Greek Tragedy Must Be Averted Within 7 Days.

Posted on: 27/06/2015

Greece is in a mess.

With a population of around 11 Million and a national debt of roughly 320 Billion Euros, every Greek (man, woman & child) would have to give their exchequer 30,000 Euros to pay back the country's creditors.

Now the UK's national debt per person is broadly similar to that of Greece. The difference is that the UK's Gross Domestic Product (GDP) per person is about twice that of Greece. Put very crudely, it would take Greece 18 months to pay of its national debt, if it could apply all of its GDP to meeting the bill. It would take the UK 9 months to meet its bill in the same way.

Why Greece has got into this position will no doubt fill books, when anybody can be bothered to write them. Such volumes are unlikely to be best sellers in Athens, for a variety of reasons.

In any event, with its economy in recession, unemployment running at  25% and only 42% of the population in the labor force anyway, Greece cannot pay its debts.

3.5 million working Greeks are trying to keep a population of 11 Million afloat. Even for a sea-faring nation, that is simply not possible.  For the same ratio to apply in the UK, the population would need to be 94 Million. It is actually around 64 Million.

The International Monetary Fund and European Central Bank want the money they have loaned to Greece repaid. They really do not see how that can be achieved, but cost cutting is always their first option, so they want  Greek government expenditure slashed. Pensions and other State Benefits have particularly caught their attention in this respect.

Sadly, feasible cuts in Greek pensions are NOT going to deliver 320 Billion Euros to the country's creditors. Not now; not in 10 years; not ever.

So it is time for the international community to face up to THEIR responsibilities. In essence, the lending institutions have behaved like pay-day loan sharks, whilst knowing  full well there was no money available to repay the money they were lending. No point the IMF being wise after the event - if they were really wise, Greece wouldn't be in such a terrible mess today.

It is, of course, reasonable to expect the Greek public to make some sacrifices, however token, in recognition of their nation's errors. However, most neutral observers would surely judge that the last 5 years of misery the majority of the Greek population have gone through is enough restitution. 

The creditors will need to take a hit, probably as much as 50% of the monies they have foolishly given to successive Greek governments. 

A 160 Billion Euro write-off, spread around Europe, is not pleasant but it won't break the economy of the European Union. 

The positive impact of such a write-off would be multi-faceted.

Firstly, it would allow Greece to stay within the Euro zone, which most economists believe would a good thing.

Secondly, the Greek people could  get on with their lives, working with their heads up, striving to restore their country to its former glory.

Thirdly, it would allow the whole European Union to move on. Europe should be outward looking, helping to resolve the problems of the planet. At the moment, too much energy is being expended in managing the internal ledger. 

There are probably 4 Billion people on our planet living on less than 5 Euros a day. Few of them live in Greece, but  those in genuine need elsewhere won't get Europe's attention until the Greek issues are dealt with, which should have been achieved long ago.

Time is short. A deal can be done in the next week.

Forget "can".  MUST.




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