Friday, June 18, 2010

Greece’s irresponsible neighbors and how Greek policies benefited Bulgaria and FYROM

It is not Greece's fault that FYROM has chosen its self destructive path to confrontation with the only country that has to date supported its third world economy through legal (investments in manufacturing, banking and telecommunications), semi-legal (Casino gambling) and borderline-legal or outright illegal (prostitution) cash infusions. And it is most definitely not the fault of the Greeks that the only flourishing sectors of Skopjan economy are the illicit ones.

Why Skopje should not be biting the hand that feeds it. The article Richard Rahn of the CATO institute would have written his article on the Washington Times, had he chosen to stay close to the facts.

This article by Miltiades Elia Bolaris is a reply to Washington Times'article: "RAHN: The irresponsible neighbor"
and it was originally posted as a comment to the article on the readers' reply section of the Washington Times:

http://www.washingtontimes.com/news/2010/jun/3/the-irresponsible-neighbor/

Mr. Rahm's article is also hosted at the CATO Institute's website:
http://www.cato.org/pub_display.php?pub_id=11864

Our reply has also been posted as an independent article in the American Chronicle:
http://www.americanchronicle.com/articles/view/163639


True statement: “Whether you are a homeowner or a country, it is better to have responsible rather than irresponsible neighbors.”
Two of Greece's neighbors are FYROM and Bulgaria. Both have greatly benefited for the last twenty years from torrents of foreign investment from Greek companies that closed their higher wages factories in Macedonia and Thrace, in northern Greece and set up sweat shops in impoverished Ex-Yugoslavian Skopje and Bulgaria. Now, the financial crisis that hit Greece is causing pain in both neighboring countries, but much more so in FYROM. Skopje’s parasitic economy, including their numerous Cazinos and its prostitution industry which have been living off the body of a more prosperous Greek economy siphoning euros out of Northern Greece are now in shambles.
Skopje was part of Yugoslavia, but it declared independence in 1991. From day one, the Skopje government began its ultranationalist provocations against their southern neighbor, taking on the misnamed title of Republika Makedonija, adopted irredentist symbols like the flag of the ancient Macedonians as their own, and claiming that the northern province of Greece, historic Macedonia will at some point need to join Skopje to create a Slavomacedonian homeland. This fabled so called United Makedonija would make its capital in Thessaloniki, Greece’s second largest city. Greece, like any self respecting country would, forced Skopje to the negotiating table where abide where an agreement was reached and Skopje changed its internationally recognized name and flag, along with its most virulently irredentist articles in its constitution. People who are ignorant of Balkan realities, or who intentionally, therefore maliciously, pretend not to understand what is happening, spread roumours that Greece’s response to Skopjen ultranationalist vitriol was much ado about nothing, about some so called “totally irrelevant historical events”.
The Skopjan position, which their allies try to promote pro bono for them, is that the ancient Paionia and Dardania has been occupied by many people over the past few thousand years, but they chose to remember only one of them, the Macedonians. In the popular mind, a misnomer for the mind of the average homo ignorantus around the globe, FYROM has been successful in associating itself with the name of the Greek ancient “Macedonia” which of course is most often associated with Alexander the Great and his father Philip” .The most outrageously amazing thing about Skopje’s campaign of history falsification is that it gone so far as to find respected CATO institute scholars some of whom contribute to this respected newspaper who somehow mixed up their history so much who think that Philip and Alexander the Great were “actually born in modern-day Bulgaria”!...What!? How stupid will I sound if I say that Julius Caesar was actually born in Algeria and that the Algerians are the true descendants of the ancient Romans today, and that the modern Algerian Arabic is the language of the ancient Latins? No further comment of the Bulgarian-born Alexander the Great...has anyone ever heard of Pella?...no, I do not mean the Pella, Iowa, USA town where Pella, the windows company is headquartered To many people’s surprise, there is actually a Pella, Macedonia of northern Greece town by that name, where Alexander the Great was born!
It is for misunderstandings like these that Greeks have an understandable emotional attachment to the name Macedonia, as the French have for Alsace, the Italians for Veneto and the Americans for Arizona or California. After all, the Greeks have a bordering province that is the real and historic Macedonia, whose inhabitants speak the same language since Philip’s and Alexander’s time. Even though Slavic people have been at times been the majority population for the last 1,300 years in the Yugoslavic land that is now the country of the Former Yugoslav republic of Makedonija, FYROM has little if anything to do with ancient Macedonia, and for sure nothing to do with Alexander, or Philip who only visited those lands as conquerors of Thracian and Paionian tribesmen. Because of this, when FYRoMakedonija declared its independence from Yugoslavia (NOT from Serbia!...let’s keep our history on solid factual ground!), Athens insisted that it could not be called Makedonija or Makedonija, and thus Skopje consented to be admitted to the United Nations with the name of the Former Yugoslav Republic of Makedonija (FYROM) - a rather awkward name for a country , because it was only a temporary one- which the Skopians have since sabotaged and refused to accept their own signature on it.
Many countries in the world, including the U.S., rushed to recognize FYROM by its chosen misnomer, the R of M, but the Greeks continue and will understandably continue to resist to this historical abomination. Athens blocked Skopje's entrance into NATO but it allowed Skopje to become a candidate member of the EU, making sure that Skopje understands fully well that the solution to the name issue will have to come before final and full membership in the EU. Although any member state can blackball any new potential member in these and some other international organizations, Greece never used this right against FYROM, only when Skopje tried to enter as R of M. The "name dispute," however, has not kept Athens and Skopje from active trade and from engaging in normal commercial relationships. This included considerable Greek investment in FYROM, to the point of ruining Greece’s border industries with jobs and capital flight into the cheaper Balkan countries. Unfortunately, the Greeks allowed the opportunity of helping the Skopje nomenclature move towards calmer seas by lowering their anti-Hellenic hysteria, to go unused. Greek businessmen became hostage to political intrigues nad the dominant “Makedonism “ of Skopje, and they become pawns at the hands of Skopian propaganda. FYROM, being the landlocked poverty strikcken and tiny ex-Yugoslav province that it is, has little chance to become a player in any international arena whether it joins or is locked out of NATO and the EU. Despite this, The Gruevski administration is playing dangerous games inviting Turkish militarism to join hands in a political alliance against Greece. The Turkish muslim NGO’s are active in FYROM building mosques and restoring old Ottoman ones, in anticipation of a resurgent Islamic alliance running through the Balkans, in accordance to Ahmet Davutoglu’s neo-Ottoman geopolitical schemes. Greeks, of course, who build factories and operate Banks and telecommunications companies in FYROM, employing more than thirty thousand employees in a country of 32% unemployment, see the irony of who is spending the money and who is reaping the geopolitical benefits. The Greeks help FYROM stand on its own feet and become modernized and independent and end up with deleterious spite, while the Turks that spend pennies creating an Islamic net that will trap FYROM into ethnic strife and underdevelopment gets the hurrahs and the laurels of the friend against the Grci! Now, the Greek financial crisis has resulted in a major drop in exports (12 percent of its traditional market) from FYROM to Greece. This is compounded by the fact that Greece is the only country with which FYROM has had a positive balance of trade, and this does even take into account the black money of the underground economy, the gambling and prostitution on the Casinos lining up the FYROM (some Bulgarian cities too) north of the Greek borders whose clients are almost exclusively Greek. A recent article in a major Skopje daily was shedding tears that the prostitutes in Skopje are now offering their services for 3 to 5 euros, when before the crisis they were able to charge as much as 15 euros! No wonder the Gruevski administration is worried about this drastic fall in revenue in its most productive private sector industries.
Bulgaria, which shares a border with Greece and FYROMakedonija, is faring much better. Having learned from the past, it chose to cooperate rather than antagonize Greece. Because of enthusiastic lobbying from Athens, Bulgaria (as well as another friend of Greece, Romania) is now a member of both NATO and the EU. While Greece has allowed its deficit-to-GDP number to rise to an unsustainable 125 percent, Bulgaria's debt-to-GDP ratio is one of the lowest in the world at only 15 percent. On the other hand, poverty in Bulgaria is abysmal and the fact that Greece has had negative balances of payment with these countries is in large degree due to the fact that Greek industries that relocated there, like American industries relocating in Mexico or China, left joblessness behind them but imported cheaper products from FYROM or Bulgaria back into Greece. What is worse, most of these investments were encouraged by Athens and were subsidized by the Greek taxpayer. Bulgaria is not and for a long time it will not become part of the euro zone and FYROM will probably never be invited in, especially after the latest events in Europe.
Bulgaria, with generous help from Greek investors has achieved up to the recent recession a real per-capita economic growth rate of a bit more than 6 percent, keeping in mind that it started from ground zero levels of economic catastrophy after the collapse of the regime ancient. FYROM on the other hand, obsessed as it is with its own irredentist dreams and problems of holding its own ethnic seams from bursting out, has not done nearly as well. It claims to have achieved a five-year compound annual growth rate of 4.7 percent, if we are to believe their numbers. Both FYROM, has, according to the latest EU reports stopped any and all economic reforms and it is sinking into economic oblivion, losing its last chance to tie itself to the EU, unlike Greece, which has started a deep and fundamental change in all aspects of its economy, from tax collection and opening of closed sectors, to reforms in the labor laws and drastic restructuring of its social security system. Bulgaria has also benefited from having a close relation to Greece, although its latest decision to scrap the largest investment into its land, the Burgas-Alexandroupolis oil pipeline has angered both Greek and Russian investors and it has betrayed a level of unforgivable amateurism on the part of the governing Bulgarian elite that will surely sour the Greek-Bulgarian business climate for years to come.
FYROM and Bulgaria, as contrasted with EU member Greece, have adopted flat-rate income-tax regimes of 10 percent on both personal and corporate taxes. With these tax rates they obviously attracted many Greek companies. What these businesspeople are finding now is that the 10% is where it all starts. When the tax men show up at their door for the traditional taxman’s shake up, the 10% the state has asked becomes the reminiscence of a bitter joke. The final part is when the local organizacija tough boys show up, the mafia that has to take its cut too. Greece, by contrast, has a minimum tax rate of 25% and a maximum tax rate of 40 percent, which is of course only nominal because if all Greek businesses paid their taxes their country would not have to go out and borrow in the international market. To the question why will would the Greeks now pay their taxes when the rate goes above 40 percent, is that before they were unwilling to pay taxes at the current rate because there was little or no reinforcement of the tax laws, while now the sqweeze has become evident and people who are evading taxes see their names and faces on national tv and newspapers and they head towards the tax courts for stiff penalties. Tax evasion from now on will defy common sense and economic logic.
FYROM and Bulgaria have for very long tolerated too much corruption, but to compare the level of corruption in these countries to that of Greece would be to compare Latin American standards of corruption to those of the US. Whatever the level of corruption in Greece, we have still to see a prime minister’s brother being caught heavily involved with the Kosovar Albanian mafia wholesaling drugs. FYROM’s judges had to let prime minister Gruevski;s brother loose with a gentle slap on the wrist, when some over jealous but uninformed policemen (were they working for a competing gang?...we will never know) caught him red handed.
Greek politicians have allowed themselves to be bribed for years by German and American multinationals, forcing the Greek state to buy at rates multiple to what the German or American taxpayer pays for the same services and products. The caramanlis and Simitis administrations also lied about the fiscal health of the Greek economy, like most other European countries but even more so, providing the international community with phony numbers. The taxpayers of Europe and even those in the U.S. will never see the benefit of the billions that these multinationals made selling their products to Greece with high up-prices, and they will certainly never see the billions the London, Frankfurt and New York traders and speculators made as a killing bgetting on the collapse of the Greek and now the overall European economy. The people of FYROM and Bulgaria who hardly saw any benefits out of the millions that Greek businessmen invested in their companies, except for the lucky ones who benefited from the wild west real estate boom in Sofia and the Euxine Sea coast of Bulgaria or the ones working in the Casino and prostitution trades in FYROM, will now face a shrinkage of this income because Greeks will have to become more fiscally responsible.
It very obvious to anyone following international events that the current trends in European governmental policies is that Greece was simply an excuse for a wave of attacks on the standard of living of their people, ostensibly to help European economic competitiveness. Greek and Isish and Spanish or Italian deficits were just fine as long as the money went to fatten the income numbers of German and American Banks and other multinationals. Unfortunately, many Western European policymakers ignore the obvious fact that low-rate, flat-tax countries like Bulgaria or Latvia are stuck in third world dire poverty, while countries that have that have restrained spending an taxed heavily like Sweden or Finland are doing phenomenally better. As for aspiring Ottoman protectorates like Bosnia, FYROM or Kosovo whose governing elites include the same drug running Mafiosi and KLA mujahedin, are only going to survive doing what they have done well up to now: becoming the illicit drug and women and illicit guns trafick routes for the rest of Europe. If you add to this the self inflicting damage that the anti-Greek bravado of the Skopje governments have engaged in, in their lunatic efforts to be accepted by the rest of the world as “Macedonians” then the situation becomes desperate. Biting the hand that feeds you was never a good policy and spitting on the face of the only ones that can help your economy get beyond third world survival in the middle of Europe, is senseless. What will it take to wake them up, is a very good question indeed!

2 comments:

  1. Miltiathe,
    Congratulations for the letter you wrote to Mr. Rahn as a response to his article in the Washington Ties. Keep up the good work because you are doing a great job. Nick Hodges.

    ReplyDelete
  2. Good post and Smart Blog
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