Thursday, 19 May 2011

«In the aftermath of the global economic crisis: what next?»

left-red-arrowGood morning. I would like to thank this session’s moderator for his short introduction. I’d also like to thank the conference organizers, Economist’s conference division, who have a great tradition in successfully organizing similar events, Mrs. Parassivakis and all her colleagues. And thank you, ladies and gentlemen, for being here in this, early morning and thus challenging, session.

As we all know, during NATO’s Lisbon Summit in November 2010, the Alliance’s new Strategic Concept was formulated following many years of deliberations and preparations. In November, the NATO heads of states and governments formulated some widely accepted principles that are almost self-evident. We all wanted to transform NATO into an organization of not just defence but of security as well, one with strong politico-military characteristics however. The top priority was the capacity to prognosticate, and then manage, crises -through all the levels that a crisis, that can assume, as it often does, military characteristics, goes through. But such a crisis obviously starts as a political one and is a problem that in the end is being resolved with political and diplomatic means.

Moreover, I would like to remind you that in November a list of modern threats was formulated in the most official and codified way. That list includes not only everything that we already knew until a few decades ago, but [it also includes] asymmetrical threats, terrorism, environmental dangers and the dangers by climate change, energy risks and risks associated with supply security and the security of fuel routes. We strongly referred on the dangers associated with new technologies, those of communications and information: the space that we presently call cyberspace.

I do not think that there was a feeling back then that only a few months later, over the first few months of 2011, the situation in the wider region of the Mediterranean Sea, of North Africa and the Gulf, would so impressively change. That in reality, another chapter in the history of the Arab world would open, with many countries joining this array of shocking changes, allowing us to say that we witness history in the making.

Soon after Lisbon’s decisions this past November, the Alliance –I’d say the International Community, the UN, the US, the EU, the whole Western world and not just that- faced new challenges. It is easy to look for linear explanations. It is easy to say that all that is happening, changing the balance of forces, might be attributed to demographic factors since we are dealing with societies with very low age averages. It is something that we Europeans, who live in aged societies with substantially high age average, cannot comprehend. We naturally have societies with vast inequalities, with internal injustices, with exclusions.

We have citizens who face huge unemployment and income inadequacy problems.We have countries with poverty problems and problems of extreme inequality. We have vast populations excluded from the exercise of power or even the exercise of simple political influence. And of course we have a substrate with huge religious, ethic and racial differences. Everything goes back to the interwar period, during the early 20th century, as if the whole 20th century and the first decade of the 21st century never happened.

However, the point is not just that. A great factor in this crisis is the strategic gap that appeared to exist in the Western world: The failure of the US and the EU –in the end of NATO itself- and of course the failure of the UN to quickly formulate a complete strategic plan that convinces people that it has a beginning, a middle and an end, that it includes a strategy to enter and a strategy to exit the crisis.

Unfortunately, this is evident in the way that, at least initially, military operations are planned and executed. And it is evident in the way that the situation evolves for the past few months. This means that perhaps our first obligation and our first priority is to fill this strategic gap in order for the Western world and the present institutions that are seeking –and owe to- play a role in ensuring stability on a global level, to meet those challenges, to be able to predict and manage crises, to be able to act as a safety point, as a point of reference for the planet.

Obviously, this is not happening. We, the EU members, are well aware of the Union’s huge financial strength, that as an economic entity, the EU has a size that by itself constitutes an important, clinching argument and that despite the crisis in the eurozone, the public debt crisis, Europe still is a very large financial entity.

In reality, however, Europe as an autonomous political entity does not exist. The large EU members who are also UN Security Council members obviously make decisions according to their own national approaches. And in reality the Common Foreign and Security Policy, despite the institutional promises made by the Lisbon Treaty, has not been established and does not produce results.

On the other hand NATO surely is the real security pillar in the European continent –because the 20th century has taught us that the European security problem is and always has been euroatlantic, that’s the lessons of World Wars I and II, of the Cold War and of the period following the collapse of the Soviet Union. But NATO has faced an identity and strategic crisis, only a few weeks after the much-promising proclamations of the Lisbon Summit and the announcement of the New Strategic Doctrine.

So while we are used to –and that’s my contribution to our discussion today- facing new threats and the new stability issues on a global scale under the perspective of the regions that appear to be facing those problems (and in any way, on a perspective that places the West in an observer’s role), we must consider what our responsibility also is. For as long as the West does not formulate a policy and an institutional personality which allows it to fill its strategic gap, we must, therefore, view the West as an instability factor.

Of course this pre-supposes a different manner in which the EU operates. It pre-supposes another, more open and sincere and transparent relationship between the EU and the US. And of course it pre-supposes a much more widespread discussion than the piecemeal discussions that we have for handling one crisis, or another.

The problem is not crisis management in Libya, or in Egypt before that, or in Tunisia in between, or how to manage the situation in Syria, or our position regarding problems that arise in the Gulf. The problem lays in the overall assessment of thing which, as you realize, is the only one that allows us to formulate a stable and clear strategy, one that’s clear for our peoples too.

We are obligated to formulate this strategy in democratic terms, while remaining faithful in a legal and cultural civility, out of which we have no right escaping. That’s the only way to provide an answer to the security and the liberty problem, the issue of Democracy and the rule of law. This is the big challenge for the Arab world who obviously wants –influenced by the new global information conditions- to draw as many institutional advantages as possible out of the Western institutional and political tradition.

How can this take place though, when an element of insecurity and uncertainty is the financial and fiscal situation itself? When all the countries face their own fiscal problems? When the problem of the huge public debt is not solely a Greek problem but an American one, for example?

Greece, for the moment the scapegoat –because many believe that it may be, on a state level, the “Lehman Brothers’ of the EU- currently has 1.6% of Europe’s total public debt. Its relative size as well as its size in total numbers does not justify, in a first glance, such a global interest, such an excessive daily preoccupation with the issue of Greek debt.

Was Greece in the wrong place at the wrong time? Are we, beyond our own undeniable responsibility, because of losing fiscal control, victims of a competition the size and the parameters of which we cannot comprehend or do not confess during the international public discussions [taking place]?

On the other hand, it would be interesting to consider, of course, that many other countries face a similar public debt problem. If we use as a criterion the size of debt in relation to the annual government revenues, the top positions in the debt list would be filled by the US and by Greece.

It is, therefore, absolutely necessary to clear out the field and it is also absolutely necessary to realize that the common western strategic problem concerns all levels, both the defence and the security policy and the level of economic and more specifically of fiscal policy as well.

That’s why we despite posing a problem, we can be part of the solution in the same way that we, as an old NATO and EU member, contributed in the formulation of the mainstream for  the management of all crises.

I’d like to remind you here that Greece, despite its fiscal crisis and the very austere cuts in public spending, despite the need to cut back its defence and armaments budget, is present in all international missions under the UN, the EU and NATO flag. Greece is present, not just in Kosovo and Bosnia-Hergeovina, but [also] in Afghanistan, in Somalia, the Horn of Africa and the Mediterranean in the struggle against terrorism. It is present in Libya, of course, with its major military infrastructures, with Crete, the Souda Bay facility, its airports, its airborne early warning systems and its Search and Rescue assets and with its Navy that participates in the operation to impose an arms embargo.

Greece is ready to participate in the mainstream that needs be formulated to overcome the fiscal crisis as well, because without it we will never be able to fill the gap in the western strategy. And I’d like to say, as I am given this opportunity, that external recommendations, drafted in fact slatternly, are not necessary for us Greeks to realize what’s obvious and self-evident: that what is needed is a responsible attitude, unity, consensus, in fact not just political but social consensus.

If only an understanding among political parties were enough to achieve the necessary national consensus. This is a necessary precondition but not an adequate one. The reason is that the political system goes through a crisis of legitimacy and credibility. So we need something more that that.

We need a social and national consensus that includes all those people who institutionally or individually can make a contribution. We cannot face the problem alone, as a government, or as a party system.

§   We need the civil society.

§   We need productive players at a sectoral and local level in which everyone perceives the problem better.

§   We need the local governments.

§   We need the Justice, because without its contribution, no crucial growth problems can come to completion, no ambitious investment plans can be realized and the state assets, especially the public real estate, cannot be used.

§   And of course we need a clear understanding with the banking sector which is in a tight embrace with the state and the fiscal problem. That embrace need not be lethal but salutary, not just in fiscal or banking terms but for the real economy too. And that is why bold and innovative actions are necessary.

On a national, European and international level we are facing some major and complex challenges. The security problem is also a problem of external and internal security, because the security problem is a problem of strategy. That means that, in terms of security, it is directly linked to all the parameters of national strength. And a key parameter of national strength is financial strength and fiscal stability.

Greece is fully aware of its weight as an old, medium-sized EU and NATO country. Greece is aware of its responsibility for the tough spot she’s into and for which she first and foremost bears the blame, based on each one’s responsibilities and their institutional role. The citizens are not at fault. Those who exercised or exercise power, us that is, are.

So, in the way that we are fully aware of all those parameters, this is how we must transfer this awareness in a European, NATO and global lever, in order for the West to act not as a factor that multiplies uncertainty, but as something that contributes towards stability and for overcoming the crisis.

Thank you. redsq

Answers to questions from the audience

Q: A question for Mr. Venizelos. Minister, if we accept the notion that Greece can geographically be characterized as a country at the epicenter of what is going on in the Balkans and as a deeply democratic country that guarantees peace on the wider Mediterranean region, could you shortly tell us what are Greece’s actions today in relation to issues that could ensure energy peace with the neighboring countries, Turkey, Balkan countries, Arab countries, etc?

An one more question: Do you think that the scores of illegal immigrants –more than one million- already in Greece, pose a destabilizing threat in the country, as far as the financial situation is concerned? If yes, how big is this threat? Do you have an concrete data in hand?

redsq Ev. Venizelos: I would like to thank you for his question. As far as the so-called energy peace is concerned, obviously I’d prefer the term “supply safety” and “route safety” in this case. You know that we try to diversity our supply sources and routes, because we have a twin problem of safety and supply. We cannot rely solely on one source but we also cannot rely on the same routes too.

The Foreign Ministry and the Ministry of Energy and the Environment implement the policy that you are already aware of, in relation to oil and natural gas lanes. Electric power, in any case, largely depends on the distribution of raw materials used. The way the market for electric power has been shaped, I don’t think that a supply safety problem exists for Greece.

Moreover, I don’t think that Greece faces an energy security or intensity problem with any neighboring country. If you were referring to the truly unlucky and incomplete issue of the Bougas-Alexandroupolis oil pipe, unfortunately this is something that Greece cannot handle by itself. It didn’t come to fruition. Greece tries to think differently now, in order to be faster, more effective and never go back to square one without achieving a tangible result.

In relation to the immigration issue which is acute for the country: The truth is that Greece is the gateway for 80% of illegal immigrants entering the EU. So it is very important that the EU realizes that the immigration issue is not a Greece but a European problem.

The presence of Frontex in the sea and land borders of Greece shows us that a step towards that direction has been made. The EU understands this is a European problem, a problem of policing the EU common borders.

In relation to the crisis in North Africa, Greece is not facing an acute immigration pressure because of that [crisis]. Of course we are faced with the already known immigration flows. We try to deal with those with a number of measures the Prime Minister announced the other day during the cabinet meeting. Those measures are largely linked to the Athens city center and the city center of some of Greece’s other cities.

Is the presence of illegal immigrants in the country a fiscal problem? To the degree that we the health systems is burdened [by that] one could say that yes, there are extra costs. To the degree that there is undeclared labor and the social security organizations are losing income, yes, we have lost income. But on the other hand, legal immigrants contribute with their contributions towards the viability of the social security system in Greece and play a very important role. The evolution of IKA (social insurance institute) would be much different.

What does that mean? It means that this problem must be dealt with in a complete manner. It must be dealt with swiftly and we are fully aware of the urgency and the crucial nature [of the problem]. It must be dealt with in a singular and not conflicting communication attitude. We cannot use immigrants as illegal workers in the morning and treat them as possible criminals at night. It requires, I’d say, a continuous and consistent attitude.

And of course the EU must take some very brave initiatives in relation to Greece’s funding as far as the country’s support by Frontexand the creation of new security infrastructures are concerned.  And also [to take some very brave initiatives] regarding the change in rules of “Dublin II”. The way those rules are being implemented is unfair to our country because of its geographical position and its vast coastline. Greece, as I previously said, receives a large percentage of the illegal immigrants that wish to enter, and do enter, the EU.

Q: On the crisis in North Africa

redsq Ev. Venizelos: We greatly appreciate the role of the Arab League. Besides, UN Security Council Resolution 1973 places great importance on the role of the Arab League and its general secretary.

We also understand how tough this role is and how difficult it is to formulate wider consent. That’s why attitudes are changing on a case-to-case basis.

With what was said during the last stage of this discussion, one realizes how difficult it is to shape a single police and how great the strategic gap is, beyond the difficulties that we all are aware of, is. How difficult it is to must to reach an understanding that includes so many countries in the world with so many different perceptions, politically and culturally, within a difficult, thin and dangerous balance.

So, we are aware of the problems, of the dangers and of the missions that must be undertaken mainly by the West in order to formulate an operating framework of the international society that does not exist. The crisis we refereed to, does not concern solely the Arab League, or NATO or the EU. It primarily concerns the UN itself. Obviously there is an institutional and operational problem that’s huge.redsq

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