The Greek situation can change the European economic landscape forever.Kostas Tsironis / Bloomberg News
The Greek situation can change the European economic landscape forever.Kostas Tsironis / Bloomberg News

Time to draw a veil over the Greek drama



Thanks to transparency, we can now follow the unfolding Greek crisis minute by minute. It is also as a result of transparency that we hear a cacophony of opinions from European leaders with deeply diverging comments on the crisis.

The result is a growing unease, with increasingly volatile markets and the cost to the European economies going up as a result of the uncertainty following the comments of yet another politician.

Transparency is a high goal with obvious benefits to markets, but the recent developments in Greece show that a serious reflection on its limits might be timely.

Martin Wolf, the chief economics commentator of the Financial Times, recently said that "on many subjects … we think the views of the vast mass of the people count for more than the weight of scientific opinion".

I think this also applies to transparency. It is seen as logical in today's world that we all know instantly what is going on. The masses have the right to know.

I would dare to suggest this principle is at times counter-productive and undermines solutions to the problem that needs fixing.

A recent example was the tsunami in Japan, followed by the Fukushima disaster. I do feel deep sympathy, not only for the Japanese people but also for the Japanese government, which was dealing with this disaster of unbelievable proportions, in its sequence and devastation, briefing the world instantly on developments without having a good understanding itself of all that was going on.

It is exactly that aspect that makes instant open and uncoordinated communication tricky, and at times counter-productive.

The Greek debt situation is similar to the Japanese situation in that everyone expects to have answers on a platter and is then annoyed when answers are not forthcoming. Exacerbating this situation are the seemingly unstoppable opinions and views expressed by those who do not have a full picture of the situation, but, based on their position in the European apparatus, cause the market to take their comments at face value.

When solutions are being worked out, the EU needs one voice in this singular crisis. It should be a voice with the expertise and full understanding of the situation, such as that of the independent European Central Bank (ECB), which knows how to communicate sensitive issues to the market, avoids sowing confusion and uncertainty, and can work towards solutions.

The historian Francis Fukuyama recently said in an interview that "a big problem in Western public administration is that we don't like deference to experts and we don't like delegating authority to experts. Therefore we ring them around with all of these rules, which limits their discretion because we don't trust them".

That seems a good description of the Greek quagmire, where the one institution with the experts and know-how is not trusted enough to deal with this complex situation. Politicians play a role when the time to take decisions has come and the market can hear concrete steps that have been accepted.

The Greek situation is, as someone said recently, a generational change that is causing anxiety and resistance in Greece that complicates issues further. It also tests the viability of the euro. It is, in short, a Greek drama with huge implications that could change the European economic landscape forever.

A crisis of this proportion demands a prudent and carefully orchestrated approach. Neither a minute-by-minute account, nor a cacophony of opinions, is going to be conducive to a solution.

The US seems to have more of a singular voice in these matters, or at least the main officials are not contradicting each other or dropping loose statements that take the market by surprise. The tickertape in New York that shows the accumulation of the national debt in the US advances with such speed that you could easily imagine the effect of a multitude of opinions, as is happening in Europe right now.

The prudent approach to this will be to appoint one official, representing the euro zone, as the sole source for the press while the ECB is working towards an acceptable and credible solution.

This might take us to some degree away from the transparency expected these days but will allow a complex situation not to become an insoluble situation that will cause far more damage than a temporary loss of openness.

Paul Koster is the chief executive of the Dubai Financial Services Authority

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Phishing: Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.

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Know your Camel lingo

The bairaq is a competition for the best herd of 50 camels, named for the banner its winner takes home

Namoos - a word of congratulations reserved for falconry competitions, camel races and camel pageants. It best translates as 'the pride of victory' - and for competitors, it is priceless

Asayel camels - sleek, short-haired hound-like racers

Majahim - chocolate-brown camels that can grow to weigh two tonnes. They were only valued for milk until camel pageantry took off in the 1990s

Millions Street - the thoroughfare where camels are led and where white 4x4s throng throughout the festival