For more than five years, Greece has been sliding further into debt and toward the danger of bankruptcy and default. In that time, Greece’s GDP decreased by more than 22 percent from 2009 to 2013, overall unemployment increased from 9 percent to 26 percent, and youth unemployment shot from 24.8 percent to 51.2 percent — with estimates that more than 1 million jobs were lost in the private sector. In January 2016, Bloomberg ranked Greece as the third worst-performing economy in the world, behind only Venezuela and Brazil. Ever since the country’s debt crisis first erupted, Greece has been in the spotlight, drawing the attention of the international community and of the country’s political class toward the negotiations about bailouts and repayment of public debt, Greece’s place in the Eurozone, and on “austerity” programs implemented by successive Greek governments.
The road to renewed prosperity requires a solid commitment to fiscal responsibility and structural reform. In order to make a clear, persuasive case for this new way forward, Atlas Network and its partners convened an Emergency Economic Summit for Greece in Athens in May 2015, calling for structural reforms to return Greece to a path of growth and break its cycle of crises. The event was held in conjunction with Atlas Network’s local partners, Greek Liberties Monitor and Liberty Forum of Greece, as well as the Cato Institute and the Friedrich Naumann Foundation for Freedom.
Ivan Miklos, Alexander Skouras, and Thomas Sargent
Nobel laureate Thomas Sargent and New York University economist Nicholas Economides — along with more than 20 expert economists, reformers, speakers, and moderators — were among those counseling then–Finance Minister Yanis Varoufakis that reducing government spending was essential to restoring trust in Greece’s future, breaking the cycle of crises, and returning the country to economic growth.
Varoufakis, who joined the debate at Atlas Network’s invitation, held the position that the Greek government cannot be realistically expected to reform itself at this late stage and to pay back what seems like an unpayable debt, also suggesting that free-market reformers may be counterproductive in their efforts to push for solid fiscal accountability — a perspective that surprised no one in attendance.
Dr. Tom G. Palmer (Atlas Network); Yanis Varoufakis (former finance minister of Greece); and Alexander Skouras (Atlas Network)
Sargent responded to Varoufakis’s government talking points by pointing out the difficult reforms that must be made to restore lenders’ confidence in Greece’s future. He explained in his following remarks that these difficult choices have to be made, no matter how painful in the short term, in order to restore long-term international confidence in Greece. This confidence is crucial to bringing back investors who have rapidly fled the declining Greek economy and to restoring the nation's credit rating within the European Union.
“This is a crisis of insolvency, and the position of his government is that the people on the other side should just understand that they are not going to pay that whole amount,” Sargent said. “Given that truth — that’s the truth that [Varoufakis] talked about — the other side is just not negotiating seriously.” Sargent pointed out that if Varoufakis is suggesting that the Greek government should not be expected to reform, the many journalists in attendance should ask Varoufakis what his true vision is for Greek society — as well as his Plan B for the next post-bailout crisis generated by the government’s ongoing wastefulness.
Kyriakos Mitsotakis, who served as minister of administrative reform and e-governance in the cabinet of former Prime Minister Antonis Samaras, and was elected as the leader of the opposition New Democracy party in January 2016, spoke at the summit about how his efforts to reform employment in the public sector had begun to be reversed by cabinet of the newly elected Prime Minister Alexis Tsipras. The new government began reinstating public positions that had previously been cut or reallocated, Mitsotakis said, without regard to whether their services were necessary or strategic priorities.
“It is a question of priorities,” Mitsotakis said at the summit. “This government is sacrificing the true priorities of the public administration to satisfy a very specific electoral clientele. Now, we can have a big discussion as to whether this is an appropriate size of the public administration. There will be arguments in both directions.” Mitsotakis pointed out that any mobility within public sector jobs between regions within Greece had been met with a great deal of resistance, particularly from unions leaders who aimed to maintain the status quo.
Kyriakos Mitsotakis and Harry Theocharis
The Atlas Network summit provided a marked change in a conversation then revolving around short-term fixes and negotiating brinkmanship. Not long afterward, Prime Minister Tsipras took a spectacular U-turn — away from the platform that brought his leftist Syriza party to power — to avoid default and a disorderly “Grexit” from the European Monetary Union. The new deal, ratified in Parliament on July 15, 2015, included some much-needed market reforms but also ill-advised tax increases that will weaken prospects for a growing Greek economy.
Despite this policy whiplash, and continuing uncertainty about the Greek government’s real level of commitment to any particular course of action going forward, Tsipras and Syriza garnered a decisive re-election in September 2015 — a victory that Varoufakis himself, who resigned from the administration in July 2015, has suggested will ultimately result in failure.
Organizers of the Emergency Economic Summit for Greece from left to right: Dr. Tom G. Palmer (Atlas Network); Hans Stein (Friedrich Naumann Foundation); Ian Vasquez (Cato Institute); Michael Iakovidis (Greek liberal Monitor); Nikos Charalambous (Liberty Forum of Greece); and Alexander Skouras (Atlas Network).
This unstable political and economic climate underscores why it is essential that Atlas Network continues to support the work of its independent partners in Greece, who labor every day to build a persuasive case for fiscal sanity.
Atlas Network partner Greek Liberties Monitor, one of the 2015 summit sponsors, was founded that same year by Dimitris Pefanis and Michael Iakovidis, who had long pondered how to create a stable platform for networking, information, and communication with supporters of classical liberalism, libertarianism, and free markets both within Greece and abroad. Their aim is to create a point of entry to the difficult-to-penetrate mainstream media market that tends to be wary of upsetting the status quo.
“Greece is currently second to last in the media freedom index, 130th in the economic freedom index, ranked as the most corrupt country in the EU, ranked 50th in the International Properties Rights Index and a number of other categories which show a simple truth: Greece is a thoroughly un-free society and economy,” Greek Liberties Monitor explains on its website. “There is a fundamental lack of understanding and information of liberties, how to fight for them and their importance to the [lives] of everyday Greek citizens, which hampers our progress as a nation, an economy and a society. Greek Liberties Monitor aims to change that by popularizing basic concepts regarding liberties in Greek society, by promoting dialogue with international organizations which are active in these areas, and by pressuring key decision makers in making such issues a part of the political and social agenda.”
Atlas Network Executive Vice President for International Programs Tom G. Palmer meeting with liberty activists and think tank leaders in Athens, Greece.
Liberty Forum of Greece, another Atlas Network partner and sponsor of the 2015 summit, began its work in 2011 to introduce, promote, and clarify the classical liberal ideas of free markets, individual freedom, limited government, and an open society in Greece, and to strengthen demands for policies that promote this vision. Its activities include publishing Greek books about liberty, translations of international classical liberal literature, organizing frequent open discussions and seminars, maintaining and developing a library and archive of classical liberal works, creating original multimedia material, and networking with people and institutions that share its goals.
Today, Liberty Forum of Greece has ambitious plans to lead new advocacy campaigns, develop rigorous research projects, produce informative publications, and host a series of groundbreaking events that that will continue to change the climate of ideas in Greece and pave the way for substantial reform.
“When the Greek crisis started, the ideas that were floating around were the ideas of right wing and left wing collectivism, and that’s why we had the rise of radical extremism,” said Greek native Alexander Skouras, Atlas Network’s associate director of institute relations. “Atlas Network and its partners are committed to ensuring that this won’t happen again in the future. Our goal is that, next time, we’ll be more prepared as classical liberals and have our ideas in place.”
Without growth, Greece will remain stuck, dependent on its creditors for yet another bailout in the future. Atlas Network will continue to collaborate with those who can make a principled case for a change of course in Greece, toward the institutions of freedom that have proven to be so conducive to prosperity.