Interview with Kevin Featherstone, Professor of European Politics at the LSE

Posted by economia 31/05/2019 1 Comment(s) Economia Blog,

Which is in your opinion the biggest pathogeny of Greek public administration ? Why the proposed reforms are not properly executed ? Where do we “go wrong” when it comes to the (non) implementation of laws and regulations that have been voted ?

 

The pathogeny of Greek public administration has different components: its manipulation by ministers for their own political interests; the historic deficit of professional skills and modern technology; but also its social capture.Greek public administration has been caught in a ‘social trap’: social interests expect political favours and this creates a vicious circle of poor performance.For Greece to escape from this social trap will take determined leadership, a shift of culture, and time.That’s a systemic challenge.

 

 

 

You were the first non-Greek member of the National Council for Research and Techonology during the period 2010-2013. Which was your role and mission and which is your view –based on your experiences- for Greece’s potential?

 

The Council, under the expert leadership of Professor Stamatis Krimigis of Johns Hopkins University and NASA, recognised that Greece does possess real R&D potential in certain sectors that can be linked to entrepeneurship and growth.With the ministerial lead of Mrs. Anna Diamantopoulou, the Council developed a long-term plan of how to prioritise and develop this potential.Sadly, the demands of the Troika forced long-term planning off-track: a loss for both Greece and its creditors.But the problems of universities and research centres in Greece stem, in part, from the absence of a stable, competitive system of research funding.Its absence disincentivizes research and creates a culture of mediocrity and insularity.

 

 

 

Greek economy is rebounding and is gradually returning to growth after many years of harsh austerity. Do you believe that its current trajectory is viable ? Have the necessary reforms been implemented in the public sector?

 

The exit from the crisis is constrained both by the limited range and depth of past reforms and by the fiscal straitjacket placed on Greece by the agreement of August 2018 with the EU.The crisis did not lead to sufficient structural reforms to enable the Greek economy to become more competitive nor to have more effective public institutions able to deliver the necessary services.The responsibilities for these constraints are shared by Greek politicians and the clumsy nature of the bailout programmes.

 

In the long-term, there are major strategic risks for Greece within the European Union as a result of the above.Soon, the EU may well agree on its own renewal, taking steps towards further integration.But, a Greece that fails to reform enough or to become much more competitive risks being side-lined or marginalised by the EU in the future.If President Macron is successful with his bold new vision for the EU, is Greece in a position to be able to join in, to live with the new demands and remain within the EU core?Or, if a German-type agenda is followed by the EU, again is Greece able to cope with that, to keep pace?The ‘jury is out’, I suggest.Note that on a number of key indicators of the quality of public institutions, Greece is converging with Bulgaria and Romania, while Portugal is catching up with France and Germany.There are strategic risks for Greece here of it not doing enough to help itself.

 

 

How would you characterize Greek politicians?  What is the view from abroad for them?

Of course, there’s been a major change since the crisis of 2015.Varoufakis reduced Greece’s credibility with the EU drastically.Since then, the credibility of leaders has been greatly improved.But credibility is fragile, easily lost and slowly recovered.The bailouts destroyed the careers of many able Greek politicians, so the EU itself is culpable.After this year’s elections, leadership credibility will be crucial if Greece is to be given better recovery terms.

 

Maastricht was perhaps the boldest step forward the EU has made since the 1950s, but it was imbalanced or incomplete.It created a euro-zone without a fiscal union, better able to cope with asymmetric economic shocks, and the zone appeared too elitist, lacking political accountability and legitimacy.When the international crisis came, these gaps made the euro-zone ill-prepared to cope.

 

Today, the incompleteness of Maastricht is widely recognised, but the solutions continue to differ along fault-lines already evident before Maastricht.Both sides talk of ‘economic governance’, but they give very different meanings to it.German leaders use it as a subterfuge for ‘ordo-liberalism’ – the opposite of its original French conception of an economic union, with greater fiscal capacity at the EU level.Macron has taken up this latter conception and offers to transform the system of economic governance.But with a German-led coalition of EU states, there’s still a divide between those who insist on risk-reduction being the responsibility of national governments and those who think the European project means risk-sharing.A cohesive, united EU will be better built on the Macron-type model.

 

Europe needs this kind of bold new reform, not only to secure the euro, but also to be able to develop an agenda that is seen to be more relevant and supportive of the lives of people across the Union.Some economists talk of a common European unemployment scheme, for example.What better way to insert ‘Europe’ into the awareness of the public, into the daily lives of individual Europeans, their families and friends.Other initiatives can help achieve the same relevance: on energy security, climate change, etc.The EU has suffered in the euro-crisis by seeming to be too detached from the lives of ordinary people: often a threat, rather than a support.

 

We cannot be complacent about the EU.EU polls show Greek voters have less positive images of the EU and that they trust it less, than the Brits, for example.If you need an alarm-bell warning, that’s surely it!

 

 

What are your main conclusions after the results of the European elections? What shall we expect from now on, based on the new political reality in Europe?

 

The elections had many positive aspects for the European project.More voters turned out.The populist eurosceptics failed to do as well as they expected.The Liberals and the Greens – both of which have positive new ideas for how to take the EU forward – did particularly well.This is a promising climate for the EU, enabling it to move forward.The momentum rests, though, on the political strength of President Macron, which has faded, and Germany’s support as Merkel gives way to, we assume, Annegret Kramp-Karrenbauer.We know little of her European instincts as yet.There’ll also be replacements for Juncker, Tusk and Draghi this year.So, the drama will have a new set of actors.But, the immediate future looks rather brighter than it did some months ago.The EU, historically, has suffered from upswings and downswings.I think an upswing is coming.

 

 

Prof. Kevin Featherstone will participate at the 18th CFO Forum by KPMG, June 13 2019

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