary group. He explains the left’s view of university reform succinctly: “[The government’s] only goal is to destroy free, public education. They want a smaller university by reducing the number of enrolments and a less democratic university by autocratically controlling the administration.” Samaras would appear to have his work cut out for him. Trends suggest that the Greeks who can afford to will study abroad for years to come.