My simplistic view from the ground…..
However giving further loans to a country with a cronic deficit & debt problem will not cure it. Greece will eventually have to default. Unfortunately they’ll keep putting it off until there’s no alternative, therefore prolonging the agony.
Absolutely right Chopera. You can see it, the average Greek can see it, but the EU’s priority is simply “the EU project will not fail”. Prolonging the agony as you put it is achieving only one thing, burdening the Greeks with more debt that they can never repay.
How the heck is this type of borrowing ever going to be serviced? The answer is it can’t. Greece only has a population of 10 million people. The loans so far of €110 billion, with the ridiculous interest rate and repayment timeframe, can only result in failure. That’s without any new lending which would only delay the inevitable.
But the elite of the EU, panicking that their pet project could fail, would rather ‘whip the dying donkey’ than admit it can no longer stand. Making Greece restrict some of it’s successful industries such as salt and flower production (making tens of thousands redundant) as a pre-requisite to joining the EU due to vested interests of other EU countries, is now viewed as ‘it’s all not been worth it’. Mis-use and abuse of EU funding over the years by politicians should warrant numerous jail sentences.
Forget the tired ‘joke’ that Greeks are lazy and don’t like to pay taxes so it’s their own fault. The average employed Dimitris works hard and is taxed at source. The game of tax-avoidance is played the elite and the politicians who have their own businesses, masters of the loop-hole, smoke and mirrors.
You can only cut the pensions of the elderly by so much, same for salaries. People are being made redundant by the tens of thousands, the cost of essentials are going through the roof (eg. taxation on petrol, foodstuffs etc). What is going on here is brutal but the sad truth is it won’t/can’t even dent the surface of this kind of borrowing. It is also ringing the death knell for any hope of kick-starting growth.
I repeat, the population is only 10 million – this size of borrowing, and possible further borrowing, can never be serviced and those up top should have the nuts to be honest and acknowledge that. The Greeks have been put in an untenable position and are paying a dear price for this insanity.