AMBASSADOR DAFARANOS AND THE GREEK FINANCIAL CRISIS

"For what is Europe basically? It is an idea before it is a market. More precisely, it is only a market because it is , first of all, an idea. And it is this idea, a knot of the three threads of the mind of Rome, of Jerusalem and of Athens. If one of these threads is cut, it is the soul of Europe that will be lost. If we should come to lack one of these three elements, Europe as a civilization and a culture will collapse."  It was with this thought-provoking quote from Bernard Henri Levi that Ambassador for Greece in  Australia, Mr Haris Dafaranos concluded his recent talk for the Monash European and EU Studies Centre, on the Greek Economic Crisis.

Seldom has a Greek career diplomat been called upon by the Australian mainstream to provide a critical analysis of an event of such historical importance. That Ambassador Dafaranos was requested to do so says much for his standing as a diplomat, and even more as an analyst and critic of repute.

His lecture, delivered aptly enough at the Immigration Museum, to an academic audience in a packed auditorium, comprised of a multifaceted and sophisticated review of the causes of the Greek Economic Crisis, the response and the remedies, the impact on Greek society and the current situation, all through the prism of both a national and European/ International dimension.

Unlike many of his counterparts, who have shied away from analysing events in the country they represent, Ambassador Dafaranos sees it as beneficial to engage with the broader community, offer pertinent facts about Greece and allow the community to draw its own conclusion. It was for this reason, that his digression on the etymology of the word "crisis," coming from the word  «κρίσις,» meaning evaluation in order to pass judgment, was so appreciated by his audience.

Ambassador Dafaranos, in assisting his engrossed audience in forming their own judgment of this weighty matter, identified a number of key causes of the Crisis, causes that were domestic, European and International in origin. Firstly, he spoke of Greece's entry into the Eurozone in 2001 despite the fact that according to many analysts, the country did not meet the convergence criteria, either on government deficit of national debt. Secondly, the laxity of the Europeans in not implementing the stipulations of the fiscal discipline imposed by the Stability and Growth Pact. He then went on to mention that the Global Financial Crisis exposed many Greek vulnerabilities, such as a non-competitive economy, a weak administration, a tax evading mentality, over-borrowing and of course, over-spending. Coupled with this, according to Ambassador Dafaranos, was the fact that Greece had for years, inherited economic weaknesses which had been exacerbated through incentives in the form of low interest rates and the tolerance by the Eurozone institutions, such weaknesses being a lack of competitiveness and the significant account deficits in trade that were accumulated, Greece being a country where growth depended on consumption based on borrowed money.

Boldly, and without attempts at obfuscation, Ambassador Dafaranos mentioned that some analysts believe that Greece embellished her public debt and budget deficit, hinting that the European Union if not complicit in this, at least turned a blind eye, allowing Greece all the benefits of a single currency as well the opportunity to accumulate enormous debt, due to the low interest rates afforded by Eurozone membership. This practice, he was careful to point out, is not specific to Greece but rather seems to have been the norm internationally at that time. Indeed, the Ambassador took pains to point out that the Greek crisis should be seen as a systemic European crisis and that the bailout that ensued, albeit with stringent austerity measures, should be seen as a desire by the IMF and European banks to limit contagion, in the event of a Greek default, to other countries possessed of similar circumstances.

The draconian fiscal reforms Greece accepted in exchange for the bailout, according to the Ambassador Dafaranos, have brought about an unprecedented recession and extremely high unemployment. He pointed out that unemployment has risen to 27%, youth unemployment to 59% while those on the poverty line are at 31%. Pensions and superannuation have been cut by up to 40%. Meanwhile, reduced public spending has had severe repercussion on health and education services. Nonetheless, the budget deficit has been drastically reduced by 13% of GDP, lost competitiveness  has been regained through internal devaluation of wages and for the first time, a primary budget of 860 million euros has been achieved and net growth of 1% is expected in 2015.

Regardless of what Ambassador Dafaranos sees as Greece's slow, painful but inevitable crawl into fiscal responsibility and structural reform, he did not shy away from pointing at some of the social and political issues arising from the imposition of fiscal measures that have brought the country to its knees. Touching on issues pertaining to national dignity and sovereignty, he also spoke of deteriorating living conditions, as a problem of refinancing the real economy through national and European mechanisms, stating that these conditions are unsustainable in the long run.

The novelty of Ambassador's Dafaranos' analysis of the Crisis, lies in his humane and all-encompassing approach to it. There was no attempt to gloss over governmental deficiencies and he readily admitted that the country bears a certain responsibility for the failings in governance that sparked the Eurozone crisis but which, as he points out, were not its cause, this being rather the incomplete and haphazard nature of the union of Eurozone countries, each with different structures, competitiveness and levels of development. The speaker also took great pains to dispel certain stereotypes about Greeks such as laziness, tax evasion and profligacy. In doing so he paid tribute to the stoicism of the Geek people who have made tremendous sacrifices and endured privation during the past six years in order to set their country back on track, paying in fiscal measures to the value of 70 billion euros. To the Eurosceptics, Ambassador Dafaranos stated that it is significant to note that despite the social and financial upheaval, in June 2012, the majority of the Greek people voted in favour of remaining in the Eurozone, an expression of their enduring attachment to the European dream and its ancillary values.

It is refreshing to listen to the views of an ambassador, who unlike the stilted delivery of some of his predecessors and their tendency to lapse into tangents on topics that do not interest an Australian audience, is a skilled communicator. Ambassador Dafaranos certainly knows how to talk the talk and make expert use of the jargon that is required in order to get one's point across. When spoke of the Greek people "taking ownership of the crisis," his audience nodded appreciatively and the growing appreciating and sympathy for the Greek people among them was palpable. In an audience in whose country sections of the media have adopted a critical and often derisory stance against Greece in general, the absence of negativity and complete lack of prejudice was remarkable. The Ambassador's contention, that Greece's crisis will prove the catalyst for the commencement of a discussion as to the handling of the Global Financial Crisis within the context of European financial and political structures, along with his belief that the Greek people should be admired for their sacrifice and endurance were warmly received by the audience.

The proof, if anything of the success of Ambassador Dafaranos' disarmingly engaging style comes from the written comments of the audience, ranging from: "Extremely insightful to hear a first-hand account' of the Greek dimension of the Eurozone crisis from H.E. Ambassador Dafaranos" to "'The ambassador's being honest about [his] feelings for [his] country, willingness to share' and candid responses were greatly appreciated." It can only be hoped that further expert forays of this nature into the mainstream of Australian academia and beyond will do much to augment Greece's image within the broader framework of society and add to enhanced and nuanced understanding of the herculean tasks that Greece faces ahead.

DEAN KALIMNIOU

kalymnios@Hotmail.com

 

First published in NKEE on Saturday, 8 February 2014