Not Just Another Recession
Why the Global Economy May Never Be the Same
FOR many years after the tiny new Greek state came into existence in 1828 it was unable in the nature of things to pursue a policy dedicated to the maintenance of peace. Its main aim had to be to liberate from the Ottoman yoke all the many regions where the Greek element was in an overwhelming majority. Only later could peace and security become its main objectives. At the time, the very raison d'être of its existence compelled it to become the nucleus of a national commonwealth wherein the whole Greek race could be reassembled and unified. The seven-year War of Independence had been fought under this banner, and the vision of a resurrected Byzantine Empire was in everybody's mind. In such circumstances the ensuing peace could have no other meaning for Greeks than a truce. Indeed, hardly had the new monarchy set up its provisional capital at Nauplia than it undertook strenuous diplomatic activity aimed at uniting all Greeks under the crown. In the young foreign office, departmental divisions were established corresponding to the provinces of the Ottoman Empire to be liberated, notably Thessaly, Epirus and Crete.
Obviously such sweeping claims could hope to receive satisfaction only in conjunction with the outbreak of a major war, and in view of the tensions created by the continuing crisis between Egypt and Turkey this did not seem very far off. But as time passed the chances of a general conflict seemed to recede, so that one of the most well-balanced of the Greek envoys of that day, Spiridion Tricoupis, representing his government in London, had to report in 1835 as follows:
We must not expect much from the European powers who, in their earnest desire to secure the annulment of the Turco-Russian treaty of 1833, are ready to accept any concession agreeable to the Sultan. On the other hand the Philhellenic feelings of the years of the War of Independence are on the decline all over Europe.
In view of this melancholy state of affairs, Tricoupis urged his government to lose no time in undertaking extensive naval armaments with a view to an eventual coup de main in the Aegean.
I mention this proposal because it expresses vividly the spirit that pervaded Greek foreign policy in its early stages. It continued to prevail through the nineteenth century and into the first two decades of the twentieth, undaunted by disappointments and reverses. Through all this period Greece always championed the principle of nationality, ready to exploit any opportunity with a view to promoting her national aspirations. Everything else--economic development, social well-being--was subordinated to this one purpose.
The price paid for such a national policy was high, but nobody demurred, and in the long view the returns were not disappointing. Slowly but steadily, Greece's territory was enlarged by the incorporation of the Ionian Islands in 1864, Thessaly in 1883, southern Macedonia, Epirus and the islands of the eastern Aegean in 1913, and finally western and eastern Thrace, together with the Smyrna area, in 1920. This policy of national unification was aided by several important factors: the undisputedly Greek character of the liberated territories; the state of decay and unrest in the Ottoman Empire; the economic and cultural superiority of the Greek race as compared with the other racial elements in the Balkan Peninsula at that time; and the mutual antagonisms of Great Britain, France and Russia in that part of the world.
The Treaty of Lausanne of July 1924 marks a turning point, at the end of this long period of national resurgence and expansion. The territorial and economic provisions of the treaty are well known, but equally important are their political and national implications and their psychological impact on the minds of two of its principal signatories, Greece and Turkey.
For Greece, the Treaty of Lausanne did not represent just another truce in the long struggle against the Turks. It meant a final arrangement, implying the wholehearted acceptance of the new status quo and the willingness to abandon forever all aspirations to revive the Byzantine Empire. It meant a complete reappraisal of the Greek position in southeastern Europe in the light of the new circumstances.
During the period 1912-1922 Greece had, indeed, reached the extreme limits of her military and political potentialities. Against the better judgment of King Constantine and his military advisers, she had deliberately entered the war by the side of the Entente in 1916, in anticipation of further territorial aggrandizements. Encouraged by initial successes, she had embarked on her ill-fated expedition in Asia Minor, where the Turkish element constitutes the great majority of the population. By overstretching her military capacities while she was divided internally by political and constitutional controversies, and being left to fend for herself after the repudiation of the Treaty of Sèvres by its principal signatories, Britain, France and Italy, she consumed all her energies and finally collapsed into disaster. Further, the evacuation of more than a million refugees from Eastern Thrace and Asia Minor and their settlement in Greece faced the country with a new set of formidable problems, economic, technical and demographic.
Meanwhile the emergence of new and vigorous national states in the vicinity--Jugoslavia, Bulgaria and Turkey--made it impossible for the Greek element in the Balkan Peninsula to think any longer of dominating the whole area by virtue of the economic and intellectual superiority which it had enjoyed in the time of the Byzantine and Ottoman Empires. The economic and military conditions that had made the Byzantine Empire possible in the remote past had ceased to exist and Greece had to accept the new situation. It was because a considerable part of Greek public opinion headed by King Constantine realized this fundamental change that it opposed the expansionist program of Venizelos in Asia Minor. For a time, nevertheless, the brilliance of Venizelos' leadership concealed the weakness inherent in his policy. But the military disaster in Asia Minor revealed beyond any dispute the basic change in the position of the Greek nation and inevitably led to a general reassessment of Greek policy.
There is surely an element of personal drama in the fact that the historic task of carrying out this reassessment fell upon Venizelos himself, the very man who had inspired his country in its last and most brilliant achievement of national expansion. Addressing the Chamber in the course of a debate on naval rearmament on February 10, 1930, he referred to Greece's new relations with Turkey, and concluded his speech as follows:
Greece accepts in good faith the contractual obligations that put an end to the late war, both those which are favorable to her and those which are not . . . . So long as the concept of Greater Greece determined our policy, we were compelled to bend our energies to securing naval supremacy in the Aegean. But, since we have accepted the frontiers fixed in the last treaties, and as we are firmly decided to live within these frontiers, the necessity of naval supremacy in the Aegean no longer has any foundation.
This was no mere oratorical statement. For not only was it accepted by all political parties but, as already mentioned, it corresponded to the hard facts facing a country ruined by war, threatened at many points along its long northern frontier and struggling against overpopulation and misery. The profound social changes consequent on the war and defeat facilitated this diplomatic and intellectual realignment. A new ruling class, mainly recruited among the rapidly expanding industrial and commercial ranks of society, and a corresponding development of the working class, directed public interest towards new and pressing problems of an economic and social character. The very foundations of expansive nationalism were shaken.
At the same time Turkey was also undergoing a similar process of readjustment of her national aims. The theocratic and imperial concept on which the Ottoman Empire was founded had been superseded by Ataturk's new national and lay state. Defeat and foreign domination had also demonstrated in Turkey's case the impossibility of domination over other neighboring peoples. Moreover, the coalition of the Western powers opposing her had decided against her total dismemberment only because of the military and political eclipse of her formidable northern neighbor; and this brought home to the new Turkish leaders the necessity of more safeguards on their country's western frontier. At the Lausanne Conference, although Turkey stubbornly defended her claims, she gave ample evidence of this awareness. This made possible the final settlement on the basis of the new concept of national states. Turkey and Greece found themselves on common ground with regard to their respective policies, confirming their reciprocal claims within the limits of their indisputably national territories.
A long and protracted period of readjustment followed the acceptance of this new concept of policy.
In the north, Jugoslavia had to become reconciled to the new state of things in Macedonia. By their exorbitant demands concerning the free zone in the port of Salonica overconfident Jugoslav statesmen had alienated for a time Greece's long-established friendship. Bulgaria, resentful and still unrepentant after her last two defeats, maintained a state of undeclared guerrilla war on the Greek frontier. Fascist Italy, having already set foot in Albania, threatened Greece from the northwest. And the exchange of populations with Turkey created many difficult problems, both financial and political.
It is to the credit of Venizelos that by a series of imaginative agreements he succeeded in reducing tension with Italy, effecting a reconciliation with Jugoslavia, and, last but not least, wiping out the remaining differences with Turkey. This persistent effort culminated in the signature of a pact of friendship with Italy in September 1928, a pact of friendship with Jugoslavia in October 1929, and a general settlement of outstanding questions with Turkey in June 1930, followed by a treaty of friendship and a protocol for the limitation of naval armaments. This network of friendships, old and new, served equally well the interests of all the countries concerned.
At the time these readjustments were being completed the world-wide implications of Fascist and Communist designs were not fully discernible, and Hitler's aspirations had as yet no solid foundation. The Balkan agreements of the period were based on the assumption of neutrality vis-à-vis the European powers. The slogan "the Balkans for the Balkan peoples" was a generally accepted if not explicitly stipulated premise. But as Fascist and then Nazi aggressive policies took on more definite shape it became evident that the agreements of 1928-1930 should be supplemented by a common defense policy. After long negotiations, new defensive agreements were signed in the years 1933-38, but their scope was limited to a local Balkan casus belli, namely a potential Bulgarian aggression. Greece and Turkey were reluctant at that time to enter into military agreements of a wider character lest they arouse Italian or Russian susceptibilities. This limitation, agreed upon and recorded in secret documents annexed to the main treaties, proved to be fatal. When Italy attacked Greece, and when later Germany took military and diplomatic action in the Balkans in order to support the badly-shaken Italians in Albania and at the same time to secure the southern flank of her armies in preparation for her attack on Russia, the inadequacy of these agreements became apparent. The whole defensive system disintegrated and one after the other the Balkan countries fell beneath the Nazi sway.
The lesson from this failure did not pass unnoticed. When a new danger, coming this time from Russia and her satellites, loomed up after the war, Greece and Turkey turned to their wartime allies and asked to be admitted to the North Atlantic Treaty Organization. The isolationist concept of "the Balkans for the Balkan peoples" had obviously become out of date as a consequence of the new strategic situation in the world. Peace and security could be bought only at the price of subscribing to reciprocal agreements with the rest of the free world.
On the other hand, the geographical and military position occupied by Jugoslavia, Greece and Turkey formed an important link in the defense of Europe, the Middle East and Africa. Its strategic implications, from the point of view of both defense and attack, were summarized by Major General William H. Arnold before the Senate Foreign Relations Committee during its investigation into the implications of the Mutual Security Act in March 1952, as follows:
Greece and Turkey occupy extremely strategic positions. The loss of Greece would provide the Soviets with an outlet to the Mediterranean Sea, threaten the flanks of both Turkey and Italy, expose the southern boundary of Jugoslavia, and cause further unrest in the Middle East. Geography has placed Turkey in the most strategic position of any member of NATO on the Soviet periphery. She faces Bulgaria on the west, controls the vital Straits and borders the Soviets for some 200 miles on the east. Turkey is NATO's anchor on the south, a position that requires great strength.
Both Turkey and Greece are poor when compared with other members of NATO. Luckily this poorness applies only to material things, for both countries possess a priceless wealth in fortitude and stoutheartedness, spelled simply g-u-t-s.
In fact, the adherence of Greece and Turkey to NATO was welcomed as an important contribution both to their own security and to the general defensive system of the alliance. Had it not been accepted in time, the present Russian drive into the Middle East would have been directed eventually towards the Bosporus and the Aegean and, from a military viewpoint, there would have been practically nothing to oppose it.
Recent developments have considerably reduced the effectiveness of this defensive system, to the detriment of both Greece and her allies.
The increasing tension between Jugoslavia and the Soviet bloc reflects the difficulties and uncertainties inherent in Tito's tightrope policy between East and West. Not being a member of NATO, Jugoslavia cannot be counted on as a potential ally in case of open Russian aggression in the Balkans. Nevertheless, her determination to defend her own territorial integrity against any threat or infiltration reinforces the military position of Greece and Turkey in the event of an all-out Russian attack in that area. Moreover, the use of the Bulgarian corridor by an invader from the north for a limited attack on Turkey or Greece, with an uncertain Jugoslavia on Bulgaria's flank and rear, would be a risky undertaking. It was precisely for this reason that Hitler, after the Belgrade coup d'état of March 27, 1941, had to delay the advance of his armies through Bulgaria into Greece until he had first disposed of Jugoslavia. The consolidation of Jugoslavia's present attitude as an uncommitted country thus contributes to the defense of the Balkan sector. But precisely for that reason--not to speak of the existing ideological controversies between Soviet and Jugoslav Communists--it is unlikely that Russia will ever really put up with the present situation, whatever the vicissitudes of her official relations with Tito's régime. The long and tedious dissertations on the merits of "many roads to socialism" or of "socialist solidarity" in which the Cominform countries indulge in the course of their attacks against Tito can hardly conceal the real issue. In any case, the deterioration of the situation in this quarter places Greece and Turkey in a position of great uncertainty.
It is all the more to be regretted that Greco-Turkish coöperation, so painfully achieved after years of hostility, is now undergoing the heaviest strain in its short but fruitful history as a result of the Cyprus issue. Viewed from the angle of the common strategy of defense, the revival of the century-old Greco-Turkish feud constitutes a distinct setback.
It is idle to disguise the fact that the Cyprus dispute has by now gone beyond the limits of the original controversy and by reviving old suspicions and smoldering antagonisms has brought us back to the state of things which existed prior to the Greco-Turkish arrangements of the 1930s. This has to be fully realized if the implications of the Cyprus issue are to be understood at all.
As long as the controversy was limited to a legal and diplomatic debate on granting Cyprus the possibility of exercising the right of self-determination, with Britain as Greece's main antagonist and Turkey remaining resentfully silent in the background, Greco-Turkish relations were only slightly affected. The press on both sides confined itself to polite warnings and more or less friendly complaints, while the Turkish Government restricted its interference to tactful reminders that to raise the issue in the United Nations would seem "ill-timed." This Turkish attitude was misconstrued by over-optimistic Greek diplomats as amounting to conditional acceptance of the Greek view. A more positive démarche of the Turkish Ambassador, for some odd reason, never reached the highest quarters in Athens. The Greek Government remained under the impression that, however severely the Cyprus issue might affect Greco-British relations, the Turco-Greek friendship would not be seriously affected, the more so since relations between Greeks and Turks in Cyprus itself had remained friendly for centuries in spite of the permanent state of hostility between the mother countries.
In course of time, as Turkish intervention became more outspoken and stiffer, Greek public opinion grew more restive and indignant, suspecting--perhaps not entirely without reason--that the Turks were acting under British instigation. This Turkish intervention in opposition to a national claim concerning an island by all standards overwhelmingly Greek, and in regard to which Turkey had formally given up all rights by virtue of a treaty signed by her at the end of a victorious war, was deeply resented in Greece. To the Greeks, it seemed hardly conceivable that the pledges of the United Nations Charter should not be applicable to a population whose political and cultural level is far higher than in many countries long ago accorded self-determination. After the savage outburst of anti-Greek fanaticism in Istanbul and Smyrna in September 1955, resentment gave place to open hostility and the long heritage of national enmity once more came to the surface in all its crudity and bitterness.
In Turkey, on the other hand, Greece's insistence on self-determination for Cyprus has been interpreted as a revival of Greek expansionism with all its sinister implications. The alleged importance of Cyprus for Turkey's security can be understood only if seen against this background of suspicion. In the hands of a friendly nation--as Greece sincerely and unreservedly wants to be--Cyprus could hardly be used otherwise than in the interests of the common cause. But the memories of the Greek invasion of Asia Minor after the First World War still cast their dark shadow on the Cyprus issue. A certain element of bargaining for diplomatic advantages may also have come into play.
As a result of the interplay of these intricate motives, the Cyprus dispute has taken on the aspect of a real tragedy. The elements in it which are irreconcilable do not lie in the issue itself but in its historical background and in the formidable national problems it raises. That these problems are in fact little more than an echo of old conflicts very few will seriously contest.
That this could ever occur reveals the fragility of the Greco-Turkish reconciliation of 1930. Time had not yet permitted the work then achieved to become consolidated, and the deep emotional undercurrents which agitate this part of the world have frustrated the efforts of individuals. All the nations in this area have been in turn the nuclei of great empires, and the memory of past glories, defeats and humiliations still survives. Only after a long period of stability and peace would it be possible for the embers to be extinguished and covered at last by the dust of time. But on each occasion, long before that could happen, fresh conflicts, invasions or internal convulsions would intervene to destroy what had been done to establish peace and stability. This is what gives the whole area the distinct shade of tragedy which matches the barren austerity of its landscape and is revealed in the gravity of look and demeanor of women and men and in the plaintive melodies of their songs, despite radiant skies and serene seas. It compensates for many other deficiencies, but it also makes life arduous and policy often sterile.
How far can this situation now be redressed, if that is at all possible?
An improvement in Greco-Turkish relations presupposes at least a temporary or limited solution of the Cypriot problem, and this in turn postulates a revival of mutual confidence. No wonder, therefore, that a great deal of diplomatic skill has been wasted in the idle effort to square the Cypriot circle. Nevertheless, recent diplomatic developments may indicate some encouraging changes which should not be lost to sight. Are they due to an increasing awareness of the risks involved, or merely to the miraculous effects of Metternich's cynical axiom, "Eventually, every affair will somehow find its end"?
Whatever the reason, both Turkey and Greece, while firmly upholding their respective positions concerning self-determination or partition, have in fact moved somewhat toward a de facto agreement. A careful study of their respective attitudes vis-à-vis the Macmillan plan of last June seems to corroborate the emergence of a few preliminary points tacitly or even explicitly accepted by the three main parties to the dispute. These points of more or less general agreement can be summarized as follows:
1. That under present conditions a final settlement of the Cypriot problem is hardly possible and that in its absence a temporary agreement for the administration of the island should be worked out.
2. That this agreement, covering a limited period, say seven years, should be based on integration of the two communities, with a clear majority of the Greek element in the organs of central government.
3. That this agreement should in no way prejudice the final settlement of the problem.
In his reply to the Macmillan proposals, Turkish Foreign Minister Zorlu pledged his Government's willingness to collaborate in the implementation of the British plan, while at the same time pointing out that in his opinion this plan "was not irreconcilable with partition."
In his turn, Sir Hugh Foot, the Governor of Cyprus, pointed out unequivocally in his statement of August 1, that "there must, therefore, be a course set for a period of years, which leaves the final solution open."
On the other hand, M. Karamanlis, in his statesmanlike letter of August 19 to the British Prime Minister, while firmly upholding the Greek Government's attitude regarding the introduction of democratic self-government in Cyprus, clearly implied the acceptance of a provisional régime on condition that all provisions leading to partition were dropped from the plan. "In general," M. Karamanlis concluded, "our observations, as Your Excellency will notice, seek to remove from your plan those elements which divide the Cypriots in an almost organic way instead of promoting concord and coöperation. . . . I am afraid, Mr. Prime Minister, that the plan put forward by the British Government, without the modifications of the Greek Government, will not serve the purpose which you have proclaimed."
Thus the whole problem boils down to the question of devising appropriate constitutional machinery for a provisional administration of the island which, while it secures the widest possible measure of integration and self-government, will at the same time rule out both partition and Enosis (Union with Greece). Given good will and mutual confidence, it should not be impossible to work out a constitutional formula adapted to the circumstances. The real difficulty resides precisely in the lack of confidence which is even more indispensable when it is a question of securing the coöperation of two separate ethnic groups, destined to live together and collaborate in the administration of their common country.
Viewed in this context, it seems of paramount importance that any reference to Mr. Lennox-Boyd's statement of December 1956 concerning partition should be eliminated. The coöperation of neutrals in the machinery of government will also be of a great help for reëstablishment of confidence. The reorganization of the police force and the administration of justice under the supervision of neutral commissioners would help to foster general acceptance of the new administration. The nomination of the members of the High Court, which constitutes an essential part of the Macmillan plan, should also be entrusted to an independent body, for instance the World Court.
The new experiment, if ever carried through, will certainly exceed in importance its immediate aims. It will provide administrative machinery which will serve the needs of the Cypriot people even beyond its time limit, and which will continue to be applicable whatever the final solution adopted at the end of the seven-year period. Turks and Greeks will learn again to live together, and this is equally indispensable whether under the status of an independent country or any other international régime to be agreed upon. Cyprus, the bitter apple of discord which threatens to undermine the whole structure of Atlantic defense in Southeastern Europe, should be a link between three allied countries bound together by a common destiny. Given statesmanship and creative imagination, this may yet be possible.