J BROOKS SPECTOR considers the long-playing Greek drama and proposes a political solution that is the way out of the logjam, and, incidentally, actually helps the Greeks help the rest of us.
For months now, the slow-motion train wreck that is the Greek financial crisis has transfixed – and horrified – much of the world. Over time, the question has effectively solidified into two mutually opposing, largely irreconcilable positions.
On the one hand, the German/Scandinavian/Eastern European view has largely been that the Greeks are guilty of wasting the opportunities of their previous bail-outs and loans. As a result, they are entirely too much like a caricature of an ouzo-drinking, sleeping-in-the-sun, dancing-away-those-productive hours Zorba to be trusted easily, yet again, with real money from all of those other hard-working people in the rest of Europe. Given this, the prescribed diet of strict austerity and yet more austerity, along with some serious, even punishing reforms in the Greek tax collecting system are crucial, as a quid pro quo for yet more new money being shovelled towards Athens.
On the other side of the argument, the Greeks and their intellectual and academic supporters in many quarters around the world have continued to argue that if the European Union (EU), the European Central Bank, the International Monetary Fund, Germany and other creditors really want to keep the euro alive and not, simultaneously, be responsible for the utter collapse of the Greek nation and economy, they will have to help with some serious new funding to tide the Greeks over as they take their medicine. And this will have to come with a generous amount of debt forgiveness and some serious softening of the terms of the remaining debt to allow them to recover.
Yes, it is true that the Greeks finally knuckled under to their creditors’ demands for real tax reform, still more austerity measures, forced privatisation of those unproductive state-owned enterprises, and other related demands. Nevertheless, the Greeks continue to fight a rear-guard action against their financial tormenters over many of the details, as the negotiations over the specific terms and conditions of their help and humiliation are still ongoing.
Left out of both positions is any real sense of what must be done – concretely and specifically – to rebuild Greece’s economic circumstances by comprehensively and directly encouraging growth in a sustainable manner. Ideological purity is a wonderful thing, perhaps, but it doesn’t put food on the table – and it really never has done. Instead, it almost seems as if everyone has forgotten some basic lessons from economic history and economics 101: To help grow an economy and generate economic stability, one has to put people to work, have businesses purchase goods and services, have banks lend them money, have them earn enough to pay back the loans, and make sure there is some planning over the longer term in doing all of this. Oh, and all of this must be done with a real sense of urgency, before things get worse. Now, hold those thoughts.
Just the other day, there was a news story that the American city of Boston was no longer going to be “going for gold” in trying to get the nod from the US Olympic Committee for the US bid for the 2024 Olympics. The lack of political will in Boston and Massachusetts (and presumably an awkward hole in the budget and difficulties with the local committee’s funding calculations) were key problems with the bid.
In fact, the international Olympic movement more generally is experiencing increasing difficulty in getting cities to come in with real bids with legitimate funding models for the international body’s two premier events – the winter and summer games. Brazil, now saddled with the 2016 games, has seen angry protests and worse over all the money that has been thrown at building all those special venues and such for their upcoming Olympics in Rio and the folks in Tokyo have pulled the plug on the centrepiece stadium that was supposed to be the core of their 2020 games. Of course the Rio games are already coming in for criticism over water quality, with some media reports saying the open water for certain events will effectively have the athletes competing in sewage. Ugh!
These Olympics cost a huge amount of money to prepare and stage and while the figures are sometimes confusing – accidentally or deliberately – it has been a really rare Olympics that has actually made any money, once all the bills have been settled. More usually, the costs have lingered and lingered, long after the euphoria and cheering is over, as the accountants fess up that the whole thing ended up costing a lot more than anticipated. (Anyone who has ever been part of a commercial or residential construction project will understand just how easily that happens.) According to many observers, the last games that made a real profit were held in Los Angeles in 1984, and they did it largely by re-using, renovating and recycling sports venues already scattered around the city. That trademark Olympic stadium in Los Angeles was, in fact, built for the much earlier games that took place in 1932.
Ah ha. By now, clever readers are probably beginning to see where this is all going. So, here it is. The easiest way to put the new money to work in Greece, to ensure it creates scads of professional as well as labour jobs and incomes, puts people to work, creates demand for the materials needed for infrastructure, and generates a demand for services throughout the economy (with ripples throughout the EU and eurozone more generally) is to embark on a Greek equivalent of the New Deal. This would be a Keynesian pump priming effort with a real transnational vengeance. Of course Athens is already an overcrowded city with too much of the country’s total population. Accordingly, because much of the unemployment is also beyond Athens, the entire country will be the platform for this effort, giving the whole nation a lift.
So, here’s what has to be done. The Olympic movement will make a commitment that beginning with the 2024 games, and continuing for at least two decades thereafter, all summer games will take place in Greece in purpose-built facilities financed by a comprehensive international consortium led by European financial institutions with an interest in saving Greece. They would issue bonds to finance the construction, guaranteed by this consortium and underwritten by the income from all of the long-term deals for broadcasting and sponsorship revenue that have become crucial parts of any Olympics financing plan.
With a commitment to use these dedicated facilities every four years for decades to come, it would be likely that other sporting events would gravitate to these pan-European facilities in non-Olympic years, generating a more intensive use of facilities that would be built with such demands in mind in the first place. (Just incidentally, the cost of the games might even go down somewhat as the crucially important media centre and communications connections and the Olympic village for the athletes, among various other facilities, would not have to be built from scratch every four years all over the world, the Greek ones would merely be updated and refurbished periodically.) With 2024 as the goal, the entire project can be designed, financed, and built in a careful, financially prudent, well-managed, and well-planned manner – rather than in the usual throw-cash-at-it, hell-for-leather dash to deadline day that has become the norm for Olympic games.
As part of making and keeping them universal, for each quadrennial games, other countries could bid for co-sponsorship rights, thereby gaining the chance to host those big, splashy opening and closing ceremonies which offer prestige and attract global broadcast television audiences. Perhaps this honour could be routinely cycled through the continents, as the various nations in Europe, then South America, Africa, North America, and Asia and the Pacific could then take turns to serve as co-sponsor, according to a well-planned, far-in-advance schedule.
Other nations, and we’re thinking China right now, would be encouraged to step up to help construct the various facilities that would be scattered throughout Greece for this permanent Olympic infrastructure. The Chinese have already constructed dozens of such things around the world and they must be about ready for a whole new world to conquer. And with this plan, the entire Greek nation would become host and beneficiary of the Olympic facilities and associated transportation infrastructure, rather than just one overburdened city. And along the way, the tourist and transportation infrastructure throughout Greece would benefit from a major facelift, and thousands of unemployed people would gain skills and experience as they work on the massive, national construction programme this plan would set in motion. Other European nations would similarly benefit from the demand for construction materials, among many other inputs.
Oh, and one final thing. The plan would need some internationally adept, thoroughly experienced global leadership to see it through to fruition, especially since the whole package would become much more than just another national construction boom. By 2017, a certain Barack Obama will be looking for a new job, and this seems just the kind of thing for a man of his experience and skills. And if he needs a deputy along the way, perhaps, when Angela Merkel finishes her time as German chancellor, she would be the perfect fit – especially if the international funders need to be sure their financial interests are safely protected during the whole process.
And just why shouldn’t the Olympic movement – an idea that began, after all, in Greece more than two millennia earlier – make a permanent return to its original home, with the entire world supporting it and cheering on its success? The next step is for someone to propose this formally to the various parties and thereby bring the Greeks, Europeans and all those international financial bodies on board with this plan. Time is moving, and there are only nine years left until 2024 is here so the ground-breaking ceremonies should be scheduled soon. DM
Photo: The Olympic flame is seen at an altar in front of the Parthenon on Acropolis hill in Athens during the Olympic Torch Relay, Greece, 04 October 2013. The torch is going to be relayed to the Russian city of Sochi, host of the 2014 Winter Olympic Games. EPA/SIMELA PANTZARTZI.
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