6/8/11

Why should Germany invest also in research and education infrastructure in Greece


Recently the EU and especially its de facto leader, Germany, decided to bailout Greece, for a second time. A year ago another 110 billion EUROs, largely on Germany's initiative was poured in the country to save it from default and from imperiling the whole of the EU project.

For sure this move will burden the German and EU taxpayer; the bailout can only be justified in a long term perspective. Long term perspectives are obviously never a top priority of the struggling taxpayer, of any taxpayer. A new world is however emerging with pronounced roles for China, India, etc. If the EU does not stick together, does not integrate in a sole political and economic power then it is very likely to exit the historical scene it has dominated for so many centuries.

So goes the argument. History will only, eventually, judge whether these bailouts (and those to, most probably, follow in Greece and elsewhere) will really eventually contribute to this noble goal. Just as history only post-justified Roosevelt when he entered the WWII and did not just seek to avoid to burden the US taxpayer. Or Lincoln, when he decided to integrate, at such a great human life, and not just economic, cost, a backward and old fashioned US South. Contrary, the vision of Mr. Lenin for Russia and the world was, in retrospect again, nowhere to be validated and ended up strongly condemned and utterly rejected.

At this moment in time one can only celebrate the long term perspective and vision of Mrs. Merkel and the rest of the EU leaders.

Strategy aside, there are also some short term implications. Now that Greece has been twice bailed out it would only be a complete shatter for the EU policy to let it, now, fail and default. Or, alternatively, to keep on endlessly bailing it out. Some 200 billion already shoveled in, it must be sure the Greek problem will be solved.

Thus, it is almost certain that Germany and the EU will take action. It has already been advertised that a task force will settle in Greece to monitor measure progress and provide, a much needed, technical assistance. It is statistically certain to assume that without this task force nothing will ever change in Greece; the same, incompetent and populist policies will continue and once and a while the country will painfully emerge and call out for further demonstrations of EU solidarity and several accompanying billions to cover its endless deficits. To an increasing irritation of the citizens of the EU north.

It is also well agreed that unless investments take place there is no chance to avoid default and collapse, no matter what this “task force” does in terms of slashing piles of unnecessary and socially useless expenses and increasing tax revenues. As Stiglitz, excellently, put it in a press interview (Kathimerini, 31 July), the debt haircut that will be eventually required is related to the GDP development that Greece will achieve. If Greece is let on its own dynamics, it has just zero chances to go significantly well above a zero GDP rise; it is only investments that can provide for some solution to this situation and justify all the effort and the money.

From this point of view and taking for granted that Germany will not just comfortably trust Greek promises nor will it write off the 200 billion that it has allowed to flow to the country, let alone be trapped in endless and fruitless bailouts, one is mathematically certain:

Germany will invest in Greece and will invest heavily.

Under this plausible, key, assumption, follow below some thoughts on why an investment in research and education would be a wise decision, as part of a broader investment plan of Germany in Greece.

1. A German speaking, German standard University in the East Med

Have no doubt about the demand for and success of such an institute. Greeks migrate in thousands to the West, in search of quality university education. They are the largest, by far, student community in western countries. In proportion of course with population. These are facts, that may be most easily confirmed. Equally easy you may confirm that the numbers of Greeks in command of some acceptable level of German (lets say level B2 according to the existing classification of language level) are again difficult to match in numbers.

The driver here for Germany would be to increase its political and cultural influence in the broader region. Because Greeks are in extremely good relationships with the nearby Arabs. History has engineered many encounters between Greece and the Arab world. Some may have been on the battlefield yet it is a fact that there is deep intimacy and respect between the two civilizations. Do not be misled by what you may read in the press about a growing affection between Arabs and Turks. Truly, Erdogan is a great leader, one of the few of our times, by global standards and not just when compared to his incompetent Greek peers, of the last 30 years. Erdogan has advanced a lot Turkey' s position in the Arab world, to the extent that even Syrians, Turkey's deadly foe in the past, often look at him as a liberator from the Assad family tyrants. And he has, alone, openly and courageously challenged Israelis for attacking civilian boats, bringing humanitarian aid to Gaza.

No matter how capable and world class leader Erdogan may be, he still has a lot to do to destroy a deeply anti Turkish sentiment running widely among the educated masses in the Arab world. Despite religion, Arabs will massively and certainly opt for studying in Greece rather than Turkey (or even the UK). Provided of course the quality of the educational service is high and is worth the pain, there is no doubt that the Arab elite would opt for Greece for its studies. This it did already in the 70s when there were a lot of Arab students in Greek universities. A trend that completely collapsed together with any sense of quality of the Greek University level education in the 80s and beyond.
Germany can transfer in Greece its quality University system and can benefit from the deep cultural ties of the nation with the Arabs and from the unique climate and natural beauty of the country. This will result to a totally unique educational setting, by EU standards.

Also, there is no reason to run the venture in English. It should be to the interest of Germany to expand its cultural influence. There is no doubt the venture would be highly successful even if set up in the German language. If Germany is to be the powerhouse of the EU its language needs gradually at least match the proliferation of that of the British.

The potential in Greece for top quality educational services is unlimited, if the right, German inspired, setup is secured. The opportunity is important for both Germans and Greeks. Public sector educational policy in Greece has not been driven by any true educational mandate but rather by political reproduction purposes, along with some regional development objectives; and the private sector initiatives considered that just because the quality bar is so low in Education they can offer an attractive alternative solution in just a couple of rooms with a secretary to answer the phone, with badly paid and desperate professors and with some logo from some pretty unknown English or US University on the wall.

The void to fill is huge.

Investment in education will pay back in political influence. The US example clearly mandates that the best possible University setup of our times is that of a private, not for profit institute (Note: In Greece few people would really understand the term as it seems just unbelievable that there can be something private and also not for profit...)

In short, good Universities are not for making money; they are for building human capital and increasing political influence.

Applied research, however, is primarily about making money.

2. Top quality, industry linked applied research in selected areas

As said, from the very beginning, everything laid out here is based on the assumption that Germany will invest in Greece. If this does not happen the >200 billion EUROs invested in saving Greece and the EU will just sink. Markets are shut off for good; Greece will once again, in about a year from now, present several billions a year as deficit asking for new help. So on, so forth.

If this scenario is to be avoided, then Germany needs invest in Greece; in areas where this truly makes sense. Which are these? Energy/ renewable technology, environment, tourism, food and humanities. That is all what Greece may be competitive about. That's where German investment will focus. (Shipping is also an extremely competitive activity in Greece; however Greeks lead the world in this business and there is no true opportunity gap for Germany or anybody else to tap into in this area.)

Investing, also, in serious research capacities in exactly these areas would be wise. Why? For a number of reasons.

Greece has an excellent research human capital. In Greece as well as abroad. I often here from people in the EU/ US that all Greeks that have some value, that are risk takers and not comfortable with sipping coffees and waiting the EU money to fall down, all these have just left the country.

This is just a very wrong work hypothesis.

Truly, in the immigration waves in the early and mid twenty century, the most dynamic and risk taking part of the society, left. This is not any more the case. Now life is quite better in Greece as compared to those days. Greeks still eagerly seek a serious education abroad, as there is little on offer locally. Yet, a good majority gets back to Greece. The recent crisis is truly making things worse; more and more capable people are leaving or looking forward to do so. Difficult to say right now if this trend will carry on or will stop. In any case the idea often raised that all capable and risk taking people have left Greece is just totally wrong.

Capable people are here; very capable people. In big numbers. What is not here is a serious context that will allow them to deliver. This is not so much about the ridiculous educational and research policies of the last 30 years. It goes much deeper. The real issue is that Greece lacks the real life, the business and the industry stimulus to guide its huge potential. With the exception of the very successful shipping sector that is globalized and is most keen to stay as far as possible from the death touch of the Greek state, there is hardly any other economy sector that has had some remarkable success.

If business does not drive applied research, if business has just trivial and no state of the art problems to tackle, how can this huge research potential ever really develop?

Answer: it will never develop

An example. I was once in a research evaluation exercise n Brussels. There were a lot of multi million research proposals presented by Greek institutes. In my evaluation panel there was a senior, a very experienced British guy. He had run projects all over the world in the scale of several billions. It was a learning and social pleasure for me working with Dave for that week. He was really baffled by the Greek proposals. He found them extremely well laid out but also extremely unrealistic. He knew the topics very well. There were some that only giants like BP had any practical experience upon. And yet, here it was! An excellent, technically laid out, Greek proposal in front of him, claiming that it would develop some extraordinary technology in some remote Greek village in Macedonia, for the Greek electric company having its main facilities up there. By the way, the Greek Electric Company is notorious for its utter backwardness and its literal control from trade unionists who have secured a wealth of privileges for themselves, have hardly any education at all, and do not give a damn to challenge BP or anybody else not directly threatening their privileges !

This epitomizes the drama of the research community in Greece.

Real industry problems lacking, it has to invent them!

Here is where the link with the assumed investment activity would be catalytic. The research units set next to real investments would not only be staffed by extremely well educated researchers, but they would be targeted, not exotic, aiming at practical results not just fancy methods and paper/ art work.

Linking research with results would increase further the efficiency of the researchers by an order of magnitude. This link, is now totally lacking and only results to frustration among the capable, active and not “depreciated” Greek research community. Because, currently, good or bad, active or sleepy all are considered the same in terms of reward. Productivity is a cursed word in Greece.

The only problem I see in such a radically new and investment/ industry driven research setup is that it may turn out to be so attractive that it would result to a return wave from the EU, Germany, etc., to Greece...

The synergy between the educational and research activity is obvious and needs no further commenting.

Last and most important:

Let education shine and you will witness a rapid dissemination of a new paradigm throughout society. The now powerful, within the Hellenic education society, phobic and reactionary ideologies and their painful jargon will be, in a blink, wiped out together with their many current bearers and sponsors.

Not only will this SOON result to the most healthy cell within the Hellenic society; it will also provide you, Germany and the EU, with more competent, local, interlocutors.

Conclusion

Under other circumstances you may have justly asked “Why should we engage in this costly transformation process of the Greeks?”. You would only be right.

Under the current circumstances, however, you are already engaged in it. And on the assumption that with no EU investment in Greece, prospects are very very bleak, then, the above, research/ education lines of action are just a drop in a large pool of money already invested and planned for investment by Germany and the EU in the country, for the sake of the EU, monetary and beyond, cohesion project.

A drop that can be pervasive, extremely value adding, with multiple benefits, strategic and economic.

For the benefit of Greece and Germany. For the benefit of the whole of the EU.