By a long stretch, the Financial Times is my favorite English-language newspaper. Not only because it covers better than others the international economic stories that are of concern to folks like me, the readers of this blog. More importantly, the line-up of outstanding writers and thinkers is stunning: Gillian Tett, Alan Beattie, Edward Luce, Gideon Rachman, Martin Wolf, Simon Schama, Shawn Donnan, Lucy Kellaway, Rana Foroohar, and I can go on...
Given my enthusiastic support for the FT, its coverage of Greece has been an on-going frustration. Over the last couple of years I've been following the Greek debt crisis closely, and traveling to Athens regularly. I don't expect the FT to take my view of the crisis and the underlying issues, and on analysis the FT is quite good (especially Wolfgang Munchau). It's the slanting and distortion of some of the daily reporting that is particularly troubling.
In the last 24 hours, there was good economic news from Greece, on at least two fronts. First, Israel's government gave the go-ahead for a joint venture that would make the Greek firm Energean a partner in the development of offshore gas. Second, consumer confidence in Greece jumped 4.5% this August according to data just released. It's possible that these news items didn't happen in time for Kerin Hope to file her story in the print edition of today's FT. The story is 100% negative. The notion that Hope gives to readers is that, now that the bailout has been done, Greece's progressive Syriza government will re-balance things, reassuring its supporters on the left by adopting extreme anti-market economic policies. But each element in Hope's story is misleading in an important way.
First, she claims that Syriza has launched on a new anti-foreign investment tack, which is shown by the government blocking one part of the Canadian Eldorado mining project. Reality: there have been environmental and local community issues with this project going on for many months, as well as questions about tax avoidance. The company has won some victories in litigation but controversy over this project continues. Nothing substantial has changed in any of the actors' positions since the bailout. Anyone familiar with foreign investment in extractive industries will know how sensitive these kinds of projects can be, and the importance of local support. The situation with Eldorado has nothing to do with the overall approach of the Greek government to foreign investment, regardless of who has the best case, the local community, the federal Government, or the mining company. Of course, there is nothing wrong with Hope raising the the Eldorado issue but how about a little balance-for example, the generally successful outcome of China's massive investment in the Piraeus, Greece's largest port and a key transportation hub in the region?
Second, the FT writer trots out plans by the Syriza government to impose what she presents as punitive rates of taxation and social charges on lawyers and other professionals making more than $75000 per annum. But there is nothing new here, either. I've been hearing complaints from lawyers in Athens about this move for over a year; this has much to do with the complexities of social security when applied to relatively affluent self-employed people, which lawyers often are, rather than confiscatory taxation. I'm not defending the government's position; I've heard both sides of this issue, and it's complicated. But Hope is fundamentally misleading to give it as an example of a radical left policy suggesting Greece is going to veer away from balanced social democratic politics.
The third issue Hope raises is university reform. She creates the impression that Syriza has somehow suddenly reversed reforms in 2011. Hope is right that many academics are critical of any effort to backtrack on the promised changes. But there is nothing new in this. That's been Syriza's established policy for some time. The reforms, very sensible from the perspective of globally-connected academics in elite Greek institutions, were nevertheless highly divisive among different social interests in Greece. I don't think it is a completely unreasonable judgment of the government, and again it's not a recent one, that the requirements of social solidarity during a period of great crisis should be put ahead of university reform, in terms of urgency.
