Thursday, 24 October 2013

Legislation by Footnote

It appears that the substance of the Samaras government's intentions is often in the footnotes. The communist party on Wednesday took strong objection to a rider on a public order bill, which criminalises violations of sanctions by international bodies on third countries.

The six month jail sentence it instates might be somewhat understandable if, say, a tanker owner attempts to supply Iran with refined fuel. But the KKE and other opposition parties are worried that the law might one day be used to penalise political expression. "This article could be interpreted to mean that those who demonstrated against the war in Yugoslavia should be jailed for six months," said KKE MP Thanasis Pafilis.

Last Tuesday, the suspension of public funding to parties whose leaders have serious indictments hanging over them was added to a bill about renewable energy. That clause was elected by almost four fifths of parliament. But other, far less popular clauses, were also added. One renders the refusal to be included in a payroll census a "serious disciplinary misdemeanour" for administrative staff in higher education. The government is currently in the process of recording the administrative staff of universities and polytechnics, with a view to dismissing 1,249 of them. This amendment reinforces suspicions that those who refuse to be counted will be the first to go. 

Wednesday, 23 October 2013

Golden Dawn Chained but not Chastened

This article was published by Al Jazeera.

Greece’s parliament voted on Tuesday by a majority of 235 out of 300 to strip the far-right Golden Dawn party of further state funding. “It is absurd for Greek taxpayers to be supporting a party the justice system tells us is engaging in criminal acts,” says Dimitris Papadimoulis, spokesman for the radical left Syriza party. Golden Dawn’s MPs left the debating chamber before the vote.

Syriza, which is in the opposition, came to a compromise resolution with the government, which is conservative-led but includes socialists, to sideline the far right. The resolution suspends state funding to parties “when there is sufficient evidence that under the mantle of a political party, serious crimes are being committed by its leadership,” or by a tenth of its members of parliament.

The only party that currently fits that description is Golden Dawn. On September 28, its leader, Nikos Mihaloliakos, along with two other parliamentary deputies, was arrested and placed in pre-trial detention on charges of heading a criminal organisation. Three more MPs were charged and released.

The law against terrorism and organised crime that Golden Dawn is being prosecuted under was passed in 2001, specifically to enable authorities to more effectively prosecute Greece’s most notorious terrorist organisation, 17 November. It was controversial at the time for the way in which it allowed a secretive three-judge panel, rather than a public prosecutor, to authorise police to eavesdrop and gather evidence. The law helped authorities put 17 November behind bars ahead of the 2004 Athens Olympics, but it has never been used against political figures before.

The charges stem from the killing ten days earlier of Pavlos Fyssas, a left-wing musician, at the hands of a self-confessed Golden Dawn supporter. The government believes that this was the latest in a series of crimes ordered by Golden Dawn’s leadership.

Public order minister Nikos Dendias further instructed the Supreme Court to pursue dozens of indictments over a two-year period as part of a larger case against Golden Dawn. Deputy prosecutor Haralambos Vourliotis issued an opinion describing the crimes, which include two murders, an attempted murder and two manslaughters, as “crossing the boundaries of isolated events”.

The parliamentary ruling will deprive Golden Dawn of roughly 550,000 dollars this year and four times as much next year, yet the party is bullish: “Golden Dawn's political activity will continue normally. Nothing will change,” says Ilias Kasidiaris, an indicted MP and party spokesman. “We will have a problem in our social and solidarity work - we won't be able to do the soup kitchens for the poor and homeless.”

Kasidiaris says the party can carry on because it hasn’t spent the $1.6mn it has received so far this year, and because its 18 MPs tithe 20 percent of their salary to the party. An MP’s base salary after tax is $6,392 (4,676 euros) a month, and there are usually additions for attending committees, so the least the party should continue to receive from its MPs is $276,000 a year. There are also undisclosed donations, which the financial crimes squad is currently investigating following a raid on party offices last week. This is the money that used to be spent on the poor. Now it is to go to rent and utilities.

Golden Dawn says it is being ganged up on, not just by the government but by all the parties in parliament, because it is unfashionably patriotic at a time when monetary, fiscal and much economic policy is being dictated by Greece’s creditors in Brussels (European Commission), Washington (International Monetary Fund), Frankfurt (European Central Bank) and Berlin (Angela Merkel’s government).

 “They’re looking for plausible grounds on which to accuse Golden Dawn,” says MP Mihail Arvanitis. “Why? Why are the so-called constitutional parties turning against Golden Dawn? Are they at pains to protect Greece lest it be destroyed by Golden Dawn? No. It’s their own hides they’re worried about. They’re traitors, and true criminals.”

Is the prosecution of Golden Dawn a persecution, as the party claims? The Supreme Court says it has powerful evidence against Mihaloliakos, yet much of this could be circumstantial. Vourliotis’ indictment cites the party’s “military structure, its absolute hierarchy… the blind obedience to orders from superiors, the conspiratorial action”. Golden Dawn doesn’t deny such a hierarchy, but it doesn’t amount to a crime.  

More damning, perhaps, are dozens of phone calls made on the night of the killing between Mihaloliakos, the killer and the local Golden Dawn organiser. Their content is not known but their timing is, and if leaked records are correct, they take place in the form of a continuous cascade around the time of the killing.

Finally, there is the as yet undisclosed deposition of a few Golden Dawn informants, which could include at least two police officers arrested for alleged collaboration with the party. Golden Dawn says that, like the killer himself, these informants are provocateurs planted by the authorities.

“I have the feeling that [chain of command] can be proven,” says Yiorgos Katrougalos, a public law professor at the University of Thessaloniki, “because in the past we had a constant presence of Golden Dawn in different neighbourhoods where they have acted against immigrants, against homosexuals, against leftists, against trade unionists – so the permanence exists in this kind of continuity in the criminal action.”

Nonetheless, the government has adopted a high-risk strategy. Golden Dawn is trying to turn the funding resolution into a broader discussion about party and campaign financing, a potentially inflammable topic in Greece’s present liquidity drought.

Greek parties are allowed to accept donations, but the lion's share of their money comes from the state. A 2002 law allows them to claim 0.137 percent of public income. This year that gave them 95 million dollars, divided according to parties’ share of the popular vote. Golden Dawn, whose share was just over two million dollars, believes that money is too much.

“We got quite a shock when we saw how much is spent on parties in parliament,” says Ilias Kasidiaris, one of the six indicted Godlen Dawn MPs. “A year ago we proposed a bill to scrap state financing, but we were told that is unconstitutional. Well now they're doing it anyway to put a lid on Golden Dawn's political activity.”

Golden Dawn is small enough and isolated enough that its legislative proposals in parliament can easily be quashed; but it could conceivably win public opinion over to the idea of radically lowering public funding of the political system. Such a move would do little damage to Golden Dawn now, but it would torpedo the finances of the ruling conservatives and socialists, who have borrowed heavily against future electoral victories. Together they owe banks more than $350 million. For that sort of money, private donors could create several new parties.

Now that it has broached the topic, the government is also being reminded of its pre-election promise to instil transparency. “[Interior minister] Mr. Mihelakis had committed to lowering party financing and toughening the requirements,” said Democratic Left MP Maria Yiannakaki. “Authority to check political funding would be taken from parliament and handed to an independent authority. We would have expected today’s resolution to be couched in a broader context that included all that.”

Parties are governed by the mildest of accountability regimes, being obliged to publish only a minimal balance sheet at the beginning of each year. Their accounts are submitted confidentially to parliament’s audit committee, composed mostly of parliamentarians, which does not make its minutes or its findings public. The committee is also weak. It may only check the internal consistency of what it is given. It lacks prosecutorial power to raid party offices or demand documents, as, for instance, the financial crimes squad may do with corporations. Unsurprisingly, the audit committee has never exposed any major misdemeanours. “We hope that the other parties undergo the same [audit] process,” says Kasidiaris. “If that happens it's certain that some of their top people will go to jail.

Such blatant opacity has fuelled public indignation and helped weaken the authority of institutions in recent years. “Golden Dawn is trying to exploit this diffuse anger of the electorate against the party system to transform that into a kind of legitimacy problem of democracy itself,” says Professor Katrougalos. He worries that Prime Minister Antonis’ Samaras’ strategy of treating Golden Dawn and the main opposition party, Syriza, as two equally dangerous extremes will also weaken democracy. “He wants to present himself as the guarantor of stability against not only the sort of instability represented by Golden Dawn, but also the basic leftist party of the opposition, Syriza. So Samaras tries to make the equation that everyone that contests his policy is a risk to the stability of the regime.” Katrougalos believes this amounts to “a very short-sighted interest to polarize the electorate.”

Golden Dawn has always thrived on the notion that it is an unorthodox political force, not subject to the realpolitik that leads to compromises and the loss of ideological compass. If anything, both the legal and the political prosecutions against it reinforce that image to its supporters. Polls taken since the arraignments of its six MPs show that while it no longer enjoys double-digit approval ratings, it has dropped to a solid base of about seven-to-eight percent. That is more than enough to ensure its continued presence in the Greek parliament, even if it has to contest the next election with one hand tied behind its back. Unless it demonstrates a willingness to rebuild its authority through greater accountability, the ruling coalition could find that its punishment of Golden Dawn will also become its own. 

Tuesday, 8 October 2013

Greek journalist says media integrity is on trial

This article was published by Al Jazeera.

The trial of Greek journalist Kostas Vaxevanis broke off without conclusion on Tuesday. It is his second trial for breach of privacy law. Vaxevanis’ alleged offence is to have published a list of 2,059 Greeks holding Swiss bank accounts last October.

The list, says Vaxevanis, is the now infamous Lagarde list, named after International Monetary Fund chief Christine Lagarde. As French finance minister in 2010, she sent it to her Greek counterpart, Yiorgos Papakonstantinou, to assist him in tracking down tax evaders.

Vaxevanis now faces a possible sentence of life in prison, but the trial is about more than his personal fate; it is seen by many Greeks as a measurement of the government’s will to silence or encourage investigation of the rich and powerful.

Middle class Greeks have borne the brunt of a $49 billion adjustment of state expenditure, which has allowed Greece to balance its budget. Nonetheless, many feel that the wealthy have not carried their share of the burden. The Lagarde list was a tool handed to the government to enable audits.

Vaxevanis’ lawyers, two of whom are a current and a former opposition member of parliament from the right and the left, respectively, have a major new weapon in their arsenal. Last summer, a parliamentary committee of inquiry voted to indict Papakonstantinou and two former heads of the financial crimes squad, responsible for major audits, for possible criminal negligence in failing to make use of the list. Vaxevanis’ defence is that his publication of the list was instrumental in making that happen. The newfound interest in the list prompted current finance minister Yannis Stournaras to order its prompt analysis, and lends support to Vaxevanis’ view that he acted as a political catalyst.

Whether it provides a legal, to-the-point defence is a different matter, but Vaxevanis has decided that he will put the media on trial in his stead.

He doesn’t mince his words when it comes to Greek journalism. “A big chunk of the press and the broadcast media are constantly held hostage by the political system and the banks,” he told Al Jazeera the night before his retrial for breaching privacy law. Vaxevanis was referring to the mainstream media, large newsgathering organisations with television and radio stations as well as daily newspapers.

“The government gives them state advertising and the banks give them banking ads and loans,” he concludes. “All these people see the media merely as a way to disseminate their view.”

Vaxevanis, who started out in journalism as a cameraman for one of those mainstream networks during the Yugoslav wars of the 1990s, has now set himself apart.

In April 2012 he launched a fortnightly magazine, Hot Doc, which he says is self-supporting on a circulation of 20,000. It declares that it refuses, on principle, any advertising from banks and the public sector.

“The entire system of corruption is on the list: The economic elite, the political elite, the publishing elite, their offshore companies,” says Vaxevanis. “Silence is the safest course for the political system and those who have something to hide.”

Vaxevanis’ first trial a year ago ended in acquittal, but the prosecutor appealed. Shortly after that acquittal Vaxevanis came home one night to find five men in his small back yard. The police said it was an attempted break-in, but he is convinced that they were government agents.

That event prompted him to move his staff from a bedraggled downtown mall to the basement of his house, which now resembles a fenced-in compound. Visitors enter through a tall steel gate in the garden wall to the sound of three large, hyperactive dogs. The newsroom, painted in Pompeian red and amply proportioned for the magazine’s seven employees, looks out onto a small, empty swimming pool.

Vaxevanis’ journalistic integrity has also come under attack by bloggers and mainstream journalists, who believe he is acting as an agent for Syriza, the radical left-wing opposition party. The timing of his publication of the list, an off-cycle imprint two days before a major austerity bill debate, certainly played into Syriza’s hands. He emerged from his indictment accompanied by a Syriza MP, which also created a certain impression. Vaxevanis insists he is a straight-up-and-down journalist with no party affiliations or secret funding.

Whatever the truth about his influences or lack thereof, Vaxevanis is indisputably adept at planting himself in the middle of the story. “A guilty verdict will make me go to jail to make people understand what is going on in Greece - that there is a question of press freedom in Greece,” he says defiantly.

Vaxevanis sees his own unorthodoxy in the most flattering light: “A year ago we were a bunch of crazies. Now we are a danger to the system.”

Tuesday, 24 September 2013

An Early Sunset for Golden Dawn?

In the five days that have elapsed since the politically-motivated killing of musician Pavlos Fyssas in Athens, the conservative-led government has pursued the far-right Golden Dawn party legally and politically.

Golden Dawn member Yiorgos Roupakias has confessed to the killing and has been charged with murder and illegal weapons possession. Eye witnesses say police were present at the time of the killing and may have witnessed it, but questions remain as to why they failed to stop it.

Yesterday the public order ministry announced that it was suspending seven top police commanders in Athens pending a full investigation into press allegations of Golden Dawn sympathies and collaboration in the force.

At the same time, five police commanders have been either withdrawn or have resigned in central and southern Greece following reports that they failed to investigate a Golden Dawn weapons cache a few hundred yards from the police station in the town of Halkida, on the island of Evoia, 100km northeast of Athens.

The suspicion of strong Golden Dawn sympathy among security forces is not new. National weekly newspaper To Vima has repeatedly published an analysis of 11 ballot boxes in voting centres around Athens police headquarters, where hundreds of police are registered to vote. The newspaper found that the vote for Golden Dawn in those boxes was between 17.2 and 23 percent, compared to a range of five-to-seven percent in neighbouring voting centres.

Political Pursuit 

The government has announced that it is looking into a legal amendment that would stop state financing to parties running paramilitary organisations or with criminal indictments hanging over them. Only Golden Dawn answers this description. The party has already received three quarters of its 1.6mn euro allocation for this year.

There are 32 pending indictments against Golden Dawn members, which supreme court deputy prosecutor Haralambos Vourliotis is now examining. He is also reportedly looking into prosecuting Golden Dawn as a criminal organisation. To do so he would have to prove that attacks like that on Fyssas were not spontaneous initiatives but centrally directed.

Greek media are now reporting that the government will table a discussion in parliament on how to deal with the resurgence of fascism. The government evidently sees an opportunity to emasculate a party that took 6.9 percent of the right wing vote last June, and until recently enjoyed approval ratings of up to 13 percent. 

An opinion poll published yesterday by Eleftheros Typos, the conservative party's unofficial mouthpiece, found that three quarters three quarters of Greeks believe Golden Dawn to be a threat to democracy, to organise violence and to have been connected to the killing of Fyssas - something Roupakias reportedly denies. 

If the government succeeds in cutting off state funds to Golden Dawn, putting a number of its operatives in prison and crippling it by indicting a broad swath of its commanders, it will have dealt a blow many Greeks and immigrants feel was long overdue. Golden Dawn gangs are suspected of being behind hundreds of late night attacks on migrants in the past two years. Their outbursts and rants in parliament have set a new low watermark for the standard of debate in the chamber.  

The government may also consider bringing to the floor of parliament an anti-racism bill former justice minister Antonis Roupakiotis drafted last May. The bill was never presented to parliament because the government feared that most conservative MPs would vote against it. 

See also Yiorgos Lambropoulos' article on how Golden Dawn is structured.

Saturday, 21 September 2013

Can Greece’s Rescue Plan Succeed?

This article and an accompanying television report were published by Al Jazeera

Germany’s election means something to almost everyone in Europe. To the Greek street, it signals the point when the government ought to pluck up the courage and ask the Eurozone to forgive a big chunk of its onerous debt, which now stands at 174 percent of its GDP.  

Four years of austerity have succeeded in eliminating a $49 billion budget deficit even while the economy shrank – a painful process akin to playing the piano while someone breaks your fingers. Having done this, Greece finds that its economy has shrunk so much, it is barely able to service its debt. Interest last year cost $16bn, placing the country in what one economist calls a “debt bondage”.

The debt also acts as a barrier to growth, creating a vicious cycle. “No-one wants to invest in a country which is uncertain, which has lost confidence, which is shrinking,” says former finance minister Nikos Christodoulakis. Apart from the risk, there is the reality of high taxes.

Angela Merkel’s government has lent the Greeks money on the principle that German taxpayers will never have to pay for the European periphery’s debts, so it seems that the Greeks will be disappointed in their quest. The problem is that most Greek economists no longer see the country’s rescue package as viable without serious intervention.  

“It is highly doubtful whether this rate of tax extraction from a moribund economy can be maintained,” says Athens University economist Yanis Varoufakis. He is admittedly one of the Greek rescue plan’s most severe critics, and has predicted that the euro will ultimately meet its Waterloo in Greece.

Varoufakis is not alone, however. “You need fresh money in this country,” says Gikas Hardouvelis, a proponent of the Greek rescue. As chief economic advisor to Prime Minister Loukas Papademos, he played a leading role in negotiating Greece’s second facilitation loan last year.  “Otherwise we’re going to lose our youth, the country is going to shrink and we’re going to be taken over by foreigners.”

Merkel’s opponent, Social Democrat leader Peer Steinbrueck, espouses the idea of a massive investment package for the European periphery – a second Marshall Plan; but his party is trailing the ruling CDU in the polls by about 10 points.

Greece was essentially bankrupt when it lost the ability to borrow affordably from markets in early 2010. It accepted some $300 billion in facilitation loans from the European Commission, the European Central Bank and the International Monetary Fund – the notorious ‘troika’ – who feared a collapse of the euro as a currency should Greece be allowed to fail like a massive Lehman Brothers. In return, Greece had to commit to painful spending cuts.

The result of austerity is that the economy has lost 26 percent of its size and is still shrinking. Unemployment is the highest in Europe at 27.9 percent, and twice that for the young. Wages have fallen sharply for those who do still work – by about 23 percent in the private sector and as much as twice that in the public sector.

Prime Minister Antonis Samaras put a brave face on things in an annual economy speech earlier this month. “Greece is turning a new leaf. Its economy, after six years of recession, is turning a new leaf,” he said, predicting recovery in 2014. The government is claiming to have finally reached a budget surplus before debt servicing is factored in. It also sees a lower-than-predicted recession in the second quarter (-3.8 percent instead of -4.6 percent) as heralding the beginning of an upturn to growth.

The government has been quick to grasp at straws before. In late spring Samaras foresaw unemployment stabilising. In January his finance minister, Yannis Stournaras, foresaw a return to growth by the end of the year. Both predictions were confounded. Could this time be different?

Greek economists think not. They are deeply skeptical about the primary surplus, attributing it to the government’s withholding payments to private sector suppliers and Value Added Tax returns to businesses, and allowing the social security deficit to widen. 

They converge on the view that the recession is slowly lifting, but that this merely leaves the economy moribund. “A starving person sheds a large portion of his weight in the first few weeks. As death approaches, the rate of weight diminution declines to zero,” says Varoufakis dryly.

When $140bn of Greek debt was written off in March 2012, there was an optimistic camp, which felt that Greece’s finances were going to be sustainable. That camp is now deserted because financial markets still won’t touch Greece.

At the very least, analysts expect Greece to be given another reduction in interest (it has already fallen from five percent to 3.1 percent) and an extension on the maturity of its loans. But this is merely to prevent a collapse in instalments.

Growth is a more elusive goal. The Greek banking system cannot finance it because it is itself bankrupted by the level of nonperforming loans. Two years ago the government brought in the financial consultants Blackrock to audit the banking system. “Blackrock found that about 30 percent of loans were nonperforming in 2011. Now it might well find twice that proportion,” says Christoforos Sardelis, who created Greece’s Public Debt Management Agency in 2000, and now works at the National Bank of Greece.

Five ways out

Austerity has led to such a massive sapping of public and private wealth that the recovery has to come from outside, most Greek economists say. Their ideas fall into two categories – those that reduce debt and those that would bypass it to nurture growth.

I think the eventual solution for the Greek debt problem will be some form of debt-equity swap,” suggests Hardouvelis. “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.”

The idea of mortgaging sovereign territory to Germans might be politically controversial, but it kills two birds with one stone, generating revenue and reducing debt at the same time.

Christodoulakis suggests a different kind of swap between Greeks and Germans. Germany coerced two loans out of the Bank of Greece in 1943, during the Nazi occupation. These were never repaid, and Christodoulakis estimates their current value with interest at over $21bn – roughly, he says, Germany’s contribution to Greece’s first facilitation loan in 2010. 

I think that a very fair compensation and settlement of the issue would be to count one for the other… It would reduce the amount of Greek debt by 8-10% of GDP.” This idea enjoys overwhelming popular support in Greece, but has been ruled out by Germany.

Sardelis focuses on growth. He believes that a “risk transfer” to an internationally recognised body would unlock liquidity to the south.

“The European Investment Bank or the European Central Bank or some other institution needs to take on the role of loan guarantor. That would enable [banks] to issue loans to the peripheral economies on looser terms,” he says. “When trust breaks down someone intervenes and restores it. This isn’t happening,”

Left-of-centre economists focus on how Greece might regenerate itself without a wealth transfer from the outside. Savvas Robolis, who heads the Labour Institute, believes that Greece could generate half a point of GDP and seven thousand jobs just by restoring minimum wage to 751 euros a month. A controversial law in February 2012 lowered it to 586 euros despite the protestations of the Greek business community that taxes and state bureaucracy were a far more pressing concern. Unemployment has continued to rise, suggesting that the measure was far from successful.

Also in the self-sufficient camp, Varoufakis doesn’t think Greece can recover if it attempts to service its debt while it remains in recession. “Greek debt will remain sky high while Greece’s GDP will continue to shrink,” he says.  He believes a new contract between Greece and the troika should make Greece’s repayment schedule “dependent only on Greece’s GDP growth rate.” Greece’s left wing opposition has embraced this suspension of interest payments; but Hardouvelis believes it would “strain relations with Greece’s Eurozone partners” to the point of getting it kicked out of the EU.  

Greece is not alone in its financial asphyxiation. The single currency showed up weaknesses in the competitiveness of southern European economies and helped channel investments to the north.

Panayotis Petrakis, an economist at Athens University, describes this unequal structure as “the new normal”. He divides the Eurozone into “a productive centre, which concentrates capital from the periphery, which will have 27-30 percent unemployment.”

But Greece is singled out by the length and stubbornness of its illness. Portugal, Spain and Ireland have begun to see a pickup in their exports, bring in fresh money to pay off debts. Greece’s pickup has been much slower – an indication of the investor-unfriendliness it has to fix at home, and this is the nub of the problem.

“Suppose for twenty years we have no problem with the debt,” says Hardouvelis. “Are we going to fix a country that generates the income that, when the time comes, enables the future rich Greeks to pay back the debt? … The question always comes back to us.”

Wednesday, 18 September 2013

Greece Struggles to Slim the State

This article was published by Al Jazeera.

Central and local government, law courts and schools remain closed throughout Greece on Wendesday and Thursday, as the country grapples with a public sector  strike against austerity

Wednesday’s march through Athens by roughly 10,000 public employees marked the height of a week of troubles for Greece’s austerity government. It was the banner event of a 48-hour strike in the entire public sector, to protest against ongoing attempts to slim the state. Greece has already been experiencing the effects of an indefinite strike in public high schools, which began in earnest on Monday.  

Secondary school teachers, in particular, are fed up with the indignities of austerity. They say they have lost almost half their income during the crisis, and 16,000 - about one in five - have been allowed to fall off the payroll as their contracts would up or they retired. The result is that this year the government is asking those who remain to spread themselves across various subjects - yet it has cut their overall teaching hours.

“You cannot have growth without health, education, electricity and water,” says Thanasis Konteles, a teacher and union leader in Athens’ southern suburbs, outlining sacred areas in which he believes the government should not attempt severe savings. “We’re not against reform, but we want to have a voice in the process,” he said.

Health and social security are big budget items, however, and the cuts there have been deep. Since 2009, the government has slashed pharmaceutical spending alone by some $3 billion. It is now consolidating public hospitals and cutting spending on medicine even further. Its plan is to save another $800 million to bring total health expenditure to about $4.8bn in next year’s budget.

We're trying to do the reforms in the healthcare system that other European countries have done many years ago - spending less money for better healthcare,” health minister Adonis Georgiadis tells Al Jazeera. He believes that his plan to create fewer, larger hospitals with satellites of primary care centres will ultimately give Greeks better health services. The radical left opposition party, Syriza, he believes, orchestrates street demonstrations like Wednesday’s.

People on the left are good people, they're romantic people, they're utopic (sic) people,” he says. “But they don't live in this world. They live in another planet… Greece was the last soviet state in the European Union. This has to be ended and we will end it now.”

Not all Greeks see austerity as a process of ultimate improvement. Instead, many see a two-tier society taking shape in the widening gap between private services for those who can afford them, and dwindling state services. “I came here for a biopsy and they said ‘wait six weeks’,” said Katerina Ioannidou, a former state employee who was fired from public television this year. Al Jazeera met her outside Konstantinopouleion hospital, which has just absorbed the remnants of a smaller the government closed this month. “Imagine having cancer for six weeks and not knowing it.”

Austerity has managed to close an annual deficit of some $50bn over four years. That has produced 27.9 percent unemployment, the highest in Europe, but mostly at the expense of the private sector. Even though at least 180 thousand people have left the public payroll during the crisis, some 700 thousand remain, and the government has promised its creditors to shed almost a quarter of them over four years.

The conservative-led government has made the strongest efforts of any administration during the last four years to reform the state. It passed legislation this year paving the way for mass dismissals.

Yet for all its efforts, it hasn’t managed to fire a single employee. Two thousand were meant to go in June, and as many again by August. Efforts to fire the first batch by shutting down public television, ERT, ended in a debacle. The government lost a coalition ally, the Democratic Left, over the closure, and saw its parliamentary majority drop from 19 seats to a mere five. That leaves it vulnerable to defections and inherently insecure. It has since lost any practical benefit to the public payroll that might have transpired, promising to hire back two thousand of the roughly 2,700 people employed by ERT. The road to an efficient state that costs less and attracts investors is apparently going to be a long one.

Wednesday, 17 July 2013

Bridge to Nowhere: Syrian Refugees in Greece

This article was published by Al Jazeera

Daoud Abdo's  daughter Surin, aged 6 (Photo by Anna Psaroudaki) 

The passage to Greece was probably easier for Daoud Abdo and his family than it is for most Syrian refugees. It took the family of five just two weeks to travel by bus to Istanbul and cross the Evros river, which forms Europe’s southeastern-most land border; but it was still fraught with danger.

During the long march to the Evros on the Turkish side, Daoud says, “my wife and I both fell off duckboards into sumps.” It was raining and the marshes that surround the Evros were deep. Daoud is convinced they would have drowned that day, were it not for a group of Bangladeshi fellow travellers. The Turkish trafficker who led them had some 70 people to smuggle across, and barked, ‘Leave them! Leave them!’ but, Daoud says, “the Bangladeshis ignored him and helped us out.”

That was only the beginning of the family’s ordeal. Once in Athens, they spent a full year sleeping in city parks and on the street, only intermittently offered shelter by the traffickers to whose Syrian collaborators they had paid 18,000 euros to take them to Western Europe. Sometimes the shelter was offered on condition that they prostitute their eldest daughter, Suzin, a poised girl with intelligent eyes and a coy smile, who was then 14 – an offer they never accepted. It was only here that they discovered that the full bargain they had struck in Aleppo would not be honoured without more money, and that, penniless and jobless, they were stranded in Greece.

For the 48 year-old Abdo, once a well-to-do lawyer who used to undertake government work and owned a series of properties in Aleppo, it was a severe blow. At times, he sounds almost suicidal. “I wish I had died there. It would have been better and easier for me. The most difficult day for me in Greece was when we were homeless and all my children were crying because they were hungry and I couldn’t feed them.”

Abdo says his properties are mostly destroyed by the war in Syria and he would never risk going back. “There is no peaceful place left in Syria. Because we are Alevi people hate us,” he says referring to the minority tribe that, since Bashar al Assad’s father became president in 1971, has held sway over this nation of 22 million. “Before the hate was hidden. Now there is constant pressure from all the villages to leave.” His wife’s family has scattered to other countries. “I will not send my children to their death,” she says when asked if the family would ever return to Syria.

Six months ago they were picked up off the street by scouts for the Coptic Church in Greece and were put up in an apartment owned by the church, which also feeds them on a daily basis.

Yet life in Greece remains difficult. While the war rages, Greek authorities will not deport Syrian refugees, but nor will they support them in any way. Without residence permits, it is next to impossible for them to work legally. Many are reduced to begging. Others live off the charity of the Greek Orthodox church and community organisations. It is easy to be picked up during police stop-and-search operations targeting undocumented migrants. Syrians can end up jailed for months while their nationality is verified, and once inside a detention centre, police brutality is all too frequent, as Juan Akash, a 35 year-old journalist, discovered.

Police picked him up with a group of Syrians trying to cross over to Italy from Greece’s west coast at the beginning of the year. He was crammed into a cell with 56 others. “We didn’t sleep for three days,” he says. When police bussed the inmates to other precincts, “the senior officers took me out and started to slap me on the face. Then police took out sticks and started to beat me. On the way down the stairs they beat me behind the knees.”

Akash was taken to Korinth detention centre, one of six police have created to house deportation subjects. “It is not a human place,” Akash says of the former army camp where he spent close to 50 days before being released.

During that time he witnessed frequent beatings of Syrians and other nationals, including that of an Afghan man who refused prison food, and was beaten in full view of the others as an example. “He was on the floor, not moving, completely full of blood. I was watching from the window. I could not see his face, only the blood.”

“Police brutality is a fact,” says Vasilis Kerasiotis, a human rights lawyer who works with the Greek council for refugees. “There is no eye, no non-governmental organisation constantly inside the detention centres.”

Greece has suffered a severe backlash against migrants, legal and illegal, as a six-year recession has driven unemployment to 27 percent. Coupled with this, Greece has over the past two decades become Europe’s frontline immigration state. According to Francois Crepeau, the United Nations’ Special Rapporteur for the Human Rights of Migrants, 85-90 percent of “irregular migration” into Europe passes through Greece. The UN often decries conditions in these detention centres. Crepeau called them “shocking” and the detention of children and families “utterly unacceptable”.

The financial burden of policing external European borders and the legal task of separating political refugees and legitimate asylum seekers from economic migrants has come as a shock to Greek authorities, which estimate the total cost at some $650 million a year – an enormous sum in light of the fact that Greece can barely pay pensions or finance public hospitals. “The European contribution is 230 million euros. We are grateful, but… I am afraid that it is not enough,” Greece’s public order minister, Nikos Dendias, told European officials last month.

The war in Syria has exacerbated the problem enormously because it has produced close to two million refugees in just a year. Thousands have elected to go to Europe, but end up living a non-life in Greece, which hasn’t the money, and arguably the legal culture, to support them.

The Hiluh family are a case in point. They applied for political asylum, a notoriously difficult process in Greece, where applicants must pass muster through two committees. Until now, the process taken up to three years. “Average approval rates are 0.25 percent in the first committee and about nine percent in the second committee,” according to human rights lawyer Alexandros Konstantinou.

The Hiluh family (photo by Anna Psaroudaki) 

Last month, Greece finally overhauled its asylum process, taking out of the hands of the police and assigning it to a dedicated Asylum Service in the interior ministry. In its first month of operation, the service received 878 applications, 51 of them from Syrians, and made initial rulings on 46, suggesting that it may live up to its ambition to process applications in under five months. The service is also to open three border offices, making the application process easier for many. Maria Stavropoulou, the director of the new Asylum Service, says her office will also recognise the right of applicants to work legally. “Our law says that anyone with international protection has the right to work. The real problem is the level of unemployment in our country.”

This is progress, but the Asylum Service won’t be processing the backlog of at least 25,000 valid applications that are still languishing. Those will remain in the hands of the police.  

The dysfunction of that police system is readily apparent. To maintain asylum applicant status, Idriss and Roshan Hiluh had to show up for an interview once a month, despite the advanced pregnancy of Roshan. “Two weeks ago we missed the interview because my wife was inducted into hospital for anaemia,” says Idriss Hiluh, a cabinetmaker from Aleppo. “When we returned to immigration police we were given deportation papers and lost our asylum status. We said, ‘what shall we do?’ They said, ‘That’s your problem.’”

During their harrowing trip to Greece, the Hiluhs saw just how reluctant Greek authorities were to admit or help them. As they crossed the Aegean at 2am in an overfilled rubber dinghy, they were accosted by a Greek coastguard vessel. “The coastguard told us to go back,” Hiluh says, “but we had a group of Algerians among us who said, ‘this is our fifth crossing and we are not turning around.’”

To make the point, they began to knife the dinghy one compartment at a time, until the Hiluhs and their four children, including an infant, were in the water. “Only then did the coastguard pick us up,” says Hiluh. Like the Abdo family and thousands of others, they are stuck in Greece without the money to go deeper into Europe or the legal means to feed themselves.

Greek asylum procedures have become so notorious, that a European Court of Human Rights ruling obliges other EU member states to process those who manage to escape Greece and file applications on their soil – even though this directly contravenes existing treaties. 

Syrians seem to have cottoned on. Within days of our interview, Roshan Hiluh had alighted in Switzerland – not an EU member, but a state with no smirch on its treatment of refugees. She bore her sixth child upon arrival and plans to file for family reunification there. Idriss Hiluh articulated the alternative in Greece. “What shall we do? Await a slow death?” 

Unions Stage General Strike

Posted on Al Jazeera:

Workers in Greece are staging a 24-hour nationwide strike as unions called for protests against the latest round of austerity measures.
Trains ground to a halt and hospitals worked with emergency staff as strikers took action against plans to fire thousands of public sector employees.
Representing about 2.5 million workers, private sector union GSEE and public sector union ADEDY have brought workers to the streets repeatedly since Greece slid into a debt crisis in late 2009.
The latest strike comes a day before a parliamentary vote on Wednesday on reforms Athens agreed with its European Union and International Monetary Fund lenders as a condition for $8.9bn in aid.
Among the measures included in the bill are job cuts for teachers, municipal police and local government posts.
Flights to and from Athens were disrupted as civil aviation unions staged a four-hour work stoppage in solidarity.
City transport was also affected, with bus and trolley bus drivers holding work stoppages in the morning and in the evening.
Trains stopped running and tax offices and municipal services remain shut.
'Annihilate workers'
Al Jazeera's John Psaropoulos, reporting from Athens, said that there are abo
ut 10,000 poeple on the streets protesting against austerity measures, adding that public transport unions did not attend the rally and public transport is working normally in Athens.
Psaropoulos said that unions connected to tourism were particularly on strike, which led buses to stop operations and flights to be cancelled or delayed.
"It's an attempt to hurt government where it hurts. In other words, in the tourism industry which is actually going relatively well this year," he said.
"But the real pain to be felt here is among municipal and local government workers, about 8,000 of whom expect to lose their jobs over the next six months.
"What the unions are trying to say now is these thousands of jobs that will go, may turn into ten thousands of jobs very quickly.
"They do not trust the government, they think they are eroding workers rights, that is why this is something that should concern public sector as well as the private sector," our correspondent said.

Monday, 15 July 2013

Greece Eyes Investment Jackpot

This article was published on Al Jazeera.

For half a decade, Greece has become notorious for its dwindling fortunes. Its stubborn recession has broken postwar European records. Its unemployment levels, the highest in the European Union, threaten political stability. It seems as though no story is too bad to be true.

Yet days ago Greece surprised the world with two developments suggesting that it may finally be turning a corner in this crisis.

The first is that Greece will form the heart of the so-called Southern Gas Corridor, an energy security strategy emanating from Brussels aimed at weaning Europe off the dominance of Russian gas.

The second is that Greece’s biggest port of Peiraieus, near Athens, is well on its way to becoming Europe’s main gateway for trade with China. The projects are worth $2.3 billion in direct investment and 2,300 construction jobs over three years, a fact Prime Minister Antonis Samaras was quick to emphasise.

“This is a very important vote of confidence in Greece,” he said after the Trans-Adriatic Pipeline, two thirds of which will be built across northern Greece, was chosen as the conduit for Azeri gas to Europe. The gas, which is to be extracted by the European-dominated Shah Deniz Consortium, is to flow in 2017. “Who would invest so much money in an economically, socially and politically dangerous country?” Samaras rhetorically asked.

The Institute of Economic and Industrial Research has estimated TAP‘s total beneficial effect over its half-century lifespan at some 33 billion euros, translating into at least 4,300 jobs on an annual basis.

No less important is the decision by the China Ocean Shipping Company, or Cosco, to invest $290 million in expanding its container port terminal from a capacity of about 2.5 million 20-foot containers (or TEU) a year to 6.2 or even seven million.

"We want to turn Piraeus into the top port in the Mediterranean and Europe," said Wei Jiafu, Cosco’s outgoing chairman at the inauguration ceremony.Greece can– and I say will – become the commercial gateway for China and Europe,” replied Samaras.

The political timing of these announcements could hardly be better. A week earlier, Samaras’ government was hobbled by the departure of a key coalition member, reducing his parliamentary majority to a mere three seats.

“The immediate priority is to bring the turnaround as quickly as possible, to defeat unemployment, to bring investments, to avoid new austerity measures… and to raise our geopolitical profile,” he told his reshuffled cabinet.

Tangible economic benefits are a matter of existential importance to Samaras, who pledged himself to an agenda of growth over austerity during last year’s election; but the true value of the two investments arguably lies in the fact that they place Greece at the heart of strategic European relationships with the rest of the world.

“The political effect of being part of such a huge undertaking firmly puts Greece on the energy security map of Europe,” TAP’s managing director, Kjetil Tungland, told Al Jazeera from Baku.  “European gas production is going down. Russia is almost the sole supplier. The southern route is almost a dream about to come true. How Greece benefits from this is up to Greece. It should have plenty of opportunities.”

The big question is whether Greece can make the most of these opportunities. Reaping benefits requires investment, and the country is caught in a debt trap. Last year it spent its entire primary surplus of $16 billion servicing loans. This year’s tax revenues are almost a billion dollars behind schedule as the recession ploughs into its sixth year. Nor is any investment revenue forthcoming from its privatisation plan; anything raised from asset sales must go directly to creditors. Even EU-funded public investments don’t amount to more than $9 billion this year, and Greece may not manage to launch enough projects to claim the full amount.

The cash crunch means that the government is a beggar rather than a chooser. For example,
TAP has announced that it will contract the operator of the Greek natural gas distribution system, Desfa, to carry out maintenance on its pipeline. But Desfa is about to be sold to the Shah Deniz Consortium, according to the Hellenic Republic Asset Development Fund, which oversees privatisation, so the Greek state will not reap the benefits of expansion.

Divestment, rather than investment, is the order of the day, says Stelios Stavridis, who heads the Fund. “Public companies are falling apart. In two years’ time nothing will be left standing because there’s no money. And the companies due to bad management will collapse,”

Stavridis insists that privatisation is now the key to development, because once they are in private hands, assets’ true value will shine through. “Every boatload of containers saves $1.5 million by coming to Peiraieus compared to going through Rotterdam or Hamburg or elsewhere in northern Europe,” he says.

The Fund now wants Cosco to take over the entire Peiraieus Port Authority, or OLP, a state enterprise of dubious profitability. OLP, which currently competes with Cosco, managed to increase its container traffic by 14 percent over three years. During the same period, Cosco increased container traffic through its Peiraieus terminal a dozen times over.

Cosco says it is willing to bid for OLP, and intimates that it plans to invest massively in other network industries that complement its European bridgehead. The reason is that once its container capacity has expanded to seven million TEU a year, Greece’s single-track rail line to the north will no longer suffice for overland shipping to the Balkans and beyond.

The state will have to consider at that point whether it is willing and able to make the necessary investment,” says Tasos Vamvakidis, commercial director at Cosco’s subsidiary, Piraeus Container Terminal. “Cosco, which is making these investments here, would not want to be at the mercy of whoever takes on the management of rail in future. We’re interested in studying whichever proposal the government puts forward,” he told Al Jazeera.

But privatisations do not always go as planned, partly because Greece’s dependence on its creditors also bends it to their political will. Last month they stymied efforts by Russia’s Gazprom to buy Greece’s gas monopoly, DEPA, depriving it of $1.2 billion. DEPA will be re-floated later this year to what is expected to be a narrowed field of bidders.

I think we would be kidding ourselves if we denied that Greece’s negotiating position is reduced,” says Thanos Dokos, director at the Hellenic Foundation for European and Foreign Policy, or ELIAMEP, a leading think tank. “And the investors know this.”

Focusing on how to sell a dozen assets won’t bring Greece to a new period of prosperity,” Dokos says. “If we allow a few companies in without creating a plan, we are doing half the job. The point is to place all this into a broader strategy.”

That broader strategy has so far evaded Samaras, who is often accused of spasmodic moves. Yet he has also demonstrated an ability to stick to his guns in a crisis. If he can train those guns on restoring lost Greek sovereignty as well as prosperity, he might prove that what goes down must come up.