Beware of Greeks Bearing Good News

by Michael Patrick O'Leary

This article appeared in the March 2014 edition of Echelon magazine.

Greece takes on the Presidency of the Council of the EU

It is not so long ago that there was much talk about Grexit – Greek exit from the eurozone and possibly the EU itself. Now Greece holds the Presidency of the Council of the EU. Every six months a member state of the EU holds the Presidency of the Council of the EU and presides over its work. This is not to be confused with President of the European Council (current incumbent Herman Van Rompuy) or the President of the European Commission (currently José Manuel Barroso). During the time a state holds the Presidency of the Council, it plays host to the majority of the EU’s events and plays a key role in the activities of the EU. It is responsible for organising EU meetings, setting the Union’s political agenda and ensuring its development, integration and security.

As I write, Greece holds the Presidency from January-June 2014. The Greek government will have to lead hundreds of meetings, conduct complex negotiations, and host 13 ministerial councils in Athens. The Greeks will have to manage with a budget for the next six months that is about 40 percent lower than that of the previous presidency. Greece’s Deputy Minister for Foreign Affairs, Dimitris Kourkoulas, announced, to show what good managers Greeks could be, that he planned to make do with an even less than the allocation.

Panagiotis Ioakeimidis, professor for European policy at the University of Athens believes the presidency will give Greece the opportunity to improve its image within Europe and restore the credibility it has lost in recent years. Greek Deputy Prime Minister Evangelos Venizelos insisted that Greece was not thinking of its domestic priorities, but of those of the EU. The EU parliamentary elections in May are likely to bring a new political balance and a rise in euroscepticism and representation for far right groups.

Greece’s Prime Minister Antonis Samaras declared: “Greece starts the EU presidency on a positive record, with a primary surplus and an imminent recovery. This is going to be a presidency of hope – hope for more Europe, and hope for a better Europe.”  Athens seems to want to do whatever it takes to show that Greece is on the path to recovery, reminiscent of what Ireland did last year when it held the presidency of the EU. Hit by the economic crisis, Ireland was in an ideal position to lead the way in driving forward policies and legislation on core priorities of jobs, stability and growth. Getting agreement on the €960 billion Multiannual Financial Framework (MFF) budget for 2014-2020 was arguably the Irish Presidency’s greatest achievement. The budget is effectively an investment in key policy areas that will help boost growth and create jobs in all Member States. By December, Ireland became the first EU member to exit its bailout.


Few believe at this stage that Athens can make good. The latest figures show a jobless rate of 27.4%, with youth unemployment standing at 59.6%. Critics say the average Greek on the Athens omnibus does not perceive improvement and the upcoming municipal elections, which will take place at the same time of the EU parliamentary elections in May, might show the crisis is not over. Austerity policies have shrunk the labour market by 21%, throwing 40% of the workforce out of the national insurance system.


The state holding the presidency should not push through their own interest. Nonetheless, Greece started its six months in charge by declaring that the imposition of austerity by Berlin and Brussels could no longer be tolerated. One of the first things the new presidency will have to do is renegotiate with the Troika about itself. Greece will also have to reach an agreement with the rest of the eurozone on how to finance its debts beyond 2014, when the current aid program ends.

This will be Athens’ fifth run in the rotating presidency. Previously, they tried to advance a socially conscious agenda, albeit with moderate success. In 1988, Andreas Papandreou pushed for a European Social Charter, which only a year later became a reality under the French presidency. In 1994, Athens’ social agenda was set aside in the face of negotiations for an enlargement of the EU to the north. In 2014, in particular, Greece wants to devote attention to youth unemployment and EU subsidies to get young people into jobs. Greece plans to focus on proposals for a banking union and amending the data protection act, and the policy of particular importance to its own interests – growth.

According to figures from the Greek Finance Ministry, 98% of EU bailout funds have been directed back to Greece’s lenders, rescuing French and German banks, while only 1.6% of the money from the European Stability Mechanism’s flows into the real Greek economy. Officials are lethargic about pursuing tax evaders — including the 2,000 prominent Greeks with Swiss bank accounts on a list provided to the Athens government by IMF managing director Christine Lagarde.

In order to maintain the pretence that Greece has turned the corner and is on the road to recovery, EU and Greek officials celebrated the beginning of the EU presidency amid draconian security and a ban on public demonstrations. Nigel Farage of the Eurosceptic UKIP became a hero to Greeks when he told PM Samaras “I must congratulate you for getting the Greek presidency off to such a cracking start.” Farage said Samaras should drop his party’s name, New Democracy. “I suggest you call it No Democracy because Greece is now under foreign control. You can’t make any decisions, you have been bailed out and you have surrendered democracy, the thing your country invented in the first place.”

Although Venizelos warned of the growing appeal of neo-Nazis, there is a strong folk-memory of what German Nazis did to Greece during World War II. There is rising anti-German feeling in Greece, even though, in the year up to August 2013 Germans were the biggest spenders among visitors to Greece, with a total of 541 million euros. Angela Merkel is seen as the architect of the austerity policies that are hurting Greeks. Merkel, whose steering of the euro crisis propelled her to soaring popularity at home and a third term, has become increasingly resented in the rest of the EU. Greek newspapers regularly run articles on how much money Germany owes Greece. There is persistent resentment over hundreds of billions of euros in reparations that Greeks say Germany owes the country from World War II, money that some say should go toward helping to forgive Greece’s debt. Just before the Greek Presidency was due to begin, a gunman sprayed the German Ambassador’s residence in Athens with bullets.

Some critics question the wisdom of the rotating presidency. Greece was the recipient of the EU’s biggest bailout. Other EU states were anxious when Cyprus, a bankrupt member, whose economy represents a mere 0.2% of the eurozone, led policy-making just when Europe faced its greatest hour of need. Barely a week before taking over the presidency, Cyprus was forced to follow Greece, Ireland, Portugal and Spain in resorting to the EU and IMF for emergency financial assistance. Another economically weak country, Italy, takes over the presidency in July 2014. Italy is not relying on money from the bailout fund, but it too is suffering from a recession and is heavily in debt. After Italy, Latvia, the newest member to join the eurozone, takes over. In 2008, Latvia lost a full quarter of its economic output and during its recovery lost 8.5% of its population.

George Soros wrote, “What was meant to be a voluntary association of equal states has now been transformed by the euro crisis into a relationship between creditor and debtor countries that is neither voluntary nor equal. Indeed, the euro could destroy the EU altogether.”