4 ★ FINANCIAL TIMES Monday 19 August 2019wife from her family and the fence on
the southern border with Serbia.
“It is important to know that there are
differences between building borders,”
he said, echoing the anti-refugee line
common among supporters of Mr Orban.
“Here there was a border between
Europeans and Europeans... it is a
good thing we are not letting Muslims in
because these nations will never inte-
grate in Hungarian society.”
Mr Nagy said the modern divisions
over migration resulted from the funda-
mental split in mentalities that occurred
with the imposition of the Iron Curtain.
As a result, aligning thinking to western
Europe was “mission impossible”.
“For 45 years we were in the deep
freeze and in 1990 they took us out,” he
said. “And now in western Europe they
are annoyed that we don’t think like
them and we don’t adopt many things
that they think we should.”
Back in Sopronkohida, a shirtless
road worker blocked access to the road
leading to the border crossing. But it was
only temporary, he said, because the
road west was being widened.The picnic’s rallying cry, which
referred to the Iron Curtain, was
“Demolish it and take it with you!” —
but Mr Nagy said the difference was that
“this fence [with Austria] was against
us, this was our jail for 45 years. The
other is protecting us.”
Mr Nagy’s sentiments were echoed by
Arpad Bella, the frontier station chief on
that fateful day, who had worked on the
border since 1969 but could not set foot
in Austria until 15 years later as Hun-
gary gradually reduced border restric-
tions, unlike its communist neighbors to
the east.
“When we let the DDR [East German]
people go to Austria, we did that to help
our common Europe,” he said. “Now, as
we are stopping the hordes of people on
the Serbian border, we are also helping
our united Europe.”
Joszef Toka, a local dentist, said his
wife, an ethnic German, had not been
able to see her family members on the
other side of the Iron Curtain for 25
years until the Berlin Wall fell. Dr Toka
also took pains to make a distinction
between the fence that separated hisfields and crossed into Austria. In less
than a month 60,000 East Germans were
en route to West Germany via Vienna.
Now, migrants are once more on the
political agenda but the view from Hun-
gary is rather different.
Along with Poland and the Czech
Republic it has refused to take in any of
the 1,214 migrants allotted to it by Brus-
sels and challenged the quotas at the
European Court of Justice.
Separately, the EU announced last
month that it would take Hungary to
court over a package of laws introduced
last year by the government of Viktor
Orban, the nationalist far-right premier,
that tighten eligibility requirements for
asylum seekers and make it a criminal
offence to help refugees. Brussels has also
opened infringement proceedings against
Budapest for refusing to feed migrants
who have been denied asylum.
Laszlo Nagy, who helped to organise
the 1989 picnic as part of the Hungarian
Democratic Front, the conservative
nationalist opposition movement, said
he supported Mr Orban’s construction
of a fence on the southern border.VA L E R I E H O P K I N S— SOPRONKOHIDAThree decades after it played a pivotal
role in the fall of the Berlin Wall, all is
quiet on the single-lane border crossing
between Austria and Hungary.
Every few minutes a car rolls slowly
through, passing several metres of
barbed wire that have been preserved as
a reminder of the days when this was the
dividing line between east and west. The
Sopronkohida crossing was once a tiny
part of the vast network of walls and
fences that made up the Iron Curtain.
For decades it was mined on the Hun-
garian side and its fence emitted an elec-
tric shock. But as communism began to
crumble in the late 1980s, it was on this
spot 30 years ago that 600 East Ger-
mans walked into Austria — a water-
shed moment.
Members of the Hungarian anti-com-
munist opposition had organised a pic-
nic at the border crossing to protest
against the fences dividing Europe.
But as thousands of people gathered
for the symbolic event, East Germans
who were in Hungary for their holidays
or in the hope of escaping west surprised
the border guards by taking the oppor-
tunity to flee.
“On 19 August 1989, a prisoner nation
opened the gates of its prison to help
another prisoner nation step to free-
dom,” reads a plaque in Hungarian and
German in the field where the original
picnic was held.
Since then, the event has been cele-
brated with an annual gathering of
Europeans from both sides of the bor-
der. Angela Merkel, the German chan-
cellor, will return for the 30th anniver-
sary picnic today.
But Hungary’s pride in the role it
played in bringing the Soviet era to an
end contrasts sharply with the wide-
spread domestic support for a more
recent barrier — the fence it built on its
southern border with Serbia in 2015,
after 1m asylum seekers passed through
on their way to Germany.
In 1989 too, observers worried about
the consequences the potential migra-
tion of hundreds of thousands of free-
dom seekers would have on Europe.
In the weeks after the picnic, thou-
sands of East Germans abandoned their
DDR-produced Trabants in the nearbyI N T E R N AT I O N A L
K E R I N H O P E— ATHENSGreece’s new finance minister has said
implementing sweeping tax reforms
will be his “key priority” as his country
seeks to boost growth and rebuild credi-
bility with investors following a decade
of international bailouts backed by the
EU and IMF.
Christos Staikouras told the FT the
centre-right New Democracy govern-
ment was planning “a comprehensive
tax reform that will have a four-year
horizon and will accelerate growth”.
The overhaul will focus on reducing
income and corporation tax, cutting
value added tax, streamlining tax incen-
tives for investors and abolishing emer-
gency levies imposed during the Greek
debt crisis to meet conditions set by
bailout creditors.
“The fundamental objective is to
achieve sustainable high growth rates so
as to gradually restore the country’s lost
wealth,” Mr Staikouras said in his first
interview with foreign media since he
took office after last month’s election.
New Democracy, led by Kyriakos Mit-
sotakis, swept to victory over the
leftwing Syriza party of then premier
Alexis Tsipras at a snap election last
month, campaigning on a platform of
cutting taxes, digitising the economy
and creating new jobs.
The conservatives are also committed
to promoting privatisation and embrac-
ing several flagship foreign investment
projects neglected by Syriza, whoseleaders opposed private investment and
resisted pressure to broaden the previ-
ous government’s privatisation pro-
gramme.
“We are taking ownership of the
reform agenda... we will implement
structural reforms in a front-loaded
manner,” Mr Staikouras said.
“We’ve agreed [with the EU] to accel-
erate privatisations because we believe
they can contribute to sustainable
growth rates when... they’re carried
out under conditions of absolute trans-
parency and also include a social
return.”
Mr Staikouras has already pushed
through parliament his first piece of leg-
islation, cutting an unpopular annual
property tax by an average of 22 per
cent per household and giving breathing
space to cash-strapped Greeks by reviv-
ing a plan for tax arrears to be paid in
120 monthly instalments.
A second tax bill due to pass next
month will include a reduction in corpo-
ration tax from 28 per cent to 24 per
cent. Like the earlier measures, it will
take effect immediately.
A former deputy finance minister
who oversaw the national accounts
between 2012 and 2014 during Greece’s
second bailout, Mr Staikouras is cred-
ited with knowing how to pace the tax
cuts to prevent any backsliding on the
country’s commitment to attaining an
annual primary budget surplus —
before debt repayments — of 3.5 per
cent of gross domestic product.Despite the cuts already announced,
“we estimate we will meet the 3.5 per
cent target in 2019, but it’s clear we have
no more fiscal space [for additional
cuts] this year”, he said.
Given the growing prospect of a reces-
sion in Europe, Mr Staikouras was reluc-
tant to make growth projections for
2020 and 2021. But he was confident
that Greece would beat its officialgrowth target of 2 per cent this year,
given the business climate had been
steadily improving.
Yet much higher growth will be
needed if Greece is to make up for the
25 per cent fall in GDP during the crisis.
Mr Mitsotakis has argued the high sur-
plus requirement is strangling growth
by squeezing consumption and deter-
ring public and private investment.Greece has begun talks with the EU
officials charged with monitoring the
country’s post-bailout progress in the
hope that the primary surplus can be
reduced from 3.5 per cent of GDP to 2.
per cent as early as next year.
Meanwhile Athens is poised to com-
plete some other measures that would
signal to investors that Greek economic
conditions are returning to normal.
In September, Mr Staikouras is
expected to announce the full lifting of
capital controls imposed at the height of
the Greek crisis.
The ending of capital controls —
which date back to mid-2015 when
Greece was poised for a disorderly exit
from the euro — will send “a message of
stability”, Mr Staikouras said. Not only
would it encourage exporters, but ana-
lysts anticipate that several billion euros
of deposits that fled during the crisis
would return, easing the liquidity
crunch faced by Greek banks and boost-
ing investor confidence.
Mr Staikouras has also revived a
stalled plan for early repayment of €3bn
of Greece’s €8.5bn debt owed to the IMF,
which carries an interest rate of 5.1 per
cent. The move comes after Athens
raised €2.5bn in the capital markets
through a seven-year bond issue at a
yield of 1.9 per cent, a record low.
“Our goal is the swift implementation
of a coherent and realistic but outward-
looking economic plan,” Mr Staikouras
said. “We have to move the economy to
an upward virtuous spiral.”Greece to prioritise broad tax changes
Finance minister vows overhaul to ‘restore lost wealth’ and aims to end crisis-era capital controls
Modern divisions.Migration
Hungary marks fall of one border but defends new one
Celebration of Iron Curtain
coming down contrasts with
support for Serbia fence
East Germans flee to Austria at the Sopronkohida crossing; Angela Merkel at the 20th anniversary of the picnic in 2009— Klemens Beitlich/Ullstein Bild/Getty; EPA; Szilard Koszticsak/EPAChristos Staikouras, left, seeks 4-point corporation tax cut— Alexandros Vlachos/EPA-EFEME H R E E N K H A N— BRUSSELSBrussels is to revive a blacklist of
non-EU countries which it accuses of
money laundering, after a previous
attempt was shot down by European
capitals when it named Saudi Arabia
andfouroverseasUSterritories.Vera Jourova, the EU’s justice commis-
sioner, told the FT that the incoming
commission would by October unveil a
revamped methodology to identify
overseas jurisdictions which are failing
to crack down on money laundering
risks and terrorist financing.
Brussels’ fresh push to produce its
first independent blacklist comes after
27 out of 28 EU member states blocked
the publication of an initial draft in
February, in an unprecedented rebuff to
the commission. Governments led by
the UK, Germany and France com-
plained that they had been blindsided
by the initiative and said the list was not
drawn up in a “transparent and credible
process”.
Ms Jourova told the FT that the rejec-
tion “is still not easy for me to swallow”
but the commission would forge ahead
with a fresh blacklist using a new meth-
odology that had been devised in co-op-
eration with EU capitals.
“I believe we honestly did our best to
have the methodology right and to have
the assessment right,” said Ms Jourova.
“The member states were critical with
the methodology for two reasons: insuf-
ficient involvement from their side in
the process and insufficient communi-
cation with the territories likely to be
listed,” Ms Jourova said. “We have
admitted this point and said we need to
communicate earlier with the states
that might appear on the list. That is
why we are now reviewing the method-
ology.”
The initial draft named 23 jurisdic-
tions including Saudi Arabia, Guam, the
US Virgin Islands, American Samoa and
Puerto Rico — none of which are named
on an international blacklist prepared
by the Financial Action Task Force, the
global authority on money laundering.
Their inclusion sparked fierce lobbying
of EU states’ national capitals by Riyadh
and drew sharp criticism from Washing-
ton for being a politically motivated
exercise.Revamped methodology
Brussels to
revive money
laundering
blacklist
DA N I E L D O M B E Y— MADRIDSpain has said it is ready to allow a boat
stranded off the coast of Italy with
almost 150 migrants to dock, in a move
highlighting growing tension between
MadridandRomeonimmigration.The government of Pedro Sánchez,
Spain’s caretaker prime minister, said
yesterday it was preparing the southern
Andalucían port of Algeciras to accept
the Open Arms, a rescue ship carrying
1 4 7 m i g r a n t s. T h e S p a n i s h
vessel has been waiting at sea off the
Italian island of Lampedusa for two
weeks in difficult weather with worsen-
ing living conditions on board.
The boat has become the latest focus
of the political battle between Italy’s
warring coalition parties. Matteo Sal-
vini, interior minister and leader of the
rightwing League party, has refused to
let it dock, triggering a furious war of
words with his coalition partners, the
anti-establishment Five Star Move-
ment, and premier Giuseppe Conte.
Mr Sánchez’s Socialist government
said in a statement: “The caretaker
prime minister has taken this decision
given the refusal of Matteo Salvini to
permit disembarkation in Italy and the
difficulties put forward by other Medi-
terranean countries.”
Madrid added that it would also con-
sider the possibility of taking action in
the EU or at an international human
rights “against the Italian government’s
attitude with respect to the reception of
the migrants aboard the Open Arms”.
“The prime minister has taken this
decision because of the situation of
emergency on board,” the Spanish state-
ment said. Spain called on Italy to allow
the migrants to disembark, arguing the
Italian government now had a guaran-
tee they would be accepted by other EU
countries, including Spain. Madrid said
that it had received no indication disem-
barkation would take place.
In the year to August 4, 13,
migrants arrived in Spain by sea, com-
pared with 4,000 t o Italy, said the Inter-
national Organization for Migration.Italy tension
Spain offers to
take stranded
refugee boat
‘This fence [with Austria]
was against us, this was
our jail for 45 years. Theother is protecting us’
Contracts & Tenders
AUGUST 19 2019 Section:World Time: 18/8/2019 - 18: 18 User: david.owen Page Name: WORLD3 USA, Part,Page,Edition: USA, 4, 1
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