October 28, 2012 § Leave a comment
Ever since Greece joined the Eurozone, it enjoyed spectacular boom and then it all went horribly wrong. Austerity has brought about numerous budget cuts leading to job losses, cut pensions, salaries and benefits. Families go without food, schools don’t have books and hospitals without drugs. A fifth of all public sector workers are set to be laid off. Pensions have been cut by an average of 30%. Vast private wealth remains evident yet Greece is broke.Young people feel they have been robbed off their future. It is estimated that 40% of Greeks could soon be living below the poverty line. The unchecked spending by the government when they joined the Eurozone as come back to haunt them. When the Greece joined the Eurozone, they got into an era of cheap borrowing and they embraced it until the bills started rolling in. In 2004, they hosted the Summer Olympics and this put a large hole in the Greek coffers.
All this isn’t exclusively a Greek Tragedy but more of a Eurozone tragedy. Larger economies such as Portugal, Italy and Spain are all facing austerity measures. Germany, the European Central Bank and the IMF which has come to their rescue with bailout money but austerity preconditions. Many Greeks loathe the Germans with even the German Chancellor being referred to as a Neo-Nazi by the Greek press and some politicians. This was even evident during the recently concluded European Cup Competition when Germany played Greece during the quarter final match. The Greek fans were singing ‘screw your debt’ and ‘we’ll never pay you back’. Nonetheless, Germany beat the Greeks. The Greek economy accounts for only 1.8% that of the Eurozone yet quiting the Eurozone means a collapse half of Europe’s Banks which hold Greek debt. Greece being in the Eurozone means they cannot devalue their currency to make their exports cheaper.
The story of Greece is a modern morality tale to individuals, corporations and nations. Have we learnt anything or shall we have a repeat of this in the future? Seems no one paid attention when Argentina went burst ten years ago.What is the way out for Greece? To quit the Eurozone all together? To default? What are the implications of this?How do we remedy this? That’s your food for thot…