Vrachanski Balkans

Up and away early to avoid the midday heat which once (actually three times) disabled the car a few years back in this part of the world at this time of the year as were driving back from the lovely Thassos island. Just outside Drama in Greece - as were were beginning the ascent for the new border crossing there – the car engine just stoppped. We were kindly treated (with an overnight stay needed for a petrol filter to be replaced) before the same happened at Plovdiv - after much meandering through gorges and round the densely wooded edges of the Rhodopes (with many minarets in the villages). After a mechanic asked for 300 euros with no guarantees, we discovered the car was working again and decided to proceed – over the Balkans. A Romanian lorry driver confirmed that it was the heat – it had happened to him. Just as we reached the top of the mountain ridge, the car stopped again – but, by then, I knew the trick – just to wait ten minutes or so.
Anyway I neednt have worried today – since, apart from my climb over the Petrohan Pass starting before 09.00, the road is heavily wooded and therefore protected from the heat. But the surface is bad (particularly on the descent) and the road twisty – so a 100 kilometres journey from Sofia to Varshets actually took 3 hours (including a trip to Pennywise in the nearby village of Berkovitsa for a bottle of Mezzek Sauvignon/Pinot Gris . I’m in the heart of Vrachanski Balkan Nature Park here – with towering mountain ranges on 2 sides. The hotel is very nicely situated - with solar panels covering the entire roof (very rare!). I was able to check in (to a large room), get organised and have a swim all before midday.

After my last post, I got thinking about Path dependency – and discovered that the phrase originated in economic not sociological studies as I had imagined. And, of course, it takes us deep into fundamental issues which thinkers have argued about for millenia - such as free-will! The opening pages of this paper are quite enlightening about this – but thereafter the paper gets typically turgid.

culture matters

I changed the title of yesterday’s post after inserting some of the argument of the 2nd article on Greece (which tried to explain what might be called the "amoral familism” of the country – and its neighbours such as Romania and Bulgaria (to a lesser extent I feel)
I also added the link to the brilliant paper about Romania written by Ionitsa in 2005 which had used that term -

Leaders are supposed to be promoters of their protégés; and clan-based loyalties take precedence over public duties for salaried public officials. Such behavior can be found not only in the central government but also in local administration, the political opposition, academia and social life in general, i.e. so it permeates most of the country’s elites. Classic studies of Mezzogiorno in Italy call this complex of attitudes “amoral familism”: when extended kin-based associations form close networks of interests and develop a particularistic ethics centered solely upon the group’s survival7. This central objective of perpetuity and enrichment of the in-group supersedes any other general value or norm the society may have, which then become non-applicable to such a group’s members. At best, they may be only used temporarily, as instruments for advancing the family’s goals − as happens sometimes with the anti-corruption measures.
Since Romanian society, like others in the Balkans, still holds onto such pre-modern traits, its members are neither very keen to compete openly nor are they accustomed to the pro-growth dynamics of modernity. Social transactions are regarded as a zero-sum game; a group’s gain must have been brought about at the expense of others. This may be a rational attitude for traditional, static societies, where resources are limited and the only questions of public interest have to do with redistribution.

And I was reminded of a recent discussion I had with an ex-Deputy Minister who was bemoaning the lack in public life here of the soft skills of communications and cooperation operating for the public good. And of my realisation of how rare was the enthusiasm of the lady from Pernik. It takes me back to the early days of my work in Romania when the Head of the European Delegation handed us summaries of Robert Putnam’s Making Democracy work; civic traditions in modern Italy which had recently appeared (I already had a copy of the book). She had quickly sussed out what Putnam called the „lack of social capital” in the country – ie the lack of trust and associations. Thanks to the World Bank, academic writing about Social capital then became a cottage industry. I’m not sure if we are any the wiser as a result!
As I’ve noticed before, "path dependency” is the phrase used by those who feel that it is impossible for a country to shake off its history. And that takes us into the murky areas of cultural studies – and of
Samuel Huntington whoe views are considered so offensive here since he suggests that the line dividing civilised from non-civilised countries puts Balkan countries on the wrong side (mainly for their Orthodoxy). But his stuff is worth reading – particularly Culture Matters which is a marvellous coverage of the proceedings of a conference on the subject which brought together in argument a lot of scholars.

I wrote recently about a new Gallery of Contemporary Art opening in Sofia’s south park – a magnificent renovation of an old mansion. Courtesy of Norway, Iceland and Leichtenstein no less. I paid my 3 levs and ventured in – and was bitterly disappointed. No Bulgarian artists – just a few small Chagall and Picasso etchings – and a large exhibition of Scandinavian ceramics. The second floor was roped off. I ceremoniously tore up my entrance ticket at the reception – and roundly chided them for false pretences. Apparently all the fault of the Prime Minister who wanted it open earlier rather than later to show what his government is capable of (the rehabilitation work only started in October). OK the building is nice – as are the large (Bulgarian) scupltures which surround it. But don’t bother going in!
And an example of the problems of moving around in this part of the world. Next week I will be up on the Bulgarian side of the the Danube just south west of the city of Craiova – as the crow flies it is little more than 90 kilometres from there to Vidin where there is a ferry from Calafin. I thought it would be a good idea if Daniela came down from Bucharest and met up at Vidin – so that we could explore the fascinating mountain area which is the north-west. In fact it will take her about 4 hours to make that 90 kms (much longer if she were to take the train) on the Romanian side. Two hours by bus; waiting time 2 hours; and 15 minutes the ferry which deposits you apparently 5 kilomtres from the town of Vidin- with no onward public transport! A bridge is half built (with European money) – but the Bulgarian side is bogged down in commercial arguments – and it could be another 18 monthe before it is ready (watch this space). I remember a woman from the cabinet Office here telling me that it took her a similar time and 3 changes of transport to move a similar distance within southern Bulgaria.
An interesting post this time last year - on government matters.

Balkan mistrust

Summer seems to have dawned at last – with 40 expected in the plains of Bucharest and 31 here in Sofia rising to 33 Monday. I should then be in the rarely explored North-Western mountain area – first of Varshets then, from Tuesday evening, in the old fortress area of Belogradchik. In the meantime, I have my spreading fig tree to protect me from the sun in the garden.
Amos Oz has been keeping me company these last few days – first with Black Box mapping ruthlessly the relations a woman has with her present (faithful and loving if rather eccentric) husband; her tight-arsed and rich ex; and their delinquent boy. Great stuff – with the powerful outporings of emotion I have now come to expect of this writer who should have got the Nobel prize a decade ago. Now I’ve started on his story of the strained relations between a 60 year old nomadic planning/engineering consultant back home and living with a younger woman with a mission – Don’t Call it Night. Oz seems to have a happy 40 year old marriage himself but he really gets into the painful crevices of relationships! Here's a long interview with him from Paris Review.
During the night I was reminded what an insightful writer Michael Lewis (of Vanity fair) is on current financial matters – the best things I have ever read on the Irish meltdown (his story reads like a modern version of The Emperor's New Clothesand the Greek crisis.In the classic journalistic (if not Detective Colombo) tradition, he approaches the issues from a common-sense point of view.
And here is an interesting article which was inspired by Lewis's exposure of Greek corruption to dig deeper and to try to explain why the Greeks have the political and ethical problems they do.
He reimnds us that, until the late 19th century, Greece was part of the Ottoman system (as were BUlgaria and Romania) - with all this means about clientilism and antipathy to authority. "Greeks are naturally distrustful of their leaders, and extremely quarrelsome among themselves" - as one can certainly say also about the Romanians. Here it's worth going back to the Ionitsa article I excerpted from on June 13. There is little doubt that officials have major difficulties talking and cooperating with one another (let alone with citizens!)in this part of the world (an ex-Deputy Minister here who is one of the trainers on our programme was talking to me recently about this). And yet this is never really picked up in the needs assessment which supposedly precedes all the training which EC programmes fund here. All the emphasis is on transferring knowledge - not altering attitudes and behaviour.
Finally an excerpt from a longer piece -

The present financial conundrum is a result and not a cause. It is the result of decades of rule by incompetent politicians, certainly in the case of Greece.( It doesn't need a Marshall plan it needs a regime change. Count on the evil undemocratic EU to take over much of the decision making behind the scenes, and a good thing too.)
The problem with present-day politicians in general is that they aspire to power and once they have it they don't know what to do with it. Consequently they're easily influenced by lobbyists and public opinion. The result is - predictably - indecision and procrastination or hysteria and panic. Being so unfocused our dear leaders get lost in petty detail, always a sign of people not getting the big picture. The founding fathers of the EU had a clear concept: no more war in Europe. The present lot just looks after the shop, and not very well

Two musical bonuses – first, from Romania (but only for the next few days), the pianist and composer Dinu Lapatti (1917-1950)
and from the English mining community The aquarelle is a Stamatov

Rating agencies are part of a criminal set-up

With all the focus on Greece, I had missed the latest news about the rating agencies cutting Portugal's rating - here's a powerful response from a Portugese journalist

The rationale for Portugal’s rating cut makes no sense. Portugal was targeted with a streak of rating cuts that put us in the verge of “junk”. But then everything changed, a stable majority in parliament, a 78 billion euro loan, a programme designed by the troika, a committed government, a prime-minister obsessed with compliance. No matter what. We weren’t even given a full week: we’re junk.
The reasons for a rate cut are now absurd: the challenge of reducing the fiscal deficit, the need for more money and the troublesome return to the financial markets in 2013 are topics being addressed by the government. By the Country. This rating cut doesn’t identify these challenges, it precipitates them. This decision carries with it severe and immediate consequences. Not only because Portugal takes one step backwards in the path back to the financial markets. But because many investors will now dispose of Portuguese assets. Because collateral on our debt will have to be reinforced. Because today all Portuguese assets lost value. Portuguese companies, Portuguese banks, everything lost value between yesterday and today. At a time when privatizations are being prepared. When stress tests are underway. There are no coincidences. Today, thousands of investors who’ve been short-selling Portuguese stocks and bonds are richer. Buying stocks in EDP and REN will now come cheaper. We’re not on sale, we’re being ransacked.
Portugal was a mad MAN, he threw himself into a cliff and now clings to a rope that was thrown in his direction. He’s trying to hold on with all its strength, lucid and humble in the way only those in ruin are lucid and humble. Then came Moody’s, spitting to the side and saying climbing the rope is tough – thus cutting the rope.
This is not about Portugal, it’s a matter of war between the US and Europe, it’s about profits for private investors in the shadow of ratings agencies. Two weeks ago, an outstanding piece by the journalist Cristina Ferreira, at newspaper “Público”, illustrated that corrosion. Another journalist, Myret Zaki, wrote the remarkable book “La fin du Dollar”, which documents the “system” on which these agencies thrive and the underlying euro-dollar tug of war.
Yesterday, Angela Merkel condemned the power of rating agencies and promised to fight back. In less than 24 hours came the response: S&P’s warning that the Greek debt roll over will be considered a selective default; and Moody’s rating cut on Portugal.
We’re in the middle of a scam and the European Union is impotent. Four years after the crisis that these agencies allowed, Europe has been unable to put out a recommendation, a threat, a European rating agency. What has China done? They created their own rating agency. What does that rating agency say? That Portugal is BBB+. That US debt is no longer triple-A. The Chinese have power and courage, Europe has hung itself in the American bargain-price shop.
The troika is worried about the lack of corporate competition in Portugal… What about competition in rating agencies? Two days ago, Stuart Holland put forward, along with Portuguese former Presidents Mario Soares and Jorge Sampaio, the proposition for a European “New Deal”. He told this newspaper “we need government governing instead of rating agencies ruling”.

We’re not asking for pity, we want fairness. Europe crosses its arms. Let us not do the same. The European Central Bank must stand up against to this despotism. In October, a report by the Financial Stability Board, led by Mario Draghi, advised private banks and the central banks to build their own models for assessing the eligibility of financial instruments, putting a stop to the mechanical evaluations made by rating agencies. Draghi will soon become chairman of the ECB’s governing council. He doesn’t need to terminate rating agencies, he needs to rise up in look into their eyes.
This rating cut is uncalled for, and it will cost us. Portugal is now Europe’s junk. Rating agencies are the undertakers, wealthy and euphoric, of a ridiculously impregnable system. The agencies assure us they don’t hold anything against Portugal. As the man said, “it’s nothing personal, it’s strictly business”. That man was a mob boss.

The rating agencies, are of course, utterly incompetent and corrupt - since they are funded by the companies they rate. This has been admitted by a senior manager. I would normally choose a georg Grosz painting or caricature for a subject like this -for a change I've used James Ensor, the Belgian painter of the early part of the 20th century since the picture captures the corrosive characters of those set in judgement over us.

Is there an alternative?

In March, I drew attention to a new sub-site on Europe established by the Guardian newspaper – and reproduced my response to its invitation for comments and suggestions on possible people who might contribute to the site
Thereafter I forgot about it – but went into the site today and found a useful piece from the historian Mark Mazower about a possible Marshall to deal with the economies of the European periphery. It has set off an interesting discussion thread – with many useful points being made – eg
• The role of the rating agencies (ineffective (they didn’t pick up the practices which led to the global crisis) unaccountable; corrupt (their resorces come from the companies they are rating!)
• The different contexts of post-war Europe and now
• The incentive banks still have for buying dud Greek bonds (they make more than the minimal rates available elsewhere)
• The basic issue about Greece being not their life-style but 2 other things - its political system (its conflicts being so great that it was felt necessary as early as the 1930s to give civil servants constitutional protection for their jobs – with the result that the system has swollen to 800,000); and the immorality of its richer middle class (who simply don’t pay taxes)
One particular post caught my eye -

The private sector caused the crash. The private sector created the conditions for the crash by ceaselessly chest-thumping for ever-greater deregulation and lower taxes (with threats to depart the country if its wishes aren't granted, an undemocratic influence which often outweighed the voices of voters). The private sector also causes the deficit (both here and in Greece) due to its persistent failure to pay the correct amount of tax.
And by relying on unreliable, undemocratic, random, greed-led and potentially catastrophic "market forces", they have created a national and international economy that makes no sense whatsoever - not for people, not for the environment, not for society.
It's time we stopped letting the private sector - in other words, the rich and powerful - hold us, our society and our children, as hostages to the fortunes of capitalism. Anything useful that the private sector makes or does, ought to be done in the public sector. It can be done there without the inefficiencies of competition or stuffing the pockets of the wealthy with profit margins and dividends. And anything useless that the private sector makes or does - and there's a lot of it, from advertising junk food to poodle-grooming parlours and conservatory-salesmen - would not be missed if it were shut down. That might reduce notional GDP, but if those figures place profit above people, then they were useless to start with. The opportunity cost of having a private sector are simply unsustainable in the 21st century: every pound or professional wasted in the private sector is one not being used to shore up the NHS, to build our green energy resources, rebuild our infrastructure, or research the cure for cancer. It's time to cut the parasitic private sector loose, and focus on our society's really valuable economy instead.

Perhaps a bit over the top. But a lot of basic truths. The rich and powerful just don’t seem to get it – that most of them are useless parasites who live in a bubble world separated from reality. It’s all too easy, however, to vent one’s energies on such emotive outbursts – rather than patiently selling an alternative. And the alternatives do exist – as is shown in The Equality Trust’s second Digest which looks at inequality trends and reveals how Sweden’s policies cut inequality there between 1960 and 2005 by 12% - whereas it rose by 32% in the UK in the same period. One June 10, I referred to an article in Social Europe about the Nordic model.
It was Thatcher who undermined our belief in political and collective action. Her mantra was TINA – There is no alternative. And the underlying agenda of the triviliality which overwhelms us in the press and television is the old “bread and circus” one. Powerful media barons want to keep the world the way it is – for their sort. They define what is feasible – and are drumming still the TINA agenda.

Finally, some useful clues on how to assess whether the money in your bank is safe.
Today I'm showing an Angela Minkova print I acquired recently. Astry Gallery had an exhibition of this talented artist's work. She also does quirky little scupltures (see May 5 for an example)

Oldies

Curious weather for July here near the Greek border. Relentless rain on Sunday and ovrecast skies and stunning claps of thunder yesterday afternoon followed by rain. This morning brings some sickly sunlight.
BBC’s Through the Night is always good listening and has currently a nice idea – 2 hours of music composed in 1876 - . Only available for a few days!
For those of you who don’t know Jason’s Godwin’s writing about the Ottoman empire and Istanbul, here is an interview which gives a sense of his knowledge on these subjects.
Travel writing is a favourite genre of mine. Here is a treatment of three famous names – although Robert Byron seems to have slipped out of public view.

Borderlands

Pernik is on the east edge of Sofia and, as befits an old coal-mining and industrial area, a sad eyesore – particularly on a cloudy and rainswept day with its grey rows of jerrybuilt flats an insult to the beauty of the surrounding rolling hills. A few kilometres on, a clutch of peeling high flats announced Radomir. But it was the more charming town of Kyustendil which was my destination – reached through a twisting 20 kilometres ascent and descent of dense wooded hills. In the puddles and rain, the town was less charming than I had remembered from my last visit in 2008 – and was showing evidence of the sort of decline (derelict shops) which can afflict border towns these days. Kyustendil is about 30 kms from both Macedonia and Serbia – and several busloads of umbrella-protected tourists from Macedonia were wandering around the desolate town centre. The old minaret looks set to fall any day – although an old hammam has been spruced up and the water from its well is still gratefully taken in bottles by the residents nearby. Apart from Monday’s workshop (on EU funded territorial cooperation projects), the main reason for my overnight stay is the chance to visit the Vladimir Dmitrov art gallery – whcih is housed in the ugliest concrete bunker I have ever seen. Dmitrov (The Master) is one of Bulgaria’s most famous painters – indeed the name of the gallery’s website actually incorporates the master into it. I’m not actually a fan of a lot of his stuff particulary not one of his trademarks – a face in front of a lot of crudely painted and brightly coloured flowers – but it was good to visit this collection and see a wider range of his paintings. I was taken with some of his earlier, smaller paintings – sunrises and sunsets; his mother; his father – and some multiple face silhouettes. And his Peasant with a hoe (above) which is in the Sofia City Gallery is very graceful.
It was good to meet up again with Belin, one of the trainers, at dinner – who’s deeply involved in the master plan for the stretch of the Danube in this part of the world. He made an interesting observation about the different attitude of the Bulgarians and Romanians to the river. For the Bulgarians, it’s their link with Europe - more psychological than logistical perhaps whereas the Romanians, apparently, have tended to turn their back on it. It’s part of the poor flatlands for them – although with the easing of border controls with Greece in 2007, he sees signs of change in that attitude. I'm reminded of an early 1990s film showing a 1930s military base in that part of the world with the lovely Kristin Scott Thomas speaking Romanian (An unforgettable summer - thanks to UTube in 8 parts - this is part 3)
The great pleasure at the workshop was to meet an official from Pernik – making a major presentation about how they had made succesful bids for EC projects – who was really enthusiastic about her work and the impact which visits to projects in Denmark and Northern Ireland had made on her. Sadly such belief in change and determination is rare in this part of the world. The 2 projects with which Pernik are involved are good examples of EC programmes – Innohubs which links towns on the edge of country capitals in a network to explore and develop good practice for places which have that particular combination of challeges and opportunities. Retina is a network after my own heart – revitalisation of traditional industrial areas (in south-east europe) – since I was one of the founder members in the early 1980s of RETI which brought old industrial European Regions together in a network of good practice and lobbying.
Another interesting chat with Belin whether there is any hope of reviving the derelict villages which are such a striking feature of Bulgaria – in all parts. True (and unlike Romania) Brits, Russians and Dutch people have moved in large numbers into some of these villages – particularly around Veliko Trnovo and the Black Sea (and even on the edges of the Danube) – but the Brits certainly are older people. And it is the young who are needed. He wondered whether the new contractual and work from home patterns which the internet now allows were part of the solution; to which I added my usual input about the increased need for frugality and self-sufficiency also supplying another perspective. We both seem to agree that it is about reframing the issue. The old solution was about location marketing and inward investment. Time to develop self-sufficient strategies!

Coming next

Just back from a trip to Kyustendil, the old town which is close to the border with Serbia and Macedonia - and only 85 kms from Sofia. Purpose was a workshop on inter-regional/transfrontier cooperation with EU funding. For more, read tomorrow's post.