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Official Discusses EU, Globalization

Greek Minister Papantoniou Reviews Progress of Greek Economy

By Matthew Palmer


The Greek Minister of Finance and Minister of National Economy Ioannis Papantoniou explored the challenges of globalization in a speech Tuesday.

Audience members filled Killian Hall to hear Papantoniou. He was introduced by the chairman of the MIT Media Lab Nicholas P. Negroponte, who is also of Greek heritage.

The speech was timely as Greece became the 12th member of the Euro Zone at the beginning of this year. As a whole, Papantoniou said, the European Union (EU) has been well-coordinated, leading to economic growth. However, he added that more cooperation and maybe a new unified governmental system is needed.

“Europe is the prototype of wider problems of globalization and democracy,” Papantoniou said. In his speech, he tried to extract lessons from the EU’s experience, and the economic reforms Greece made to join it.

From 1974 to 1994, Greece’s economy was “in a pathetic state,” Papantoniou said. Its inflation rate and budget deficit were high, and annual growth was only at one percent. Through a series of economic reforms, Greece has been able to eliminate its budget deficit, lower inflation, and its economy has been growing at five percent annually. This turnaround has allowed Greece to join the EU.

“Greece can be seen as a success story ... but it has been an uphill struggle,” Papantoniou said.

While some nations have been prevented from joining the EU by economic reasons, other countries such as Turkey and the Ukraine have not been able to join because they have not made adequate civil rights reforms, he said.

EU faces several challenges

“The challenge for Europe is to be more than the addition of its components,” Papantoniou said.

“There’s the danger of uncoordination” within the EU, he said, since there are 12 governments and national banks instead of one. “The more integrated [the participating countries] are, the faster reform will move.”

The EU may also help standardize its member nations’ practices as well. One problem with European business are the high labor taxes, Papantoniou said. Uniform standards may help ease these taxes and promote growth.

Papantoniou proposed a solution that would promote consistency and coordination within the many governments of the EU. He said he wanted to see a European Commission, a Council of Ministers, and a European Parliament with enough power to speed along decision making.

Papantoniou said that “[the current] European Parliament does not have real legislative power.” The strengthened Parliament would be similar to America’s House of Representatives, the Commission to our executive branch, and the Council to our Senate.

The central government, which would include politicians from all member nations, would enhance the efficiency of decisions and increase its democratic legitimacy, he said.

“The direction of political change should go to homogenization,” but making one European super-state is going too far, Papantoniou said. Instead, making the EU more like a federation of states would be an appropriate move.

“National balances must be preserved,” Papantoniou said. He stressed that even though the countries of the EU are growing together, each should be allowed to maintain its national identity.

The lecture, which was followed by a brief reception, was presented by the MIT International Science and Technology Initiatives.