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CCIs in Greece in reference to Structural Fund (2007 - 2013) by Anestis Mantatzis

1. Introduction

The present paper attempts to provide an overlook of the systemic flaws regarding the allocation of resources on culture in Greece. At the centre of this effort is the argument that a redirection of funding should take place towards supporting creative industries, given the ongoing cuts on state funding in the last 2 years. As an increasing need of changing the whole financing model of culture appears, the EU structural funds could become a generator on this effort in Greece of crisis in order to transform it into a Greece of future.

2. Rationale on Supporting Culture

The positive relationship between culture and the economy has long been discussed in the international debates. and any further attempt to present these long standing debates is not the purpose here. However, it is very useful for our analysis to create a short framework on how and why EU allocates considerable funds in every programming period on cultural purposes. We could argue, that the whole meaning behind the EU support on culture is laid behind these words:

" the role of culture in development is multi-dimensional. Firstly, it is a value in itself, secondly, it is a foundation for the establishment of the knowledge society and finally, along with the culture industries, it is one of the most dynamically developing sectors of the economy." (Monika Smoln, Under-secretary at the Polish Ministry of Culture & National Heritage)

Culture is recognized as a pillar of sustainable regional and local development and can play an important role for social, economic and territorial cohesion between the EU regions when provided with appropriate tools and support. Investing in cultural heritage, cultural infrastructure and tourism are the most common ways through which culture is seen as a factor of local and regional economic development. Culture has also traditionally played a role in raising the attractiveness of territories and in integrated sustainable urban regeneration through powerful place marketing techniques, while also has an important role to play in generating more and better employment, in education, skills development and training. Similarly, It is also a factor that has proven beneficial for territorial cohesion. Culture develops new skills and creates new jobs, improves education systems and attainment levels, stimulates innovation, enhances digitalisation in terms of access and participation, encourages youth employment and helps combat social exclusion. Undoubtedly, cultural dimension should complement the economic, social and environmental dimensions of development in order to ensure that values such as creativity, knowledge and diversity are equally developed across European territory. Alongside this premise, continue investing in culture through EU structural funds help achieve the EU-2020 strategy objectives which also refer to creativity and cultural diversity as key assets for the future EU development.

These arguments were widely supported on the last two EU programming periods during 2000-2006 and 2007-2013 with more maturely stated during the latter¹. Particularly for the period 2007-2013, the amount dedicated to the Structural Funds is € 347 billion. In the same period, planned expenditure for culture under Cohesion policy amounts to more than €6 billion estimated on 1.7% of the total budget (see table 1 below). In fact, draws resources both from European regional development funds as well as national sources. For example, European Regional Development Fund supports cultural, heritage and tourism infrastructures, cultural and creative SMEs, research and innovation in cultural and creative industries etc. A small part of the ERDF funding supports the European Territorial Co-operation, which can include co-operation in the cultural field. In this case are included regional co-operation schemes that implicitly include targets on cultural fields alongside with their primary objective. For example, in the current proposal for the ERDF regulation there is one reference to culture in terms of cultural heritage under the objective 6 "Protecting the environment and promoting the sustainable use of resources".

On the other hand, European Social Fund supports actions related to creating employment, improving education and poverty alleviation. Under it's objectives, it could support initiatives from the arts and culture field such as e.g. upgrading skills of arts teachers, developing new programmes in arts universities, developing schemes for access to culture, supporting non-profit cultural organisations etc. Importantly, it can also support the capacity building for cultural administrations to better implement the Structural Funds. However, contrary to ERDF, in the current proposal for the ESF there is no direct reference to culture.

The latter implies that despite the wide recognition of culture on top of the European policy agenda as a positive force towards European integration and development, it has also been acknowledged that the obstacles to wider use of structural funds for culture are the lack of awareness of local, regional and national authorities of the ways in which culture contributes to local and regional development and failures of communication and advocacy within the arts and culture sector itself. This reflects in the difficulty to bring cultural policy issues at the top ranks of the broader policy agenda, and consequently explains why the share of structural funds devoted to culture badly fails to match the share of cultural and creative sectors in total EU value added. For many decision makers and policy officers operating outside the cultural realm, the cultural sectors are at best a minor, low-productivity branch of the economy, largely living on external subsidies, and which is therefore absorbing economic resources more than actually generating them. Not surprisingly, as a coherent consequence of this wrong conceptualization, cultural activities are often the first and easiest targets of public funding cuts during the current economic crisis.

Given the above presumptions, and the budget cuts that Greek economy faces in all it's sectors and primarily in culture, the dependence of culture on public subsidies seems a political and economical dead end. In the next section I will further look deeper into the case of culture in Greece exploring the potential opportunities of a different financial route with the help of EU structural funds of the next programming period.

3. Financing Culture in Greece: systemic flaws and potentials

Trying to describe the cultural model in Greece is difficult to label it either purely centralised or decentralized. The government, maintains it's role of setting the primary directions and priorities, however, peripheral authorities are responsible for developing the sectoral and local operational programmes. A shift towards decentralization in the early 1980s resulted in the creation of regional thea­tre organizations and other local arts infrastructures. In the mid-1990s, the National Cul­tural Network of Cities was created, including regional centres for performing or visual arts. Within this effort, the Ministry has set up special departments responsible for cultural heritage protection², whereas a number of archaeological mu­seums were transformed into special regional service entities³ resulting overall in the creation of a great number of regional services responsible for the on-site implementation of poli­cies on the protection, preservation and valorization of archaeological heritage⁴

In fact, the Ministry of Culture provides support for regional cultural development and the arts via its arms-length sector bodies. Many regional theatre organizations, municipal cinemas, cul­tural centres and other similar organizations are co-funded by the Ministry of Culture, and operate under the long-term programme agreements between the municipalities and the Ministry. However, a large number of independent folk art, ethno-graphic, applied arts or local history museums are also financially supported by the Ministry of Culture. There has also been a move to separate the administration of mu­seums from the archaeological ephorates. Generous financial support has been given to major independent museums and galleries (such as the New Acropolis Museum Foun­dation, and the Benaki Museum). The National Advisory Council for museum policy, provided for by earlier legislation, is now in operation, was expanded to include repre­sentatives from smaller non-state museums, and is expected to play an important role in setting higher standards for museum provision and professionalism which will, hope­fully, help to boost upward trends in museum attendance.

Perhaps the Athens Con­cert Hall stands as the most notable example of private-public co-operation. It has been established as an independent foundation, with members of the Board of Di­rectors appointed both by the state and by the Society of the Friends of Music however, its yearly programme is also supported by a large state subsidy.

Obviously, such a model creates serious tensions on financial distribution of national or regional resources. Decentralization and take over control of cultural management from regional authorities is necessary, however the fact that Major national museums or even private collections are relied solely on state subsidies additionally to the support given on the regional bodies of the ministry themselves, put a considerable burden onto the state so that it is difficult to handle in the current economic context (e.g. the Athens Concert Hall aforementioned). In the graph 1 below it is clear that, during both programming periods, state support is primarily directed towards museums, galleries, which are often under non-state management whereas support on regional & local authorities is gradually minimized.

In fact, the budget of the Ministry of Culture still repre­sents a small fraction of the state budget. Some public investments relevant to the arts or heritage are provided by other Ministries (Public Administration, Public Works, Press and Media). Nevertheless, culture has increasingly depended for funding on the EU Commu­nity Support Framework, cultural attraction visitor and sales revenues, and, since the mid-1990s, on the Lottery Fund, administered by the Ministry of Culture.

Diagram 1-State subsidies for cultural purposes

Source: survey on cultural activities from Ministry of Culture & Tourism directories.

Greek National Statistic Service (Own Processing)

Indicatively for 2005, according to Eurostat estimations, direct public expenditure in culture was about 300 million Euros, a considerable amount compared to the average of 1.55 billion Euros of 30 countries average⁵. Another information by DG Region for 2006 estimates state cultural expenditure at about 568 million Euros⁶.

Indeed, the financial support that Greece has received under the EU cultural policy has been very significant over the last two program periods. The table 1 below shows analytically the EU structural fund distribution that Greece has received compared to the EU averages and per EU regional policy objective. These data illustrate the comparative size of support that Greece has received compared to EU-27 average. They also reveal, the emphasis given on development of cultural infrastructure and preservation of cultural heritage compared to other cultural services, a recognition that will prove crucial for the rest of our analysis. Finally, it is implicitly extracted that during the programme period 2007-2013, culture draws financial resources from all the EU regional policy objectives indirectly and not under a dedicated cultural programme as occurred in the programme period of 2000-2006. (see table 2). For example, within the objective of European territorial cooperation, many European co-financed programmes of interregional cooperation, or rural development & protection incorporate cultural objectives. In particular the objective "developing linkages between the cultural and natural heritage with the tourist industry" is mentioned in Natura 2000, whereas all Leader Plus (Leader +) funded plans include support to the culture sector under the priority "developing natural and cultural resources, and in particular areas of Community interest".

EU structural funds allocation (Programme period 2007-2013)
EU Regional Policy Objective	Community Amount (€)	Culture amount (€)	Culture	of which:
				Protection & preservation of cultural heritage	Development of cultural infrastructure	Improve cultural services
Convergence	281,316,597,521	4,670,743,388	1.7%	0.8%	0.6%	0.2%
Regional Competitiveness and Employment	55,173,775,952	814,650,717	1.5%	0.7%	0.6%	0.2%
European Territorial Cooperation	7,831,459,588	480,494,116	6.1%	2.6%	1.6%	2.0%
TOTAL	344,321,833,061	5,965,888,221	1.7%	0.9%	0.6%	0.2%
Greece	20,210,261,445	483,445,000	2.4%	1.4%	0.8%	0.2%
EU 12	173,955,897,999	2,952,100,724	1.7%	0.8%	0.8%	0.1%
EU 15	162,534,475,474	2,533,293,381	1.6%	0.8%	0.5%	0.3%
EU 27	336,490,373,473	5,485,394,105	1.6%	0.8%	0.6%	0.2%

Table 1- EU structural funds allocation (Programme period 2007-2013)

Source: DG REGIO

 

Operational Programmes with culture-specific activities (2000-2006 Structural Funds, Greece)
Total SF's allocated (million Euros)		Total Number of Operational Programes		Dedicated National Programmes		Regional programmes with Culture priorities	Thematic programmes with Culture priorities	European Community initiatives
	20.961	19		1		5	2	5
Allocation of 2007-2013 Structural Funds & presence of culture priorities in Operational Programmes
Total SFs allocated (million Euros)		% of ERDF dedicated to culture	Regional programmes with culture priorities		Thematic/Sectoral Programmes with culture/tourism priorities		Participation in Cross-border, transnational and interregional co­operation
	20.420	3.1	3		-		-

Table 2- Presence of culture priorities in Operational Programmes. Comparison of programme periods 2000-2006 & 2007-2013 in Greece

Source: DG REGIO

Coming back to table 1, despite the emphasis given by the EU structural funds allocation on infrastructure construction and preservation purposes, data provided by National Statistic Service indicate how inefficient by purely economic perspective is such an allocation. In particular, data on excavations expenditure in national archeological sites by source of funding show clearly that public sector carries the major burden and this becomes even more intense if we also consider the Legal entities of public law, whereas the share of other institutions, private sector or private law entities is relatively smaller, nevertheless increased after 2006.

Diagram 2-Expenditure on excavations by source of funding

Source: survey on cultural activities from Ministry of Culture & Tourism directories.

Greek National Statistic Service (Own Processing)

Diagram 3-Evolution of major expenditures & revenues of archeological assets in Greece

Source: Archeological Directories Survey. Greek National Statistic Service (Own Processing)

Simultaneously, such a persistent resource allocation cannot even be justified (always by economic perspective) by a simple cost-revenue comparison, where it becomes clear that revenues from archeological assets fall significantly behind the expenditures on their maintenance and preservation⁷.

Summarizing this section, available data reveal that the financial resource allocation in Greece suffers from considerable flaws and inefficiencies:

• Available budget of Ministry of Culture as well as collaborated Ministries that co-finance cultural activities has unavoidably been minimized during the last two years of Memorandum and economic crisis.

• Considering the above recognition, state budget will not be able to continue to support financially all the wide variety of cultural institutions, regional cultural authorities and museums, especially those that have gradually transformed into a more autonomous authority or even function privately.

• Under both recognitions above, the increasing importance of EU structural funds for Culture, indicates the necessity to be partly reallocated into supporting only a limited number of regional authorities, or cultural institutions emphasizing on improving cultural services objective (see table 1), within a wider effort of a more business-oriented model of financing culture in Greece.

In the next session, follows an analysis of why cultural services and CCI sector can potentially carry the burden of redeveloping culture in Greece as a major economic driver per se.

 

3. Towards Cultural & Creative Industries ?

Before we proceed in any data analysis about the role and the potential of Cultural & Creative industries in Greece, it is useful to provide a simple categorization of what is meant by the term. In fact, CCIs include the following categories:

• Core arts areas - performing arts, visual arts, cultural and architectural heritage and literature.

• Cultural industries - film, DVD and video, television and radio, video games, new media, music, books and press.

• Creative industries - those industries which use culture and creativity as an input but whose outputs are mainly functional, including architecture, advertising, design and fashion.

Particularly for the last category, creativity is a complex process of innovation, combining some or all of the following dimensions: ideas, skills, technology, management, production processes as well as culture. In this context, culture is not analyzed as a source of final consumption (as in the case of films, books, music, cultural tourism, etc.) but as a source of intermediate consumption in the production process, that adds extra value in the final products being functional (to the contrary of core arts areas or to the output of cultural industries). Culture will provide specific skills, working methods and codes that will be transferred into other sectors of the economy and combined with other skills.

Having argued in the first section that culture is often perceived as a lower-productivity branch of the economy, instead a perception of great importance is that artistic expression, the carrying out of conservation work or displaying works of art in a museum etc. are not usually commercial activities. Activities like these have traditionally been funded publicly because they are for the public good and generate indirectly considerable economic activity. Therefore, culture is constantly treated as a function or as an aspect of another economic sector. One of these reasons is that the culture sector is stigmatized for low pay and temporary employment, meaning that not just policy makers, but economists and planners responsible for drafting and implementing development plans ignore the culture as an area worth investing in. The table 3 below provides a quick look on the size of the total turnover created by creative industries in five European countries (core arts turnover is included as a sub category) and implies that, despite such perceptions, holds a considerable share on the total economy's turnover of the selected countries. Furthermore, the diagram 4 below illustrates the comparatively higher turnover that cultural services-creative industries are able to produce compared to other core art industries. Nonetheless the economic crisis that started to affect Europe since 2008 left it's scar on the CCI's turnover index depicted below.

Diagram 4- Turnover index for selected cultural sectors (EU-27, NACE Rev.2)

Source: Eurostat, SBS (online data code: sbs_na_2a_dade)

 

 

Table 3- Percentage of economic turnover of the CCIs per country, in several EU countries

Source: Eurostat, SBS (online data code: sbs_na_2a_dade)

Particularly for Greece, despite the decentralization trends and the change on the management status of some cultural institutions, culture is treated as a pure public good as implied by the huge financial state support relative to other sources. The state continues to be the primary sponsor of culture and privatization of cultural infrastruc­ture and organizations is not part of the current policy priorities. The situation becomes even more complicated as there is no single comprehensive law for the culture industries as a whole, since they are not really considered to be a cohesive field of activity (broadcast media for example are considered as a separate field and regulated by a separate Law, 2328/1995).

Constrained by limited funding, the Ministry of Culture has focused support for the cul­ture industries through sector organizations and the rationalization of funding initiatives. For example, the National Book Centre is the main vehicle of support for Greek books, and has recently engaged in a broad-ranging programme of subsidized translations and other activi­ties to promote Greek literature. Also, the Greek Film Centre now supports the annual production of a significant number of Greek films, within an increased budget of 7 million euro. Independent (private) theatre companies are supported by a subsidy scheme (ca 1.5 million euro worth), which was recently rationalized to follow a more consistent set of criteria on artistic contributions and past performance; subsidies are given to selected dance perform­ances, operating under the same principle. New measures being con­sidered include: schemes involving a few banks and multinationals supporting blockbuster events produced by large-scale national institutions in the arts; other types of incentives.

Data provide a rationale and solid basis towards further supporting cultural and creative industries either by private sponsorships, or by reallocated EU structural funds. During the period 1997-2003, long before the economic crisis, CCI's contribution in Greece's average turnover growth was at the same level with the EU-25 average⁸ although it significantly lagged behind in GDP value-added terms.

 

	Average turnover growth (1999-2003)		Growth in value added to
			European GDP
			(1999-2003)
Greece	5.4%		4.4%
Total EU 25	5.4%		6.6%
Total 30 countries	8.1%		12.3%

Table 4- Contribution of the European cultural & creative sector to the European growth

Source: Eurostat and AMADEUS

Data elaborated by Media Group

 

Diagram 5- Knowledge & creativity investments in CCI

Source: Eurostat and AMADEUS- Data elaborated by Media Group (Own Processing)

Since added value and thus productivity in cultural & creative industries is often related to intellectual capital and other intangible assets, diagram 5 shows the level of investments directed towards developing various forms of intellectual capital. Again, Greece falls behind the EU average in the level of investments within the creativity sector. The above information leads to the conclusion that even a decade before the economic crisis and the wider reduction in private investments, private investment was a major weakness regarding creative & cultural sector in Greece, which seriously affected CCI's capacity to produce added value. Of course, this is up to a point expectable since the fact that cultural policy adopted was totally centralized (in terms of funding and not administration) dependent to it's greatest extend on state subsidies and the emphasized allocation on archeological sites and infrastructures. And this can explain perhaps the impressive turnover levels (see table 4) compared to the EU-25 average despite the low levels of knowledge and creativity investments of diagram 5.

 

Field	Total	% share of total
Museums and Sites	174.030.822	62.2
Literature	3.160.000	2.0
Libraries	10.637.000	3.6
Press	n.a.	n.a.
Music	15.867.000	11.0
Performing arts	42.082.000	6.8
Visual arts	7.129.000	1.7
Film / cinema / photography / video	7.812.224	3.6
Radio / television	n.a.	n.a.
Socio-cultural activities	1.646.000	3.1
Expenditure on cultural activities abroad	4.164.250	1.4
Education and training	n.a.	n.a.
Others	27.667.563	9.57
Total	294.195.859	100

 

Table 5- State Cultural Expenditure by Sector (Thousands Euros)

 

Source: Regular Budget of the Hellenic Republic: A) Ministry of Culture:
http://www.mnec.gr/el/economics/budgets/ypoio_kratikos_proyp_2008/proyp2008/PDFProyp/2.5

 

This argument, perhaps is better realized at table 5 ⁹ where the 2006 state expenditure on various forms of core art and cultural industries is insignificant compared to the overall funds allocated on archeological sites and museums (see also diagram 2 on previous section).

In line with the above analysis, available data on publishing sector in Greece reveal the potential that CCI have in terms of added value despite such low state support and private investment. Of course although these data are mentioned on publishing sector and not CCI on the whole, however are used only as a "good practice" example of the whole CCI potential in Greece. Available data are shown in the table 6 ¹⁰ below:

 

Share of publishing turnover in manufacturing, 2002-2007 (%)
		2002	2007
	EU-27	1,90%	1,70%
	Greece	3,30%	2,70%
Average annual growth rate of turnover, 2002-2007 (%)
		Publishing	Manufacturing
	EU-27	2,50%	6%
	Greece	5%	9%
Share of publishing in manufacturing value added Vs share of publishing in manufacturing turnover, 2007 (%)     Added Value Turnover EU-27 2,50% 1,70% Greece 4% 2,80%   Table 6- Economic performance of publishing sector in Greece & EU-27 Source: Eurostat, SBS (online data code: sbs_na_2a_dade)

 

 

Diagram 6- State subsidies on publishing sector

Source: survey on cultural activities from Ministry of Culture & Tourism directories.

(Own Processing)

 

In fact, during the period 2002-2007 both publishing sector as well as manufacturing sector in general experienced a turnover growth acceleration achieving higher rates than EU-27 countries and agree with the increasing trend of publishing turnover index shown in diagram 4. Although table data from Ministry of Finance are not available particularly for press category, data from Ministry of Culture & Tourism directories show considerable fluctuations on state expenditure during this period which did not affect the overall growth acceleration of the publishing turnover. However, despite this acceleration the share of publishing turnover into manufacturing sector has been reduced over the EU-27 average. Remarkably though, publishing sector in Greece produces considerably higher added value compared to it's turnover in significantly higher levels than European countries. Summarizing this short assessment, publishing sector performs better than EU countries in average with the capacity to contribute significantly in added value and overall turnover.

All the data presented in this section, lead as to the assumption that as a rapidly expanding sector of the private economy, cultural industries and products provide the grounds for a considerable growth potential, for example such as activities linked to publishing. If we also consider the considerable higher ratings in turnover increase shown in diagram 4 ,cultural service sector and creative industries in general might perform even better than core arts or cultural industries in terms of added value.

However, as culture in Greece is often treated in isolation from other factors of economic development as well us under the "protective umbrella" of the state, this gradually led to insignificant private investments in CCIs which in turn seriously limited it's capacity to produce added value and contribute to the economy.

4. Concluding Remarks.

Given the already implemented budget cuts, the state will not be able to support culture at the extent that it used to during the last two programme periods. As it seems from our analysis both the persistent resource allocation towards new infrastructures, museums preservation, archeological excavations has proved economically costly and unable to create added value through new services or products related to culture. Although the data that are included in the present analysis have been processed into aggregate numbers, more analytical calculations from National Statistic Service could make this argument even stronger emphasizing on the extreme dispersion of archeological sites, museums and therefore resources.

In relation to the above argument, the internal symptoms of culture management & administration system in Greece indicated the inefficient one-sided resource allocation from the state budget even in cultural institutions that have been administratively autonomised. This situation on the one hand limited the available funding for such institutions and also created serious obstacles on the attraction of alternative private resources that could be directed into CCIs and therefore increase their innovation capacity.

On the other hand, our analysis tried to bring into surface the potential that CCIs have in Europe and particularly in Greece which often performs above the European averages. There is a strong belief on this paper that the change of the whole financial model for cultural purposes is a matter of survival. Considering EU structural funds for the period 2014-2020, a strong support towards investing on creative & cultural industries seems one-way. Similarly, a coordinated effort should take place on the redistribution of state funding into investing into innovation capacity on CCIs in order to achieve wider economic benefits. Of course, state support to current maintenance works across the country will continue, but a rationalization and targeted change of the national policy emphasis and spending is necessary. But it is now more imperative than ever that assistance to culture by the Structural Funds should not only enable the preservation and development of cultural assets (i.e. the cultural heritage), but also productive investment in cultural industries and products.

Footnotes:

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