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Former Greek Foreign Affairs Official Assesses Greece’s Financial Crisis
FOR IMMEDIATE RELEASE CONTACT: Demetra Atsaloglou
April 2011—No. 02 (202) 785-8430

 

AHI President’s Note: The American Hellenic Institute presents AHI’s Capital Report which is a timely synopsis of recent policy discussions in Washington to help keep you abreast of the latest developments. As a service to our membership and constituency, and to gain an understanding of the position of other entities on our issues, the American Hellenic Institute attends and participates at policy forums or roundtable discussions to ensure the policy positions of the Greek-American community are represented.

The content provided in AHI’s Capital Report is for informational purposes only, and does not necessarily reflect the position or opinion of AHI.

 

Former Greek Foreign Affairs Official Assesses Greece’s Financial Crisis

AHI attended an event titled Greece’s Financial Crisis and the Future of the Euro at the Woodrow Wilson International Center for Scholars, March 11, 2011. Petros Doukas, head of Capital Partners S.A., and former Deputy Minister of Foreign Affairs, presented on the topic.

Doukas did not offer an optimistic outlook about Greece’s economic future, highlighting the fact that there exists a “brain drain” as educated young people from Greece see little reason to stay. He added this trend does not bode well for the country. However, Doukas said it was important that panic did not set in. He stated the best model for recovery was to make jobs, especially civil servant positions, based off of a meritocracy. He articulated that it was important to reduce the size of the state because much of Greece’s money goes to subsidies, payrolls, and pension funds for state employees. For solutions, Doukas proposed term limits in Parliament, said that there should be more uniform tax rates and retirement rates, and urged that the seaports and Olympic venues should be part of the stock exchange. As far as the European Union, he said because Germany dictates the financial terms, Prime Minister Angela Merkel should convince her constituents that it is in Germany’s best interest to aid Greece for the sake of the Euro.

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Turkish American Leadership Conference Covers Many Issues

AHI also attended The Turkish American National Leadership Conference at the Hyatt Hotel Crystal City, Arlington, Va., on March 17, 2011.

Speakers of the Plenary Session included: the Presidents of the Assembly of Turkish American Associations and the Federation of Turkish American Associations, the Turkish ambassador to the United States, the Turkish minister of EU Affairs, as well as the mayor of Alexandria City and the Arlington City Council chair.

Speakers who participated on the panel discussion on U.S.-Turkey relations were the deputy chief of mission of the Embassy of the Republic of Turkey and the director of the Office of Southern Europe at the State Department.

The conference was presented as an opportunity to highlight similarities in the values of the United States and Turkey as well as a common, shared vision. It also provided a forum for the members of the Turkish American associations to speak, and most importantly, a forum to motivate young Turkish Americans to run for office. 

Turkish Minister of EU Affairs Egemen Bagis highlighted Turkey’s strategic importance, which according to him, stems from its role as a geographical, cultural and religious bridge between the East and the West; as a mediator between rivals in the Middle East, South Asia and Caucasus; and as a source of inspiration for its eastern neighbors. He also reiterated Turkey’s goals to amend its constitution and legislation and to become one of the top ten global economies by 2023.

According to the speakers on the panel, U.S-Turkey relations have become stronger during the last four years (Bush and Obama Administrations). This is in part because Turkey has taken on a greater international role in many areas, including: international organizations (G20, NATO, UNSC), politics, security and energy transportation; and also in discussions on the global economy and climate change.

The State Department’s director of the Office of Southern Europe, Jess Baily, urged Turkish and Turkish Americans to speak out and broaden public opinion and interaction in both Turkey and the US.

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Turkish Minister Addresses U.S.-Turkey Relations

AHI attended a discussion titled Turkey’s EU Membership: A win-win case with Egemen Bagis, minister for European Union Affairs and chief negotiator of Turkey, on March 18, 2011. Daniel Hamilton, director, Transatlantic Relations, Paul H. Nitze School of Advanced International Studies, moderated the event which the school hosted.

Mr. Bagis presented an address on U.S.-Turkey relations, stressing the importance of strong friendship and cooperation, and in the process, asking for U.S. support Turkey’s EU accession course. He addressed Turkey’s path to EU membership emphasizing its commitment to the join the EU. In his view, the EU offers the grandest peace project in history. He added membership has been a strategic goal for Turkey which along the way has introduced numerous radical reforms, especially in the recent years. Further, Minister Bagis outlined key reasons why Turkey’s EU bid would be mutually beneficial that centered on economic growth, energy access and supplies, abundance of human and resource capital, common security and defense policies, and common values. The minister proceeded with a series of requests directed toward the European Union, calling for a more fair negotiation process and greater recognition of Turkey’s improvement record.

On the question of Cyprus, Mr. Bagis iterated that the Republic of Cyprus is held responsible for the blockade of Turkey’s EU negotiation. He expressed the view that the Greek Cypriots should be the ones working the most toward Turkey’s EU accession as they would have a direct benefit from it.

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AHI Questions Turkish Minister on Occupation Troops in Cyprus

During the Q& A session, AHI President Nick Larigakis questioned Minister Bagis about the occupation troops and the prospects for a solution based upon communal agreement. Mr. Bagis replied that Turkey views the situation in the island as two different democracies. Although he was not aware of the exact number of the occupation troops, the minister said that if the Annan Plan had been approved that Turkish troop levels would have diminished upon its enactment. In his opinion, the EU Council’s decision (April 26, 2004) isolated northern Cyprus and allowed only one state, the Republic of Cyprus, to trade with it has set a double standard. Turkey calls for a solution based on political equality, and it does not wish to be left in a situation where it might have to resend the troops, he explained. Furthermore, Cyprus should be the one fighting more for Turkey’s accession into the EU, he contends. Instead, Cyprus has been the one impeding the process by politically blocking a great number of the accession chapters, he offered.

Solon Savva, first secretary, Embassy of the Republic of Cyprus, questioned the minister about the steps Turkey is willing to implement so as to move forward with the EU negotiations. Mr. Bagis said that in his opinion, the EU has been using the question of Cyprus to block Turkey. He found it unacceptable that the ‘Cyprus problem’ is part of the EU membership conditions and believes that the EU has not always been consistent in its conditions.

On a question asked by foreign media on Turkish-Israeli relations, Minister Bagis replied that historically the two nations have had good relations and Turkey was the first Muslim country to engage with Israel. Over the past few years bilateral economic relations have increased, and even after the latest developments, there have been no blockades in the economic relations.

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Turkey’s Role in Europe’s Energy Security Examined

AHI attended a discussion forum titled Europe’s Energy Security in the Balance: What Future for the Southern Energy Corridor at the Woodrow Wilson International Center for Scholars, March 30, 2011. It featured Andrea Lockwood, deputy assistant secretary for Eurasia, Africa and the Middle East, U.S. Department of Energy; Adnan Vatensever, senior associate, Energy and Climate Program, Carnegie Endowment for International Peace; and Peter Doran, senior policy analyst, Center for European Policy Analysis (CEPA).

Lockwood’s discussion revolved mainly around the significance of the South Corridor as a means of diversification of energy sources. In her opinion, expanding ties between Iraq and Turkey is a determining factor in building the South Corridor gas pipeline.

Adnan Vatensever addressed the current Russia-Turkey energy relationship and its future implications related to the South Corridor. In his view, Turkey’s energy activity has been proactive during the past two years for three reasons. First, Turkey’s energy bureaucracy is much more consolidated since the reshuffling of energy leaders during the past two years. Second, Turkey’s private sector lobbyists for energy projects have been active in the development of gas and oil in Iraq. Finally, Turkey’s energy diplomacy goal is to become a major negotiator in international energy issues.

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CSIS Seminar Explores Greece’s Economic Crisis

On April 8, 2011, AHI attended a seminar titled The European Economic Crisis Seminar Series: The Case of Greece. Opening remarks were offered by Dr. John Hamre, president and CEO, CSIS and Ambassador Vassilis Kaskarelis, ambassador of Greece to the U.S.

During his remarks, Dr. Hamre highlighted the need to analyze the Greek economic crisis as part of a broader crisis and that an integrated Europe is needed in order to find a solution. Ambassador Kaskarelis emphasized that the economic crisis is global, not just Greek, yet Greece has been the easiest target of the speculators and rating agencies. Greece has been undertaking several major reforms concerning its tax and pension system and has progressed with the opening of many closed professions and merging of its local government institutions as Greece is committed to working toward a transparent society and improved governance.

Keynote speaker was Dr. Lucas D. Papademos, former vice president of the European Central Bank, offered an in-depth analysis on the broader importance of the Greek crisis. He outlined that its main causes were mostly national (e.g. insufficient fiscal monitoring, inept labor costs) and fell within a wider inadequate policy framework of the Eurozone. Dr. Papademos expressed optimism about the measures Greece has taken during the past year. He noted Greece has significantly reduced its deficit, has made the pension system more viable, and has reduced the union labor costs all while containing Greece’s current account deficit. He stressed that policy should be directed toward: increasing tax revenues by improving the tax collection mechanisms, enforcing institutional and legal reforms that will set the base for long-term fiscal stability, implementing further privatizations, and increasing competitiveness by supporting more economic activities. In his opinion, the key to Greece’s economic success lies in the consistent implementation of the Economic Adjustment Program; however, the concern over its effective implementations on an EU and national level as well as lack of political support poses a great risk. Recovering from the crisis will be take time and demand difficult policy decisions.

The panel discussion was titled, “Greece’s Future Economic Health and Well Being: a Diagnostic” was also a part of the seminar. Dr. Constantinos Papadopoulos, secretary-general, International Economic Relations and Development Cooperation, Hellenic Ministry of Foreign Affairs, discussed the characteristics of the Greek economy before the 2010 crisis. He argued Greece is one of the countries that has benefited most from the Economic Monetary Union, achieving an average annual growth of 3.7% from 1996 to 2009. However, Greece’s lack of competitiveness and low productivity during the same period resulted in large current account and trade deficits, while the overexpansion of the public sector led to enormous public deficits. Papadopoulos concluded that a reformed public sector will help the private sector recover its dynamism. He suggested that a positive turning point might come for the Greek economy very soon.

Juergen Kroeger, director for “Economies of the Member States I,” Directorate General for Economic and Financial Affairs of the European Commission, highlighted Greece’s deficiencies in many sectors particularly its oversized public sector and inefficient health system. He acknowledged that efforts are already being made by the country’s leadership to address these issues. He argued that although there has been recent progress on public deficit that further progress is necessary. Tax evasion needs to be reduced through structural reforms, he emphasized.

Finally, Timothy Adams, managing director, The Lindsey Group, suggested that hard decisions need to be taken by European leaders in the upcoming period. He proposed that a prosperous Europe is in accordance with U.S. economic and security issues and while Europe has been responding to U.S. expectations during the last year, more needs to be done. In this regard, the recapitalization of European banks is a crucial goal. However, there is a current lack of leadership observed in Europe that needs to be overcome, he added. In relation to Greece, Adams argued that solid economic plans must be implemented and political risks overcome if capital is to flow into the country because markets are still pessimistic. The next six months will be crucial, he concluded.

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Young Scholars Examine Turkish Society, Culture, Politics

AHI attended the Young Scholars on Turkey Conference 2011 co-sponsored by the SETA Foundation, The Institute of Turkish Studies and the Ali Vural Ak Global Islamic Studies Center at George Mason University, on April 15, 2011. The conference was divided into three panels, each analyzing a different aspect of Turkish society, culture and politics.

The first panel offered a historical sketch of Turkish national identity from 1923 to the present. Analyzing contemporary Turkish society, Neslihan Cevik, University of Virginia, noted the emergence of Muslimism especially among the Turkish middle class. Muslimism is an identity that rejects both Western secularism and Eastern Sharia, seeking to maintain the cultural characteristics of Islam within the context of a liberal state.

This tension between East and West provided the framework of analysis for the second panel which examined Turkey’s foreign policy in relation to its European prospects. Ravza Kavakci Kan, Howard University, proposed that European leaders’ perception of Turkey as too big, too poor, and too different has been the main reason behind Turkey’s failure to complete EU accession. Panelist Emiliano Alessandri, The German Marshall Fund, noted that the EU remains a possibility, or even a priority, for Turkey—but not a destiny.

The final panel discussion focused on the internal and external dynamics that determine Turkey’s foreign policy. Nick Danforth, Georgetown University, suggested that the notions of democracy and modernity, which determine U.S. support of Turkish leaders’ decisions, are abstract terms; and noted that this allows the U.S. to shift its position according to current political aims, which often leads to unpredictable results. Ryan Kennedy and Matthew Dickenson, University of Houston presented results from their computer simulation of Turkish public opinion on the country’s foreign relations. They showed that there is increasing mistrust of all international actors by the Turkish public. Therefore, the results contradict the view that Turkey is more likely to turn to the East rather than the West. They predicted that Turkey will be follow a more autonomous course over the next few years.

Overall, the conference panelists and discussants made an effort to present an image of Turkey as self-consciously and confidently not European, yet not Islamist like its neighbors in the East. The increasing distance between Turkey and Europe was presented not as a failure to achieve the EU acquis communautaire but as a decision to acquire a more active role in the Middle East to safeguard the region’s security and stability. No reference was made to Turkey’s problematic relations with Greece or Cyprus and only fleeting reference was made to the Kurdish issue. Moreover, the impact these issues have had on Turkey’s EU accession process was not taken into consideration in any of the presentations. Nevertheless, these issues have created tensions between Turkey and the EU, UN and NATO in the past and are likely to become even more critical in its relations with these organizations as what Omer Taspinar, Brookings Institution, identified as Turkish Gaullism—a more nationalistic and defiant attitude towards the West—develops in that country.

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Think-tank Scrutinizes Europe’s Foreign Policy

On April 28, 2011, AHI attended Europe as a Great Power? A Scorecard for European Foreign Policy hosted by The Brookings Institution. Justin Vaisse, senior fellow and director of Research, Center on the United States and Europe, The Brookings Institution, moderated the discussion. Panelists included: Marta Dassu, director, Aspen Institute Italia; Steven Erlanger, Paris bureau chief, New York Times; Charles Grant director, Center for European Reform; and Mark Leonard, director, European Council of Foreign Relations. The event reviewed the 2010 European Foreign Policy Scorecard, which is the European Council of Foreign Relations’ first annual evaluation of Europe’s Foreign Policy Performance.

In general, the panelists were positive in their comments on the report. However, Steven Erlanger suggested that that the ECFR was too lenient in its evaluation of the EU’s relations with the Middle East and N. Africa, particularly with respect to its response to the recent uprisings in these regions. He argued that the EU remained inward looking and focused on immigration issues during the crisis.

Bilateral relations with Turkey and the Cyprus issue were mentioned only in passing. According to the report, relations with Turkey, especially as they pertain to Cyprus, have been one of the areas in which the EU has been the least successful in 2010.  On the one hand, Turkey’s refusal to implement the 2004 Additional Protocol to the Ankara Agreement, and its opposition to the new round of sanctions on Iran, and on the other hand, highly divergent views on Turkey’s accession within Europe, have led to a stalemate in membership negotiations. As a result, the EU has largely lost its leverage with Turkey on the Cyprus issue with the danger that negotiated partition is becoming increasingly the sole realistic option. The Cyprus issue remains particularly important for Europe, as bilateral relations with Turkey, regional stability, and European influence in the East all require a solution that will satisfy Cyprus and guarantee its cooperation in the Turkish accession process.

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AHI Educates Freshmen House Foreign Affairs Members on Issues

In March and April, AHI continued its proactive outreach to Capitol Hill, meeting with several congressional offices of freshmen members who sit on the House Committee on Foreign Affairs.

These meetings included the offices of: U.S. Reps. Mike Kelly (R-PA), Tom Marino (R-PA), Renee Ellmers (R-NC), Bill Johnson (R-OH), Frederica Wilson (D-FL), Karen Bass (D-CA), and David Cicillene (D-RI).

“It is extremely important, with 95 new members in the House of Representatives, that we work to educate them on Greek American issues,” said AHI President Nick Larigakis, who presented the congressional staff with a copy of AHI’s 2011 Policy Statements. “This is especially true for the new members of the foreign affairs committee.”

AHI reports that some of the congressional staff had some familiarity with Greek American issues, including the Cyprus issue and religious freedom for the Ecumenical Patriarchate. Also, a few of the new members have had contact with the Greek American community within their respective congressional districts. 

“However, it was also clear that some congressional staff had no familiarity with Greek American issues,” said Larigakis. “And those that did were not aware of the full scope of the particular issue or that legislation exists that they can co-sponsor.”

Maria Stavrou, AHI assistant to the Congressional Liaison, accompanied President Larigakis to the meetings.

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For additional information, please contact Demetra Atsaloglou at (202) 785-8430 or at [email protected]. For general information about the activities of AHI, please see our Web site at http://www.ahiworld.org.


The American Hellenic Institute is a nonprofit public policy organization that works to strengthen relations between the United States and Greece and Cyprus, and also within the American Hellenic community.

1220 16th Street, NW | Washington, D.C. 20036
Phone 202-785-8430 | Fax 202-785-5178 |
www.ahiworld.org

 

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