Sunday, 25 October 2015

Koroni and the Keynesian Question

Saturday, 24th October

We hopped around the peninsular today from Finikounda to Koroni, about 18km or so. It's a spectacular drive through mountainous garrigue, which culminates in a spectacular view across the Gulf of Messinia to the mountains of the Mani. The sunny weather has not materialised, we still have light rain showers, but the air has cleared and you can see for miles.

Wonderful drive from Finikounda to Koroni

Photo opportunity!

Storm clouds over the Mani

 Why are the potholes always on our side of the road?
After shopping at Koroni's supermarket - no Lidl style 'Euro-groceries here! - we found Camping Koroni. The place might best be described as quirky and quaint, in other words like somewhere we might have camped in circa 1978. That's OK. The facilities are spotless, but rustic, the four unisex 'warm showers' are so small and ancient that I think I will use the on-board facilities. The pitches too are designed for the era of the VW camper and Bedford Dormobile. Maisy squeezed on, but only just, and ended up on a distinct slope even using our ramps. But hey, we're ex-cycle campers, if we wanted glamping we would have headed for Spain.

We walked into town, it's only a few hundred metres down the hill. From the road you get a great view of the red roofed old town with a vista over the wide bay all the way to Stoupa and the Mani.

Our Rough Guide talks Koroni up somewhat into a kind of Greek St. Trop. In high season maybe it feels different, but today the scores of somewhat bog-standard tavernas were touting for business from a handful of tourists. The public spaces look unkempt, and away from the harbourside a lot of the old buildings are boarded-up. The whole place looks as if it is in a gentle but inexorable decline.

Koroni, from the road down from the campsite.

Empty streets
empty tables - a sad state of affairs...
It seems to me that the less developed economies of the EU are in a real bind. An American friend forwarded a Daily Telegraph article to me today concerning the result of the Portugese election. I've seen the Swiss and Canadian results on the BBC, but not the news from Lisbon. It should have been headline grabbing stuff, and it should concern all of us who are citizens of the EU for two reasons.

The first is to do with democracy. In the Portuguese election around 52% of the electorate voted for left of centre parties who are broadly anti-austerity. This is a similar result the Greeks who returned Syritza to power a couple of months ago. However in Portugal's case the President intervened to stop the left wing coalition form a Government, and invited the centre right with 38% support to continue as a minority government. The reason given - that Portugal's economic situation was such that it was ill advised to embark on a program of radical change. That may, or may not be the case, but it's not what the electorate said. What it shows is that it is the requirements of the European Central Bank and the IMF that is calling the shots, not the will of the people. I am a committed pro-European, but I am also a committed democrat; it saddens me to see the continent drifting towards oligarchy.

The second reason has to do with economics. The article contains two diagrams. The first is a graph which tracks growth in GDP of Spain, Portugal and Greece compared to the Eurozone average. As you might expect, the Euro average shows steady growth over the past 25 years with a distinct dip in the years following the banking crisis in 2007, from which the the continent had only just recovered. Interestingly, Spain, which was regarded as vibe table, had out performed the European average in general. However, Portugal and Greece are shown to be in a lamentable situation, in both cases, the growth in GDP which began to grow following EU membership and the adoption of the Euro collapsed back to mid 1990s levels and shows no sign on recovering. The reason is simple, as the second bar chart illustrates, Portugal's debt repayments are such that it will take until 2039 for levels to reach the target level of debt set by the international banking cartel. Both Greece and Portugal are doomed to an entire generation of externally imposed 'austerity'.

It's an odd concept 'austerity' it has an attractive ring to it, with connotation of self discipline and a healthy rejection of profligacy. It is, of course, in current economic parlance a euphemism for externally imposed impoverishment. Only the British are daft enough to vote in in, the Greeks and Portugese electorate are more savvy, and demand a more Keynesian solution that will allow growth and investment in their countries. What makes the refusal of this demand by Europe's economic elite especially ironic, is that it was the bankers and political elites that were profligate, yet the people at large are being forced into years of poverty.

You don't have to read an article in the Telegraph to understand the consequences of this; just walk down a street in any town in Southern Greece. To pursue a policy that deliberately denies people hope, seems to me a highly risky course of action, inviting extremism. Alicia Stallings, an American poet living in Athens has just posted  another article,  Authorities on island of Lesbos have processed the arrival of 48,000 new arrivals from Syria in the past two days. How can Greece withstand the twin pressures of mass migration and enforced impoverishment? We live in troubling times.

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