The MT Diary: Howard Davies

Howard Daves gives his view on Greece and ponders whether European socialism is back.

by Howard Davies
Last Updated: 06 Nov 2012

In their recent elections, the Greeks decided to ask the western world to stop while they get off. I suppose they feel entitled to do so, having invented the thing.

I was there at the time, sailing. On election day itself, I started in Corfu Town and ended in Gaios, the throbbing capital of Paxos, an island famous, of course, for its stuffing. There was not a single election poster and no one seemed to care a jot. I found one bar that showed a heavily made-up blonde newsreader looking at a wall of voting numbers, which made a change from endless reruns of the latest Olympiakos/Panathinaikos game, but that was all. I guess that is the way the world ends, not with a bang but a retsina-fuelled whimper.

The Ionian islands are not, to be fair, at the epicentre of the Greek economic crisis. They live on tourism. Corfu receives those floating blocks of flats laughingly described as cruise ships; the remoter islands survive on the largesse of 32-footers, mainly sent there by flotilla companies. Since I was, of course, there on an in-depth field research trip for MT, rather than skiving off on a late spring break, I made enquiries.

In spite of the crisis around them, the islands should do well until July, but after then bookings are way down. The Olympics seem to be discouraging the Brit from straying far from his Sky dish. I suppose we could say that it serves the Greeks right for having invented that ludicrous extravaganza too. It will make for a tough summer, though the calamari will get a chance to breed.

Since they gave the wrong answer in the election, it is likely that the Greeks will be asked to take the test again. That has been the way of things in the EU in the past decade. Every time a population gives an answer on integration which is awkward for the governing class, they are told to wash their pens out and have another go. The Irish are dab hands at redrafting the question to make it easier to get right.

One can't help thinking that this process may come to an end at some point and maybe quite soon. Francois Hollande has ideas for redrafting lots of treaties, in ways that the Germans might find quite awkward. They might find themselves obliged to write a very large cheque payable to the Club Med, and one that doesn't even give them a guaranteed lifetime sun-lounger.

Indeed, the Germans are so unpopular that they might be better off holidaying in the Baltic. At Athens airport the other day, so the story goes, a taciturn young immigration officer (they retire at 50, of course, exhausted by the hard work) asked the arriving visitor his nationality. 'German,' he responds. 'Occupation?' 'Nein, nein, just visiting,' he quickly replied.

The Hollande victory has given the European left a fillip. Two days after his election, I received an excited invitation from a left-of-centre think-tank to a discussion on whether European socialism is back. With the local election results to boot, these must be heady days in the Miliband household. (Miliband junior, I mean. Miliband senior must have got gloomier and gloomier as every blue council turned to red.)

Yet it is hard to see any pattern except the tendency to throw out whoever happens to be in office at the time. Since the crisis, Spain has turned right, Portugal left, the Netherlands right, France left, Ireland from one of those funny-sounding Fine/Fianna parties to the other, and Italy has turned away from politicians altogether. In New York, they are beginning to ask themselves whether the same thing will happen there. Actually, that's not quite right, since 99.99% of Americans have no interest in European politics whatsoever and the remaining 0.01% think Meryl Streep is still our prime minister.

For the first time, the polls are saying that Obama might also be a victim of the incumbency curse. Romney, having fought off the crazies, has edged ahead. People wonder if, in fact, against all the previously assumed odds, they just might wake up in November and find him fitting out a Latter Day Saints chapel in the grounds of the White House. A leading indicator is that you can't get a ticket for The Book of Mormon, a Broadway musical about all the intriguing things Mormons believe, for love nor money.

The latest jobless figures in the US didn't help either. Unemployment has been edging down for a few months, but the already slow pace has stalled further, suggesting that Obama will be batting on a very sticky wicket in the autumn.

What difference would a Romney victory make for the rest of us? Economically, it rather depends on how he deals with the deficit problem. Bush's tax cuts expire at the end of the year, and there is no agreement in Washington on renewing them, or indeed on anything else. If nothing is done, fiscal policy will be tightened sharply, too sharply even for the deficit hawks, and probably enough to knock the hesitant US recovery on its head. That would make life even harder for the struggling eurozone, and for us.

Still, as the Santorum and Gingrich campaigns reminded us, Romney spent two years in France as a missionary and, horror of horrors, actually speaks French. Their negative ads showed him doing so, in an attempt to frighten the voters. In the French election, speaking French was not a handicap, as it turned out, so he and Hollande are bound to get along famously. Never mind 75% tax rates or 35-hour weeks, it'll be the entente cordiale all over again.

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