Greece’s coalition splits over closure of state broadcaster

The three party coalition government in Greece has broken down. The sudden decision on June 11th, of the New Democracy prime minister, Antonis Samaras, to shut down the state broadcaster ERT, with a promise to open a new state broadcaster in about two months, and his subsequent refusal to re-open it,despite an apparent, although ambiguous, request to do so by the Council of State, has been opposed by both ND’s coalition parties, the traditional socialist party, Pasok, and the newer Demcoratic Left. But Pasok is not taking any action to put pressure on the prime minister to change, while the Democratic Left, after ten days of indecision, resigned from the government on June 21st. This leaves the government with a majority of three but the Democratic Left has indicated it will not try to bring down the government.

 Motivation for sudden move is unclear

The motivation for the abrupt move of the prime minister to close ERT and his refusal to back down is unclear. A pessimistic interpretation could see it as a move to set up a new broadcaster as a New Democracy propaganda vehicle. An optimistic view would be that Mr Samaras decided to create a sense of crisis to push through expenditure cuts and reforms in one sector, which would act as precedent for radical change in other sectors such as the large array of state funded entities and the privileged professions which in spite of new legislation continue to restrict entry. But, with the troika (IMF. ECB and European Commission) breathing down his neck, it could be simply an emergency measure to save money and meet the troika’s immediate demands.

The first interpretation that he wants to control the media seems unlikely, at any right as a sole motivation, given that ERT has not taken an anti-government position, and an overtly pro-government and specifically pro Democracy stance would not be able to gloss over the actual situation of high unemployment and much reduced pay for most of those who have jobs. With regard to the second interpretation that he is deliberately creating a crisis in one sector in order to push through wider reforms, it is odd that Mr Samaras would choose the public sector broadcaster as the field in which to fight an iconic battle (its 2,900 employees are less than half a percent of total public sector employment) and unclear why he could not have just reduced the funding available to the broadcaster, so forcing it to make cuts but not to shut down. It could be that he deliberately wanted to provoke Democratic Left to resign because it had been difficult partner blocking reforms across the spectrum. Redundancies from the ERT or elsewhere in the public sector are likely to move people from the public administration payroll to the public welfare roll, with little chance of many finding new jobs. But the drastic measure of closing down ERT could create a few openings for the army of young people looking for their first job.

This crisis one year into the government’s four year term comes as the economy moves deeper into the dark tunnel it entered four years ago with no reason to expect improvement in the foreseeable future.

Much talk on youth unemployment and just a little action

Youth unemployment moves up the agenda

Recent weeks have seen increased traction to the perception that youth unemployment across the EU, especially the euro zone, has to be treated as a major—indeed the major crisis, if one is reassured that financial meltdown of the euro zone has been relegated. Of course the danger of the latter cannot be treated as though it had been eliminated but rising unemployment, especially of young people, could undermine the political support needed to sustain the kind of policies in southern Europe, and even in France, that are required to prevent financial meltdown, as so clearly indicated by the result of the Italian election of March 24-25th where huge swings in votes to the rightwing PdL and the internet based protest movement M5S, must be interpreted as protests against the well intentioned policies of the previous government led by the respected academic Mario Monti, to comply with the desiderata of the EU institutions.

 

Situation in southern Europe cannot be ignored in the north

This means not only that youth unemployment must become the top priority of governments in the peripheral countries most affected, and of the European institutions, but also of the countries like Germany the Netherlands and Finland that are doing much better in terms both of overall economic performance and specifically in providing opportunities for young job-seekers. If these countries are committed to the survival, let alone deepening, of the process of European political integration that goes back to 1951, as the great majority of political parties in all these countries claim to be (with the exceptions of Geert Wilders’ Netherlands Freedom Party and Timo Soini’s True Finns), then the employment crisis in fellow member states has to be taken as a serious challenge to their own credibility.

Recently some members of Germany’s government have shown signs that they are aware of this challenge. In mid-May the German employment minister, Ursula von der Leyen signed an agreement with her Spanish counterpart, Fatima Banez,  to facilitate the availability of apprenticeships in Germany for Spanish nationals and for German experts to provide advice to Spanish companies willing to learn on how aspects of the successful German apprenticeship system, whose roots go back centuries and which has been a major feature of the post-Second World War German economy, might be implemented in Spain. This would build on existing Spanish government efforts to promote apprenticeships. The  scheme has been supported by Wolfgang Schauble, the formidable German finance minister who has said “we must be faster and more definitive in fighting youth unemployment”. He also agreed on May 22nd with the Portuguese finance minister, Vitor Gaspar, that the German state development bank, KfW, should help set up a Portuguese institution to promote work or training for young people. On June 3rd the KfW signed a deal to lend €800m to its already existing Spanish counterpart, ICO  (with an extra €200m once agreed by parliament for “mezzanine” financing). On July 3rd, Angela Merkel is to host a meeting of EU employment ministers in Berlin.

 

But measures so far are mere drops in the ocean

However, the measures mentioned above are no more than drops in the ocean. While the subject of youth unemployment has risen dramatically in the field of international discussion across Europe, as seen in the OECD Forum at its headquarters in Paris on May 28-29th, there is as yet no policy measures which are likely to be make a significant impact. The €6bn of EU funds structural funds which are frequently mentioned are over the whole 2014-20 period so amounting to less than €1bn a year, which is 1% of the EU’s modest budget and 0.01% of EU GDP. It can be argued that larger sums if made available might be mis-spent given high levels of corruption in parts of southern Europe but that means that the rapid use and of EU funds to provide job and training opportunities, followed by rigorous assessments of their success with a view to applying any lessons to further funding, are urgently required.