Events in Greece are always important for Romania because of the significant Greek investments here and because the two countries are important regional trading partners. The enormous economic difficulties faced by Greece in the past few years have made these investments seem increasingly fragile and the recent, inconclusive, election result has brought the world’s financial community to the edge of their seats.
Two thirds of those who voted in Greece’s general election rejected the austerity-only terms of the country’s financial bailout and they seem to be leading a popular revolt against the ‘accountants’ who insist that the only way to solve Greece’s problems is by running its economy into the ground. Unfortunately, it seems that the fragmented outcome of the election is making the formation of a new government impossible and there will probably be new elections in around a month’s time. The very damaging uncertainty will continue.
In the past few years economically ‘superior’ northern and central Europeans have comforted themselves by criticizing the economic collapse of Greece, and deriding their everything from their economic policies to the national work ethic. They take comfort in the perception that the Greeks refuse to work sufficiently hard, they don’t pay their taxes, while demanding huge benefits from the state, their politicians are crooks offering said social benefits to buy votes, while the general population continues to live a life of careless economic denial. We have been told, by EU officials and many media commentators, that only the cruelest medicine can save the Greeks, and that they forfeited the right to a voice in their treatment because they essentially brought calamity upon themselves.
The economic crisis in Greece is not different from everyone else’s crisis, it certainly isn’t, it is simply much, much worse.
Now some commentators and European politicians are asking the question, ‘…but how will the extreme austerity policies being forced on the Greek people actually solve the country’s deep structural economic problems?’ The answer, of course, is that they won’t, no matter how strictly they are applied.
Austerity-only in Greece is designed simply to reduce costs enough to allow eventual repayment of the state’s huge debts without the use of bailout money. The loans given to Greece by private institutions, in the days when it was thought that countries could not go bankrupt, are crippling. These people, understandably, want their money back as quickly as possible and they have little sympathy for the hardships being visited on the Greek people to make repayment possible.
The public money given to Greece will not alleviate growing hardship among the population or provide any kind of stimulus to the economy. It is good money after bad on a short-term basis. How will the money, from the EU, be paid back if and when the private loans are dealt with? That is a question that may not be asked and yet it is vital to the long term future of Greece and its people.
So far so good, for anyone sitting in the boardroom of a private investment bank, an E.C.B. meeting room high above Frankfurt or a TV studio in Paris or London. But for Greek citizens, whose government has just broken every contract it made with its people and suddenly they can’t pay the mortgage, or pay for school books or sufficient food for kids, or know that retirement will be spent in poverty, the perspective will be rather less detached. If taxes are rising while salaries are being cut without warning, while the Finance Minister spends EUR 200,000 refurbishing his two offices. Or those who haven’t been paid for months but know that the owner of the company awarded the contract for printing the country’s school books is a close relative of the Minister for Education; it's easy to see why going onto the streets and voting for extreme parties can appear as the only alternative.
The bailout of the country’s capacity to pay its debts to private institutions leaves the country with huge debts to other EU countries for many years to come. None of the money tied up in this process is available for investment in national economic renewal. Greeks know that their kids will still be cleaning up the mess with nothing good to look forward to. Is that the best that European financial and political minds can offer?
If I were a Greek, I’d be on the streets too.
Greece, like most other European countries, is mainly a consumerist economy. If the people cannot afford to consume, the economy cannot grow and without investment, restructuring and growth there is no conceivable way that Greece can begin to solve its financial problems on its own.
Greece is a country that needs to be saved from itself, saved from the chaos of resurgent Fascism and populist Socialism, saved from enduring a return of the generals and saved from a Eurocracy in Brussels, Frankfurt and Berlin, which tries to squeeze countries into a fiscal model that does not work. It’s time for the EU to stop wasting time and our money and work to solve real long-term problems.
Ronnie Smith is Scottish and now lives in Romania, working as a professional training business consultant and communication coach. He is also a teacher of political science, a political and social commentator and a writer of fiction.
The views expressed are his own and do not necessarily reflect those of Romania Insider.com.