Ladies and Gentlemen,
Everything that could be said, has been said in the previous sessions and, in a way, our job is easy. I think that our task is to try to highlight certain key features which emerge from the discussions by way of concluding remarks. While trying to do that, I would like to spell out, at the same time, a proposal relating to the role that Greece may play in shaping the new geopolitics in the Eastern Mediterranean.
The general conclusion is that we live today in uncertain times. Uncertainty is something which holds true for the world as a whole and, more specifically for Eastern Mediterranean. So, in order to devise a new strategy in the context of the new realities, one has to be very flexible because all scenarios that one can imagine may prove possible. The task and the challenge before us is to discern those features in new realities that have a permanent character and separate them from transient features which have a cyclical nature and are not going to persist.
We know the world we left behind us and I think that we have to convince ourselves that this world is not going to return. We are going to live in entirely different circumstances and it will be a fatal mistake to try to reconstitute the old world and live old stereotypes. New situations require fresh thinking and the courage to see things as they develop.
In order to help the discussion, I would like to highlight factors of a permanent nature which affect the world as a whole and factors which are more endogenous to the Eastern Mediterranean.
Global factors which give rise to changes in the geopolitics. Of the many than one can mention, let me highlight three:
1. The drastic and structural – I emphasize structural – shift in the distribution of wealth, income and reserves away from traditional industrial countries to the «new world», primarily to Asia and some parts of Latin America.
2. Very divergent demographic trends which eventually give rise to massive migration from South to North.
3. Intensive competition among the regions for access to energy resources.
All these factors, which characterize changes at the global level, have a bearing on the shaping of the geopolitics in our area. About the first factor which has not been discussed so far, let me place some emphasis on that.
As a result of the globalization that started in the late ’80s, there has been a dramatic shift of the centre of production, away from North America and Europe to developing countries such as China, India, South East Asia and Brazil. This major shift of production was of course associated with a redistribution of world income. Now, notice something very important. If the constituents of the world do not grow in a balanced way with some countries growing very rapidly while others falling behind and if further this phenomenon is associated with the fact that the fast growing countries are high savers and the countries that stay behind are high spenders, then equilibrium at the world level is achieved through massive capital flows which give rise to debt. If this situation continues, the accumulated debts will produce a financial crisis. This is the crisis we have today.
Unfortunately, the world has not learned from the past. The cause of today’s crisis is not the debt as such. The debt is the symptom of the crisis, the cause of the crisis is the fact that we have not found a way to manage the world in a balanced way so that no country remains, for long period, either in surplus or in deficit situation. Let me remind you that, immediately after the WWII, at Breton Woods, Keynes sought to establish a world monetary system that, through a system of penalties, would force both surplus and deficit countries to adjust their pattern of consumption and production so that the world will be in an equilibrium. We say that the Bourbons never learn anything but haven’t forgotten anything, but this holds true also for the political leaders who never forget anything but haven’t learned anything from history and the country which must have learned from history, from debt crisis, is Germany. If you do not recognize the fact that what you have is a fundamental disequilibrium in world competitiveness and a disequilibrium in the distribution of wealth and assets, you are not touching the problem. Trying to solve the problem through financial methods of debt rescheduling is nonsense. Dear friends, in history, sovereign debt was never, NEVER, paid back.
There are two ways of dealing with sovereign debt, the pathological way and the normal way. The pathological way is through war and massive inflation. This happened after the WW I and Germany was the victim of it. The normal way of settling the debt problem is when the deficit country grows faster then its debt so it can pay the interest payments and roll over. For example, the USA which borrowed massively to finance WW II, never paid back its debt, it simply rolled over the debt but the income increase in the US was so rapid that, over the years, the debt owed was an insignificant part of their national income. If we do not learn from history – and we haven’t – then we are going to repeat the same mistakes and we will end up in a crisis and a disequilibrium with Asia moving ahead and Europe and the US falling behind. This will be a source of global instability and political problems.
The second factor which is very important relates to diverging demographic trends. Russia and Europe are falling behind in terms of population increase where the South, and particularly Muslim countries, grow rapidly. In two decades, the Muslim population of the world will account for 38% of the total. In our area, the Mediterranean countries of Europe, from Portugal to Greece, the population will be stabilized in the next 20 years, to around 200 million where the Mediterranean countries of North Africa, including Turkey, will grow from 230 to 450 million people. This kind of change introduces a major shift in the geopolitics and we have to take it into account. These diverging trends, coupled with wide gap in the standards of living among countries will give rise to massive migration. Europe must be prepared to accept some 40 million people from Africa and the Middle East in the next 30 years, a development which creates major problems of assimilation of people from different cultures. A multicultural, multi religious Europe is a major challenge in this century.
The third factor is that growth in the world is based on energy. But energy resources are limited. We have talked this morning about the energy requirements of Europe, but let us not forget that the main demand will come from China and other Asian countries. So, we must prepare ourselves for a very intensive competition at the world level for access to energy resources.
Regional factors which give rise to changes in geopolitics in the Eastern Mediterranean:
I think all these three factors, the shift in the distribution of wealth, diverging population trends and increased competition for energy resources have a bearing on shaping geopolitics in the Eastern Mediterranean. In addition, there are two regional factors which are important:
1. the so called Arab Spring and
2. the new role of the Easter Mediterranean as a transit area for energy resources from the Middle East and Asia, and now from the Eastern Mediterranean itself to Europe.
These two factors could be elements of either instability or stability depending on how we deal with them. Mind you that Eastern Mediterranean, traditionally, has been a very unstable area for a number of reasons which I need not go into right now, but let’s not forget that a major cause of the instability is that the area itself has been the field in which major world players contested each other for control, exactly because of its geopolitical importance.
In the post War period, we experienced relative stability, it was the period of Pax Americana and the Soviet Union was kept out of the Eastern Mediterranean. Let me remind you that the lynchpin of Pax Americana in the area was the axis of three countries, Israel, Turkey and Iran, strangely none of them an Arab country. Now, Iran fell out long ago and recently Turkey is following its own path trying to become a geo-peripheral power. Israel, of the old trio, remains alone and is looking for new alliances. So, the area is unstable again. I think that both the Arab spring and the discoveries of energy in the area could become elements of stability in the area.
With regard to the Arab Spring, we have to notice first of all that there has been no Arab fanaticism and Islamic radicalism. It was mostly a revolution of the young, a «facebook» revolution of people who wanted higher standards of living, dignity and freedom. It is true that the movement was not organized and in the second round, as we are witnessing in Egypt and elsewhere, more organized groups like the Muslim Brotherhood may take over politically but I think that in the long run, the political leaderships have to heed the needs of the people. They must provide jobs, shift financial resources away from armaments and defense to economic and social development. This process will actually require organization of the markets which whether they like it or not will contain elements of democratization. Thus, in the long run, I think the Arab Spring will prove to be a Spring and not a winter.
Furthermore, I believe that the region now can play a catalytic role as supplier of energy to Europe and this new role can create the incentives for cooperation among the states in Eastern Mediterranean. But, of course, this will require vision and political leadership.
I come now to the role of my own country. When I talk about geopolitics in the Eastern Mediterranean I do not want to use the term «Greece», I prefer to refer to Hellenism, because Hellenism conveys the idea of the historic role that Hellenes played in the broader region, not only in Greece, Cyprus and Asia Minor but also in the flourishing communities of the Diaspora from Alexandria to Bucharest. Cypriots call us «Helladites», we call them Greek – Cypriots but we are all «Hellenes», we are children of the Hellenic civilization. I insist on this point because I consider it central to our proper understanding of our role in the new geopolitics. Let me emphasize that it was not by fluke of history that Hellenism flourished when its economic and cultural presence in the Eastern Mediterranean was pronounced.
This point of view I have tried to advance during my political career. Specifically, in 1994, as Minister of Defense in the Government of Andreas Papandreou, I had the honor to launch and implement the Dogma of United Defense Area: Thrace, Aegean and Cyprus. The Dogma was not directed against anyone, and went beyond defense matters to issues of economic and cultural cooperation in the broader area. Thus, in 1995, I visited Israel – the first ever visit of Greek Minister of Defense – and with the Prime Minister Yitzhak Rabin, who was also Minister of Defense, we concluded a defense agreement which contained provisions for joint military exercises and cooperation in defense technology. A few months later, in my visit to Syria, we concluded a defense agreement which incidentally created quite a commotion in Ankara. Our credibility reached a high point and indeed discussions were advanced for Greece to play an intermediary role with peace keeping force in the Golan Heights. We concluded also a defense Agreement with Egypt.
Unfortunately, this dogma of United Defense Area and its corollary agreements, was essentially abandoned after 1996, in the context of the new orientation of the Simitis governments. Thus, a historical opportunity was lost. Now, the new situation in the area gives us the opportunity to play again our historical role. Starting with cooperation in the energy field among Greece, Cyprus and Israel and later on with Egypt and Lebanon, we can eventually create the conditions of peace and cooperative development in the whole region. That’s why I believe that we should not waver any longer but should go ahead and declare right away our exclusive economic zone. Subsequently, we may call upon neighboring countries to work together with us and define our frontiers. I am certainly aware of Turkey’s position on this issue, but that should not deter us. We are a member country of the E.U. our exclusive economic zone is part of the E.U. sea areas and there is nothing that Turkey can do to prevent us. If she has disagreements about the delineation of the frontiers of the E.E.Z., she could bring the matter to the International Court of Justice where any dispute can be settled.
I do hope that this time, the opportunity which the new geopolitical situation gives us, will not be missed.