Despite crisis, Greece still functions

[June 20, 2012]  ATHENS, Greece (AP) -- A conversation in struggling Greece is, often as not, about the superlatives of doom: The country is on the edge, the people are headed toward catastrophe, and the state, drained of cash and lasting political consensus, has effectively ceased to function. Yet in Athens, home to nearly half the population, the garbage trucks make the rounds at night, traffic police in smart blue uniforms pull over motorists and tourists stroll around the ancient sites or lug suitcases on wheels through the heat-soaked side-streets.

For a country where crisis has become an intimate state of mind, there is plenty of benign normalcy around, lots of reminders of the rules and infrastructure and hygiene standards that define what it is to be a Western European country, imperfections notwithstanding.

Greece's election on Sunday may not ultimately deliver a way out of economic stagnation and the chronic uncertainty that threatens to rattle the global economy, but the near-total absence of violence at the polls, and the pro forma concession speeches of the defeated candidates, spoke to a system that, in the broadest sense, works.

There is the potential, however, for one of Europe's weakest states to sink deeper into failure, even if it does not come close to the dire indicators, including endemic violence, that define Somalia, Yemen and other countries viewed as "failed states" by academics and policymakers. The election winner, the New Democracy party, sought a coalition government aimed at keeping Greece in Europe's monetary union. But political stability and economic recovery is far from assured, unemployment is at a record 22 percent, public services are strained and many Greeks are buckling under austerity measures imposed by international lenders in exchange for bailout funds.

"There are many different ways that you can fail as a state," said Harris Mylonas, author of "The Politics of Nation-Building," a book about state efforts to assimilate refugees and minorities. He stressed that Greece was more susceptible to perceptions and accusations of failure than more troubled countries because it was accustomed to higher standards, the result of decades of integration with wealthy European democracies after the end of military rule between 1967 and 1974.

On Monday, The Fund for Peace, a Washington-based research group, released its annual "Failed States Index," which measures the political, economic and social pressures on nations around the world. It rated Greece as "stable" but declining, at 138 out of 177 countries, with No. 1 Somalia judged to be the most troubled country and highest-ranked Finland seen as the most successful. As a state, Greece was considered in vastly better shape than emerging powers Russia (No. 83) and Turkey (No. 85). Criteria include poverty, state legitimacy, deterioration of public services, refugee movements and demographic pressures.

"The term 'state failure' is one that is thrown around a little too easily when it comes to countries like Greece," J.J. Messner, a senior associate at The Fund for Peace, wrote in an email. "Yes, Greece's economy is experiencing significant hardship, but it is still a relatively functional country, is democratic, most (though, perhaps, rapidly fewer) have a decent standard of living and the country is at very little risk of conflict."

Greece has periodically been gripped by riots, protests and strikes, and televised images of battles between masked police lobbing tear gas and stone-throwing demonstrators suggest an image of anarchy that belies a relative calm, despite rising levels of crime. On Monday, a fire-swallower performing for small change at a traffic stop was one of the most flamboyant sights in downtown Athens.

There is a less forgiving view in Germany, a major creditor of Greece that has become increasingly frustrated with the opposition of many Greeks to wage cuts and other austerity measures they are enduring after years of easy credit and state largesse. In a May 25 speech in Berlin, the day after returning from a trip to Athens, the incoming co-chief executive officer of Deutsche Bank said the people and business community do not see a way out of the crisis.

"Greece is the only country about which we can, in my opinion, still say, that it is a failed state," Juergen Fitschen said, according to comments reported by Die Welt and other German newspapers. Greece "is a corrupt state, corrupt so far as the political leadership goes, and apparently some people were willing to support this."

Fitschen had met in Athens with representatives from the finance, industry and maritime industries.

"I asked my counterparts who the people are who they would trust to lead the country into a new era, in whom they trust to ensure the country can be a treasured member of the eurozone," he said. "The number of names they offered was unfortunately very limited."

Dimitrios Tsomocos, an economic adviser to Antonis Samaras, the leader of the New Democracy party, rejected a "failed state" label for Greece and said it was "counterproductive," while emphasizing that Greece was committed to collaboration with its European partners.

Despite Europe's financial crisis, Greece is still providing "reasonable" levels of security, rule of law, political participation, respect for human rights and other services, according to Robert Rotberg, founding director of the Harvard Kennedy school's Program on Intrastate Conflict.

"Compared to Congo or Zimbabwe, Greeks are still 'reasonably' well-served. Soon, if they return to the drachma and turmoil, they may suffer inflation and months during which those political goods (essential services) vanish," Rotberg wrote in an email. "But, and here is the big 'but,' all failed states must by definition be involved in civil war. Greece is not yet there. Hence it is certainly a weak state getting weaker as opposed to a strong state like Germany, Denmark, Sweden, and Finland. Its weaknesses are palpable and apt to worsen."

In an article on the Greek crisis two years ago, author Mylonas explored theories about why state dysfunction is especially pronounced in Greece, citing the possible impact of:

• Centuries of Ottoman rule that encouraged corruption and delayed the growth of strong national institutions.

• Political polarization that sometimes exploded into violence, as during the 1946-49 civil war.

• Developmental funding from Europe that ended up supporting patronage systems of traditional politicians, whose parties plunged in popularity because of the current economic upheaval.

• A culture of impunity that fueled tax evasion and helped drive the country into debt.

Mylonas said a crisis was brewing in Greece long before the financial chaos hit the headlines, noting a "mentality" whereby people were heavily reliant on the state, not so much for the effective regulation of society, but for the material rewards that it dispensed when times were good.

"People considered it a success to enter the public sector, and even doing business in the private sector was very much linked to the government. The term 'entrepreneurship' had gotten a negative connotation," he said. "That is something that is not healthy, at least in a capitalist economy."

[Associated Press; By CHRISTOPHER TORCHIA]

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