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Reminder Invitation:UN Library Geneva Book Presentation - Game Over: The Inside Story of the Greek Crisis - Monday, 3 October 2016, 12:30 - 2 p.m., Library Events Room (B-135), Building B, Door 20, 1st Floor
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During his tenure as Finance Minister in this critical period for Greece and Europe, he overhauled the budget process, put in place expenditure monitoring and assessment mechanisms, and created an independent statistical authority; embarked on tax reform, with legislative and organizational changes to combat tax evasion; implemented wide-ranging structural reforms in product, service and financial markets; and designed a large-scale privatization program. When he left office, the public deficit was 6 percentage points of GDP lower, Greece had recovered half the competitiveness lost since Eurozone entry and was the fastest reforming OECD country – a huge adjustment effort with however an equally large economic and social cost. In the process, he also became the perfect scapegoat for all the troubles of the country, ending up in a trial by a special court for his handling of the so-called Lagarde list – a gruelling personal ordeal which he powerfully describes in the book.
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George was born in Athens in 1961, and studied economics in the UK and the US. After obtaining a Ph.D from the London School of Economics, he went on to work for 10 years as an international civil servant at the OECD in Paris. In 1997, he returned to Greece to serve in a policy advisory capacity for the Greek government under Prime Minister Kostas Simitis. He ran for parliament for the first time in 2000, was elected in 2007, became party spokesman, and in 2009 headed the PASOK list for the June European Parliament elections. He resigned as an MEP a few months after being elected, upon being appointed Finance Minister in the government formed by George Papandreou following the October 2009 elections.
About the Author
Giorgos Papakonstantinou
From Wikipedia, the free encyclopedia
| Giorgos Papakonstantinou | |
|---|---|
 | |
| Minister of Environment, Energy and Climate Change | |
| In office 17 June 2011 – 17 May 2012 | |
| Prime Minister | George Papandreou Lucas Papademos |
| Preceded by | Tina Birbili |
| Succeeded by | Gregory Tsaltas |
| Minister of Finance | |
| In office 7 October 2009 – 17 June 2011 | |
| Prime Minister | George Papandreou |
| Preceded by | Yannis Papathanasiou |
| Succeeded by | Evangelos Venizelos |
| Personal details | |
| Born | 30 October 1961 Athens, Greece |
| Political party | Panhellenic Socialist Movement |
| Spouse(s) | Jacoline Vinke |
| Alma mater | London School of Economics New York University |
| Website | Official website |
Giorgos Papakonstantinou (Greek: Γιώργος Παπακωνσταντίνου), born October 30, 1961[1] in Athens, Greece, is a Greek economist and politician and former Minister for the Environment, Energy and Climate Change of Greece and former Minister for Finance. He is currently working in an advisory capacity in the private sector.
Education and career[edit]
He graduated from the London School of Economics (LSE). He later obtained a Master of Arts in Economics from New York University and a PhD in Economics from LSE.
After his studies, he worked as a senior economist at the Organisation for Economic Co-operation and Development in Paris from 1988 to 1998.
In 1998, Papakonstantinou returned to Greece and was appointed an adviser to then-Prime Minister Costas Simitis on "information society" issues.
Two years later, he was appointed Special Secretary for the "Information Society" at the Ministry of Economy and Finance (2000–2002). Between 2002 and 2004 he served as a member of the Council of Economic Advisors of the Ministry of Economy and Finance, as a board member of OTE (Hellenic Telecommunication Organization), and as the Greek representative to the European Union'sEconomic Policy Committee (EPC). In 2003 he coordinated the "Lisbon Strategy" for economic and social reforms during the GreekPresidency of the EU.
Between 2004 and 2007, Papakonstantinou served as economic advisor to George Papandreou, the president of the Panhellenic Socialist Movement (PASOK). He was also a board member of the Institute for Strategic and Development Studies, PASOK's think tank, from 2005 to 2008.
Between 2003 and 2007, Papakonstantinou also taught economics at Department of Management Science and Technology of theAthens University of Economics and Business and advised the European Commission on research and information society issues, participating in various international research projects.
Political career[edit]
In May 2005, Papakonstantinou was elected a member of the National Council of PASOK. In September 2007, he was elected member of the Hellenic Parliament to represent the district of Kozani,[2] and was subsequently appointed PASOK's Press Spokesman in March 2008.
Papakonstantinou headed PASOK's list of candidates for the European Parliament in the 2009 European elections and was electedMEP in June 2009. In October 2009 he was appointed Finance Minister in the government formed by Papandreou, the former prime minister, after the national elections.[3]
As Finance Minister, he revealed that the Greek deficit was much larger than what was reported by the previous government, and when Greece was shut out of international markets, he negotiated a €110bn loan agreement for Greece with the EU and the International Monetary Fund, together with a programme of severe fiscal consolidation and structural reforms. During his tenure, he overhauled the budget process, instituting a medium-term fiscal framework with expenditure monitoring and assessment mechanisms, and an independent statistical authority; embarked on tax reform, with legislative and organizational changes to combat tax evasion; implemented a wide-ranging program of structural reforms in product, service and financial markets; and designed a large-scale and wide-ranging privatization strategy. When he left office, the public deficit was more than 6 percentage points of GDP lower than upon his appointment, while Greece had recovered half the competitiveness lost since Eurozone entry and was named the OECD country with the fastest pace of structural reforms.
In June 2011, Prime Minister George Papandreou reshuffled the government and appointed him Minister of Environment, Energy and Climate Change, a post he kept in the government of Lucas Papademos until he handed over to a caretaker Minister in May 2012. In the field of environment, he accelerated the closure of uncontrolled landfills; revamped the waste management and recycling systems; helped implement a large number of water management projects co-funded by EU Structural Funds; advanced the completion of land and urban planning and of the national cadastre. In energy, he brought legislation to liberalize the energy market; oversaw a large increase of Greece’s renewable energy capacity and presented a road map for energy policies to 2050; spearheaded ambitious renewable energy projects, such as Project Helios for exporting solar energy; pursued Greek participation in international gas routes; and brought forward the exploration of Greece’s hydrocarbon potential.
He was one of a number of Papademos' cabinet who failed to be re-elected in the May 6, 2012 General election that saw PASOK lose almost 120 seats in the house.
Following the elections, Papakonstantinou has faced a parliamentary investigation into the handling of the so-called Lagarde list, containing information on the deposits of roughly 2,000 Greek citizens at HSBC bank's Geneva branch, which he asked for and received from French authorities in 2010. While Papakonstantinou asked the Greek tax authorities to investigate the list, they failed to do so. In late 2012, the Greek authorities alleged that the names of three of his relatives had been removed. Those allegations resulted in his expulsion from the PASOK political party,[4] He has consistently denied all charges and claims he is being made a scapegoat for the inaction of others on this issue as well as for the public’s need to punish politicians for the austerity policies in Greece.[5] In 2015, a Special Court convened for this case and composed of 13 judges drawn from the two highest Greek courts unanimously cleared him of the breach of faith charge, concluding that there had been no damage to the State from his actions. At the same time, with an 8 to 5 majority by the court, he received a suspended misdemeanour conviction for the tampering charge.[6]
In 2016 he published a book in which he told his story as finance minister of greece when the debt crisis unfolded.[7]
Personal life[edit]
Papakonstantinou is married to travel writer Jacoline Vinke. They have two sons, Nicolas and Stefanos.
George Papaconstantinou was the point man in the Greek economic and financial crisis. When he became Finance Minister in October 2009, he uncovered the true extent of Greece’s fiscal troubles, went on to participate in all the European discussions and efforts to create a support mechanism for Greece, and negotiated the 110 billion Euro loan agreement with the EU and the IMF, together with the package of fiscal, structural and financial policies which went along with the largest loan ever received by a country.
During his tenure as Finance Minister in this critical period for Greece and Europe, he overhauled the budget process, put in place expenditure monitoring and assessment mechanisms, and created an independent statistical authority; embarked on tax reform, with legislative and organizational changes to combat tax evasion; implemented wide-ranging structural reforms in product, service and financial markets; and designed a large-scale privatization program. When he left office, the public deficit was 6 percentage points of GDP lower, Greece had recovered half the competitiveness lost since Eurozone entry and was the fastest reforming OECD country – a huge adjustment effort with however an equally large economic and social cost. In the process, he also became the perfect scapegoat for all the troubles of the country, ending up in a trial by a special court for his handling of the so-called Lagarde list – a gruelling personal ordeal which he powerfully describes in the book.
Charles Wyplosz
Charles Wyplosz is Professor of International Economics at the Graduate Institute and Director of theInternational Center of Monetary and Banking Studies.
Comments on Brexit
Recent writings:
The six flaws of the Eurozone, Economic Policy, 2016.
Minimal Conditions for the Survival of the Euro (with Barry Eichengreen), February 2016.
An entertaining fiction on the Eurozone crisis (with Barry Eichengreen), February 2016.
The Eurozone Crisis: A Near-Perfect Case of Mismanagement, November 2014.
The Centralization-Decentralization Issue, European Economic Papers, DP 14, September 2014.
PADRE 2.0, update of PADRE (below), May 2014.
George was born in Athens in 1961, and studied economics in the UK and the US. After obtaining a Ph.D from the London School of Economics, he went on to work for 10 years as an international civil servant at the OECD in Paris. In 1997, he returned to Greece to serve in a policy advisory capacity for the Greek government under Prime Minister Kostas Simitis. He ran for parliament for the first time in 2000, was elected in 2007, became party spokesman, and in 2009 headed the PASOK list for the June European Parliament elections. He resigned as an MEP a few months after being elected, upon being appointed Finance Minister in the government formed by George Papandreou following the October 2009 elections.
on 9 September 2016
The best book about the 2010 – 2016 Greek disaster. You often need to force yourself to turn the pages. Some events are that painful.
To remind, Greek budget deficits (gvt expenditure less income divided by GNP) during 2009 – 11 were: 15.2%, 11.2% and 10.2%. Current Account (Exports minus imports, divided by GDP) was equally disastrous, a 9.9% deficit in 2010. The author’s tenure as senior member of the governing party lasted from Oct ‘09 to Nov ‘11. For a country unable to depreciate, borrow or print money and without the benefit of large transfer payments, such deficits spell catastrophe.
“It wasn’t me, guv” permeates throughout. But it was you. You, and your party and prime minister, George Papandreou. And his dad, Andreas. And his grand-dad George. Over three generations, starting in the ‘60s, the Papandreou family’s populism successively destroyed the country’s economy, finances and values, transforming elections into auctions: whoever promises to deliver ever more. Still, in 2007, Papandreou's government was voted as the best government Greece ever had.
For years economists realised that Greek binging was unsustainable and would end in tears. Corruption and gvt largesse were out of control, tax evasion a national pastime. But when the previous gvt asked for restraint, the author’s party responded “why? There’s plenty of money”. As Economics Minister in waiting, the author must bear full responsibility.
There was no shortage of warnings. In 2001 the mere suggestion of mild pension reform (Giannitsis proposals) caused the biggest demonstrations in history with one million people taking to the streets chanting “hands off our pensions” “we want it now”. The reforms were abandoned. Ten years later pensions collapsed. The Greeks blamed Merkel and the IMF for reducing pensions that they shouldn’t have had in the first place. What were the highly sophisticated economists, such as the author, doing? Advising the party - since 1998 - and later running for office. Any hints of restraint? On the contrary: fully cognisant of the facts, they promised even more spending. The 2009 election was won with a landslide and the newly elected gvt’s first act (with the author in charge of the economy): Large handouts. To nobody’s surprise, the markets went ballistic. The author regrets it, but it’s a little late for contrition.
There are plenty “they” in the narrative: the New Democracy party handing over a poisoned chalice. The opposition that refused to co-operate. The unreasonable Germans. Sarkozy. Obstinate party members who refused to go along with austerity. Incompetent civil service. Corrupt tax officials. Voters who didn’t understand the trouble they were in.
And the feeling of somebody out of his depth, relieved it’s over. The second part of the book, with the author as observer rather than principal, is better.
How did the story end? Six years later, it’s not over. And as long as SYRIZA remains in power, it won’t be. Not entirely surprising when the prime minister’s son is named “Che” after Guevara. As for the author, the ending was grim. A “grateful” political class put him through two years of legal agony, ending in exoneration. He should have known: Greeks are famed for their “gratitude”.
Objectivity apart, worth reading.
To remind, Greek budget deficits (gvt expenditure less income divided by GNP) during 2009 – 11 were: 15.2%, 11.2% and 10.2%. Current Account (Exports minus imports, divided by GDP) was equally disastrous, a 9.9% deficit in 2010. The author’s tenure as senior member of the governing party lasted from Oct ‘09 to Nov ‘11. For a country unable to depreciate, borrow or print money and without the benefit of large transfer payments, such deficits spell catastrophe.
“It wasn’t me, guv” permeates throughout. But it was you. You, and your party and prime minister, George Papandreou. And his dad, Andreas. And his grand-dad George. Over three generations, starting in the ‘60s, the Papandreou family’s populism successively destroyed the country’s economy, finances and values, transforming elections into auctions: whoever promises to deliver ever more. Still, in 2007, Papandreou's government was voted as the best government Greece ever had.
For years economists realised that Greek binging was unsustainable and would end in tears. Corruption and gvt largesse were out of control, tax evasion a national pastime. But when the previous gvt asked for restraint, the author’s party responded “why? There’s plenty of money”. As Economics Minister in waiting, the author must bear full responsibility.
There was no shortage of warnings. In 2001 the mere suggestion of mild pension reform (Giannitsis proposals) caused the biggest demonstrations in history with one million people taking to the streets chanting “hands off our pensions” “we want it now”. The reforms were abandoned. Ten years later pensions collapsed. The Greeks blamed Merkel and the IMF for reducing pensions that they shouldn’t have had in the first place. What were the highly sophisticated economists, such as the author, doing? Advising the party - since 1998 - and later running for office. Any hints of restraint? On the contrary: fully cognisant of the facts, they promised even more spending. The 2009 election was won with a landslide and the newly elected gvt’s first act (with the author in charge of the economy): Large handouts. To nobody’s surprise, the markets went ballistic. The author regrets it, but it’s a little late for contrition.
There are plenty “they” in the narrative: the New Democracy party handing over a poisoned chalice. The opposition that refused to co-operate. The unreasonable Germans. Sarkozy. Obstinate party members who refused to go along with austerity. Incompetent civil service. Corrupt tax officials. Voters who didn’t understand the trouble they were in.
And the feeling of somebody out of his depth, relieved it’s over. The second part of the book, with the author as observer rather than principal, is better.
How did the story end? Six years later, it’s not over. And as long as SYRIZA remains in power, it won’t be. Not entirely surprising when the prime minister’s son is named “Che” after Guevara. As for the author, the ending was grim. A “grateful” political class put him through two years of legal agony, ending in exoneration. He should have known: Greeks are famed for their “gratitude”.
Objectivity apart, worth reading.
on 5 September 2016
This highly readable memoir focuses on Mr Papaconstantinou's tenure as finance minister as the Greek crisis exploded in 2009-11. It has the strengths and weaknesses of an account by a core participant, rather than a detached academic or journalist. Happily Mr Papaconstantinou writes lucidly and with wit, weaving the dry economics with the politics into a coherent narrative that explains how Greece got into a mess, why a solution was so very hard to find, and why the decisions were made as they were. It is a very useful counterpoint to those who tend to assess decisions using 20-20 hindsight rather than the highly imperfect understanding and intense pressure of those in the room.
on 21 July 2016
The publicity describes this book as a "real life political thriller". It certainly live up to this description. A blow-by-blow account of a crisis which took a lot of courage to address. Reading this book is essential for anyone who wants to understand the challenges faced by the Papandreou government and by the European authorities in managing the Euro through a very difficult period. The book is well written and engaging.
on 28 June 2016
Excellent insider story, very well written, it makes the whole Greek drama very clear.
TOP 1000 REVIEWERon 9 June 2016
For once, I’m a rather good guy to write the introduction to a book.
My political connections have always been with the nemesis of the Socialists, the New Democracy party. Five and a half years before the author accepted the poisoned chalice that is the Greek Finance Ministry, I had found myself in a similar position: Entirely through political connection, I was offered to run the debt office.
It was a summary process. The final decision maker was the chief of staff of the Finance Ministry, a man generally acknowledged to be honest and hard-working and whom my father (a keen follower of late-night political debate on TV) thought highly of. By the time him and I were talking turkey, it was the position of deputy we were discussing, but the process was the same. His name was George.
I visited him at his modest office and in no time I was perusing the file of the infamous Goldman swap. “Nice little gift from the previous government,” George said. “First payment not due till after we took over.” And then the bombshell: “I’m letting them stew on it. I’m in arrears! What are you going to do with this?” “Nothing,” I suggested. “This is so enormous, they can’t exactly tell anyone we’re quietly defaulting, it would be material. Let them come to you with a suggestion.” Other than remind me it was pari passu, he did not give me any indication of what he thought of my answer, but the conversation moved on.
Eventually I asked the question: “My real job. What is it? Is it to minimize the NPV of our national debt?”
George’s jaw dropped. Clearly, for all the 16 years I’d spent in Greece, I must have been some type of ingenu foreigner. To make sure we’re on the same page, to set me straight, to adjust the wavelength, the man switched to English, better to get his message across to the not-really-Greek idiot he had in front of him: “your job is to minimize the cost of debt service over the next four years.”
Now, this was (and remains) a good guy. There have always been bad people in Greek politics. People who do it strictly for self-enrichment. Nay, people who will do anything to get the job so they can steal from the public purse. George was not one of those people. He was as good a guy as you can possibly be and survive in Greek politics; this I knew. But my job under him would be to freeze the ball.
Clearly, then, I was staying put in London.
The author of the book, another George, inherited what my George (and his many predecessors) begat. This is the book of his travails.
I read this in Greek, thinking I’d be reading the original, but the original is the English version. The translation into Greek is rather gauche. Funnily enough, that was the norm in Greek politics during the reign of the third generation of the Papandreou clan, with English expressions often transliterated into stilted neologisms. In that respect, the book captures the zeitgeist very well.
It is a remarkable book both for what it has to say and for what it leaves unsaid.
The story of a new government inheriting in the middle of the worldwide crisis a 15.4% budget deficit (that had weeks before been expected to barely surpass 6.5%) is told well. You really feel the shock. If it’s the evolution of the numbers you want to follow, or the series of relentless negotiations with my country’s European partners, look no further. This will be the definitive account. The buck genuinely stops with George Papaconstantinou.
You also get to find out a lot about the attitudes of people like Trichet, Strauss-Kahn, Merkel, Sarkozy, Schaeuble, Lagarde, Barroso and how their personalities shaped the European response to the crisis. The politics of all the emergency weekend meetings, the walk down the quay in Deauville, the emergency measures and half-measures, it really is all there. You could have skipped five years of reading the FT and this book will make up for it. It is a tremendous companion book for Martin Sandbu’s book about the EU, for example.
Also, George Papaconstantinou truly comes across as modest, honest, well-meaning, moderate and suicidally selfless.
On the other hand, if it’s Greece you want to find out about, look elsewhere. This is a book about a European process. In the eyes of the public, the author was (and probably remains) the personification of the sundry memoranda that were foisted upon the country by self-serving debt collectors. His angle, of course, is that he fought like a lion. You can read the book and make up your mind.
What you will learn nothing about (zilch, zero, nada) is Greece.
Simple stuff that should be here simply isn’t. What does the private sector contribute to Greek GDP? What’s the breakdown between tourism, shipping, manufacturing, agriculture, services, importers, retail etc? Which forms of tax bring in what? Corporate tax, employment tax, VAT, income tax, property tax, stamp duty, customs? Where does it go? What goes to defense, what goes to education, what goes to healthcare, what goes to transportation, what goes to services, what goes to pensions, what goes to the other multiple entitlements? What remittances arrive from all Greeks abroad? How has all this changed in the past decade?
What parts of the economy have been growing? What’s been shrinking? What’s the best use of the marginal dollar? Which sector exports the most? To where? What’s it exporting to Europe? What sector can best be re-oriented? Who will find it easiest to move abroad if he has to contribute more tax than before? Who’s stuck? How much energy do we use? How much of it do we import?
Supposing we were to move to our own currency, what is our self-sufficiency in food, energy and medicine for which foreigners will refuse to be paid in our own scrip?
Supposing we were pardoned all our debt (or, more likely, supposing we stopped servicing our debt) what working capital would the economy need to survive a lockout from the world’s financial markets?
I would have hoped that in a 400 page opus I’d see, dunno, five pages on the above. There isn’t five sentences, really. You get some crumbs about the re-orientation of tourism and maybe a couple stats about the total tax burden. And a few throwaway words about oil imports from Iran. E basta.
The question you have to ask, then, is “was this guy really the finance minister?” Did he have the authority and power to bring about the necessary changes? Was he in a position to effect a transformation? It does not take an insider to conclude that no, he was an honest broker and not much else. And I guess he had the keys to the safe, or else he would not have been the bete noir of his party’s old guard that totally went way out its way to throw him under the bus.
So, from my angle at least, the finance minister flunks economics.
On the other hand he gets an “A” when it comes to incisive political commentary. Three issues stand out:
1. He correctly identifies Samaras as the most sinister and most tragic character in this play. The leader of the opposition fought a totally irresponsible rearguard action against the Troika’s program from 2010 to 2012, not only (i) sabotaging the country’s credibility in front of our European lenders, not only (ii) dictating domestically the anti-reform tone that still reigns supreme, but also (iii) paving the way for Tsipras to turn that exact strategy against him two short years later. It is a tale of hubris and nemesis straight out of Aeschylus, Sophocles or Euripides.
2. He unmasks the sundry do-gooders who flocked from across the world to “defend” Greece, the Stiglitzes and the Krugmans, as well as the more nebulously-referred-to British media (Martin Wolf is a friend, you see), for what they really are: doctrinaires who were happy to fight their proxy war against “austerity” on the Greek battlefield. Who cares if their doctrine is in principle the right doctrine? In practice, they egged us on to enter a fight against our European paymasters that, politically, Germany’s Schaeuble could only be seen to win. So he did. And we lost. Our natural allies (Ireland, Spain, Portugal and Italy) cheered for the other side, besides, precisely because they had adopted the orthodoxy.
3. He spends the minimum number of words on Varoufakis (precisely because that’s what would displease Varoufakis the most, one presumes) but enough to parry the most pertinent accusation: the man is all about vanity.
The author also comes out of this as a tragic figure: he does not have the full picture of how to turn things around, but he knows we’ve done wrong. He can point to a million ways we got on the wrong path and he recounts with massive pride a series of changes he effected on institutions that will hopefully help Greece in twenty years’ time: He made the statistical office independent. He finally got around to getting a headcount for the number of people the Greek state employed (900,000, unbelievably), an exercise that had never been attempted before. He attempted to create a… land registry (yes, we don’t have one). And so on. Sweden-on-the-Aegean, here we come.
Thing is, when the patient is admitted to the hospital with lung cancer, first you get out the tumor. Then you have the conversation with him about smoking. And the timing is rather wrong to bring up smoking with his family. They need to know about the operation.
So I’m extremely annoyed with the author, because not once in this book does he turn his guns to those within his party that refused to consider the scalpel. Tell us about Katseli, dude. Talk to us about Ragoussis. The people who were happy to see you carry the can for the memoranda, but would not allow you to truly make the necessary changes. The people who chose their political careers over the country’s interests and eventually lost both. What’s stopping you, George? If you can see it in Samaras, if you could see it in our current president, you could sure see it in pretty much all of Pasok.
So the man is dead-honest about everything he discusses, but is rather disingenuous through omission: Greece is a failed state because both the socialists of Pasok and the “liberals” of New Democracy made the conscious decision to avoid firing public employees, avoid confronting the labor unions (e.g. those of the power company and the train company) and decided to balance out the numbers by putting most of the load on the hitherto semi-healthy private sector, the Atlas of the Greek economy.
When, under the weight of the “brave” measures that brought down the deficit from 15.4% to 4.5%, the private side of the economy literally vanished, there was nobody left to pay for the unreconstructed public sector. The blood-out-of-stone math whereby to employ somebody privately I must pay for two public employees to scratch themselves all day morphed into “no more blood left in the stone” and that’s what our political leadership has wrought: an economy where EU-subsidised pensions are the main driver for consumption.
There cannot possibly be a 400 page account of the past Greek history that does not expose this basic truth. Not one you’d want to take seriously.
I hate to say it, because I grew to really appreciate the author as I was reading his book, but “Game Over” is a missed opportunity. On the other hand, if you care about Greece you can’t not read it.
My political connections have always been with the nemesis of the Socialists, the New Democracy party. Five and a half years before the author accepted the poisoned chalice that is the Greek Finance Ministry, I had found myself in a similar position: Entirely through political connection, I was offered to run the debt office.
It was a summary process. The final decision maker was the chief of staff of the Finance Ministry, a man generally acknowledged to be honest and hard-working and whom my father (a keen follower of late-night political debate on TV) thought highly of. By the time him and I were talking turkey, it was the position of deputy we were discussing, but the process was the same. His name was George.
I visited him at his modest office and in no time I was perusing the file of the infamous Goldman swap. “Nice little gift from the previous government,” George said. “First payment not due till after we took over.” And then the bombshell: “I’m letting them stew on it. I’m in arrears! What are you going to do with this?” “Nothing,” I suggested. “This is so enormous, they can’t exactly tell anyone we’re quietly defaulting, it would be material. Let them come to you with a suggestion.” Other than remind me it was pari passu, he did not give me any indication of what he thought of my answer, but the conversation moved on.
Eventually I asked the question: “My real job. What is it? Is it to minimize the NPV of our national debt?”
George’s jaw dropped. Clearly, for all the 16 years I’d spent in Greece, I must have been some type of ingenu foreigner. To make sure we’re on the same page, to set me straight, to adjust the wavelength, the man switched to English, better to get his message across to the not-really-Greek idiot he had in front of him: “your job is to minimize the cost of debt service over the next four years.”
Now, this was (and remains) a good guy. There have always been bad people in Greek politics. People who do it strictly for self-enrichment. Nay, people who will do anything to get the job so they can steal from the public purse. George was not one of those people. He was as good a guy as you can possibly be and survive in Greek politics; this I knew. But my job under him would be to freeze the ball.
Clearly, then, I was staying put in London.
The author of the book, another George, inherited what my George (and his many predecessors) begat. This is the book of his travails.
I read this in Greek, thinking I’d be reading the original, but the original is the English version. The translation into Greek is rather gauche. Funnily enough, that was the norm in Greek politics during the reign of the third generation of the Papandreou clan, with English expressions often transliterated into stilted neologisms. In that respect, the book captures the zeitgeist very well.
It is a remarkable book both for what it has to say and for what it leaves unsaid.
The story of a new government inheriting in the middle of the worldwide crisis a 15.4% budget deficit (that had weeks before been expected to barely surpass 6.5%) is told well. You really feel the shock. If it’s the evolution of the numbers you want to follow, or the series of relentless negotiations with my country’s European partners, look no further. This will be the definitive account. The buck genuinely stops with George Papaconstantinou.
You also get to find out a lot about the attitudes of people like Trichet, Strauss-Kahn, Merkel, Sarkozy, Schaeuble, Lagarde, Barroso and how their personalities shaped the European response to the crisis. The politics of all the emergency weekend meetings, the walk down the quay in Deauville, the emergency measures and half-measures, it really is all there. You could have skipped five years of reading the FT and this book will make up for it. It is a tremendous companion book for Martin Sandbu’s book about the EU, for example.
Also, George Papaconstantinou truly comes across as modest, honest, well-meaning, moderate and suicidally selfless.
On the other hand, if it’s Greece you want to find out about, look elsewhere. This is a book about a European process. In the eyes of the public, the author was (and probably remains) the personification of the sundry memoranda that were foisted upon the country by self-serving debt collectors. His angle, of course, is that he fought like a lion. You can read the book and make up your mind.
What you will learn nothing about (zilch, zero, nada) is Greece.
Simple stuff that should be here simply isn’t. What does the private sector contribute to Greek GDP? What’s the breakdown between tourism, shipping, manufacturing, agriculture, services, importers, retail etc? Which forms of tax bring in what? Corporate tax, employment tax, VAT, income tax, property tax, stamp duty, customs? Where does it go? What goes to defense, what goes to education, what goes to healthcare, what goes to transportation, what goes to services, what goes to pensions, what goes to the other multiple entitlements? What remittances arrive from all Greeks abroad? How has all this changed in the past decade?
What parts of the economy have been growing? What’s been shrinking? What’s the best use of the marginal dollar? Which sector exports the most? To where? What’s it exporting to Europe? What sector can best be re-oriented? Who will find it easiest to move abroad if he has to contribute more tax than before? Who’s stuck? How much energy do we use? How much of it do we import?
Supposing we were to move to our own currency, what is our self-sufficiency in food, energy and medicine for which foreigners will refuse to be paid in our own scrip?
Supposing we were pardoned all our debt (or, more likely, supposing we stopped servicing our debt) what working capital would the economy need to survive a lockout from the world’s financial markets?
I would have hoped that in a 400 page opus I’d see, dunno, five pages on the above. There isn’t five sentences, really. You get some crumbs about the re-orientation of tourism and maybe a couple stats about the total tax burden. And a few throwaway words about oil imports from Iran. E basta.
The question you have to ask, then, is “was this guy really the finance minister?” Did he have the authority and power to bring about the necessary changes? Was he in a position to effect a transformation? It does not take an insider to conclude that no, he was an honest broker and not much else. And I guess he had the keys to the safe, or else he would not have been the bete noir of his party’s old guard that totally went way out its way to throw him under the bus.
So, from my angle at least, the finance minister flunks economics.
On the other hand he gets an “A” when it comes to incisive political commentary. Three issues stand out:
1. He correctly identifies Samaras as the most sinister and most tragic character in this play. The leader of the opposition fought a totally irresponsible rearguard action against the Troika’s program from 2010 to 2012, not only (i) sabotaging the country’s credibility in front of our European lenders, not only (ii) dictating domestically the anti-reform tone that still reigns supreme, but also (iii) paving the way for Tsipras to turn that exact strategy against him two short years later. It is a tale of hubris and nemesis straight out of Aeschylus, Sophocles or Euripides.
2. He unmasks the sundry do-gooders who flocked from across the world to “defend” Greece, the Stiglitzes and the Krugmans, as well as the more nebulously-referred-to British media (Martin Wolf is a friend, you see), for what they really are: doctrinaires who were happy to fight their proxy war against “austerity” on the Greek battlefield. Who cares if their doctrine is in principle the right doctrine? In practice, they egged us on to enter a fight against our European paymasters that, politically, Germany’s Schaeuble could only be seen to win. So he did. And we lost. Our natural allies (Ireland, Spain, Portugal and Italy) cheered for the other side, besides, precisely because they had adopted the orthodoxy.
3. He spends the minimum number of words on Varoufakis (precisely because that’s what would displease Varoufakis the most, one presumes) but enough to parry the most pertinent accusation: the man is all about vanity.
The author also comes out of this as a tragic figure: he does not have the full picture of how to turn things around, but he knows we’ve done wrong. He can point to a million ways we got on the wrong path and he recounts with massive pride a series of changes he effected on institutions that will hopefully help Greece in twenty years’ time: He made the statistical office independent. He finally got around to getting a headcount for the number of people the Greek state employed (900,000, unbelievably), an exercise that had never been attempted before. He attempted to create a… land registry (yes, we don’t have one). And so on. Sweden-on-the-Aegean, here we come.
Thing is, when the patient is admitted to the hospital with lung cancer, first you get out the tumor. Then you have the conversation with him about smoking. And the timing is rather wrong to bring up smoking with his family. They need to know about the operation.
So I’m extremely annoyed with the author, because not once in this book does he turn his guns to those within his party that refused to consider the scalpel. Tell us about Katseli, dude. Talk to us about Ragoussis. The people who were happy to see you carry the can for the memoranda, but would not allow you to truly make the necessary changes. The people who chose their political careers over the country’s interests and eventually lost both. What’s stopping you, George? If you can see it in Samaras, if you could see it in our current president, you could sure see it in pretty much all of Pasok.
So the man is dead-honest about everything he discusses, but is rather disingenuous through omission: Greece is a failed state because both the socialists of Pasok and the “liberals” of New Democracy made the conscious decision to avoid firing public employees, avoid confronting the labor unions (e.g. those of the power company and the train company) and decided to balance out the numbers by putting most of the load on the hitherto semi-healthy private sector, the Atlas of the Greek economy.
When, under the weight of the “brave” measures that brought down the deficit from 15.4% to 4.5%, the private side of the economy literally vanished, there was nobody left to pay for the unreconstructed public sector. The blood-out-of-stone math whereby to employ somebody privately I must pay for two public employees to scratch themselves all day morphed into “no more blood left in the stone” and that’s what our political leadership has wrought: an economy where EU-subsidised pensions are the main driver for consumption.
There cannot possibly be a 400 page account of the past Greek history that does not expose this basic truth. Not one you’d want to take seriously.
I hate to say it, because I grew to really appreciate the author as I was reading his book, but “Game Over” is a missed opportunity. On the other hand, if you care about Greece you can’t not read it.
on 6 June 2016
The Greek crisis in the euro area has occupied policy makers' minds since its outbreak in late 2009. In depth analysis of its domestic origins and European consequences have been in high demand, but low supply. Now comes a book from a former insider who delivers a very personal account of the crisis' evolution. George Papaconstantinou was appointed Greek finance minister in October 2009. His book charts the numerous attempts at finding a sustainable solution for Greece while the euro zone crisis expanded towards other countries such as Portugal, Ireland, Spain and Italy. The costs this endeavour in crisis resolution implies are enormous, as much political, social as for himself personally. Papaconstantinou's book sets a benchmark of analysis, not only as regards the ongoing Greek crisis, but also the struggles at the European level to display a problem solving capacity that goes beyond buying (expensive) time.