CRISIS? WHAT CRISIS?

Crisis is a testing situation, an abrupt change, an upset of balance. A Crisis can be of a

political, economic, military, societal, or even a personal nature. The crisis everyone
talks about these days is an Economic crisis, generally speaking, but not one of a
uniform cause and nature. In the US it is a crisis of liquidity in the system, triggered
by the subprime mortgage loans mess and accentuated by the cash problems of the
financial sector. Wall Street and the Banks were the culprits, yet many received
generous assistance by the Government. So did GENERAL MOTORS and others
saved via the TARP, a program put in place to stave off bankruptcies and job losses.
The program seems to be working. It halted the “skid” of the economy. In Ireland it
was the banks, one in particular, loaded with “toxic” financial products threatening
their collapse. In both the US and Ireland it was the private sector that destabilized
their economies. Greece is a different story. Greek Banks wisely avoided the
financial plays of their European and American colleagues and invested, instead in
their expansion to countries where they saw opportunities, Poland, the Balkans,
Turkey. The Greek private sector was doing fine. The Public sector was not. Bloated,
unproductive, corrupt to the bone, a burden to the country and a hedge to economic
progress. It brought the country to its knees as it became impossible to maintain it,
because the government lacked the means. Greece has had Budget deficits for most of
the last thirty six years. They were financed by the EU Grants and by borrowing and
borrowing and borrowing. The Greek public debt servicing was the biggest single
expense of every Greek Budget of the last ten years. The borrowing started increasing
disproportionately to the National Income about twenty five years ago. The funds
borrowed were not i n v e s t e d productively, so that they would create wealth. They
were, instead , s p e n t buying popularity for the ruling party. The unions demanded
and Governments granted, wealth spread and its multiplier effect created more wealth
and a sense of euphoria. Costs of everything went up. Greece became heaven for
illegal immigrants, who substituted Greeks in menial work. Unfortunately, Greek
Governments did nothing to increase the healthy inflow of funds to the treasury, they
just kept borrowing. Then the bubble burst. Greek debt was considered excessive and
the cost of further borrowing became excessive, factually impossible as no plan to
rein in debt and ensure continuity of economic progress was presented to the
International Financial Markets. To compound the problem a new Government took
over, October 2009, promising raises, thus winning the elections and, when
challenged with the question of wherewithal, suggesting that funds are available. It
took the new government three months to decide that there was a problem and no way
around it. It lost valuable time. The irony was that it was fully appraised by the Bank
of Greece long before it came to power … totally unprepared, without a plan. It had,
presumably hoped that it would continue borrowing and it still could if it had acted
swiftly weeks after it came to power, but it did not until it had become prohibitively
expensive. Fortunately, for the Greeks, the “prime” minister of Greece attended the
international “get together” in Davos where a journalist literally chased him in the
corridors of the hotel with the persistent question of when will Greece go into
bankruptcy, how bad a “haircut” will its lenders get. That shook him. Reality rudely
awoke him. He returned to Greece shaken and began assessing the situation. He came
out in to the open with the facts. Greece was like the TITANIC (sinking) and he was
running a very corrupt country that had lived beyond its means for decades. He did his
best to scare the markets. The cost of borrowing quadrupled. Greece as a member of
the Eurozone was saved by its cohorts and the IMF. It received the biggest financial
assistance in history, in exchange for its economic sovereignty, which is not a bad
thing considering that what Greece is obliged to do, under the terms of the
memorandum signed, is to shape up … to start acting responsibly.

Nothing happened to Greece. Of course the morons (the species abounds in the
Greek political system) blame the memorandum for the ills of today, but the
memorandum was the result not the cause of the country’s woes. In the course of the
twenty one years of socialist Governments an anti-business climate came to be, with
profit becoming a dirty word. No aspirations for innovation, for enterprise, were
nurtured. Instead every one pursued the comfort and security of public sector
employment. The Unions, with the benevolence of the Governments, pushed wages
up, encouraging Greek manufacturing to migrate to the Balkans were, in the former
communist countries, the business climate was better and wages lower. Inevitably
unemployment started increasing in Greece. The conservative Governments in the
fifteen years of their regime did nothing to alter the situation. Populism had become
something of a social contract that no Government dared to breach. For its sake
everything became tolerable, even permissible. Tax evasion, fraud, bribery,
legalization of illegal construction, legalization of the usurpation of land- of beaches-
of forest areas, became possible. Closed professions, black money, corruption,
became norms. Slipping under the laws, rules, regulations, was smart (and rewarding).
Greasing the palms of politicians and the political parties was “business”. Having the
rules bent to one’s favor was a mark of prominence. Even in the field of education test
subjects had been sold to thus enable the “beneficiaries” to prepare accordingly.
Effortless enrichment received “applause”. Even the statistics of the Greek fiscal
realities were false, with the blessings of the Governments. The political sport became
one of exchange of accusations, no constructive debate. Contempt of laws was
without consequence, for many. The media glorified the un-natural, presented
everything in “yellow”. Governments held the media hostage with their advertising
budgets and the purposeful delay in the allocation of frequencies. The amoral ways of
the grown ups set the standards of behavior for the youth of Greece. The occupation
of schools by “striking” pupils with ostensible demands was condoned. The
destruction of buildings and equipment in Universities by “protesters” became routine
–never mind the burden to the tax payers- it was all in the name of “r i g h t s”.
Everybody has “rights” in Greece. Obligations are for the others.
Politicians used the EU grants and excessive borrowing to serve their pursuits as if
“tomorrow” would never come. But it came. There was no crisis in Greece. Only the
inevitable end of a delirium. Are the Greeks any the wiser for it???