Prof. Stathis Kalyvas of Yale: What Happened to Greece, What’s Next?

NEW YORK – Dr. Stathis N. Kalyvas of Yale University has followed the Greek crisis closely. He recently published “What Really Happened in Greece – And What Will Come Next” on foreignaffairs.com.

In a conversation with TNH, Kalyvas said, “there has to be some improvement,” in the terms of the memorandum…but this is not going to happen if there isn’t some progress on the Greek side” – in addition to “an element of good will.” While he acknowledged that the most important reforms are difficult to implement and will take time – not least because they will produce both winners and losers and thus more political conflict – he emphasized that for Greece to attract vital investments, “you don’t need to reform everything…what is needed is a sense that investment is welcome…that is not difficult to do…it’s a matter of sending the right signals.” He said “the biggest challenge is the reform of the state and involves introducing forms of accountability that will turn the big unions against them,” and he pointed out some important facts often missed by the media. First, even with the departure of the “Left Platform” the SYRIZA leadership is still very leftist – the party may break up further – and second, it is not the case that no reforms have been implemented since the onset of the crisis. For example, “the tax data has been digitized, along with other data sets so that fraud can be eliminated more easily,” he said, and ironically, the capital controls fiasco had a positive result. “One million people have acquired debit cards,” he said, which will reduce the number of untrackable cash transactions. While the unicorn of the “one stop shop” for opening news businesses has not been sighted, “quite a lot was done and the process of getting all the necessary permits was streamlined.” He said red tape is not the main problem for attracting investment, however. “In the last two years the problem has been political uncertainty, and not being sure what the currency will be.” Asked what Tsipras will do if he reemerges as prime minister, Kalyvas said, “he has not fully made the transition towards an understanding the way the economy works, that it needs investments.” Regarding last spring’s negotiations, Kalyvas said “we are still not clear about what occurred…new elements continue to be revealed…but it appears they pursued a strategy of brinkmanship…in the thought that market panic would force concessions,” and when that did not happen, they chose to double down. “The problem is that if you lose,” he said, “you lose a lot – which is what happened.”


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