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December 14, 2010
 by Steven Hill

ISTANBUL: ANCIENT CITY AND THROBBING METROPOLIS…WHERE EAST MEETS WEST…ECONOMIC DEVELOPMENT…AND IRANIAN TORTURERS…I touched down in Istanbul with a good deal of excitement. Its reputation had preceded it, causing a palpable sense of anticipation on my part. Orhan Pamuk, the Nobel Prize winner in literature from Turkey, writes of his hometown Istanbul with a mixture of melancholy and majesty that tries to reconcile the local landscape’s ancient history with its modern aspirations. Formerly known as Byzantium under the Romans, then as Constantinople after it converted to Christianity under Emperor Constantine, and finally its current name after the founding of the Republic of Turkey in 1923, human habitation has existed at this location as far back as the 10th century B.C. During this long history, this city served as the capital of the Roman, Byzantine, Latin, and Ottoman Empires (the latter lasting for nearly five centuries until 1922). In short, Istanbul is a historical proving ground, where empires conquered and got conquered, leaving layer upon layer of lost stories with the latest incarnation sitting atop the buried remains of Romans, Christians, Celts, Muslims, Crusaders, Jews, churches, mosques, Turks, Greeks, Venetians, Bulgarians, and other peoples who transmigrated east to west and back again.

Today Istanbul is a modernizing mega-city of nearly 14 million people, one of the largest in the world, and also the commercial heart of Turkey. Construction cranes stretch against the skyline in practically every direction, and it occurs to me that they are the true national monuments of modern Turkey. Turkey proper, for its part, is one of the most important emerging national economies in the world, with roaring economic growth rates that rival that of China and India. Muslims, Christians, and Jews live in relative harmony here, yet it’s as if its too-jumbled history pulses within the walls, the monuments, the winding streets, indeed within each individual Turk now inhabiting this ground zero zone. How could it not? No wonder Orhan Pamuk keens over the beauty residing in Istanbul’s "crumbling city walls, in the grass, ivy weeds and trees I remember growing from the towers and walls."

Indeed, Istanbul’s unique geographical position makes it the meeting ground of East and West; it is the only city in the world to exist on two continents, Europe and Asia. These two worlds are divided by the Bosphorus Strait that runs roughly north-south through the heart of the city like the sands of an hour glass, connecting the Black Sea in the north to the Sea of Marmara to the south (which in turn is connected to the Mediterranean). That tectonic parting into two worlds in essence defines Turkey’s historic as well as modern-day dilemma: whether to step further toward the West, or further toward the East. Or straddle both, for as long as it can. Long a member of NATO, aspiring to become a member state of the European Union, all parties to the negotiations are not sure if Turkey fits comfortably in the western camp primarily due to that “Muslim thing,” as well as vast differences in educational and wealth levels between the West and most of Turkey outside Istanbul and the country's capital, Ankara. But Turkey doesn’t fit comfortably in the East either, even with its Muslim roots, especially since the collapse of the Ottoman Empire in 1922 and the emergence of Mustafa Kemal Ataturk as the progenitor of a secular nation now known as the Republic of Turkey (Turks are immensely proud of “their George Washington,” Ataturk, and there are statues and likenesses of him everywhere - when Time magazine held an online election to select the most important person of the 20th century, Turks practiced the old village tradition of voting early and often, resulting in Ataturk winning, much to Time - and the West’s - chagrin. The magazine voided the election and handpicked Albert Einstein instead). Turkey is caught between two worlds, like Janus, the Roman god of doorways and new beginnings, depicted as having two heads facing opposite directions; one head looks back at the last year while the other looks forward to the new, simultaneously into the future and the past, to the west and the east (Janus being the namesake for the month of January, which begins each new year).

Walking around Istanbul, one of the first things that struck me was the vibrancy and energy of the place. It has a street level buzz, like New York City, Paris, or Berlin. Traffic was gridlocked and there was a hustle to the place, like a beautiful con game going on, someone trying to sell you something around every corner. One taxi driver ripped us off with a clever little ruse, and we were boggle-eyed enough to fall for it. I got drawn seductively into the give and take of a Turkish carpet trader, and by the end of the session was out more money than I could have imagined but was the proud new owner of a stunning hand-woven work of Kurdish floor art. In the Grand Bazaar and Spice Market thousands upon thousands of vendors are jammed in, their shops practically shoulder to shoulder, hawking their sparkling wares but what was even more remarkable was that the same vendor conversed one second in English (with me), the next in French, then German, Spanish, Chinese, Russian, each shop owner knowing multiple languages of commerce, each a Marco Polo of the Levant (Polo passed through Constantinople, I am told). Adding to the edge of the place, a suicide bomber detonated his terror in the middle of Taksim Square, one of the main thoroughfares, only a few blocks from where we were staying. Our taxi driver happened to be in the square when it went off, and through his halting English we could see that he was still shaken from the experience (I wrote about this earlier in this blog, see here).

I was thrilled to be accompanied in Istanbul by my partner Lucy Colvin and my mother-in-law, Barbara Colvin. Barbara, all of 83 years wise and from Minneapolis, wrote this about her maiden voyage in Istanbul:

I was impressed with the size of the city, and then learned there were 14 million people and so much traffic and so many cars and so many taxis. That was my first impression. And then I remembered the Turks were the Hittites that used to fight the ancient Egyptians. They are quite an attractive people. Many of the women on the streets were especially beautiful. Some people spoke good English including a few of the taxi drivers. At the Spice Market and Grand Bazaar all of the shop keepers spoke good English to us and then they turned to the other customers and spoke other languages. So it seemed to me that everyone gave the impression of being well educated. The food was delicious and attractive, including the Turkish coffee I had heard was so strong. I thought it was very delicious. The breads and rolls were outstanding. The city was beautiful. It looked very modern but so much was very, very old. The ancient walls and mosques were at least 1500 years old, still very beautiful and in good shape. It seemed more foreign than other places I’d visited but obviously quite westernized. I am so pleased to have had the privilege of being there. It’s a place I really wanted to see and was not disappointed. My favorite place was the old mosque/church called the Hagia Sophia (dating from 500 AD), as well as the Spice Market. And I loved the boat ride on the Bosphorus and seeing all the beautiful homes and palaces along the shoreline. It appeared that most people in Istanbul proper lived in apartment buildings because there is not enough room for all to have houses. I enjoyed going to the Istanbul Museum of Modern Art too, it was so lovely overlooking the Bosphorus, and the sun was sparkling on the water. That is probably the best selection of modern art I’ve seen in one place. I was impressed with hearing about Atatürk and how he wanted Istanbul to be as lovely as other western cities and so he sent many artists to study modern art in France and then added this museum. I have read two of the novels by the Nobel Prize winning author Orhan Pamuk which is helping me have more background on the city.

Thank you Barbara. Like Rome (sort of), Istanbul's nickname is The City on Seven Hills because (like Rome) the city was built on seven hills. And Barbara gamely walked up a good chunk of those hills.

It was a short first visit, but filled with many highlights. I gave a lecture and was interviewed twice, first by a reporter from Today’s Zaman, which is the leading English-language daily in Turkey (one of two English-language dailies, the other being Hurriyet Daily News). The interviewer focused on issues related to the European Union, but also focused extensively -- relentlessly even -- on issues related to Israel, which is embroiled at the moment with Turkey over various Middle East disagreements. One of those disagreements is over Israel's tragically violent and unjustified attack of the humanitarian flotilla that tried to break the Israeli blockade of the Gaza Strip on May 31, 2010, which resulted in nine people being killed by Israeli soldiers. After completing our interview, the Today’s Zaman reporter told me that his photographer (who had been snapping photos of me throughout the interview) had been present on the ship that had been boarded by the Israeli soldiers. I asked the photographer a few questions, and in his broken English he responded. Yes, he had been injured by the soldiers, though not seriously. Yes, it was very scary. Yes, he was glad he was there and he would do it again because the Israeli blockade is wrong and hurting many innocent people. But he didn’t seem eager to talk about it, so finally we shook hands and said good-bye.

The article written from that interview was published on Today’s Zaman front page, below the fold. Here is a link to the article.

"United States too uncritical of Israel, says American author"
By Mustafa Edib Yilmaz
Today’s Zaman, Istanbul, Turkey

The second interview I gave was to an Iranian journalist who was living in Istanbul. The conversation focused a lot on relations between Iran and the United States, as well as with Europe. But what was vividly memorable about this interview is that, during the usual type of give and take between interviewer and interviewee, it came out that this journalist had been a political prisoner in Iran; indeed, he told me he had been tortured by the Iranian authorities. To be honest, at first I was somewhat skeptical. I don't know why, perhaps it was a mixture of a natural wariness I have learned from my travels of claims that strangers make, combined with a lack of personal familiarity with the subject. Torture is just not part of my daily, quotidian frame. So I asked him, hopefully not too challengingly, but also perhaps out of a privileged sense of curiosity, "What did they do to you?" I won't forget anytime soon the look on his sudden, pained face as he described his treatment. The details of his response aren't what stick in my mind -- they were banally evil, as these things go, to borrow from Hannah Arendt -- instead what I remember is how his face twisted up as he recalled those harrowing moments. In the close gap across the wooden table at which we sat, as I observed his breath lower and his jaw line twist, I tried to comprehend the totality of what he was saying, and I realized how much torture is psychological as well as physical. The sheer terror of being in someone else's grip, totally in their control and not your own, knowing that they have complete god-like power to determine how much pain you have to endure, how many hours and times a day, how arbitrary your life will be lived. While I reacted with the appropriate amount of horror and condemnation for the Iranian authorities, silently I cursed myself and my thoughtless skepticism for making him relive that, and the privilege of distance and the distance of my privilege. I was an envoy from the Western comfort zone, and soon we shook hands and I departed back to it. What else could I do?

Steven Hill 4:43 PM Permalink | Trackbacks
December 12, 2010
 by Steven Hill

“EUROPE'S PROMISE” INTERVIEWS FROM THE TOUR, PLUS A VIDEO OF MY SPEECH IN ATHENS AT THE FOREIGN MINISTRY…My speaking engagements in Athens attracted some media attention, including interviews and a YouTube video of one of my talks. I thought some readers might find these of interest:

Interview in Vima, the leading daily newspaper in Greece
Steven Hill: "The crisis unites Europe
The American writer, journalist and political analyst talks about the opportunities the crisis provides to Europe, and believes that Greece is on the right track.
By Markos Karasarinis
Saturday, October 16, 2010
(in Greek, use Google translator)

Video of my talk at the Foreign Ministry of the Greek government:
Steven Hill speaking at the Foreign Ministry, Athens, Greece
October 18, 2010

An article in a Greek publication reporting on my talk at the Foreign Ministry
Zoom News
October 21 2010
(in Greek, use Google translator)

Here is another interview in an Italian publication, following my lecture in Rome at Fondazione Fare Futuro
Europe and its revolution
Interview with U.S. author Steven Hill
November 30, 2010
By Francesca Cannino,4319.html

A book review of Europe's Promise in the Vienna Review (English-language, Austria)

Steven Hill 12:50 AM Permalink | Trackbacks
December 4, 2010
 by Steven Hill

MY INTERVIEW WITH GREEK PRIME MINISTER GEORGE PAPANDREOU…FROM THE TOP OF THE ACROPOLIS…My interview with PM Papandreou was preceded by one with his Deputy Minister of Foreign Affairs, Spyros Kouvelis. I was ushered into a pleasant yet not extravagant office, decorated tastefully with various artworks of Greek culture and personal artifacts. The Deputy Minister was joined by some of his staff. After introductions, Mr. Kouvelis opened with an assessment of his country’s situation, which of course he subtly pinned on the government of the previous Prime Minister, Costas Karamanlis, which had hid the full extent of Greece’s debt. Deputy Minister Kouvelis told about attending what has become a legendary meeting of the then-newly elected Prime Minister George Papandreou and his team, in which each department head and Minister reported to the PM about the state of affairs inherited from the previous government. As they went around the room, the deficit grew larger and larger as each department had discovered that the situation in their respective area was much worse than had been reported. Mr. Kouvelis talked about the look on all their faces as they realized the magnitude of what they had inherited. When the true size of Greece’s deficit was revealed to the world, the bonds markets went berserk. The interest rates on Greece’s sovereign debt spiked to unheard of proportions, threatening the solvency of the government, and the rest is history.

“It was clear that the previous government had not told the truth,” said Mr. Kouvelis in a calm, even-tempered manner. He did not belabor the point to score political points, but his overall message was sobering.

Indeed, the deficits were so big, he says, that Prime Minister Papandreou was forced to go to the European Union and tell them, "It's not just Greece that is on the line...Europe and the euro zone are on the line too," because it raised the unprecedented possibility of a eurozone member having to default on its debt. Moreover, much of that debt is held by banks in other European countries, so even though Greece’s economy is only two percent of the overall E.U. economy, there was the chance of other dominoes falling, or as it has been called, “contagion.” And indeed, Papandreou was correct about that. The European Commission already had been providing money to Greece for development for many years, for infrastructure-building and other growth-encouraging projects, and so it was already heavily invested in Greece’s welfare. Little did anyone realize then how much Greece’s fellow eurozone members would be called upon to “invest” in their Aegean partner. Greece’s plunge into near bankruptcy shattered the bonds of trust and agreement that had prevailed in the eurozone and by extension in the European Union.

Part of the rupture resulted from the fact that Greece’s crisis was not just economic in origin. As Professor Takis Pappas from the University of Macedonia has written, “The crisis has its origins in grave pathologies of [Greece’s] political system over the last three decades, so recovery will require much more than wise economic management. It will in fact require the remaking of Greece’s whole political and institutional system.” Specifically all of Greece’s major political parties had gotten into the habit of winning elections by giving away the candy store, providing subsidies and government jobs to their constituencies. What resulted was an uncompetitive economy with a huge percentage of government employees, a diminished private and manufacturing sector, and ballooning government deficits compounded by huge numbers of people from all income levels who didn’t pay their taxes. That had become the Greek “development model,” much like a declining manufacturing sector combined with a financial industry on steroids and a housing bubble had become the U.S. development model. In both countries their unsustainable ways came crashing down. Now, with its economy in ruins, could Greece figure out how to do things differently? That’s what I was interested in assessing from those I was interviewing -- did they have a plan to fundamentally change Greece? Or were they looking to band aid over this latest crisis, as so many previous governments had done?

I asked a question to the Deputy Minister. “Given that economic experts are saying that Greece needs to increase its exports, and make its economy more competitive, what does Greece have now or what will it have in the future, that the world wants to buy?” (a similar question could be legitimately asked to the Obama administration).

In response he said that Greece was looking to focus development in the following areas: high quality tours and culture (which makes sense, Greece’s peerless historical and cultural attractions had long been a big money maker for the country); renewable energy and green development (taking advantage of copious amounts of sun and wind); and shipping (a longtime core Greek industry). But perhaps most interestingly Mr. Kouvelis discoursed at length about the advantages of Greece's "geographical position." By that he meant that Greece’s location would allow it to play a key role as a gateway between the west and the east, between Europe and the Arab world. He talked about Greece being a regional hub for the Balkan countries and Turkey’s fast growing economy, and using that position to attract foreign direct investment.

It sounded plausible, even convincing. But one of the people with me, Alec Mally, was a former long time American employee of the U.S. embassy in Greece. He expressed skepticism. “This is not the first time that the Greek government has proposed regional projects like this, and being a regional hub,” he said. “But in the past those plans didn't work because of so much bureaucracy and corruption. How will it be different this time?"

That’s a key question. The large-scale patronage that I referred to earlier, besides causing a large and ineffective state, also has been responsible for a paralyzed bureaucracy. And the corruption had become so widespread that a Brookings Institute study showed that patronage, bribery and other corruption costs Greece 8 percent of its GDP per annum. Another study by Transparency International showed that in 2009 the Greeks had paid an average of about $1800 in bribes for such services as speeding up the obtaining of a driver’s license or building permits, getting admitted to public hospitals, or manipulating tax returns.

What about it, Mr. Deputy Minister? Can you reverse these trends?

The Deputy Minister made the case that the linchpin for changing Greece fundamentally was “getting people off the public payroll and on the private sector payroll." This in turn would shrink the size of government and the slice of the budget so dependent on patronage, i.e. handing out jobs to bought-off constituencies. Coming from a high-ranking member of the PASOK government, this was a statement worthy of attention. PASOK is the socialist party of Greece begun by the current prime minister’s father who was probably more responsible than any other figure in fashioning the patronage state. This was Nixon going to China, to have PASOK tackling this issue.

"Now we have a fast-track program," said Deputy Minister Kouvelis, trying to sound convincing. "The current crisis has given us more momentum for making the changes that need to happen.” As proof, he reported that for the first time ever this Greek government took the first survey of government employees to find out how many they had. “Previous governments did not even know how many public employees were on the payroll.” They found that there are 760,000 public employees, or 18 percent of the overall workforce (compared to the United States where about 9 percent of the workforce of 155 million workers is public employees).

Deputy Minister Kouvelis also talked about how, as a way of further reducing costs, they are consolidating government in significant ways. For example, there used to be 1050 municipalities, with a lot of overlapping jobs and positions. Now there are 335 municipalities, and a lot of the overlapping jobs have been abolished. My Greek sources who attended this interview with me were nodding their heads in approval over the depth in his responses.

I asked him a question that I think doesn’t get enough attention (and that I wrote about in a previous blog post), namely the downsides of having so much of the economy based on an informal sector of family and social networks. That also lends itself to barter and covert exchanges of money, which easily heads in the direction of graft and corruption; that in turn makes it difficult for the government to count things, to know how much its revenues and expense are. “Do you have a plan for bringing that under control?”

He reframed this into a discourse about the "family welfare system,” which sounds warm and fuzzy and was starting to look like an evasion. But he recovered nicely, saying “The ‘gray economy’ is a problem, but grandmothers taking care of their grandchildren is good. How do we get rid of the downsides of the gray economy without getting rid of the social aspects that we believe are good? That's what we are grappling with.”

In sum, he said that the E.U. partnership is getting better, as everyone has been making compromises to find solutions. At the moment, he is feeling hopeful about the current situation. “We are safe from a crash of the global economy. And we are ready to build a new future for Greece as part of a strong Europe.”

My interview with Prime Minister Papandreou.The next day I interviewed Prime Minister Papandreou. Prime ministers are generally pretty busy people, especially when you are the prime minister of a country in the middle of a historic crisis in which much of the capitalist world seems to believe that your tiny nation could be a domino that brings down the rest of them. So I was not surprised when the PM’s press office told me in response to my initial request, “We will have to wait until just a day or so beforehand to decide, depending on his schedule and any late-breaking situations.” The day before I was informed that “unfortunately his day is turning out to be quite busy, back to back meetings. The best we can offer you is a telephone interview, at approximately 15:00 (3 pm).” I immediately accepted, but it put me in a bit of a quandary: that afternoon was the only time I had left to climb to the top of the Acropolis, one of the most revered classical sites in all of Greece, and explore it before leaving Athens the following day. What a choice, the prime minister or the Acropolis? Then I thought, What the heck, I can take the PM’s call from the top of the Acropolis…assuming there is cell phone reception up there, since it’s located on a 500 foot tall mount in the center of Athens!

The Acropolis of Athens is the best known of its kind in the world. Although there are many other acropolises in Greece, this is the only one know as THE Acropolis. The Acropolis in its current form was constructed under the leadership of Pericles during the Golden Age of Athens. It sits on a flat-topped bluff jutting above the city, with a surface area of about 3 hectares. Its archaeological remains are vast and iconic, and one of Greece and the world’s most famous tourist attractions. Indeed, the Acropolis was formally proclaimed as the pre-eminent monument on the European Cultural Heritage list of monuments in March 2007.

The climb to the top of the Acropolis proceeds along a winding, gently sloping trail. Along the slope are the remains of two different ancient theaters built into the sides of the hill. Here, some of Athens’ leading dramatists like Sophocles, Aeschylus and Aristophanes premiered their most recent plays. Climbing through the skeletal remains of ancient Greek architecture is sobering…a chance to reflect on the rise and fall of civilizations, on the plate tectonics of human affairs that grinds up the past and deposits it in the future, transformed into little more than dust and a few artifacts of a time long gone.

The entrance to the Acropolis is a monumental gateway called the Propylaea. It’s imposing and impressive, or rather the Greek government has done an impressive job of rebuilding it. Using one’s imagination, one can see how these structures were meant to convey grandeur and power, circa 500 B.C.

The highlight of the Acropolis is the most famous, most photographed, most recognized and most admired ruin in the world -- the Parthenon, or Temple of Athena Parthenos (Athena the Virgin). The Parthenon dominates the Athens skyline, and can be seen from practically every point in the city; I could see it from my hotel balcony in the Plaka district, day or night, since the Parthenon is brightly lit at night and radiates over the city like a second full moon. Myth, religion and war are all embodied at this site, and in its heyday it housed the city's treasures and showcased a gold and ivory statue of Athena Parthenos. It is renowned as an example of Classical Greek architecture, with its famous distinctive columns, eight on each of its shorter sides, and 17 columns on two longer sides. The history of the Parthenon is the history of Greece itself: built between 447 and 438 B.C., in the 5th century A.D. transformed into a Christian church, before becoming a mosque under Turkish rule in the 1460s. The building was attacked and almost destroyed in 1687 during a siege of the Acropolis by the Venetians to remove the Turks. A British nobleman named Thomas Bruce (otherwise known as Lord Elgin) caused more damage when he looted it in the 19th century, selling much of its contents to the British Museum. The Parthenon underwent restoration in the late 19th and 20th centuries and today is considered one of the most important symbols of ancient Greece, having been named a UNESCO World Heritage Site in 1987.

I was standing right in front of this magnificent building, admiring its history and architecture when, at 15:20 (3:20 pm), 20 minutes later than scheduled, I received a call and a distant voice said: “Please hold for the Prime Minister.”

A few moments later a second, softer voice was on the phone, saying “This is George Papandreou.” His understated voice didn’t have to say it, but it was immediately and implicitly clear to me, that this was the latest scion of one of the two families that had dominated Greek politics for decades. He had been educated - ‘groomed’ is the more accurate word - for this slot as a leader, attending the world’s best schools and living much of his life abroad, including in the United States, rubbing elbows with the young elites of the world. He had grown up in a rarefied world that few could enter or understand, and it is said that his English is better than his Greek. Certainly his voice on the other end of the phone spoke better English than many of my relatives.

I started my end of the conversation by greeting him and explaining that I was, at that very moment, at the top of the Acropolis, perched in front of the Parthenon. “Somehow it seems very appropriate that I should greet you from here,” I said. He got a chuckle out of that, he appreciated the coincidence, and he was friendly and easy to banter with. But we soon got down to business.

"Your government is under enormous pressure, Mr. Prime Minister, do you think you can retain the support of the Greek people? Will you be able to hold on?” I asked him.

He responded by heaping great praise on his fellow Greeks. “I am amazed at the support we are seeing in such difficult circumstances. Keep in mind that right now we are living through the worst of it, people are experiencing the cutbacks but none of the benefits that won’t come until later. And of course people are protesting, that’s understandable. But even some of the protesters are telling me, ‘Keep going, keep going, we know that Greece needs to change.’ So everyone is in this incredibly difficult position, afraid to go forward but knowing we have to. I am really proud of my fellow Greeks, and so far I feel they are supporting my team and what we are trying to do.”

Opinion polls as well as a recent local election confirm that the prime minister’s party, PASOK, is enjoying support as well as a sizable 14 point lead over its main opponent; Papandreou himself retains fairly high ratings. But that flowed naturally into a rather obvious question: What exactly are you doing to rectify the situation? This part of the conversation repeated some of the same ground I went over with his Deputy Minister, Spyros Kouvelis. He stated some of the same themes about rooting out corruption. He spoke about how, shortly after coming to power in October 2009, he was obliged to admit that the Greek public sector suffered from “systemic corruption,” and identified cracking down on it as necessary for reducing the country’s public debt.

But he also talked about his visions for Greece’s future, reiterating some of the same themes as Deputy Minister Kouvelis, i.e. Greece as a regional hub, boosting their green economy and green tech. “For example,” he said, “The prime minister of Turkey is coming this weekend to participate in a regional conference on global warming and green economy. We are trying to position Greece as major players in this region for those issues.”

He also said that Greece’s position as a regional hub is perfectly located to attract foreign direct investment. “Chinese investors are here in Athens next weekend, and they are extremely interested in investing in our shipping and other industries where we are well-positioned to expand in the private sector if we can find sufficient investment capital.”

Suddenly, much to my chagrin, our phone connection went dead. Cell phone reception at the top of the Acropolis was spotty, and I had been pacing to and fro among the ruins and tourists, so perhaps that contributed to losing reception. But fortunately he called right back and we resumed our conversation.

I asked him a question about the Greek military. “Greece spends the highest percent of GDP on its military of all European nations, about 3.6 percent (the U.S. spends at least 4 percent, but other European countries spend less than half that amount as a percent of GDP). Given the crisis, given the budget deficit, doesn’t it make sense to reduce that spending?”

He was cagey on that one. Precisely because of its location as a crossroads between east and west, Greece has been involved in numerous military conflicts over the centuries; in the last century Greece was invaded by the Nazis and the Ottomans/Turks, with the military itself becoming a powerful special interest during periods of dictatorship within Greece. So reducing military spending taps into a lot of historical baggage. And ongoing fear of Turkey’s army has led Greece to become the European Union’s biggest military spender as a share of GDP. But last May, during a visit to Athens Turkish premier Recep Tayyip Erdogan said the neighbors and strategic rivals should work to cut military spending. And naturally matching cuts from Turkey would help Greece make the reduction in military expenditures. It seems like this is on the track to becoming a reality at some point, but PM Papandreou was not about to make any major announcements or commitments to me over the phone. He discoursed a long version of “We are looking into that.”

He asked me how things looked in the United States, and I told him it varied from place to place, but that some parts of the country had been hit really hard. In California, where I live, the state government had to issue IOUs in 2009 to pay its bills and prevent default. State and local governments have been slashing social programs and government jobs, while many communities have been swamped by foreclosed homes. A recent study found that 25 percent of Californians have no health insurance, and California has a higher unemployment rate than Greece. While both Greece and California are in major belt-tightening mode, at least in Greece all families and individuals still have access to healthcare and a long menu of other supports that Europe is known for. But in California, even before the crisis millions had no health care, and now more have lost their jobs and their health insurance, with little in the way of a support net which further reduces consumer spending and weakens the economy. The Greek economy is only about 2 percent of Europe's economy compared toCalifornia's economy, which is about 14 percent of the United States, truly” too big to fail.”

On top of that, for a couple of decades for every dollar in federal taxes that Californians have sent to Washington DC, they have only received back about 70 cents. Where did the other 30 cents go? To states like Alaska, Wyoming and other low-population, conservative "red" states who complain about big government and taxes even as they are heavily subsidized by large "blue" states like California and Illinois. Yet when the Golden State requested assistance from the Obama administration, the subsidized states complained vociferously and the White House rejected the request, forcing California to issue IOUs. I pointed out the irony: in the U.S., which has the laws and precendent for the federal govt to act as a financial backstop and bail out states that get into financial trouble, the federal govt refused to use that power; but in the European Union, which has no history, tradition or even laws to allow some member states to bail out another, they had figured out how to do just that.

He appreciate the irony, and concluded with a rather remarkable statement, a “glass half full” kind of statement that may not be fully shared by his fellow European leaders.

“Greece has given Europe the opportunity to fix a defect in the euro zone, that is the fact that we did not have a fiscal union. Now steps have been taken to begin that process. And there is more solidarity from nation to nation, and that is a good thing. That has been Greece's gift to Europe.” That sounded familiar and a moment later I learned why: PM Papandreou told me he had quoted from one of my articles saying the same thing, in a speech he gave to an audience at the Foreign Policy Association in New York City (read the speech here).

I concluded by telling him that I have been impressed with the steps his government had taken not only to deal with an extremely difficult situation handed to him by his predecessor, but also to reinvent Greece from the inside out. We both agreed there was a long way to go. At that point our connection went bad again, but the conversation had come to a natural conclusion, and he didn’t call back.

Steven Hill 2:09 AM Permalink | Trackbacks | Comments (2)

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