Greece in Europe 2040 is the product of a working group chaired by ELIAMEP’s President of the Board and Professor at Sciences Po, Paris, Loukas Tsoukalis, and consisting the following Greek experts on European integration: Maria Demertzis, Deputy Director, Bruegel, Brussels; Janis Emmanouilidis, Director of Studies, European Policy Centre, Brussels; Thodoris Georgakopoulos, Editorial Director, diANEOsis; Ruby Gropas, Adviser IDEA, European Commission; George Pagoulatos, Director General of ELIAMEP; Professor, Athens University of Economics and Business and Axel Sotiris Wallden, Senior Policy Adviser ELIAMEP, former official of the European Commission.

ELIAMEP (The Hellenic Foundation For European & Foreign Policy) is a private, independent, non-profit-making research and training institute in Athens that ranked as the number one think tank in Greece by the University of Pennsylvania’s 2019 Global Think Tank Ranking. This report was part of the White Paper on Greece 2040 produced under the auspices of the ‘Greece 2021’ Committee to mark the 200th anniversary of the Greek War of Independence. It is available online by Papazisis Publications (opens pfd link).Below you can read a summary of the report’s main points.

The path taken by the European Union (EU) between now and 2040 will be highly consequential for Greece. After all, Greece’s EU membership is the most significant factor in its foreign policy, as well as being of critical importance for the nation’s economy and public policy in general. As we all know European unification lies at the intersection of foreign and domestic policy.

The report examines the most significant trends that are expected to impact global developments in the years to come -with a focus on demographics, climate change and the technological revolution- as well as Europe’s economic model, societies and political institutions, and its international relations.

Main trends and challenges  | Europe and the international environment 

Europe’s relative import in the global balance of power will decline in the years to come. An ageing Europe with a dwindling population will be called upon to defend common interests and values in an era in which the centre of gravity is moving from West to East, and in a rapidly changing international context with power more broadly distributed and multiple potential ignition points. In other words, the international environment is undergoing major changes and Europe will be able to influence developments and defend its interests only if it acts as a united Europe and not as separate states.

Europe, same as other areas around the world will have to face the immense challenge that is climate change. Despite the many and daunting difficulties, the EU remains a pioneer in tackling climate change with the goal of becoming climate neutral by 2050 and reducing emissions by 55% by 2030. The European Green Deal is expected to be the new largescale joint venture after the single market and the euro. The new package of measures announced by the Commission in the summer of 2021 are consistent with this objective, although their implementation is expected to be extremely difficult.

As far as the digital revolution and new technologies are concerned Europe is at the forefront as a regulatory super-power, however it lags behind in production as it not currently does not have many large high-tech Companies. Countries that can control digital technologies, whether by developing systems internally or by making the best use of them, will increasingly be in a position to mould economic, social and political developments around the world. While Europe has a high level of education, skills and innovation, it does not fulfill the prerequisites for financing high-risk business initiatives. Since the future of productivity lies mainly in the knowledge-based economy that requires high-risk financing of this kind, the EU will need to take important initiatives in this direction, including the creation of a genuine capital markets union.

The report deals as well with the developments inside the EU and its Member States: The new political landscape that has emerged is characterized by fragmentation and diversity. This has made it harder to form ruling majorities, leading to fragile coalition governments and – often – to increased political instability. During this period, the so-called anti-system parties and populist parties have grown in strength. In societies with growing inequalities where the post-war social contract is under ever-growing pressure, the value ascribed to liberal parliamentary democracy, particularly among the younger generations, is increasingly in decline. Participation in elections is falling, and there has been an even greater decrease in membership of political parties. Political fluidity and social uncertainty will be inevitable characteristics during this period. As far as immigration goes, it will continue to be one of the biggest, and most difficult to solve political issues.

The EU’s resilience to the successive crises of recent years, as well as critical decisions that impact on the course of European integration, such as those reached in 2020 with regard to addressing the economic consequences of the pandemic, indicate the considerable importance which national political leaderships ascribe to the survival of the EU, despite the major disagreements that exist over numerous individual issues. The EU’s resilience is also reinforced by the positive image which the majority of its citizens currently have of the European project.

Managing the crisis facing liberal democracy will not be easy. It will require more inclusive economic policies aimed at reducing economic and social inequalities, as well as the intergenerational inequalities that already constitute a major problem. The international environment in which the EU will have to maneuver over the next twenty years will be determined by a number of factors: technological progress, the course of climate change, possible new pandemics, developments in the world economy and economic governance, arms control and nuclear proliferation, regional conflicts, terrorism. And, of course, by the emergence of other major centres of economic and political power.

The international context will range along the spectrum from a conflict-prone anarchic system to a more organized rule-based global international order of cooperation. The behavior of the major international players, and primarily the US and China, will be decisive, since it is largely these two nations that will set the tone for how global challenges will be addressed, how the world economy and the international legal order will be organized, and how they will deal with one another.

The global power shift from West to East, with the centre of economic and politico-military power moving from the West to the East, from North America and Europe to China, India and other emerging economies, is almost certain to continue. By 2040, there will be a change – most likely radical – in the balance of power. What is much less clear is how the ‘winners’ and the losers’, which will presumably include the EU, will manage this development. In 2040, China will most probably be the world’s leading economic power, If and to what extent the behaviour of this rising China is confrontational will largely depend on how the West reacts.

Five scenarios for the EU of 2040

Scenario 1: The Titanic

The EU falls apart, along with its institutions, exhausted by successive crises that have heightened its internal divisions and which are beyond its institutional capacity to resolve. This extreme scenario entails the dismantling of the European single market and the loss of the right of free movement and settlement within Europe. The rise of nationalism in Europe is accompanied by instability and confrontation between European nations and with third countries. The former EU Member States lose political and economic influence at the global level. Most European countries seek the protection of Great Powers in the context of an asymmetrical relationship of patronage.

Scenario 2: A Minimal Union

The EU is unable to proceed any further towards integration. Member States refuse to grant the EU new areas of competence, the vision of a united Europe is lost, and the path to deeper integration is abandoned. The incomplete monetary union remains prone to crises, which weaken its internal economic, social and political cohesion. The economies on the Euro periphery are particularly vulnerable to crises that lead to rising borrowing costs as well as financial and economic instability. Divided internally, the EU remains at the margins of global developments.

Scenario 3: A Europe of small steps

The Union is characterized by great resilience to crises, from which it often emerges stronger and more united than before. Nonetheless, disagreements over the future of the EU preclude any big steps towards further unification. The implementation of the programmes financed by the Recovery Fund has boosted development in the economically weak EU countries and fed into a trend towards the re-convergence of the euro area economies. The EU is improving its capacity to collaborate on immigration and asylum policy. However, there is still no single European policy, while the protection of external borders remains chiefly the responsibility of individual Member States.

Scenario 4: Coalitions of the willing

A group of EU Member States, led by France and Germany, are moving towards closer integration in specific areas of economic, foreign and/or other policy. The most likely “coalition of the willing” forms around the Eurozone, with decisions being made by qualified majority voting. These countries are moving towards a closer fiscal integration of the euro, setting up a Eurozone budget. The preconditions for a common European immigration and asylum policy start to fall into place. The “coalition of the willing” acquires a regional and international stature that is greater than the sum of its member.

Scenario 5: The United States of Europe

The EU and all its Member States take the historic leap towards a full Political and Economic Union. A Constituent Assembly adopts a European Constitution which transforms the EU into a true federal democracy.The Eurozone becomes a full-fledged economic, fiscal, banking and political union. The EU becomes a powerful guarantor of rights and the rule of law in Europe, it acquires a common foreign and security policy, and the European Defence Union becomes a reality. As a result, the EU develops into an important international power centre, whose strategic autonomy allows it to promote its distinct interests globally.

The “Titanic” and “United States of Europe” are highly unlikely, however in a world undergoing such radical changes and instability they cannot be ruled out completely. The more likely outcomes are to be found in the intermediate scenarios and in possible combinations of two or more scenarios. What it crucial is that all in-between scenarios highlight the serious possibility of a more differentiated EU through the creation of “coalitions of the willing”, meaning there will be forms of enhanced cooperation and unification in which not all the Member States will participate. This has been after all the trend during the past 20, if not 30 years in the EU.

Consequences and choices for Greece

To date, Greece’s EU participation has been marked by the right strategic choices made at critical historic turning points which determined its progress thereafter, by significant diplomatic successes in European negotiations, but also by numerous crises which have affected our relationship with the rest of Europe – far more than Greece’s size would seem to warrant.

Greece’s relationship with European integration is both existential and transactional. It is existential, because in our difficult corner of the world, the country needs powerful allies and a strong Europe as an additional shield. It is also existential because a European pole of democratic, economic and geopolitical stability can both serve as a reference point and contribute crucially to a qualitative upgrading of the Hellenic Republic. Greece’s relationship with the EU is obviously also a transactional relationship, given the enormous importance of European resources and the transfer of know-how for the country’s economic development – provided, however, that the Greek economy can compete successfully in an environment whose rules often reflect the interests of more advanced economies.

For all these reasons, Greece needs a strong and united Europe that will function more as a federation and less as a form of intergovernmental cooperation in which the interests of the more powerful states tend to dominate. In an extremely competitive environment such as the European internal market with a common currency, Greece can maximize the benefits of membership given two preconditions: firstly,that it has a healthy and outward-looking economy that implements its digital and green transformations at top speed, which sometimes requires difficult political choices between competitiveness and social solidarity and, secondly, a strong European policy of cohesion and solidarity. The first condition depends mainly on us, the second clearly much less so.

A third requirement is a modern state that sets the basic parameters and guides the domestic economy – to what degree is a matter of ideological preference – a state that negotiates with competence and flexibility in Brussels and applies Community rules effectively. What is also required is a rudimentary political consensus on the fundamental priorities of Greece’s European and foreign policy. In a more differentiated EU, which is the most likely development in the years to come, the crucial question for Greece is whether it will be able to participate in the “coalitions of the willing” and on what conditions.

A strong country with self-confidence, a modern state, a competitive economy and social cohesion, a minimum of consensus on the fundamental goals of European and foreign policy, ever present in European affairs and decision-making and with well-chosen alliances will clearly be far better placed to join the ‘fast track’ in a multi-speed Europe and influence developments. If Greece is left outside the “coalition of the willing”, however, there is a risk of its falling into a perilous vicious circle of introversion and external insecurity, economic stasis, and instability both political and social. It is precisely this vicious circle we must work to avoid with all the means at our disposal.

 I.L.

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The Greek ministry for Economy and Development has issued its Economic Outlook Bulletin for March-April 2018 titled "From recovery to growth". According to the report, the main economic trend is the high growth rate of private productive investments, ie gross fixed capital formation, which closed the fourth quarter of 2017 with an annual increase of 28.9%. Overall, in 2017, the Greek economy left behind its nine years of recession and stagnation, marking the second consecutive year of investment recovery -something that hasn´t happened since 2007. In August 2018, as the current Economic Adjustment Programme ends, the country exits the Memoranda and the close supervision of creditors, having achieved a correction of macroeconomic imbalances (fiscal & external balance), with enhanced market confidence and a view to preserving remarkable medium-term growth rates (estimated around 1.9-2.3%). These conclusions  are corroborated by the following:

(i) Positive annual growth rates of real GDP were recorded for four consecutive trimesters in 2017.

(ii)The course of implementation of agreed reforms continues smoothly.

(iii)The last two reviews were completed on time and a successful completion of the Programme is expected by all involved.

(iv)Our gradual return to the markets -with a view to create a cash buffer- has been successful.

(v)The positive stress tests results for the Greek banks.

(vi)The country’s credit rating has been upgraded by rating agencies.

The report is structured in four chapters: "From Recovery to Growth", "Constant improvement of investment climate", "Public Sector: the issue is efficiency and not size", and "New Development Law: A New Perspective on the State and Entrepreneurship". Greece is expected to maintain high growth rates in investments that after a 9.5 pct annual growth rate in 2017 and double-digit growth rates in 2018 and 2019 forecasted by the European Commission.

As news site Greek Travel Pages reports: "According to the bulletin, the forecast is based on a number of factors including shrinking government debts, the relaxation of capital controls  and a reduction in bad loans. Other factors leading to favorable conditions include the government’s development strategy which covers infrastructure, business environment, strengthening the country’s export capacity, attracting foreign investment, creating more jobs, strengthening strategic sectors of the economy and developing new small and medium-sized enterprises. At the same time, the upward trend is encouraged by improving consumer confidence and increasing deposits, which went from 119 billion euros in April 2017 to 126 billion euros in March 2018."

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The worldwide study of Price Waterhouse Coopers “Cities of Opportunity 6”, analyzes the trajectory of 30 cities, all capitals of finance, commerce, and culture—and, through their current performance, seeks to open a window on what makes cities function best. In its 2015 report, Athens was added to the 30 cities studied, ranking at number 23.

The study examines and identifies the factors that contribute to “a successful city” and “a resilient urban community”, evaluating the selected cities on the basis of 10 indicators, organized into 3 families: 1.Tools for a changing world: Education, technology, and global access, 2.Quality of life: Attaining the good life is anything but a walk in the park, and 3.Economics: Paying the way for progress. In total, the study uses 10 indicators to map a city’s performance: Intellectual capital and innovation, Technology readiness, City Gateway, Health, safety, and security, Sustainability and the natural environment, Demographics and livability, Transportation and infrastructure, Economic clout, Ease of doing business and Cost.

The indicators that were strong points for Athens were: Health, safety, and security, Sustainability and the natural environment, Cost and City Getaway. Areas that were identified as needing improvement were: Economic clout and Ease of doing business. In total, Athens is left behind when compared to the “classic” European/ western cities (London, Paris, Stockholm, Toronto) but also to the rising stars of the East (Singapore, Hong Kong, Tokyo),  while there is intense competition coming from the cities of Southern Europe (Madrid, Istanbul), which requires monitoring. Athens needs to “find her direction”, meaning where she fits in the three types of cities identified by the report: “western all time classics”, “eastern rising stars” and “the south”. The report concludes Athens can change her performance level with targeted interventions that will focus on further improving her strong points and by setting out a long-term strategic goal for her development.

Mayor of Athens, Yorgos Kaminis commented:  "This study is a very useful tool in the hands of the Municipal Authority and we will use it to implement both immediate and long-term priorities for the city. The city of Athens proposes a new model of development and social cohesion, with emphasis on openness, innovation and the creation of new jobs to stimulate the Greek capital city as an exclusive tourist destination.” The Mayor added that the report makes clear that a metropolitan type of local governance is needed in Athens, since many of the problem areas identified in the report lie outside the authority of the municipality of Athens.

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A recent working paper by CESifo, a European economic research group consisting of the Center for Economic Studies (CES), the Ifo Institute and the CESifo GmbH (Munich Society for the Promotion of Economic Research), examines what economics experts from around the world believe on how to handle the crisis in Greece.

Experts from 113 countries were polled by the CESifo World Economic Survey for their opinions on Grexit and IMF intervention. During the course of the negotiations held in June and July 2015, the majority of the experts surveyed (61.9%) were against Greece exiting the Eurozone. In October 2015, the percentage of experts against Grexit further rose to 69.8%. This share was even higher among those experts based in Eurozone countries (72.3%). 

In Greece, Italy, Ireland, Portugal, Spain and Cyprus, the share of experts advocating the Grexit was particularly low, while experts from countries such as Germany, the United Kingdom, Sweden, the Czech Republic, Denmark, and Slovakia are, in their majority, still in favor of Greece exiting the Eurozone. Econometric evidence shows that experts from those Eurozone countries with high public debt-to-GDP-ratios were less likely to support the Grexit. The fact that experts from high debt countries were opposed to the Grexit indicates that they either did not believe that their countries should bite the hand that feeds them or that they felt solidarity with Greece.

Support for IMF reforms and credit, by contrast, proved far less controversial within Europe. The purpose of the IMF is to assist countries in restoring their macroeconomic stability and effectively managing their economies. Indeed, the majority of experts agreed that the IMF should engage in Greece: 72.4% of experts surveyed believed that the IMF should provide credit to Greece and 83.6% stated that the IMF should engage in economic reform programmes. 

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ILGA-Europe is an international non-governmental umbrella organization, part of the European Region of the International Lesbian, Gay, Bisexual, Trans & Intersex Association (ILGA), working for equality and human rights for LGBTI people. The organization published recently its 2015 Annual Review of the Human Rights Situation of LGBTI people in Europe.

Marking a significant improvement, Greece ranks at number 15 out of 45 European countries reviewed, above countries such as Germany, Ireland, Luxemburg, Switzerland, etc. ILGA-Europe bases its ranking on how the laws and policies of each country impact on the lives of LGBTI people,   using a wide range of indicators such as family law, hate speech, legal gender recognition, freedom of expression and asylum rights.

According to the report on Greece, the county has progressed a lot during this past year: “2015 proved to be an eventful twelve months for LGBTI activists in Greece. The election of a government led by SYRIZA, a long-time supporter of equality for LGBTI people, in January started the year on a hopeful note. Promises to introduce civil unions for same-sex couples were quickly reaffirmed but access to adoption was omitted and legislation was slow to progress. In December, civil partnership for same-sex couples was finally introduced by a large majority of parliamentarians. Intersex people were recognized in legislation for the very first time”.

The Rainbow Europe map provides a visualization of the scores Greece achieved on various categories such as family, health, gender recognition and public opinion, freedom of assembly, association & expression, bias-motivated speech, bias-motivated violence and more.

Read more: Interview with activist Stelia Belia Civil Partnership and LGBTI claims in Greece

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