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Architects blast Greek third bailout deal

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Architects have hit out at Greece’s latest proposed £61 billion bailout, warning it will create ‘servitude for a generation’ and financial hardship not seen since WWII

The profession spoke out as the Greek parliament sat down today (15 July) to debate the controversial agreement which prime minister Alexis Tspiras condemned as ‘irrational’ but acceptable to ‘avoid disaster for the country’.

Key requirements drawn up by Greece’s creditors include ramping up VAT, increasing corporation tax for small companies and raising the retirement age to 67.

Around £50 billion of Greek assets will also be privatised with half of the proceeds being used to recapitalise the country’s banks.

Commentators in the built environment are however sceptical the deal – which comes after Greece missed two IMF deadlines for £1.1 billion in interest on past loans – will solve the heavily debt-laden country’s problems.

Steve McAdam of Fluid said the bailout could both enlarge Greece’s structural debts and shrink its economy ‘introducing financial stresses not generally known in Europe since the world wars.’

The conditions of this bailout are revolting

Andrew Waugh of Waugh Thistleton commented: The bailout was imperative. It is the conditions of this bailout that are so revolting.

‘Anybody responsible for anybody else knows that this is not the way to help them out of a problem. All we are doing is pushing the Greek people into servitude for a generation - because of the faults of their previous government.’

Greek chartered surveyor Panos Theofilopoulos suggested the deal may enhance economic activity in the long run but increased private sector taxation also could be ‘devastating’ in the short-to-medium term.

‘I anticipate increased recession and defaults due to lack of capacity to pay taxes,’ he said. 

Greek debt compared to Eurozone average. Image by Spitzl

Source: Image by Spitzl

Greek debt compared to Eurozone average. Image by Spitzl

Alex Scott-Whitby of ScottWhitbyStudio said ‘punishing’ new taxes on large properties could impact owners of holiday homes but added low construction costs meant it was paradoxically a very good time to build in the country.

Looking ahead, Scott-Whitby called on the profession to work with Greek architects to guarantee the ‘best use’ of any future funds available for investment. University of East London students taught by Scott-Whitby will focus on diversifying Greek towns’ economies next year.

Greeks have had to become more and more inventive to survive

Pointing to an economic future less reliant on tourism, McAdam said: ‘Over the past five years Greeks have had to become more and more inventive to survive. This has begun to generate some interesting businesses and ventures - from Snail Farms to educational co-ops.

‘I would like to see creative enterprise and fresh thinking rewarded through grants rather than ordinary people endlessly punished for things they did not ask for in the first place through endless new taxes.’

Waugh added: ‘They could reinvent themselves totally - invest in new green technologies and a new environmentally sustainable culture and once again be at the forefront of civilisation.

‘But unfortunately the history of the world shows that when you have beaten a people down they come back fighting not loving.’

Commenting on the wider impact across Europe, Matt White of Matt Architecture said: ‘The Euro is a predominantly political project masquerading as an economic project. Only when the Eurozone agrees to at least mutualise debt across all members or more preferably become simply a “United States of Europe” will the Eurozone become a sustainable project.’

Tom Holbrook of 5th Studio said the vision of infrastructure delivering ‘collective wealth and growth’ had been abandoned by European finance ministers intent on privatising public assets for the ‘benefit of global capital’.

He said: ‘The humiliation of Greece shows us how deeply entrenched neoliberal ideology is within Europe’s political institutions: an ideology that seeks to shrink the state in favour of private corporations and capital.’ Read Holbrook’s full comment below.

Comment: Tom Holbrook of 5th Studio

‘Anyone working with cities and the public realm should pay close attention to the Greek crisis as it illuminates who commissions, controls and benefits from our infrastructure. The humiliation of Greece shows us how deeply entrenched neoliberal ideology is within Europe’s political institutions: an ideology that seeks to shrink the state in favour of private corporations and capital.

‘After the last world war, Europe’s huge debts were assuaged by investment in public infrastructure aimed at economic growth and innovation. In Greece’s case, European finance ministers see infrastructure not as a tool of collective wealth and growth, but rather as an opportunity to privatise state assets (such as the Greek national grid and the Port of Piraeus) for the benefit of global capital.

‘That this drama is played out in Greece adds particular resonance for architects - our cities are all shaped by the Hellenic idea of public representational space, and the democratic rule of law. What we see in this deal is the primacy of the hidden hand of capital.

‘For perspective, it’s worth remembering that Greece’s bailout deal totals around 86 billion Euros. This compares to taxpayer bailouts of the banks at a quite different scale - for instance Merrill Lynch, $1,949 trillion, Barclays PLC, $868 billion;  Deutsche Bank, $354 billion, and RBS $541 Billion. I cannot remember demands for equivalent conditions to those imposed on Greece, being made in return for that socialisation of private debt.’


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Readers' comments (1)

  • Mmmmm..on a more prosaic note...'unsustainable debt that cannot possibly be paid off'...sound familiar for the current generation of £9k pa architecture students?

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