From: gd8f@kelvin.seas.Virginia.EDU (Gregory  Dandulakis)
Subject: Re: Greece and the EC (Greg 1)
Organization: University of Virginia
Date: Fri, 8 Jan 1993 18:16:07 GMT

In article <1993Jan8.144219@imhfhp16.epfl.ch> gavrila@imhfhp16.epfl.ch (Spyros Gavrilakis) writes:
>
>                             If the "other costs" are unbearable,
>Greece can reconsider is membership of the EC - which  at present
>has no intention of doing. It is perhaps futile to whine that
>Greece sufferred from its entry into the EC since the way out
>of the EC is open to any country that has complains.


Let's not turn the table around here.
Right from the very beginning I said that *my* evaluation is
that the overall Greece's participation in the EC is positive.
What was our difference is the evaluation of Greece for the EC
countries. You said that they net lose and I said that they
net gain. All the argumentations with statistics are misleading
(I believe on purpose) because they don't show the total balance
sheet.


>This is all wrong. Since their admission into the EC, Spain and
>Portugal (initially the poorest country in the EC), have thrived.


Spain and Portugal are net beneficiaries in direct transfers
like Greece. If their performance as economies was better
than Greece doesn't mean that EC lost from us.

Besides, the impact of EC entering came to their economy after they
had absorbed the oil crisis. Greece was hit with the EC challenge
the same time which the 2nd oil crisis (1978) was still in
its hight (high inflation, overindebted most of the greek
industry, Iran-Iraq war had killed our big investments there,
qualitative restructuring of our production line was in
terrible need, etc etc). I don't overlook at the wrong policies
from Greece here (easy to say "wrong" afterwards): In Greece
the private sector had stopped investing because of those
uncertainties (look today's similar situation), and an effort
to counterbalance the investments by public ones had the
wellknown result of public overindebtedness; while Keynsian
efforts to stimulate demand failed; (Give money to the consumers,
then they will increase the private demand, and this by itself will
attract new private investments to satisfy this demand; this
proposal of Keunse worked excellent after the big crashes in 1932).
But it didn't work for 1982 Greece. The private demand did really
increase, but the businesses, still overindebted and uncertain
for the EC impact, decided not to invest (even with a very positive
law for investments which gave totally free capital subsidy up
to 75% for high tech investments). Instead, the internal private
demand was satisfied by imported goods, giving rise to big increase
of country's trade imbalance (facilitated by the easy acces of EC
products); while the private companies became even more indebted
because of steep rises of wages (which was not counterbalanced by
increased production). This increadibly wrong policy for Greece's
situation was of course reversed within 4 years, by giving empasis
now to reducing the wages instead of boosting the demand by increasing
them. And it seemed that it worked much better. How much contraction
(by wages reduction, thus demand contraction, thus less competitive
companies death) and how much boost (by subsidising directly the
investments, thus increasing the imports of capital goods (eg
equipments), thus pressuring the trade balance), is a question 
which still proves to be a big one for Greece's situation
(generalised arguments don't fit in the conditions of all the
economies at all the times).


>>Between foreign ministries there is NO sympathy; there is only
>>common interests.
>
>Interesting; W. Churchill has misquoted you!


Did I use his phraise? I don't remember! I have read so many
things and adopted quite few of them that I cann't recall
who said what or it is my original thought... :-)))


>Portugal b4 the EC entry :  ex-colonial, poor.


Poor country too. But it was colonial: Brasil, Indonesia, Africa
still remember their legacy strongly.


>Switzerland : no colonies, no natural resource, very independent & rich.


I was expecting this answer. This is true that they were not
colonials. Natural resources in the form of energy and raw mate-
rials didn't have. But they had the resources in the form of
geoeconomics; they had always access to very proxime markets
which were colonially boosted (France, Germany, Italy), and even
more importantly: they have the unbelievable luck to be without
war in their land since 1200 (exact?). When all the others had
built and destroyed their country one million times, Swiss had
the *luck* to keep accumulating capital (both in material form and
in management and educational form).


>>Yugo Kalaboki? Yes check the Italians ones :-).
>
>Horror! What advertisment for Greek morals.


No advertisement at all. Just don't selectively single out Greeks.

Just as a personal detail here: When I was here in 1989, I met
a Spaniard who was doing his postdoc. As we became friends very
soon we were exchanging information about our countries. One
day I told him about the Yugo Kalaboki and asked him if he had 
heard anything in spanish media. His response was a big lough!
He says (informally of course): "You should have made him a hero!
Come on, we in Spain have had several similar cases and in public
opinion this is the right way. For that reason we are in the EC !!!"
Of course I didn't agree with him and said that "good trust makes
good businesses".


Gr