Greece Must Accept To Resolve Its Debt Crisis Will Be a Very Painful Exercise

Greece Must Accept To Resolve Its Debt Crisis Will Be a Very Painful Exercise

Jeevan A. Robinson

Release Date

Thursday, May 7, 2015


Watching the developments in Greece these past months, or perhaps I should extend it and say, these past years, provides is a stark lesson in how not to run a country.

On Sunday, July 5, 2015, the Greeks in majority voted "no" to bailout funds conditions being laid down by the EU, IMF, ECB. The results show that 61% voted no, whilst 38% voted yes. Greek Prime Minister, Alexis Tsipras, heralds this decisive vote as a victory for democracy in the country he leads. But is it trulya victory for democracy or a victory for him politically?

One can understand Prime Minister Tsipras' emotions, and also his political gamble in this high-stakes move that he championed. After all, he ascended to office on the promise to fight the bailout conditions that he claims are crippling his country.

As to what, in effect, did frankly 'cripple' Greece is a matter up for many a fierce debate, as varying factions will provide highly emotive arguments on the assumed "aggressive nature of the EU"; or you may well hear many an argument about the Germans, led by Merkel, once again seeking to control Greece in light of the history of occupation, tension and mistrust between these two nations.

The scenes of celebration that greeted the "no" vote have been broadcasted globally, and for sure, no other nation should tell another how to run its country's affairs. After all, this is one of the hallmarks of democratic practice that blood has been spilt towards for many a millennia. So therefore, the question that today's "no" vote in Greece presents for many around the negotiating table, is one of where to now?

The Greeks have played a very dangerous game of russian roulette. Prime Minister Tsipras' young coalition took an amazing, yet a crazy gamble, by even seeking to hold a referendum on the bailout conditions offered by the EU, IMF and the European Central Bank - collectively known as the Troika.

My reason for saying this is earned from several points of consideration. Firstly, Greece got into this "mess" internally. Historical civil war within Greece, and the economic mismanagement that was paramount prior to their EU ascension, saw Greece's economy being vaulted and fraught with underlying volatility.

However, Greece did not "crash"; for their entry into the Euro, amid flashing lights, and the accustomed political rhetoric saw the Greek nation enjoy a resurgence. The Euro as the national currency, meant monies were coming from the European Union. The economy enjoyed a boost.

But the question I ask is, which economic revival was being measured? The real economy? Or the propped up EU money infusion led economy? If spending was still out of control, easy loans and unsustainable practices still being the order of the day, then how could this ever have been sustainable towards the long term?

It all came telling when the global financial markets crashed, and Greece was exposed and the frailties of its economic existence were laid bare. Greece ran a deficit mainly in the 90s, spending as if monies were coming from an endless pool. In 2014 Greece' s public debt stood alarmingly at €168 billion. Them hosting the 2004 Summer Olympics is a prime example of poor financial decision making. Could they have afforded to host these games that left the country in a hole to be paid by taxpayers, to the amount of €7 billion?

The bottom line is that Greece needs help. It needs this help badly. Does it play hardball with the EU leaders, thinking they will come over to Greece's hand, for fear of Greece exiting the Euro? Or will Greece have to do what they do not wish to do, and implement tough controls financially, and rein in spending with austerity measures that will bite their country even harder?

The truth is, their is no easy way out of this financial mess for Greece. They have played a very dangerous game with the "no" vote, and this upcoming week will reveal how the EU responds. Will Merkel and company say to hell with Prime Minister Tsipras, and walk away leaving Greece to its own devices?

Or will they continue to negotiate, with Greece having to kowtow to bailout funds conditions as set by the Troika?

The world watches. We wait. The implications for the Euro as a currency, the Eurozone, political independence in Greece, amongst a host of other considerations are huge. Going forward it will be painful all around.

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