Tuesday, May 15, 2012

What now for Greece and its euro membership?

Lots of speculation during this week about the future of Greece in the euro-zone. The country failed to form a government and there are many parties now in the Greek parliament, notably Syriza and its leader Mr. Tsipras, that want to reverse the bail-out deals that the former government has signed.

That of course caused an uproar among many other European governments like in Germany. Many have threatened to withdraw any further funds to Greece, others predicted the country's exit from the euro-zone.

A number of Germany's and EU officials mentioned that solidarity works both ways and if Greece wants to receive help, it must continue the austerity program and commit to what it agreed in order to receive more funds.

Yes but with what price? The euro and everything that the EU represents and promotes must be for the betterment and benefit of the people of all EU states. Right now what we have in Greece is a total collapse, social, financial and even moral. In a country with very few suicides per year, they now became a common occurrence.

Austerity hasn’t worked in Greece at all, it only put the Greek people in a terrible position to repay debt that was deliberately thrown on to them.  Austerity would be good if it was combined with investments, cut the salaries but invest in creating jobs and new industries. So far only the first has happened and it is disastrous for the Greek people. The nation’s pride and confidence is at the lowest point and we are being treated like the Jews were before WW2.

Apart from the slander and the fact that we are being used as the scapegoat for the euro-zone's woes, there are many reports among the Greek diaspora of discrimination and abuse of the Greek ex-patriots, simply because they are Greek. Notably in countries that “give their taxes to the corrupt and lazy Greeks,” like Germany, Austria, Finland and Holland. 

Not a great example of European solidarity is it? It is a shameful act and those responsible are the European governments who allowed this to happen.

The euro-zone was flawed by its birth, it was more of a currency union than a monetary union. Our leaders knew that, but still they went ahead with it. Thus the euro became an ambitious project and a symbol for Europe, but to the expense of the ordinary citizens. What good is to a European worker to have a symbol of "European unity," when he has to pay such a high price for it?

What people need is to be convinced that if they take the austerity, better days will come. Right now Germany and the Greek government insist on more austerity, something that the Greek households can not withstand.

If they announced a program for recovery and growth, or at least a road map to end the austerity and begin a relief process, I am sure the Greek people would respond more positively.  After all the Greeks showed their support in a recent poll for the euro, with a 75% saying they want to keep the common currency.

And if you think that the Greeks deserve all this because they were irresponsible, well that is only true for the corrupt governing elite and their accolades. Is it fair to put the ordinary citizens under such a harsh ordeal, just to punish the incompetence of their past governments?

How could the Greek public have known that the country was not fit for the euro-zone and that our government lied about the country's finances to enter the euro-zone? They lied to us and apparently they lied to the rest of Europe, but personally I doubt that European governments were ignorant about it. It is well known that the EU Commission knew but did nothing about it. So does the blame fall only on Greece's shoulders?

Our leaders created the euro with many flaws and occasionally all EU states at some stage have bended the rules. The first to do so were Germany and France. As for the debt, it has been accumulated from the exposure or the European banks, mainly the French, German and British to the toxic debt of the USA.

Germany’s economy too was in tatters after the re-unification, but its recovery was partly based on high inflation of those nations that now are in crisis and Germany’s trade surplus against those countries. In other words, our then booming economies contributed to the fixing of the then limping German economy, only to be forced now into an austerity.

Greece’s expenditure is also wasted in its defence and weaponry. Mainly from Germany, France and the USA. So while the Germans are giving Greece money to “save us” they are happy that we buy their tanks and submarines to protect ourselves from where? The Turks, a NATO ally of ours.


The Greeks were blamed for overspending, but it was German cars that they were buying. So by overspending, they were actually supporting the German economy. Perhaps if they did not have developed this bad habit, Germany's economy would not have benefited so much. Besides, it was not only the Greeks who went on a spending spree, but the Irish, the Spaniards and the Portuguese fell in that trap too. All of Europe was overspending, but the smallest countries get always the "spanking!"

There have been also many scandals involving multinationals, among them many German like SIEMENS, of tax evading in Greece. But it is the poor Greek tax payer that is called to pay his taxes while the multinationals, who obviously owe more to the Greek state do not have to face the same rules.

How can we solve the crisis when it is Germany again who opposes the eurobonds, a more viable solution to save the euro. They fear that this will harm their competitiveness, so instead they want to impose the new Fiscal Treaty on others. The Treaty is good to control how much does a country borrow or spend., we need fiscal discipline and unity in the euro-zone. But Germany was the first to bend the rules in other Treaties, who is going to control Germany if they break this one too?


The solution would be, if our leaders want to keep the euro to have a full fiscal union, but that is what Germany and many other "core" European countries oppose for the moment.  Bailing the weaker states out with high interest is much more profitable for them, because interests have to be repaid.


Greece does not need austerity, it needs systemic reforms to modernize and update its taxation system that is so complicated and riddled with red tape. It needs to create jobs, cut down on its public sector and stream line its economy. Not have its population starving and being unemployed.  


Germany has highjacked the euro-zone and the European project and they are trying to repeat what they did in Eastern Germany on Greece. There they were successful, but can we also get the factories and development to go with it?

The euro is a great symbol of unity and of prestige for Europe. But keeping it alive to the detriment of the people is not justifiable. Austerity would be good if coupled with growth stimulus and funding. Just austerity, and in its harshest form,  only turns the public opinion’s against the euro or the European project and it is simply scandalous as all this is happening to save the banks and the please the Markets.

Nothing has been achieved in Greece for the past two years of austerity apart the rise of the far right and the far left. That makes it harder to cooperate and find a solution both within the Greek government and Europe. We need to start seeing investments now in Greece, but all we get from “our partners” are threats!

So even if I support the euro, if it means that the Greeks will have to suffer more cuts and without a plan for recovery, I suggest that Greece should exit the single currency. We should rejoin only when the rich states have eventually decided to create a true fiscal union, fix the eurozone, heal its flaws and when they accept new members, they have to make sure that everything is in order, both in the new member’s books and in theirs.

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