[MGSA-L] Two items on Greek Debt

Sat Feb 7 13:38:16 PST 2015

The quality and volume of commentary on the debt -- Krugman,
<http://www.nytimes.com/2015/02/06/opinion/a-game-of-chicken.html> Skidelsky
<http://www.theguardian.com/business/2014/oct/21/morality-debt-disputes>,
Stiglitz
<http://ftalphaville.ft.com/2015/02/06/2113951/michael-pettis-explains-the-euro-crisis-and-a-lot-of-other-things-too/>
, Pettis
<http://ftalphaville.ft.com/2015/02/06/2113951/michael-pettis-explains-the-euro-crisis-and-a-lot-of-other-things-too/>
(very
worthwhile).  It's amazing how many smart people are urging the authorities
to rethink an approach that provides little stimulus to the Greek economy
and may endanger the rest of Europe.

To that, I can add one item that may be useful to some list members:  an
inventory of major statements on Greek recover efforts in recent years.  I
asked a professional economist friend in Athens to send me something, and
he put this together.  I hear regularly from people who insist that Greece
has done "nothing" and needs to be disciplined:  the list (below) provides
ammo for responding.

Second, I realized this morning that many Americans unreflectively  buy
into  the northern European language of virtue and purity: every debtor
must pay what he or she owes, that's honorable, etc.

Which is fine up to a point.  But buying it can mean ignoring the ways in
which debt has historically used as a tool of control, plunder, and
predation. Examples abound:  for Americans, most likely the protests of
Heartland farmers against banks and railroads that controlled mortgages and
freight fees.  Perhaps the bankers in Boston and NY were virtuous and
benign, but equally perhaps, they knew how to make a buck.

It's easy to go in several directions at once on this, but below, I focus
on earlier Greek experience with debt, which was especially awful in the
regular periods when the olive harvest failed.  Very likely many of our
Greek - American listmembers and friends had knowledge of this sort of
thing.

Start, though, with *Orientations*, the memoirs of Sir Ronald Storrs
<http://www.haaretz.com/weekend/magazine/discerning-conqueror-1.324306>,
friend of Lawrence of Arabia, who served as governor of Jerusalem during
the riots of the early '20s, then of Cyprus around 1930, and was quite
critical of the whole colonial administration set up.  He mentions British
connivance in maintaining the Ottoman debt on Cyprus, a precursor (in only
some ways) to today's imbroglio.  The "Ottoman debt" that enabled Great
Britain to extort great sums from the island,  was calculated, he says,
with the "scrupulous exactitude characteristic of faked accounts" at the
sum of  L92,799, 11s. 3d p/a.  One of my favorite quotes.

He also sums up the stupidity of British colonial administrators in
looking down on colonials with a quote from Gide, "Moins le blanc
est intelligent, plus il méprise les noires."  ("The stupider a white man
is, the more he hates the blacks.")

Now:  Paul Halstead's archaeological work (like that of Mike Jameson, whom
he cites) has helped many understand the continuities and differences
between ancient and modern Greek agriculture.  The passage below comes to
mind right now.  It raises the question: when is enforcing debt payment
(foreclosure, in the old westerns -- and recall that the US populists hated
bankers for this very reason) -- when is enforcing debt a "virtuous"
activity expected of all decent people, and when is it an instrument of
predation and plunder?  Put it differently, who would *not *put the screws
to weaker folks, to extract some power or some cash?

Here's Halstead (and Glynis Jones).  Classical content, indeed:

"Agrarian Ecology in the Greek Islands: Time Stress, Scale and Risk"

Paul Halstead and Glynis Jones

The Journal of Hellenic Studies 109 (1989), 41-55

 [On Greek islands, later 20th c.]

... farmers in need might work for their richer neighbours, helping to build
a barn or assisting in tasks such as reaping and ploughing, in return for
grain. Exchanges between farmers and shepherds are also recalled. Only as a
last resort would farmers seek to buy grain on the market, working in
Athens or Rhodes to earn the necessary cash. On Amorgos, needy farmers have
in living memory sometimes bought grain from other farmers: ...  In more
desperate situations, *farmers start selling off their fields (and even
their children
<http://tvtropes.org/pmwiki/pmwiki.php/Main/DastardlyWhiplash>*)*, so
offering more fortunate farmers the opportunity to convert money to the
more stable and profitable form of land. The last resort of the failed
farmer is to abandon the land altogether, and recent emigration has been
particularly prevalent among poor farmers with too little land to be
economically viable. Those who have stayed behind, *expanding their
holdings by buying land from emigrés*, have tended to be *farmers of
moderate wealth*.

Also worth a look: Albert Camus' riveting dispatches on the failure of the
olive harvest in the Algerian Kabyle, and subsequent starvation and
suffering:

http://www.histoire.presse.fr/actualite/infos/albert-camus-misere-kabylie-in-alger-republicain-1939-22-11-2010-16441

http://www.amazon.co.uk/Chroniques-Algeriennes-1939-1958-Folio-Essais/dp/2070422720/ref=sr_1_fkmr2_1?s=books&ie=UTF8&qid=1423325722&sr=1-1-fkmr2&keywords=chroniques+d%27alg%C3%A9rie+camus

In English (good translation that nevertheless loses a lot):

http://www.amazon.co.uk/Algerian-Chronicles-Albert-Camus/dp/0674072588

*Source:  Michael Jameson, 'Famine in the Greek in P. D. A. Garnsey and C.
R. Whittaker (eds) Trade and famine in classical antiquity (Cambridge I983)
6-i6. Selling children is still big business in India.
<http://www.theguardian.com/world/2012/aug/04/india-traffickers-sell-children-slavery>

So, there you are.  Debt goes back for millennia, and is often
olive-related.   I I think it's the piece below that is really worthwhile,
and I'd be interested to get additional info.

Very best,

Dan Tompkins

*Sources: Official reports on Greece's achievements (and failures, delays,
state of things)*

*OECD*  [see: http://www.oecd.org/greece/publicationsdocuments/reports/ ]

http://www.oecd.org/eco/growth/goingforgrowth.htm [ OECD 20125 edition of
"Going for Growth" to be released on Feb. 9, 2015 ]

http://www.oecd.org/greece/revenue-statistics-and-consumption-tax-trends-2014-greece.pdf

http://www.keepeek.com/Digital-Asset-Management/oecd/social-issues-migration-health/international-migration-outlook-2014/greece_migr_outlook-2014-19-en#page4

http://www.keepeek.com/Digital-Asset-Management/oecd/urban-rural-and-regional-development/how-s-life-in-your-region/greece_9789264217416-26-en#page1
[How is Life in your Region - Greece, Oct. 2014]

http://www.keepeek.com/Digital-Asset-Management/oecd/urban-rural-and-regional-development/oecd-regional-outlook-2014/greece_9789264201415-26-en#page1

http://www.oecd.org/edu/Greece-EAG2014-Country-Note.pdf  [Education at a
Glance - Greece-country note]

http://www.oecd.org/greece/EMO-GRC-EN.pdf [Employment Outlook -- findings
on Greece]

http://www.oecd.org/els/health-systems/Briefing-Note-GREECE-2014.pdf

http://www.oecd.org/greece/OECD-SocietyAtaGlance2014-Highlights-Greece.pdf

http://www.oecd.org/eco/growth/ambitious-structural-reforms-can-pave-the-return-to-strong-and-sustainable-growth.htm
[Going for Growth 2014 report - press release Feb. 21, 2014 - "The
intensity of reform has remained highest in southern euro area countries
like Greece, Italy, Portugal and Spain, which are suffering from high
long-term unemployment and youth joblessness."]

http://www.oecd.org/competition/greece-oecd-identifies-hundreds-of-competition-distorting-rules-and-provisions.htm

http://www.oecd.org/competition/launch-of-the-competition-policy-assessment-of-greece.htm

http://www.oecd.org/eco/surveys/greece-structural-reforms-under-way-but-more-progress-needed-in-boosting-market-dynamism.htm
[OECD Economic Survey of Greece, Nov.2013]

http://www.oecd.org/eco/surveys/GRC_Overview_Eng_2013.pdf [OECD Economic
Survey of Greece, Nov.2013 - Overview - Main Findings]

http://www.oecd.org/greece/OECD-PensionsAtAGlance-2013-Highlights-Greece.pdf

http://www.oecd.org/greece/HsL-Country-Note-Greece.pdf [How is life -
Measuring well-being - Greece country snapshot, 5 Nov. 2013]

http://www.oecd.org/eco/structuralreformsmoreimportantthaneverforastrongandbalancedeconomicrecovery.htm
[Going for Growth 2013 report - press release Feb. 15, 2013 - "This
year's report (...)shows that the pace of reform has accelerated where it is
most needed - in the European countries hardest hit by sovereign debt
duress, including *Greece*, Ireland, Italy, Portugal and Spain."]

http://www.oecd.org/economy/structuralreformscanmakethedifferenceascountriesreboundfromcrisisoecdsays.htm
[Going for Growth 2013 report - press release Feb. 24, 2012 - "The OECD
report assesses and compares progress that countries have made on
structural reforms since the start of the crisis, covering the 2007-11
period. It shows that the pace of reform has accelerated where it is needed
most - in the European countries hardest hit by the sovereign debt crisis,
including *Greece*, Ireland, Portugal and most recently, Spain and Italy." ]
Chart from press release:

*IMF*  [see: http://www.imf.org/external/country/GRC/index.htm ]

http://www.imf.org/external/np/speeches/2014/070914.htm [Remarks delivered
at the 18th Economist Roundtable with the Government of Greece By Rishi
Goyal, Advisor in the IMF's European Department, Athens, July 9, 2014 ]

http://www.imf.org/external/np/vc/2014/061514.htm [Poul Thomsen interview
to "Ethnos", 15 June 2014]

http://www.imf.org/external/np/tr/2014/tr061014.htm [Transcript of an IMF
Conference Call on the Fifth Review of Greece's EFF, June 10, 2014 ]

http://www.imf.org/external/pubs/cat/longres.aspx?sk=41614.0 [Greece: Fifth
Review Under the Extended Arrangement Under the Extended Fund Facility, and
Request for Waiver of Nonobservance of Performance Criterion and Rephasing
of Access; Staff Report; Press Release; and Statement by the Executive
Director for Greece --  June 10, 2014 ]

http://www.imf.org/external/pubs/ft/survey/so/2014/car060914a.htm [IMF
Survey Magazine - Poul Thomsen interview June 10, 2014: "Greece: Grounds
for Cautious Optimism"]

http://www.imf.org/external/np/sec/pr/2014/pr14254.htm [IMF Completes Fifth
Review Under Extended Fund Facility Arrangement for Greece and Approves
EURO 3.41 Billion Disbursement - press release, May 30, 2014 ]

*Eur.Commission* [ see:
http://ec.europa.eu/economy_finance/eu/countries/greece_en.htm ]

http://ec.europa.eu/economy_finance/eu/forecasts/2015_winter/el_en.pdf
[Latest forecasts on Greece - Feb. 5, 2015]

http://ec.europa.eu/economy_finance/publications/european_economy/2014/pdf/ee5_en.pdf
[Market Reforms At Work in Italy, Spain, Portugal and Greece - Sept. 2014]
[Market reforms to boost economic activity and competitiveness have been a
central part of Europe's response to the crisis. This report estimates the
potential impact of a selection of such market reforms in four of Europe's
most vulnerable economies: Italy, Greece, Portugal and Spain. It finds
indicators suggesting that the varied reform efforts in these countries
appear to be starting to have a positive effect. Both reform efforts and
their effectiveness seem to vary across the four countries, with Spain
showing the strongest signs that the reforms are starting to pay off,
followed by Portugal, while Italy and Greece seem to lag behind. The report
aims to detect the transmission channels through which reforms ultimately
affect macroeconomic outcomes and pays special attention to the role that
the entry and exit of firms plays. Business dynamics channel the effects of
reforms on efficiency of resource allocation and on productivity. The
estimated potential gains suggested by the report would be significant once
their full impacts are realised, although there is plenty of scope for
further improvement. ]

http://ec.europa.eu/economy_finance/publications/european_economy/2014/pdf/ee5_summary_en.pdf
[Market Reforms At Work in Italy, Spain, Portugal and Greece - Summary for
non-specialists - Sept. 2014]

http://europa.eu/rapid/press-release_MEMO-14-495_en.htm [ EU Task Force
activity report - press release July 2014]

http://ec.europa.eu/archives/commission_2010-2014/president/pdf/qr7_en.pdf
[EU Task Force activity report -July 2014]

http://ec.europa.eu/economy_finance/assistance_eu_ms/greek_loan_facility/pdf/presentation_4th_review_2nd_programme_brussels_en.pdf
[2nd Econ.Adjustment Programme - 4th Review - Presentation - April 2014]

http://ec.europa.eu/economy_finance/publications/occasional_paper/2014/pdf/ocp192_summary_en.pdf
2nd Econ.Adjustment Programme - 4th Review - Summary for non-specialists -
April 2014 ]

*The Lisbon Council - Euro Plus Monitor* [ see:
http://www.lisboncouncil.net/ ]

http://www.lisboncouncil.net/component/news/news/576.html [17/12/2014 EU
Reform Euro Economy The Lisbon Council and Berenberg jointly publish The
2014 Euro Plus Monitor: Leaders and Laggards, the premiere competitiveness
ranking published each year. The classification is based on a complex
double metric: The Adjustment Progress Indicator measures the speed with
which countries are reforming (*this year's winners are Greece*, Ireland
and Latvia). The Fundamental Health Indicator looks at the overall economic
strength (or weakness) of the 18 countries of the eurozone plus Poland,
Sweden and the United Kingdom (this year's winners are Luxembourg and
Estonia; while Germany falls one spot to No. 3). The study was launched in
Brussels at The 2014 Euro Summit in the presence of Valdis Dombrovskis,
vice-president of the European Commission responsible for the euro and
social dialogue. - See more at:
http://www.lisboncouncil.net/component/news/news/576.html#sthash.ZsFHjp1v.dpuf
]

- IS
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