Greece: Strangled by the euro-noose
Like a leveraged Sisyphus, the Greek economy finds itself unable to push up the hill. The increasingly toxic euro effect is precluding the chances of a meaningful Greek rebound from its great depression.
The problem with politics is that for all the exciting arguments, ultimately you need to watch the money. Economics is a dry topic compared to vibrant debate on, well all those tricky political topics of the moment, but in the end cash is king. Sadly, the EU is determined to champion a movement where the political classes have not merely stuck their heads in the sand, they have increasingly brainwashed voters to ignore simple numerical gravity. Ongoing unsustainable spending alongside insufficient tax revenue simply defies common sense.
True, the spendthrift state/super-state lunacy can be accommodated periodically via the bond market but justifying mortgaging future generations to fulfill instant gratification is, at best, uncomfortable. Well, for economists anyway, politicians seem to have no such quibbles.
In the Brussels bubble, ‘new’ Commissioners were recently chosen because they have blind faith in the blob to start with - so ‘plus ca change’ alas. When it comes to the economy, EU governments are united in delusion: they don’t have a problem in the first place. This plays well amongst EU stakeholders who eagerly maintain facial expressions honed from years of mimicking synchronized swimmers (or if you are boss of the IMF - actually being a rather good exponent in your youth).
Shrill, immature, arguments espoused by these economic illiterates fill all too many waking hours of the day, passing for mature political discourse. This bombardment of pooled ignorance led by the political classes shrinks rational debate to the reassuring sound-bite: “everything is going to be alright.” Therefore, Brussels is clearly eager to draw our attention away from the eurozone which remains less a single currency zone and more the world’s largest economic edifice held together by duct tape and assorted sticking plasters. A sort of ‘Potemkin village’ of currency if you like.
Built without foundations on pure hubris, this stunningly misconceived high water mark of economic illiteracy is tearing apart...Not that it ever truly coalesced, despite Brussels’ relentless agitprop. Specifically, the blob may think Greece’s economy has been healed after a lot of (superbly boring) discussion about all manner of troika debt repayments et al. The sad truth is that Greece hangs in the eurozone by a thread which doubles as a noose, tightening daily around every citizen’s neck.
Leaving aside current Presidential posturing which may accelerate a euro exit, the moment has long past when it was anything other than pure masochism by the blob to imprison Greeks within the world’s most perfectly refined poverty generation machine.
The Greek economic situation is horrendous. A 27 percent depression has left the nation on life support. Greece remains straitjacketed in the euro. “Internal devaluation” may have successfully reduced the balance of payments but it did so by killing internal demand and reducing domestic income. Greek products are still priced in a currency oriented to selling German exports - Athens needs a devalued currency not tokens suitable for exporting BMWs. Growth has barely returned – one percent is a travesty after the meltdown, demonstrating the sheer lack of competitiveness in the Greek economy (it ranks 52nd in the world for ease of doing business - neighboring Macedonia does better). Thus the Athenian blob renders the whole nation unable to compete and discourages employment of the jobless 27 percent (75 percent of whom have been out of work for more than a year). Many are emigrating due to economic dysfunction. Even presuming the anemic 2014 rebound reaches the mediocre average EU rate of 2 percent pre-2008, it will take 13 years for the economy to recover to the 2008 peak and perhaps 2 decades to find jobs for the unemployed. Alternatively Greece can continue to hemorrhage and see its debt mountain (currently utterly unsustainable at 177 percent of GDP) accelerate as the euro noose strangles the nation.
Greece needs an outbreak of government to stop their ongoing annexation by the EU as Brussels maintains its vain attempt to retain the ill-considered euro project. Greece needs a path to rebuild the economy, especially exports and jobs. Athens must forsake the facade of European unity which is impoverishing them - or risk ongoing destruction of its national fabric. The eurozone pursuit of Greek economic martyrdom amounts to contemporary fiscal barbarianism.
As the euro noose tightens, somebody must snap the rope soon to avoid throttling Greece entirely.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.