If one listens to greek media reporting on the crisis there is this constant wounded pride and sulking in the reporting, and a certain disbelief that things are so bad. There is also a certain victim mentality. In the beginning of this crisis many countries violated the rules of the Euro by a bit.. It was a reflection of the huge sudden crisis, and the European Central Bank reasonably made some allowances if the violation of the rules on deficits a eurozone government committed was
1. relatively small and
2. temporary
3. measures were taken to put it right as it happened by the government concerned without the prodding of the ECB.
In greece the situation was and is different. This is why the ECB is more strict with greece as it should be.
1. relatively small and
2. temporary
3. measures were taken to put it right as it happened by the government concerned without the prodding of the ECB.
4. The markets regarded these measures as credible.
Basically France through it long standing behaviour for hundreds of years has earned a reputation for competence.
In greece the situation was and is different. This is why the ECB is more strict with greece as it should be.
Greece on the other hand stands accused of the following triggering the lack of willing investors buying greek bonds with confidence.
1. The greek statistical service was lying to the EU about the deficit, as it was lying to join the Euro in 2001. That is unfair for a country like Latvia for example which missed becoming a eurozone member by a few tenths of a percentage. But they didn't lie about it. This childish behaviour is embarrassing and barbaric and shameful! The Greek statistical service is led by the usual party lackeys and had no people with dignity that would stand up to the government when it forced them to lie about the Greek deficit. The fact that there are no whistleblowers in the greek civil service is even more troubling.
2. Greece had a massive deficit that it was lying about even before the crisis. The liberalisation of banking was making the private sector of greece indebted just as much as the public sector has traditionally been. This was making greece steadily even more of a basketcase than it already was. Greeks are now astonished that counterparties dont want to lend more money.
3. Greece has had a tradition of using devaluations of its currency to adjust to the real world which was totally different to the economic management of the eurozone. When we joined the euro however we got up to our old tricks and there was no reform. However the easy option of devaluation does not exist anymore.
4. The olympics were an orgy of public spending with plenty of white elephants. It was economically slightly negative or at best neutral. That is constantly touted as a great achievement which mystifies me.
5. Every single government that gets in in the last 30 years promises to fix the economyand the public debt. Every single one has not delivered. Why should the europeans think this will change now? When there is the slightest bit of difficulty Greeks fiddled the figures. Greeks cannot continue to piss on everyone else in the eurozone.
6. The measures the governement of Pasok has taken to fix the deficits are small, have been tried before with little success, don't show a change of policy when it comes to hard numbers.
7. The Pasok government got elected promising that it will spend even more money that it doesn't have which is basically lying again, now we want to regain credibility? Its not a very good way to start a government that wants to be believed. The finances were terrible even before the election and Papandreou knew how bad things were but he lied to get elected..
8. There is another dimension of an inter-generational robbery. In short one generation has leveraged the country's balance sheet as if it was fighting a war or worse. The money has ended up mostly as consumer spending by well-connected individuals. The end result is a huge bill that now creditors do not believe is serviceable anymore. Basically the country's shrinking young generations are called to: 1. have children and finance their education, 2. buy a place to live, 3. Pay all the taxes to pay back all the debt and interest that has been accumulated. No wonder lenders don't want to lend any more money, they feel that they will lose the sums they have lent already..
1. The greek statistical service was lying to the EU about the deficit, as it was lying to join the Euro in 2001. That is unfair for a country like Latvia for example which missed becoming a eurozone member by a few tenths of a percentage. But they didn't lie about it. This childish behaviour is embarrassing and barbaric and shameful! The Greek statistical service is led by the usual party lackeys and had no people with dignity that would stand up to the government when it forced them to lie about the Greek deficit. The fact that there are no whistleblowers in the greek civil service is even more troubling.
2. Greece had a massive deficit that it was lying about even before the crisis. The liberalisation of banking was making the private sector of greece indebted just as much as the public sector has traditionally been. This was making greece steadily even more of a basketcase than it already was. Greeks are now astonished that counterparties dont want to lend more money.
3. Greece has had a tradition of using devaluations of its currency to adjust to the real world which was totally different to the economic management of the eurozone. When we joined the euro however we got up to our old tricks and there was no reform. However the easy option of devaluation does not exist anymore.
4. The olympics were an orgy of public spending with plenty of white elephants. It was economically slightly negative or at best neutral. That is constantly touted as a great achievement which mystifies me.
5. Every single government that gets in in the last 30 years promises to fix the economyand the public debt. Every single one has not delivered. Why should the europeans think this will change now? When there is the slightest bit of difficulty Greeks fiddled the figures. Greeks cannot continue to piss on everyone else in the eurozone.
6. The measures the governement of Pasok has taken to fix the deficits are small, have been tried before with little success, don't show a change of policy when it comes to hard numbers.
7. The Pasok government got elected promising that it will spend even more money that it doesn't have which is basically lying again, now we want to regain credibility? Its not a very good way to start a government that wants to be believed. The finances were terrible even before the election and Papandreou knew how bad things were but he lied to get elected..
8. There is another dimension of an inter-generational robbery. In short one generation has leveraged the country's balance sheet as if it was fighting a war or worse. The money has ended up mostly as consumer spending by well-connected individuals. The end result is a huge bill that now creditors do not believe is serviceable anymore. Basically the country's shrinking young generations are called to: 1. have children and finance their education, 2. buy a place to live, 3. Pay all the taxes to pay back all the debt and interest that has been accumulated. No wonder lenders don't want to lend any more money, they feel that they will lose the sums they have lent already..
Given these points Greeks need to become more financially educated and involved in the decisions being taken in their name. The state finances are their problem.
Other eurozone countries have learnt to live within their means, not least Slovakia. Greece needs to let the talented professionals it does have, and that are qualified to design its economic policy going forwards.
Posts
No comments:
Post a Comment