Louka Katseli, the former greek minister for Labour and Social Security, has had a distinguished career as an economist. A PhD from Princeton, she went on to teach at Yale and Athens University. Katseli has also served OECD Development Centre, UN’s Committee for Development Policy, EU Monetary and Economic Policy Committees and the Hellenic Centre for Planning and Economic Research. But as she admits herself, her crowning glory came as a politician when she pushed a piece of legislation in parliament. The ‘Katseli Law’ as it is called, has so far saved 150,000 Greeks from losing their homes to bad loans. Expelled twice from the ruling party, PASOK, Katseli formed her own party, Social Pact, about two and half years ago.
The 62-year old mother of two and daughter of a Greek actress had come to Dhaka to deliver a lecture marking the 20th anniversary of think tank Centre for Policy Dialogue. Dhaka Tribune caught up with her during her short visit for an interview. Excerpts:
You have been removed from the Greek cabinet and expelled from your party twice for voting against the party line. Is there any law in Greece, similar to Bangladesh, that you lose your job if you vote against the party line?
Yes. Well there is no law as such, but there it is more like a custom. The first time was when the government was planning to dismantle collective bargaining across sectors. I was the only one to vote against it.
So you knew you would be expelled when you took your position. Why was that?
There is a bit of history behind it. It was during my second stint in the cabinet when I was made labour minister having previously served as minister of economy, shipping and competitiveness. My predecessor had negotiated with the Troika — the European Union, European Central Bank and the International Monetary Fund — and agreed on dismantling collective bargaining. I went back and argued that at a time of massive cuts this sort of measure would further incapacitate the people and put a dent on wages. This would lead to further stagnation of the economy. Hence, I proposed that instead of such a measure across all sectors, it could be brought down to the firm/enterprise level, who may be allowed to strike their own deals or perhaps deviate.
Initially I had full backing of all the sectors because at that point even the owners and employers were scared that their associations would then also be dismantled. The Troika agreed to it and we, in fact, began to implement this new measure. Three months into it, there was pressure on the government to dismantle collective bargaining system across all sectors. And it suddenly became a precondition for the next tranche of the bailout package. Evidently others had succumbed to this pressure. I had worked long and hard to prevent this from happening. Instead of negotiating with the Troika for alternatives or sticking to our proposal, there was a push to conform. I declined and thus was removed from the cabinet. It was several months later when that bill went to parliament that I voted against it and got expelled from the party.
That was the first time. You got back into the party fold and then were expelled again soon after. Of course the second time there were more MPs – 21 this time – who opposed. You obviously have strong commitment to your politics. When do you think you started becoming political?
I had not even finished high school when a military junta took over Greece. Both my parents lost their jobs. They were in theatre. And I grew up amid such circumstances. It was probably from then on that I began to understand and feel strongly about democracy, democratic principles.
And your socialism? Would you say you were one when started in Smith in the early 70s?
Well, I don’t know what it means really. I can tell you what it meant to me then and what it means to me now. To me socialism is about the human right to employment and livelihood. It is about the right to basic needs and services. Economic democracy is another point. For instance, a heavily indebted person hardly has the power to negotiate with the bank, a consumer cannot negotiate with the supermarket. Power is asymmetric. People should have the power to bargain collectively if only to ensure their social rights.
That is what I tried to change when I pushed a law through the parliament.
It is called the Katseli Law, I understand.
Yes. It is the reason that I can walk from one end of Greece to another. So basically when a heavily indebted person finds that it has become impossible to pay back loans and chances of default is imminent, that person can seek legal recourse and keep the primary home from being taken away. The person in debt can ask the court to restructure the loan and keep the home from being seized and taken away. This of course had not gone down well with the banks at all since they had securitised the homes as collateral. Till date, 150,000 Greeks have invoked that law to save their homes.
It was when your former party PASOK was in power that Greece went through the economic crisis. But surely the seeds had been planted a long time before as they often are. When do you think that was?
It must have been during the 1980s and early 1990s. That was when consumption began to be financed by heavy borrowing. But there was little attempt to increase production or productivity. It was during those decades when consumption spiked, triggered by a number of factors. And it was during the 80s when there was an internal rift in PASOK with one faction – the structuralists – favouring development and another – the modernisers – favouring liberalisation, consumption and expansion. It was in fact because the modernisers had gained an upper hand within the party that I had to move away from the party for a few years.
Didn’t the Asian Crisis come as some sort of a warning? The European, including the one of Greece, is similar to that of Asia in many ways.
I have said many times that the crises are remarkably similar and even when we prepared a report saying that financial crises would keep recurring if international monetary regulations are not implemented. But at that time no one was really willing to hear about it. Essentially we did not really learn from that. And the last time around Pasok had come to power essentially on a pledge to address the economy. Although we understood that the situation was bad, we had actually thought that we would still have time to manage. But of course it was too late.
There were other measures in different parts of the world that also contributed to this problem with banks being allowed to participate in speculative markets, whereas commercial banking and investment banking should be kept separate.
You are saying that depositors’ assets should not be vulnerable to a bank’s affinity to gamble?
Well yes. A bank’s investment arm should be kept separate from its commercial arm so that people do not lose their deposits for faulty speculation and that too through transactions that are not at all transparent. People’s money should not be gambled with. But the international conventions still do not warrant mandatory regulations instead of the “voluntary guidelines” that are currently in practice.
You have mentioned Troika’s intrusion a number of times and even pointed out in your lecture that IMF officials themselves were disappointed with how their prescribed measures have performed. How do you see the IMF prescribing and dictating governments how to run a country?
Well first, IMF is an intergovernmental organisation. Secondly all countries get to vote there and thus it would more likely conform to those who have the upper hand internally. But I have found that due to their experience with such crises, the IMF is much more willing to listen and negotiate than others, especially when it came to the bailout package.
And it is also a hunch that government officials across the world do not push hard or negotiate or even propose alternatives to IMF suggestions which then gives an appearance that the IMF is steam-rolling over others.
And although there is the one size fits all policy, the IMF’s manner of implementation of those largely similar policies vary greatly from one country to another.
But the main problem in Greece now is that there is no governance structure left. In a bid to accommodate Troika, we have given up our right to govern. For instance, the government had recently passed a law and within two days had to go back on it because the Troika wanted it that way.
Greece has basically agreed to some stringent conditions that allow creditors to seize assets in case of non-payment, and that includes the gold in Greek treasury.
You were always interested in policymaking. In fact that was one of the reasons that you ended up studying economics. And indeed you went into it several years after joining Yale as an economics professor. Andreas Papandreou asked you work for the government. But you had a fallout with his son George. The relationship goes back many years. How difficult was it?
Yes we do go back a long time. George and I are contemporaries. He was in Amherst, while I was in Smith and we have known each other since then. Surely it is not easy but at the same time it is not quite a fallout. More like a policy fight in which we could not agree. I remember he was trying to convince me to change some wording and vote for the bill the fist time I opposed the party. There have been lengthy discussions and we did not see eye to eye.
You went on to form your own party. The Social Pact. What is that about?
Eight of us MPs joined together to form this party. What we are trying to do is work towards a grand coalition and get everyone to move in a direction especially as far as the Troika prescriptions are concerned. PASOK had come to power with 44% of the vote not too long ago but they lost that popularity swiftly and now have just about five percent. Most of its voter base went on to support Syriza – a radical left coalition. Social Pact is trying to work with all parties in the parliament to come together since there is too much polarity and present a united front politically so that everyone moves together towards similar goals, especially regarding the current crisis.
And you personally? Where do you see yourself going?
Well I am doing what I have always wanted to do – think, write, act. I am doing exactly that.
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Τις γνωστές απόψεις του για τις σχέσεις με την τρόικα, αλλά και το ΠΑΣΟΚ, διατύπωσε ο πρώην πρωθυπουργός Γιώργος Παπανδρέου κατά τη συνάντησή του με το πρόεδρο του Κινήματος Ευάγγελο Βενιζέλο, κατά την οποία συζητήθηκαν και τα εθνικά θέματα και οι εξελίξεις στην ευρύτερη περιοχή και στο Κυπριακό, όπως αναφέρεται σε ενημερωτικό σημείωμα του Γραφείου του πρώην πρωθυπουργού.
Οι απόψεις του κ. Παπανδρέου, για τα δύο πρώτα θέματα διαφέρουν αρκετά από εκείνες του κ. Βενιζέλου και ο πρώην πρωθυπουργός επέστησε την προσοχή του αντιπροέδρου της κυβέρνησης σε ό,τι αφορά τις σχέσεις με την τρόικα, ώστε να μη γίνονται κινήσεις χωρίς σχέδιο, που εκθέτουν τη χώρα.
Ο κ. Παπανδρέου σχετικά με το ΠΑΣΟΚ εξέφρασε ενστάσεις και διαφωνίες, οι οποίες πηγάζουν από μια διαφορετική θεώρηση και αντίληψη για την αποστολή και το μέλλον του Κινήματος, απόψεις τις οποίες ο κ. Παπανδρέου θα αποστείλει και γραπτά στον κ. Βενιζέλο.
Ειδικότερα, στο ενημερωτικό σημείωμα αναφέρεται:
«Οι απόψεις του Γιώργου Παπανδρέου είναι γνωστές και διατυπωμένες κατ’ επανάληψη δημοσίως – και για τη χώρα και για το Κίνημα. Αυτές τις απόψεις και τις θέσεις διατύπωσε και στη συνάντηση με τον Ευάγγελο Βενιζέλο. Στη συνάντηση έγινε αναλυτική συζήτηση και μια χρήσιμη ανταλλαγή απόψεων για τα εθνικά θέματα και τις εξελίξεις στο Κυπριακό, αλλά και στην ευρύτερη περιοχή, η οποία ταλανίζεται από αντιπαραθέσεις και συγκρούσεις. Επίσης, αναλυτική συζήτηση έγινε και για την πορεία της χώρας και την υπό εξέλιξη διαπραγμάτευση, στη διάρκεια της οποίας ο Γιώργος Παπανδρέου επανέλαβε τις απόψεις και τις θέσεις του, δίνοντας ιδιαίτερη έμφαση στην απόλυτη ανάγκη μεταρρυθμίσεων με δημοκρατικό και προοδευτικό πρόσημο, που έχει ανάγκη η χώρα και για να απαλλαγεί από τις κακοδαιμονίες του παρελθόντος, που μας οδήγησαν ένα βήμα πριν από μια εθνική τραγωδία και για να διασφαλιστεί ένα βιώσιμο μέλλον, απαλλαγμένο από πελατειακές αντιλήψεις, νοοτροπίες και συμπεριφορές. Επισήμανε δε, ότι θα πρέπει να αποφεύγονται κινήσεις χωρίς σχέδιο, που αποδυναμώνουν τη θέση της χώρας, όπως συνέβη πρόσφατα και την εκθέτουν σε κινδύνους.
Τέλος, σε ό,τι αφορά το ΠΑΣΟΚ, ο Γιώργος Παπανδρέου επανέλαβε τις ενστάσεις και διαφωνίες του, τόσο με επιλογές που έχουν γίνει, όσο και με τις διαδικασίες που ακολουθούνται για τη δημιουργία της ΔΗΠΑΡ, ενστάσεις και διαφωνίες που πηγάζουν από μια διαφορετική θεώρηση και αντίληψη για την αποστολή και το μέλλον του Κινήματος. Την πρότασή του θα αποστείλει και γραπτώς προς τον Ευάγγελο Βενιζέλο».