A Stormy Outlook for Greece

Several days after the Greek Parliament voted to adopt further austerity measures, the rest of the world seems to have realised the damage austerity has already done. The news that Greece’s GDP plummeted at the end of last year confirmed what Greeks have already realised – austerity is crippling the country.

As world media began to come to Greece’s defense (such as here and here), we also realised with increasing clarity that the outlook really is grim.

I wrote this weekend that I have had trouble coming to grips with the reality that hard times for Greece are here to stay, at least for much of the forseeable future. Watching the rest of the world come to the same conclusion today has only reinforced feelings of pessimism. It surprises me how much talk I’ve heard of some kind of conspiracy. It’s no secret that Greeks love conspiracy theories – in a country where networking can (or could) get you quite a lot, people are convinced there is some kind of secret motivation behind everything. These days, when no one wants to take responsibility for the situation, finding creative scapegoats as well as the standard ‘the government’ has become a convenient distraction.

I don’t know enough about Greek politics to express my opinion on the current government, but I do know enough to see that right now we are in sink or swim mode. There is no sense of long term plan, and when those in power are making decisions based on how we can make it to the next payment, it’s difficult to look beyond the next few months. This type of living-on-the-edge is unsustainable, and I am interested to see how the Greeks express themselves in upcoming elections. Leadership will have to come from somewhere, but in what form?

Too many questions, and no real way to find answers. What do we do now? Hoard food in the basement? Leave Greece? Take to the streets?  Or just keep walking..

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2 thoughts on “A Stormy Outlook for Greece

  1. Yes, leave Greece if you can. Greece is in for a long, long period of utter misery, on a third-world scale. If your politicians continue to play ball with the eurocrats, who have zero interest in helping Greece and Greeks versus shielding the euro and eurozone banks and governments, Greece is in for a gigantic depression that will probably last 40 to 50 years.

    If Greek politicians really wanted the best for Greece and Greeks, they would have already defaulted on all of Greece’s debts and returned to the drachma. Yes, that means more misery for many years, but perhaps only one decade instead of three, four, or five decades. But the real way to get Greece back on its feet again is to throw out your politicians, all of them, and elect politicians who will guide Greece to a free-market economy.

    The real problem is that Greece has been partying, so to speak, on borrowed money for more than a decade. Greece consumes twice what it produces, and has borrowed to cover the difference. No one, government or the private markets, is going to lend any more money to Greece for a long, long time, which means Greece will have to cut its consumption to match its production. Whether Greece does this under austerity measures imposed by the EU (Germany) or whether Greece defaults and leaves the euro is immaterial. Either way, your standard of living is going to plummet far below even where it is now. The only way out of this is to grow your way out of it, and that’s not going to happen as long as your government is so large and intrusive. You really, really need a free market operating to be able to grow at all. That means massive layoffs in the public sector, on the close order of cutting 80% to 90% of employees currently employed by the government and quasi-government organizations. It also means things like eliminating the minimum wage and slashing pensions and benefits by huge percentages.

    I’m sorry for you and for all Greeks. I admire your culture and your history. But there’s an old saying: when you find yourself in a hole, stop digging. Greece hasn’t stopped digging even now, and I expect things to become catastrophically worse before they start to show minor improvement. And that’ll be decades from now.

    So, yes, get out if you can.

    Best regards.

    Bob

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