Greece, EU and the economy

EU leaders might have by now realised how weak was the economic foundation of a political union in Europe. They hoped the disaster at Greece might have been avoided this time around, but it is very likely to bounce back.

People of Greece will be disappointed that their parliament agreed to the tough terms of EU loans, against which they had voted ‘NO’. Possibly, the international lobby group managed to put enough pressure on Greek political circle to inject in them the fear of economic collapse if Greece exit EU.

It comes from the utopia created through European Union, which farcically appear to be the most successful political and economic union in modern human history, that most European nations see no future outside of the circle. Idealised EU is not an end, its time Europe must foresee there is alternative world beyond this.

Lets talk about bail out again. Logically, the bailout won’t work. It has only added further debts to already debt-ridden country. It has put tougher conditions on increasing tax, end of pension and privatisation. Tougher tax means, businesses will move out of the country thereby creating additional woes to the paralysed economy. The bailout inserts no conditions for the Greek government to create environment for national and international investments.

We have seen from the South East Asia and United States that privatisation does not necessarily improve economic conditions of a country. It widens disparity – a characteristics Europe never dreamt to have. Germany, France and other Scandinavian countries are hesitant to spur privatisation within their economy but want Greece and Spain to widen the scope of privation. Are they using Greece and Spain as agents in the lab to test the functionality of privatisation?

End of pension means the increase in poverty level – possibly encouraging dying from hunger.

The debt further increases but it shows bleak chances that creditors would write off the loans. Don’t ignore the possible of Germany and IMF selling off Greek assets to recover their debts.

The tougher bail conditions for Spain and Portugal have not worked well. Italy still struggles. France is not ferrying well. Germany alone cannot run the show. It cannot sustain for long to keep EU in tact.

Greek people voted no but political leaders accepted EU conditions.
Greek people voted no but political leaders accepted EU conditions.

EU needs radical reforms – that’s what UK is demanding. Germany turns deaf ears partly because the reforms will end its dominance in the group. Resistance to reforms means accepting the gradual fall of the EU or return to the pre-EU era.

Under current EU structure, disadvantaged countries such as Greece, Spain and others continue to need money – at least over €20 billion or more individually, annually – which simply is impossible. IMF, Germany and Netherlands – the major contributors to the economy – would never be able to provide this for long.

As an outsider, IMF would surely exit the game if no gain were visible in distant future too. The onus then transferred to Germany and Netherland – to sustain the system and their dominance – would need to raise taxes, thereby eliminating in the long run large sections of their middle classes, but they would also need to dismantle their costly welfare states in radical and unheard of ways.

The fight is not between Greece and Spain with European Union and IMF but largely between the socialism and the capitalism. It appears the European Union, dominated by capitalism believers, throws enough loads on its side to project countries where socialism is likely to flourish, as mess and problematic.

Neither capitalism nor socialism would resolve the crisis that Greece and Spain are facing. The disease is likely to spread across the Europe gradually. The solution is within the citizens of the country. They must rise to work to live – not to depend on government for their livelihood. The government is not responsible for economic paralysis – it’s the individual in these countries who pushed their economy into ruin.

Rise and grow up to build your economy.

Share This Post

Leave a Reply