From Mr Paul Rayment.

Sir, The continuing political ineptitude surrounding European Union approaches to the Greek crisis beggars belief. After two years of increasingly intemperate exchanges between Germany and Greece, you now report (February 27) that Germany’s federal states have recruited 160 German tax experts to reform the Greek tax system. As you report, a similar approach didn’t go down very well in the former East Germany and it is likely to be even less welcome to the Greeks.

The EU and its Commission may feel that such reform in a euro member country is a matter for it alone, albeit in co-operation with the International Monetary Fund. But, given the collapse of trust and confidence within the eurozone over Greece, it might be preferable for the Greek government to take the initiative to invite the international economic institutions to assist it in drawing up a programme of root-and- branch reform. The IMF has a large and experienced fiscal affairs department; the Organisation for Economic Co-operation and Development has a centre for tax administration; and both can call on experts from their member countries, including Germany, to complement their own staff. This route might help to cool the temperature and may well be more productive.

There have also been suggestions from industrial leaders in Germany for a Marshall plan to get Greece back on its feet. Such calls often turn out to be rhetorical cover for a vaguely defined need for “very large programmes for very large problems”, but it is worth recalling that the basic operating principles of the Marshall plan were very different from current attitudes towards Greece. Among these was that the countries receiving aid had to draw up their own plans for reconstruction within a realistic time frame, admittedly with “friendly advice” from the Americans, but reflecting their own preferences and local conditions. In his June 1947 speech, George Marshall said it “would be neither fitting nor efficacious” for the US unilaterally to produce a programme to put Europe back on its feet.

The Marshall planners also recognised that effective leadership by the more powerful country required generosity and that “united and co-operative efforts” among the Europeans were vital for success. Less well remembered is that the state department managed to prevent US companies from moving into a devastated Germany and buying up its assets at fire-sale prices, a move that would have undermined US efforts to secure a future ally against the USSR and its allies. The EU could do a lot worse than draw some lessons from the Marshall plan on how to conduct international economic relations.

Paul Rayment, London SW1, UK

Former Director of Economic Analysis, UN Economic Commission for Europe

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