Thursday, 25 February 2010

Greece - austerity measures - does Greece need a bail out

Things are grim in Greece at the moment - yesterday we had the country paralyzed by a general strike - government employees, air traffic controllers, bus drivers - an estimated 2 million were on strike some sources say. This is the worse climate I have experienced in Greece in 15 years.

You only have to look at the faces of the people travelling on the bus this morning - expressions were morose, one can even feel other people's insecurity. Unemployment is raising its head even higher and people are simply afraid - and rightly so. How much worse can it get and how did the country get into this disastrous situation in the first place.

There are more questions than there are answers. Let's start with one FACT. In previous years, previous governments cooked the books to hide the national deficit - by fair means and foul. The national statistics office was not independent of the political powers and obviously painted the picture they were told to by the powers on how. PASOK claims when in came to power in October 2009 - it discovered and revealed to the public that the deficit was actually double what the previous government had claimed it to be.

Then we have the issue of a bloated public administration - by the way those in secure jobs and the first to strike because of a pay freeze - that's hardly what I call solidarity. Jobs in the public administration even ridiculous department were created to provide jobs for friends - not to serve better the Greek citizen. Corruption in Greece was a daily fact of life - it was uncommon for a doctor or a dentist to provide you with a receipt for their services - instead the black money went into their pockets and past the taxman. I suppose at some time there had to be an end ot this ugly story - those who earn big salaries - the doctors, the dentists, the lawyers were the most astute at not paying taxes. Taxi drivers went on strike last week because they are going to be forced to issue receipts - i.e. they will have to account and declare their real income - unthinkable in Greece - but the reality of life in the rest of Europe.

And our European friends - both Eurozone and beyond - there is a mixed message, as I see it. On the one hand they feel angered that Greece has shown itself incapable of getting in act and finances in order and ont he other they reaslie leaving the country out on a link could potentially damage the Euro, damage credibiliity in the Eurozone and ultimately political damage the credibility of the whole European concept. They feel caught between a rock and a hard place. Rumours of Greece asking to leave the Eurozone - it cannot be expelled - do not help the situation. The richi n fear of being confronted with the new devalued drachma are getting their money out of the country into Swiss banks - disaster can be a self-fulfilling prophesy.

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