Tag Archives: Greek election

The Prospect for Greece: The Sun will Shine Again

Short extract from a long interview with Hans Werner Sinn, the director of the Center for Economic Studies at the University of Munich. It was published by Spiegel.online on June 16.

SINN: The basic problem is that Greece isn’t competitive. The cheap loans that the euro brought the country artificially raised prices and wages – and the country has to come back down from this high level.

SPIEGEL ONLINE: So the euro countries shouldn’t approve the aid?

SINN: They should give them the money to ease their exit from the currency union. The Greek government could use the money to nationalize the country’s banks and prevent the state from collapsing. The state and the banks must continue to function through all the turmoil that an exit will entail.

SPIEGEL ONLINE: This turmoil would hit the population hard.

SINN: Yes, undeniably. But the turmoil would only be temporary, it would last one to two years perhaps. This time would have to be bridged with the financial aid from the international community. But the drachma will immediately depreciate and the situation will stabilize very quickly. After a short thunderstorm, the sun will shine again.

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Hans Werner Sinn is also the author of a guest column in The New York Times, “Why Germany is Balking at a Bailout” (June 12). This is an extract.

Some critics have argued that Germany, having benefited from the Marshall Plan, now owes it to Europe to undertake a similar rescue. Those critics should look at the numbers.

Greece has received or been promised $575 billion through assistance efforts, including Target credit, E.C.B. bond purchases and a haircut after a debt moratorium. Compare this with the Marshall Plan, for which Germany is very grateful. It received 0.5 percent of its G.D.P. for four years, or 2 percent in total. Applied to the Greek G.D.P., this would be about $5 billion today.

In other words, Greece has received a staggering 115 Marshall plans, 29 from Germany alone, and yet the situation has not improved. Why, Mr. Obama, is that not enough?

Dissecting the Greek Soul — An Interview with Nikos Dimou

From Spiegel Online (June 7). In 1975 Nikos Dimou, who is now 76, wrote “The Misery of Being Greek.” For this interview, he invited SPIEGEL to his apartment in Athens’ leafy embassy district.

SPIEGEL: Mr. Dimou, you have studied the Greek soul more thoroughly than almost anyone. One could say you’ve practically dissected it. How is the Greek soul doing right now?

DIMOU: The prevailing feeling is one of uncertainty. Greeks no longer feel confident, which partly has to do with their history. They have certainly suffered a great deal. But uncertainty also leads to aggression. We Greeks love conspiracy theories – they help to explain and substantiate our uncertainties. That’s why we don’t only think with our heads and our reason, but also with our emotions. You must remember, even in the ancient world, learned Egyptians referred to the Greeks as “children.” But this immaturity also has a kind of beauty to it.

SPIEGEL: And you truly believe that Greece’s history continues to determine your fellow Greeks’ behavior to this day, in the current crisis?

DIMOU: Yes, without a doubt. Modern Greeks will always suffer from knowing what the ancient Greeks accomplished, which we can neither forget nor surpass. My theory is that the Greeks suffered culture shock when they were catapulted from feudal conditions to modernity within the space of a few years in the 19th century. Being caught somewhere between east and west, ancient glory and present poverty, between orthodoxy and enlightenment, has left the Greeks with an identity problem. That’s what makes them unsettled and uncertain to this day. They always feel under threat.

SPIEGEL: Does that mean Greeks never entirely arrived in Europe?

DIMOU: Greeks weren’t free for a long time. First they were part of a multinational empire that spoke many different languages. Then they lived under Turkish rule for 500 years. Then all of a sudden they had to become Europeans, importing all these institutions. The result is that, to this day, Greeks don’t have a good relationship with their government….

SPIEGEL: And why is all of this so important?

DIMOU: It’s important if you want to work together with the Greeks, or to reform their country. Then you need to know just what deeply rooted fears torment the Greek soul. I believe these fears resurface especially in crisis situations such as the one we currently have. Then Greeks, traditionally so hospitable, suddenly start to view others as enemies who’ve come to steal their souls…. I hope the parliamentary elections on June 17 take a more rational course [than the last election on May 6].

SPIEGEL: It doesn’t particularly look that way at the moment…. Are people in Greece aware that this election will also amount to a vote for or against the euro?

DIMOU: If we fail to meet austerity requirements, we’ll lose the currency as well. You can’t have one without the other. I hope that’s made many people stop and think. This is not an election between right and left, but between the euro and the drachma. If the parties would express it that way, then we would already know the results: 78 to 81 percent of all Greeks want to keep the euro. Unfortunately, though, not only does the word “democracy” come from Greek, but also the word “chaos.”

SPIEGEL: And the word “dilemma.”

DIMOU: Yes, all of that is very characteristic of the Greek mentality. It will take generations to change. I hope, though, that we can survive this crisis with the EU’s help. Of course, there’s also the other scenario that could play out here, one where everything falls apart and we start again from the beginning.