NEW YORK – The Hellenic American Bankers Association (HABA) kicked off the community’s fall season of events with a presentation by John Micklethwait, the Editor-in-Chief of The Economist magazine, on the state of the world with a special emphasis on Europe.
He also responded to questions about the situation in Greece. When The National Herald asked him whether Greece – from both the perspectives of the Greeks and the EU as a whole – should have remained in the eurozone, he said that the time for Greece to have considered leaving the eurozone was three years ago when the situation was at its worst.
“Greece has done relatively well to get through it the way it has,” he said, and noted that Athens has done most of the things it needed to do to move in the right direction, “certainly much more than Italy and France,” he added.
Micklethwait noted that Merkel flirted with expelling Greece, but she looked at two things: the immense economic cost – and the very small gain – and the social costs. He said Merkel did not want Germany to be blamed for wrecking Europe twice within a century. “Back then it was a very tough decision, but she probably made the right decision to keep Greece in,” he said.
Asked whether a two-zone Euro might emerge, he said that while that can be discussed, France would be problematic because although it is perceived to be more like the countries of the south, the French would say they should be part of the northern zone.
Before surveying the messes, dangers, challenges and opportunities he sees on the world stage, which he called “probabilities and possibilities,” Micklethwait declared himself a paranoid optimist.
“There are a series of ‘probablies’ which are generally going in the right direction,” he said. Most of those are rooted in the economy. “The economy of the world is relatively good, explained, “but the ‘possiblies,’ the things I worry about,” are political.
He said the economic numbers of Japan, China, even the U.S. with 2-3 percent growth are relatively good, and the rest of the western economies, including crisis-ridden Europe, are holding up better than expected given the seriousness of what he labelled a “balance sheet recession” that followed a period of too much borrowing .
The main positive occurrence during the past five years is that the tremendous leap of a billion people from absolute poverty which looked in doubt after the Wall Street crash, is secure.
As a Brit, he had to express his concerns about Scotland breaking away from the UK, but he pointed out the wider implications: independence movements in Quebec, Northern Italy and the Basque region will gain steam.
The things that make him paranoid are a mixture of short and long term issues.
Putin was the first name that came up in that context. Micklethwait cited the Russian leader’s desire to “recreate something approaching the old Soviet Union, but he also noted the Russian consciousness has long been focused on territorial expansion.
Regarding Obama’s leadership, he said his failure to punish Assad when crossed “the red lines” was a disaster and caused “an immense vacuum of power.”
He said the current structure of Europe unsustainable and declared “something has to be done” to make Europe work better. That was related to the warning, which is the core argument of the latest of his six books , The Fourth Revolution: The Global Race to Reinvent the State, that western states must shrink and become more effective.
He believes necessity will cause “a slimmer, more dynamic state to emerge” but he pointed out that when the Chinese send out missions to learn about improving their state they go to places like Chile and Singapore. “Where they don’t send them is Brussels and Washington.”
The guests were welcomed to the ball room of the Yale Club in Manhattan by Costas Kellas, the president of HABA. He thanked the Club and the event’s sponsor and acknowledged the presence of George Iliopoulos, the Consul General of Greece and Vasilios Philippou, the Consul General of Cyprus.
Demetri Papacostas, Vice President HABA thanked the speaker and the guests, and invited all to remain for the reception and to attend upcoming events.