WE CAN HAZ STATEHOOD? PART II

I covered some time ago the rise and rise of the popular movement for the non-payment of road tolls in Greece. Already this has swelled to proportions substantial enough to prompt strong reactions from the Greek Government - which true to form involved mostly calling people names.

  

My feeling is that this movement is about to metastasize into something far more dangerous. Their very existence advertises to investors that the Greek state cannot honour any obligations arising from licences granted. I've no problem with a weak state mind you, but you'll probably find that citizens cannot opt for a strong state when they are on the receiving end and a weak one when they're on the giving end and this is what these guys are trying to do. It worries me even more that these people have been encouraged by their success so far to extend their campaign to public transport and even hospitals. Then again, compared to the tacit movement for not paying taxes, they are amateurs and their movement is merely a fledgling.

I suspect that this growing non-compliance movement is related to a phenomenon I discussed here. As the influence of regional clientelist networks wanes, political opportunists are trying to rebuild the client base in any way they can. I will not be altogether surprised if the main legacy of the non-payment movement is a new generation of clientelist politicians - perhaps even a single populist kingpin.

But back to our main topic: the refusal to pay tolls. Here the question is, how is this likely to play out? I strongly suspect the Skye Bridge in Scotland is the best example. 

  

Like Greece today, 1985 Scotland was a nation with limited sovereignty and a net receiver of subsidies from a population (the English) which many Scots were not too fond of (some tactful evidence here, some less tactful here). The Skye Bridge was built in response to pressure from local communities and entrepreneurs who felt that the Isle of Skye's tourist potential was being constrained by the limited capacity of the existing ferry system. They were told by the Government that they couldn't have a road for another 20 years unless they were willing to pay tolls for 27 years.

From the outset, the Skye bridge was especially controversial because it placed the Isle of Skye's only connection to the Scottish mainland in the hands of a private consortium. After it was delivered in 1995, the Skye Bridge soon became known as Europe's most expensive toll road and a massive popular movement came into existence calling for the abolition (not the renegotiation) of tolls. Refusal to pay tolls was commonplace and even the contractors' staff were known to make concessions for people they knew to be local residents. The Scottish locals' argumentation was remarkably similar to that of the Greek non-payment movement and they too received a reasonable amount of political support.  

Making non-payment a criminal offense (as opposed to a civil matter, a recipe we're about to try in Greece) did not help because local residents correctly calculated (as many of my compatriots also have) that no legal system can keep up with an entire population hell-bent on non-compliance. Unable to levy charges of any sort, the contractors decided to cut their losses and the UK Government was forced to buy the road back for £27m, in addition to the £33m paid in tolls over 10 years. The contractors wrote off about £100m in expected revenues and probably made a loss in real terms as construction had cost them £39m in pre-1995 money and maintainance had cost them another 3.5m of operating costs. This was obviously much better for the locals, who had now roped in pretty much every other taxpayer in the land to pay for something that benefitted almost exclusively themselves.  

Unfortunately, Greece cannot afford to buy anything back from anyone and I doubt the IMF will make an exception. I suspect that as more countries are faced with this problem, pressure will grow for Europe to step in and finance a low-interest buyback using some new Ponzi instrument. My favourite for this one are project bonds. The Commission will certainly welcome this, and they've even lined up a willing buyer - the European Investment Bank.  

[Barfs]

A COLLECTION OF ZEITGEIST VIGNETTES

I have now been back from Athens for some time and I thought I'd start sharing a small collection of real stories that capture something of the feeling of post-sovereign Greece. Bear with me as I post these one by one.

1. OTHER IMMIGRANTS

As I do whenever I visit Athens, I spent a good deal of my last break at the Pyramids (map), my shisha place in Metaksourgeio, which foreign readers may recall from this. It is owned by an old Egyptian immigrant (one of many that moved with the families back in the days of Nasser) and managed by one of his jovial younger compatriots. I've been visiting for over 10 years - in fact I was on my way back from one of my first visits there when I heard the news about 9/11. Surrounded by brothels, abandoned old homes and the occasional waft of urine-smell, it is a neighbourhood fixture. It has predictably defied our ill-starred smoking ban and I hear it has recently become the setting of a low-budget film.

As I waited for my order of shisha and Sprite with a banker friend, the manager approached and said excitedly:

"They say there's going to be a sweep operation. They'll get rid of all the immigrants except the Egyptians." 

I saw the reasoning behind this; the Egyptians had an existing wave of old, very settled and esteemed immigrants to integrate into. The others did not. I told him I was unsure this was the plan anyway; although the centre of Athens is teeming with illegal immigrants, the Government is far from expert at locating them. That's why they're still around in the first place. He was unfazed by my scepticism:

"I hope they get rid of all of them. These Moroccans, these Algerians, they need to go. They're not good."

The manager has generally always felt that the latest arrivals are the worst. Once it was the Iraqis and Kurds fleeing war; now it is the North Africans, flooding in due to the relaxation of visa requirements in Turkey. He's not racist by the way; I remember how back in 2001 he was more than happy to take on an obviously redundant Iraqi employee just to save him from going back into one of our notorious holding pens for illegals.  But he is socially pragmatic. The newest arrivals are always the most desperate, and his part of town is the most desperate place of all. But for this kind of open animosity to be taking root in the immigrant communities of Athens, you know they must be under pressure.

Remember this graph?

This is where the pressure is coming from. The golden age (such as it was) of immigrant labour in Greece was 2005, and you can read a very good review of how well that was working out (by one of my old professors no less) here. As new private sector jobs, especially in construction, dwindled, the gap in employment between immigrants and Greeks (for whom public sector jobs are effectively reserved) reversed and has been widening rapidly. The immigrants of Metaksourgeio were heavily dependent on contruction jobs: in the past when giving us directions some used to employ the Greek word δουλειά (work) to denote a construction site. It really was that simple.

Speaking of Egypt, my original shisha place was not the Pyramids but Ramses, which another Egyptian immigrant, Ahmed, co-owned with his rotund Cretan wife. I never wanted to leave Ramses but Ahmed gave it up and returned to his more lucrative venture of satellite dish installations (and possibly internet cafes with shisha?) to escape what he saw as a 'bad crowd' - male prostitutes, drug addicts, beggars, the lot. Ahmed was a very frank and endlessly engaging conversationalist, a university-educated horticulturalist and man of the world. His tales of Egypt (which he still visited) were sad but mostly angry. He once said to me:

"In Egypt, I can go to a square in the middle of any city and shout: 'f*** the Prophet, f*** the Book', and as long as I remember to add 'God preserve President Mubarak and his sons' no one will touch me."

I wonder what he makes of events these days. It seems to me that the Egyptians of Athens will happily jig on Mubarak's grave. On the other hand, and contrary to the Pyramids tip, it turns out new arrivals from Egypt are not that welcome. To be fair, there were no signs of an uprising back in January - not to my untrained foreign eye but not to many other people's eyes either. The possibility of a new wave of Egyptian immigrants simply didn't come up.