2012 HO Newsletter (FINAL).Pub

2012 Newsleer - Issue 10 THE HELLENIC OBSERVATORY 2012 Newsleer only concerned with the economics: we were Editorial pleased to host a joint conference (with the University of Manchester) on social change in Internaonal aenon connues to focus on Greece, which included a lecture by LSE the economic crisis in Greece. It is a tragic Emeritus Professor Nicos Mouzelis. situaon, with profound implicaons for the But we have also had a wider focus. We have development path that the naon may follow been able to expand our coverage of Cyprus, INSIDE THIS ISSUE and also for the future viability of the euro- for example, and we were delighted to host zone. Polical events, both in Greece and at the Foreign Minister of Cyprus, Dr Erato the EU level, have been dramac over the Kozakou-Marcoullis. Praxoula Antoniadou- Editorial 1 last year. We have witnessed a second Kyriacou, Minister of Commerce, Industry & ‘bailout’ and two elecons in Greece, with Tourism, together with Nobel Prize Winner 12th Annual Lecture 2 several changes of government. Professor Chris Pissarides spoke at a separate Panel Debate on the 3 It is the purpose of the LSE’s Hellenic conference on the Cyprus economy. We have Greek Crisis Observatory to analyse, to foster debate, and also launched a new programme of acvity Public Lecture with the with Neapolis University in Pafos. 4 to communicate its research and European Ombudsman assessments on Greece. This we have The line-up of speakers has been as high Public Lecture with the certainly done and this Newsleer offers a profile as at any me in our history and this man who defended 4 broad report on our acvies. HO staff and has been very pleasing and they have been Mandela visitors have been regularly reported or matched by the research outputs of the Panel Debate on PSI 5 interviewed in the press, on TV and on radio - Observatory. Our GreeSE Papers series has in Greece, in the U.K., in Europe and now published over 60 issues, with Panel Discussion on the 5 Greek Elecons internaonally. We have responded to contribuons from a wide range of scholars invitaons from Australia, Japan, Chile, the and policy makers from the Greek, Brish Conference on Cyprus 6 USA, Russia, Norway, France, Germany… the and internaonal academic communies. Public Lecture by list is very long. The Observatory has welcomed a number of Cyprus Foreign Affairs 7 We have connued our very successful public (senior) research fellows; visitors, and Minister events programme - combining lectures, research associates, who have greatly added Panel Discussion with to our working atmosphere and our research 7 debates, conferences, and research seminars. the Cyprus Civil Society outputs. Of course, a major focus for these events has Workshop The economic crisis in Greece has, inevitably, 8 been the economic crisis. We have on Social Change incorporated a range of academic views from affected the funding that is available to the Other Events 8 Professors Lapavitsas and Varoufakis, on the Observatory. Even so, we are very grateful one hand, and Azariadis and Drs Arghyrou for the connuaon of our Naonal Bank of Research Seminars 9 and Dimitrakopoulos, on the other. We Greece Research Fellowship. Nevertheless, Research by staff 10 hosted a major panel debate (in conjuncon we are obliged to adjust our operaonal with the Hellenic Bankers Associaon of the model. We will have less funding for GreeSE Papers 11 UK) with Poul Thomsen, Head of the ‘Troika’ fellowships, but we plan to shi our Research Fellows for Greece; Dimitris Daskalopoulos, Head of emphasis in order that we sustain a strong 12 2011-12 the Greek Employers’ Associaon; Moritz programme of research, o en with collaborators in Greece and involving Research & Kraemer of Standard and Poor’s; and Vicky 13 Vising Fellowships Pryce. Another successful debate concerned external research calls, and to maintain our the ‘PSI’ dimension of a possible Greek posion as an internaonal plaorm for News 14 rescue. Together with the Centre for debate and understanding. Now, more than Donors, Advisory Board, European Reform, the EU Commission’s ever, the internaonal community needs to 15 Research Associates London Office, and the LSE’s European have expert knowledge and informaon on Instute we co-hosted a conference on euro- Greece: its economy, polics and society. Forthcoming Events & 16 Who’s Who zone reform, welcoming Professors Christodoulakis, Lyberaki, and Tsakloglou KEVIN FEATHERSTONE Director back to the HO. Our crisis agenda was not SPYROS ECONOMIDES Deputy Director Page 2 THE HELLENIC OBSERVATORY 12th ANNUAL LECTURE ‘Greece between Austerity, Reform and the Drachma’ Professor Costas Azariadis On 5 March 2012 , Professor Costas outlook, but Professor Azariadis and an equivalent reshaping of the Azariadis, Edward Mallinckrodt noted that the scenarios were constuonal and polical system, Disnguished University Professor speculave, included in such a way the future for Greece was indeed as to make a gloomy. And to achieve all of this very specific that was of paramount importance set of points. was a change in Greek public To avoid atudes. The lecture, as expected, disaster, generated a lively queson and public answer session in which our Annual atudes in Lecturer was closely quesoned on Greece had his assumpons and proposed to change. soluons. It was not In the true tradion of the Hellenic merely Observatory there was a free and responding lively debate chaired by the Director to an of the HO, Professor Kevin externally Featherstone. Professor Costas Azariadis offered The lecture and discussion were austerity, reform followed by a private dinner for in Arts and Sciences, Washington and restructuring plan, that would State University in St. Louis, gave Professor Azariadis in which many lead to the salvaon of the Greek of the themes raised in his lecture the Twel h Annual Hellenic economy, or even the Greek state. Observatory Lecture. The lecture were further discussed. was entled, ‘Greece between For meaningful long-standing Austerity, Reform and the Drachma’ change to occur, the This year the HO Annual Lecture took and focused on the leading issue on public would have to place in the New Theatre the Greek polical and economic accept draconian agenda of the day, namely Greece’s measures and include a economic crisis and the opons new constuon, which available to resolve it. would target corrupon, clientelism and cronyism, In his lecture, Professor Azariadis and measures to privase began by addressing the queson of large parts of the public why there had been 'no structural sector as well as public- reform' in Greece in recent mes. private iniaves to He aributed this to blockages smulate domesc and created by special interests and the foreign investment. contradicons inherent in public Indeed if Greece were opinion. Greece, he said, had the not able to reform both ‘most distorted’ economic structure its polical system, and in the EU. It was suffering very high the structure and unemployment (especially youth), working of its economy, high income inequality, poor Greece could become a returns on educaon, excessive ‘failed state’. consumpon, and a tale of insiders versus outsiders in the domesc Professor Azariadis economy. He drew an alarming argued that Greece had faced scenario of what might happen to disasters of similar magnitude in the past, such as the Asia Minor disaster A page dedicated to the the Greek economy in the future - 12th HO Annual Lecture over the short, medium and long- and the Greek civil war, and had is available at terms - without such reforms. The managed to overcome them. A hp://www2.lse.ac.uk/ long-run scenario he labelled similar challenge faced her now. europeanInstute/research/ hellenicObservatory/Events/ 'doomsday', with Greece's GDP The basic message at the heart of pubLectures/ falling to the levels of Albania. This the lecture was that without deep Azariadis_2012.aspx was indeed an extremely gloomy structural reform to the economy 2012 Newsleer - Issue 10 Page 3 A page dedicated to this PANEL DEBATE ON GREEK CRISIS event is available at hp://www2.lse.ac.uk/ Co-organized with the Hellenic Bankers Associaon-UK europeanInstute/ research/ The Observatory was pleased to join policy, acon was being taken to hellenicObservatory/ the Hellenic Banker’s Associaon Events/otherEvents/ reduce and beer target social HBA_Panel_Debate_201 (UK) to host a major panel debate transfers, while improving tax 2.aspx on the Greek debt crisis on 28th administraon by fighng evasion. March 2012 . Major adjustments had been A er a welcome from Christos achieved, but a further reducon of special interest groups. Instead, Megalou of the HBA, we heard from 6-7% of GDP would be needed. Greece opted for -and the Troika a set of disnguished speakers: Poul There was no more scope, he accepted- horizontal measures that Thomsen (IMF), Head of the ‘Troika’ argued, for tax increases and across hit all alike. With foresight, as early for Greece; Moritz Kraemer of -the-board-cuts in wages and as November 2010, SEV had urged a Standard & Poor’s, the credit rang pensions. Further progress would shi . Fiscal adjustment should be agency; Dimitris Daskalopoulos, depend on structural fiscal reform: slower, in exchange for faster and Head of the Greek Employers’ tax administraon; means-tested more intensive structural reforms. Associaon (SEV); Vicky Pryce, a social transfers; and the ‘taboo’ Greek-born City economist, former subjects of compulsory Vicky Pryce believed that Greece’s Joint Head of the UK Government’s redundancies and closures in the current path was untenable. public sector. More generally, Deflaon and internal devaluaon labour market had their social limits. Greece had reforms ‘failed to invest enough in capacity (restoring wage improving infrastructure and it compeveness failed to undertake the polically and flexibility) difficult structural reforms to keep it and reforms in compeve within the Eurozone product and and make it a 20th century let alone service markets a 21st century market economy.

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