International Center for Contemporary Turkish Studies - ICCT

Interview with Prof. Vassilis Fouskas (University of East London)













ICCT interviewed Prof. Vassilis Fouskas after his lecture at the University of Pavia.During the lecture, at the subsequent discussion with Prof. Cerami, Prof. Poggiolini, Prof. Rossolillo and Prof. Ziller, several questions were asked about the main topics of Europeanization, Greece and debt crisis..

1. Prof. Fouskas, your book tries to identify the sources of the Greek debt crisis. You argue that the Greek/Eurozone crisis is not a fiscal crisis. Why is that?

One needs to look at some quantitative evidence here. Spain and Ireland have in fact had fiscal surpluses, yet both countries have received bail-outs. Italy, Belgium, Portugal, and, of course, Greece have had many fiscal problems, failing to come even close to the criteria set at Maastricht. Greece was the worst of all. But Greece did not go bankrupt because of its fiscal problems. Countries can live with them as long as there is a robust industrial and economic base to finance them. Japan has the largest debt problem of all western countries. Has it gone bankrupt? No. Greece and the rest of Europe suffer from a competitiveness problem within the EMU. Simply put, countries like Greece, Portugal and even Italy and France, as we see now, cannot match Germany's industry and export potential and this leads them to a vicious cycle of borrowing and, eventually, bankruptcy. You have no central bank as a state to determine monetary policy, devalue your currency and set up your interest rates. In a monetary union, this is determined by the central bank, and in this case, by the European Central Bank

2. But why is the concept of "agency" and the use of geopolitics in your analysis so important?

Economic approaches cannot explain everything, let alone economic and financial crises. The manifestation of the crisis may be in the financial and the broader economic sector, but the sources of the crises may be political and even ideological. You need to assess this on a case-by-case basis and, in particular, by drawing on history, both political and economic. History is, in the main, the study of agency and geopolitics. This is captured by all major historians. By agency I mean collectivity, social and political classes and their struggle, not just personalities and elites. The study of geo-political imperial blocs is also at the centre of the study of history. Together with my co-author, I used this framework to explain the Greek crisis.

3. You use the concept of "global fault-lines" to explain Greece's debt crisis. How do you do that?

It is important here to understand the formation of the Greek state. You have the formation of a state in the Balkans some 30-40 years of Italy and Germany, two states with strong indigenous industry, hence bourgeois classes. How come? The reason is simple. Greece, as almost all Balkan and Middle Eastern states, are artificial geopolitical constructions designed by western imperial powers to serve their own interests. In particular, Greece was founded in order for Britain, primarily, and France, secondarily, to have a base in the Eastern Mediterranean to check the descent of the Russians to the Aegean and henceforth to the Mediterranean. During the so-called "war of independence" against the Ottomans, the Greek administration had already declared its first bankruptcy as it was unable to serve the loans it took in order to conduct its liberation struggle. Eventually, Greece gained independence in 1830 only to become dependent upon Britain and France thereafter. From this point of view, the origins of the Greek debt is geo-political, not economic. It has to do with the international fault-lines upon which the Greek social formation rests: a strategically over-valued geographical location as opposed to a much inferior industrial and economic power base. I believe that the same framework can be used in order to understand many national formations in the Balkans and the greater Middle East.

4. You say in your book that Greece is a laggard. In what respect?

In all respects but its art, music and letters. Trains came to Greece 30 years after the West began using them. Historically, all sorts of innovations arrived with a delay of at least 10-15 years. Innovation, high-tech and know-how is imported. In a country with no major industrial and technological base all this is, I would say, "normal". The same goes for economic policies. The West has adhered to Keynesian policy-making since at least the late 1940s, but in Greece Keynesianism became an option for the elites only after the fall of the Colonels in 1974, following the Cyprus disaster. Similarly, Greece followed neo-liberal financialization with at least 15 years of delay compared to the West. When it comes to economic policies, the reason for the delay is directly related to two factors: security and social struggle. The move to Keynesian policy-making after 1974 and the massive wave of nationalisations under Karamanlis' cabinet should be seen as a response to Turkish aggression in Cyprus and the Aegean and also as a response to the demands of the people for an opening-up of the political system and the creation of a welfare state. Don't forget that the Communist Party and a large section of the electorate had been outlawed since 1949, when the Communists lost the Civil War

5. What role did Pasoks played in the Greek economy in the 1980s and 1990s?

Pasok played both a positive and negative role in the 1980s. The positive role of Pasok includes a great reformist work, especially in the field of civil rights, health, education and administration. It also tried to protect workers' rights, especially during its first term in office (1981-85). However, under pressure from abroad, it eventually failed to deliver socialism. Also, it created a new cast of oligarchs and reproduced Greece's nepotistic and clientelistic system. More importantly, the welfare system it built was not financed via taxation, as is the case in the West, but via external and domestic borrowing. These are the ugly aspects of Pasok's rule in the 1980s. Yet, Pasok, under Andreas G. Papandreou, did not adopt neo-liberal financialisation.

6. Is there a Greek imperialism in the Balkans and the Near East? This seems to have been the case before the crisis, as Greek banks and business seemed to dominate the region.

This is a misconception eagerly used by those who don't bother to look into empirical data. Our work shows that more than 85% of assets circulating in the Balkans and the Near East from the early 1990s to 2010, especially banking and financial assets, belonged to private investors and foreign Western banks, especially Austrian, German and Dutch. So much for the Greek imperialism in the region! The inescapable conclusion is that Greece, in post-Cold War conditions, was used as a vehicle for the strategic penetration of foreign, especially European, capital inasmuch as that capital could not do the job for itself for political and ideological reasons. How could German capital penetrate Serbia's economy after Germany's recognition of Slovenia and Croatia as independent states, a fact that signaled the downfall of Yugoslavia?

7. What does Greece have to do in order to survive the ongoing economic crisis?

This is a question to be answered by Greek politicians. However, if you believe that my opinion has any value, these are my thoughts. In 2010-11 I believed that only a debtor-led default and exit from the Euro-zone could save Greek people from disaster. I still believe that a big opportunity was lost then. Now the Greek people have gone through unprecedented austerity, with the Greek right-wing governing bloc implementing policies that are imposed by the troika (EU, ECB, IMF) and which contravene all the Treaties of the EU and the acquis, especially employment rights. It's totally absurd. In some cases, wages have been slashed even by 55%, not to mention of pensions and the extraordinary taxation, especially property taxation. The whole public sector is collapsing, including Universities, hospitals and the public pension system. Now, however, after three years of untold austerity measures, I'm not sure about this position. The so-called "internal devaluation" has gone very deep. I now believe more in an alliance of the periphery against the core and I expect Italy and France to lead a new bloc against the pro-monetarist and neo-mercantilist economic model of Germany in order to get not just Greece but the whole of Europe out of this absurdity and towards a new path of recovery, marked by a new set of supranational Keynesian policies. There is no other way. If Germany continues to do what it has been doing since the late 1990s (suppression of wages, low inflation policy, export-led growth) while the rest of Europe sits and watches, then I see no future for the European project. I see no future for Europe as a political project of unification and anti-nationalist bias. Change will not come from Germany. Change has to come to Germany. And one important detail. Conservative forces have no interest in pursuing demand-led, Keynesian policy at the European level. This is, or should be, the work of a genuine radical democratic Left. I'm glad that Syriza, the Greek Left Party, has recognised that necessity and is fighting towards this perspective.

(Author: Alessia Chiriatti and Federico Donelli)


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