American Hellenic Institute


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AHI Capital Report, Vol. 4 Issue 5

Volume 4, Issue 5


September/October 2012—No. 05 (202) 785-8430

AHI President’s Note: The American Hellenic Institute presents AHI’s Capital Report which is a timely synopsis of recent policy discussions in Washington to help keep you abreast of the latest developments. As a service to our membership and constituency, and to gain an understanding of the position of other entities on our issues, the American Hellenic Institute attends and participates at policy forums or roundtable discussions to ensure the policy positions of the Greek-American community are represented.

The content provided in AHI’s Capital Report is for informational purposes only, and does not necessarily reflect the position or opinion of AHI.

Washington Foreign Law Society, CSIS Examine European Debt Crisis

AHI attended an event sponsored by the Washington Foreign Law Society and the Center for Strategic and International Studies titled, “The European Sovereign Debt Crisis: A Political and Economic Guide,” September 13, 2012.

The presentation featured Managing Director of the Lindsey Group, former Treasury Undersecretary and CSIS Senior Advisor Tim Adams, and Director of the Europe Program at the CSIS Heather Conley. Speakers discussed the political and economic facets of the European Union and those factors currently affecting the financial crisis. The event began with both speakers providing a brief background on the European Union and its history, reminding attendees that it began as a political project intended to prevent future conflict in Europe by encouraging economic cooperation.

Politically, things are also becoming a lot more difficult, according to the panelists. In Greece, for example, government officials can’t seem to agree on the cuts needed for a potential third bailout package. If the Greek government cannot agree on new cuts for Parliament to approve, then the possibility of even receiving a third bailout package from the troika is slim. With the recent legislation in Germany, now EU governments must formally approve actions with regards to bailout installments. The current parliaments won’t approve this money for Greece. But no country is going to be “asked” to leave the Eurozone. Furthermore, there is no legal basis to leave and no political desire for the common currency to cease to exist. Any one country leaving the Eurozone is an event we don’t know about and we therefore cannot predict its outcome and how it will affect the global economy. Those are the factors that we need to watch out for - external shock factors such as something happening in Iran or a zombie bank crashing which could then result in a shock to an already fragile system.

The speakers added it is important for Euro watchers to understand the political will of Europe’s leaders for the Euro to last. But in order to rise above the effects of this crisis, there needs to be a huge level of change in Europe. Countries need to be willing to give up sovereignty and the ECB needs to instill confidence in the system and play a financing role until the private investment returns. Most importantly, growth is needed. It is also in the best interest of the United States for the Euro to succeed. They are an important ally and a NATO partner and are also able to influence and assist the US in other parts of the world. Europe holds over 2/3 of American foreign direct investment and its banks are the primary supplier of credit to the US.

Q & A: Departure from Euro for Greece?

During the question and answer , the panel was asked if Greece can escape the downward spiral of a recession that has lasted for the past five years in order to grow. Panelists responded that Greece is the most likely to depart the Eurozone but the rest of Europe will do everything to keep that from happening. Departure would be ten times worse than the situation they find themselves in today. The Eurozone members and the rest of the world also don’t knowwhat departure looks like. In the end, Greece won’t be pushed but they might decide to leave on their own. What Greece needs is to reengineer itself in order to create growth. Greece has been going through huge political contortions in order to pass cuts and gain their installments but each time, politicians and the public edge closer to not passing the necessary cuts, which has caused any trust for Greece to break down. European parliaments don’t want to bring the idea of another bailout package before their parliaments because there’s no confidence in Greece. Greece needs to radically change their tax structure, the way they treat investment, and liberalize their economy. They have the potential to become the Singapore or Hong Kong of Europe. This would be extremely difficult for them to do, but not impossible. Huge reforms would be needed. Either way, things are going to get a lot worse before they become better.

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FYROM’s Defense Minister Pushes for NATO Membership

AHI attended “Does Macedonia Belong in NATO?” held October 12, 2012 and sponsored by the SAIS Center for Transatlantic Relations and Conflict Management Program. The discussion focused on why FYROM should become a member of NATO and why its membership would be beneficial for Skopje and the organization. Fatmir Besimi, defense minister, FYROM spoke at the event.

Besimi maintained that FYROM is in a good geostrategic position, is not threatened by any of its neighbors, and that NATO would only serve to be another guarantee for peace and stability in the region. NATO’s values are values viewed within the country as symbols of democracy. The appeal of foreign investment following FYROM’s membership is another benefit to joining the organization.

During the question and answer portion, it was mentioned that Besimi avoided mentioning Greece by name but rather mentioned a political “obstacle” preventing FYROM from joining. Besimi was asked if he saw a possible compromise on the name issue and what America’s role should be. Rather than answer the question directly, Besimi said that if there was a debate over history, the best solution would be if Alexander the Great were “awake” so that he could answer all questions. Since this is not a feasible solution, Besimi maintained that FYROM and Greece need to see each other as partners in the finding of a solution to the naming dispute that builds mutual trust.

Another gentleman showed photos of various government officials speaking or standing in front of maps of FYROM depicting the country’s current boundaries as well as those of northern Greece, thereby making blatant territorial claims on the Greek region of Macedonia. He then reiterated the fact that Greece was the second largest investor in FYROM and had supported the government in its 2001 civil war with the Albanian minority and asked Besimi to address the photos. In response, Besimi stated that FYROM has always cooperated with Greece in the past and needed to be partners in finding a solution. He stated that “when you see photos like this, it is not a threat…(because) we have to have confidence in each other. I have no personal statements about those photos…we have to look at what unites us and our common goal, Euro-Atlantic integration.” He then quoted a colleague who once said, “…we can’t change history but we can shape the future” and that he was not stating one thing was right or wrong but that the two countries can only talk and try to understand each other.

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Think tank explores Turkey’s Role in Eastern Mediterranean, Impact on U.S.

AHI attended a discussion on Turkey’s role in the Eastern Mediterranean and its effect on U.S. security interests led by GWEST LLC President Paul Michael Wihbey at the Institute of World Politics on September 27, 2012. The energy resources in the Mediterranean will help redraw the map in terms of geopolitical influence and power.

The presentation addressed the eastern Mediterranean’s emergence as a new gas and oil frontier and how regional energy development and geopolitical circumstances favor Turkey’s emergence as a dominant regional influence. New frontiers have been identified in Turkey, Syria, Israel, Lebanon, Cyprus, and Jordan. Thrace was briefly addressed. Wihbey stated that not only were fairly significant deposits of oil and shale identified there but two Canadian companies with expertise in shale oil fracking technologies are currently expressing interest in the region. Political leaders of Cyprus and Lebanon met recently and discussed their natural gas reserves in shared territorial waters as well as freshwater reserves under the Mediterranean seabed, a commodity which is becoming increasingly sought-after. Cyprus also signed a 2011 maritime boundary agreement with Israel to begin cooperating in order to start exploration and drilling. The greatest market for Israel and Cypriot natural gas is Turkey but Cyprus is in danger of being isolated if Israel reopens all ties with Turkey, he said.

Wihbey also stated that Ankara established an agreement with the “government of northern Cyprus” to begin drilling in November 2011 and that whoever controls the supply chain is the power holder in the oil and gas market. Turkey has a supply chain advantage and energy-based expanded regional sphere of influence are a result of many factors including but not limited to its geostrategic position, size, and rate of growth.

AHI Questions Wihbey

AHI asked Wihbey to address the legality of Turkey drilling in Cyprus’ territorial waters because of Turkey’s continued occupation of one-third of the island with a military presence that exceeds 40,000 troops. How does this undermine Turkey’s influence in the region because the drilling is technically illegal?

Wihbey responded that he was unqualified to address issues of legality and would not be able to adequately answer this question. The one piece of information he offered with regard to this topic was that the only matter of importance for investors is the de facto power on the ground. As issues concerning “legality” come up, they will be dealt with as they arise by the respective legal departments of the companies drilling there. Legal hoops can be easily jumped through by negotiating with the de facto power on the ground, he added.

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Panelists Discuss Turkey and the Syrian Crisis

AHI attended a forum with Mona Yacoubian of the Stimson Center and Denise Natali of the National Defense University on September 27, 2012 at the Middle East Institute. Panelists discussed U.S. and Turkish policy towards Syria since the beginning of the uprising and the role played by the Kurdish minority and their tumultuous relationship with Ankara.

The United States wants to remove Assad from power, protect its security interest and maintain regional stability and is still concerned with the possibility of chaos, extremism, and violence spilling over into neighboring countries.

Two concerns are shared between America and Turkey on Syria. One is a humanitarian concern for Syrian refugees. Both countries have contributed funds towards non weapon supplies for the opposition movement. The second concern is regarding chemical weapons. There has been joint planning on what would be done if Assad started using chemical weapons or if his stockpiles became insecure. The area where both countries diverge is over the establishment of a safe area in northern Syria, something Turkey advocates and the U.S. opposes. Turkey is also trying to engage Iran over the Syria issue as part of a Muslim quartet established by Egypt.

The second facet of the discussion covered the Kurds and their actions in Iraq, Turkey, and Syria since the Syrian civil war has begun. The Kurds in northern Syria have used the political unrest to their advantage. They are politically fragmented not just based on ideology but, also whether they desire a federalist state in Syria or an autonomous region. Currently, the Kurds of Syria have no real institutions in place. Much is contingent on how long al-Assad remains in power, what type of new governmental structure will follow, and how well Kurdish groups govern their regions. Until political stability is achieved in Syria Turkish national security, and energy security will be in danger.

Turkey enjoyed close relations with Syria before the uprising and believed good economic and diplomatic ties would give it leverage over Syria. When Turkey was unable to persuade Damascus to enact political reforms, Ankara took a pro-opposition stance which has caused anger among Turkish citizens. The government in Ankara sees itself as on the right side of its neighbor’s conflict while critics are accusing the government of underestimating the al-Assad regime, being motivated by Sunni considerations, and neglecting the domestic Kurdish issue.

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Situation Greeks Facing Unfair, Says Former German FM

AHI attended a forum titled, “Germany and the EU: What Kind of Transatlantic Partners?” at the Woodrow Wilson Center. Munich Security Conference and former Deputy Foreign Minister of Germany, Ambassador Wolfgang Ischinger, gave a concise summary of the elements of the current Eurozone crisis, Germany’s role, and a brief analysis of Germany’s relationship with the United States.

Ambassador Ischinger emphasized the fact that the relationship between not only Germany and the United States, but the European Union and the U.S., is one of huge importance to both parties from an economic, political and security perspective. He discussed how the situation facing Greece and Greeks right now was an unfair one to the Greek people and that they were the true victims of this crisis. However, he stressed that the European Union has always emerged from every problem it has faced a stronger more cohesive union, and this was his prediction for the future of the Eurozone.

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AHI meets with offices of Mississippi Senator, Minnesota Congressman

AHI met with the staff of U.S. Sen. Thad Cochran (R-MS) and U.S. Rep. Keith Ellison (D-MN). Senator Cochran recently returned from a trip to Greece that focused on the elements of the Eurozone crisis. Both staff members were given copies of the one-hour PBS documentary “Cyprus Still Divided: A U.S. Foreign Policy Failure” and executive summaries of AHI’s policy statements. The merits of the AHI-backed American- Owned Property in Occupied Cyprus Claim Act were discussed as well.