" /> > Greece on a knife edge | Hallmarknews
Published On: Thu, Nov 12th, 2015

Greece on a knife edge

By Isidoros Karderinis |

It is exactly five years since Greece joined the European Support Mechanism with the close cooperation of the International Monetary Fund (IMF). At that time, the key and critical financial data were the following: GDP amounted to 222.151 billions at the end of 2010. The public debt was 148.3% as a percentage of GDP. Unemployment stood at 12.5%.

financial-messThe percentage of Greeks who were living below the limits of poverty (earning less than 60% of the national median disposable income) was 27.6%. The policy of extreme austerity applied in the country at the behest of international creditors over the years has further aggravated the economic and social reality. As a result, GDP had shrunk to 186.54 billions in 2014.

Public debt has soared to 176% as a percentage of GDP. Unemployment has risen dramatically to 26%, affecting mainly young people many of whom have brilliant scientific knowledge and as a result migrate abroad. This serious loss of talent could help the country at this critical juncture. The percentage of Greeks living below the limits of poverty is 34.6% or 3.795100 people. So, one understands from the above that the programme of fiscal consolidation in a country that was already in recession before 2010 has completely failed and it would not be rational, economically and socially, to continue its application.

This particularly restrictive fiscal policy and austerity measures form an exceptionally lethal debt-recession-austerity spiral, ruling out any prospect for development. The debt is huge and unbearable Therefore, the observed persistence in strict continuation of the extreme austerity programme by creditors will have truly tragic consequences for the country. It will lead to total economic disaster, which will not be healed for decades and certainly to an incredibly serious humanitarian crisis for the standards of a post-war Europe. The homeless and impoverished citizens who one can already be seen in the streets of Athens will multiply rapidly. Suicides due to hopelessness and despair caused by the inability to survive will continue its frantic growth trend. Children blacking out in schools due to lack of adequate nutrition will become everyday part of life.

The question then arises with intensification this critical period is what should be done in order for Greece to leave the pitch dark tunnel of deep economic crisis and enter the bright avenue of development and progress. First, the burden of debt the Greek economy carries on its back is huge and unbearable, and there seems no possibility of payment in full. Therefore, we need to write off the majority of the nominal value of the debt so that the debt burden of the country will be below 100% and become sustainable with a technique that will not harm the other peoples of Europe. The repayment of the remaining debt will be connected with a “development clause”, so as to serve from the development and not from any budget surplus. Secondly, require the reconstruction of production in the country with these key elements:financial_mess

a) The sustainable equilibrium of the balance current account through changing the mix of produced products in the country, thus strengthening the export orientation margins of many sectors of the Greek economy;

b) The industrialization with the implementation of an integrated sustainable industrial policy and the development of domestic research and production of a wide range of high added-value products. The processing sector is particularly critical since it is impossible to hope for a country that will rise in the value chain in the global apportionment of labour without creating the necessary manufacturing base that includes primarily the manufacture of finished industrial products;

c) The special emphasis on tourism, to which Greece has a strong comparative advantage and shipping -Greece has the largest merchant fleet in the world- and certainly agriculture for the production basic social goods, and

d) The efficient exploitation of raw materials -such as bauxite from which aluminium is produced- and the potentially large oilfields located both in the Aegean and the Ionian Seas. Building a modern and efficient State

Thirdly, we need to build a modern, efficient and rational state that will operate with honesty and will not interpolate countless bureaucratic obstacles to business development and the effective fight against the Lernean Hydra of corruption and tax evasion, to remove the multiple negative economic, social and political consequences caused and finally to apply fair taxation. The economic effects have not only to do with the losses of state finances but also with adverse effects on the private sector.

When the notion that only with the bribing of individuals holding nodal positions in public administration can achieve the desired effect is consolidated, investments are discouraged, fair competition is distorted and businesses that refuse to engage in such lawless and immoral trade are condemned to stagnation. The social and political consequences of corruption are also extremely serious.

Corruption causes citizens’ resentment, frustration and a collapse of a strong sense of values. It consolidates the belief that nothing works properly and that law-abiding citizens do not feel justified in being so. Institutions are undermined, shaken and ultimately slandered by the same democracy in the eyes of citizens. We need the immediate establishment of a fair tax system that will not encourage, and will not “justify” tax evasion, but will contribute decisively to the development of taxpayers’ consciences, and will have as a result a significant increase in government revenue. Greece can’t handle austerity any longer. These measures should apply immediately to pull to pull Greece out of it state of coma and recession, and lead to the much-desired path to development, away from the wild and dead-end austerity policies, which form the spearhead of financial capitalism in its attempt to repay in full their debt, and maintain its sovereignty in an era of intense and generalized capitalist crisis.

For their part, European citizens should stand in solidarity with the drama of the Greek people who, during all these years, have become a guinea pig, since the vast majority of money borrowed by the Greek government does not go to Greek taxpayers, but rather to banks or to the payment of loans, or to recapitalize Greek banks, most of the cost of which the taxpayers bear. In conclusion, Greece does not stand to continue with austerity. It has already reached its farthest limits, after the standard of living having collapsed, and with it, the dignity of the Greek people, and this will have to be understood by the creditors.

The new third agreement with the extreme austerity measures will reinforce the recession and will act destructively. So, the time of conflict and rupture, will not be far off.


About the author:

Isidoros KarderinisIsidoros Karderinis was born in Athens, Greece in 1967. He is a novelist, poet and economist with postgraduate studies in tourist economy. His articles have been republished in newspapers, magazines and sites worldwide. His poems have been translated in French. He has published seven books of poetry and two novels. Five of which have been published in the USA and in Great Britain. Isidoros Karderinis can be reached at E-mail: skarderinis@hotmail.gr

Facebook Comments

comments

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Recent posts

  • Arms seizure raises concerns over proliferation of security agencies at ports

    By FUNSO OLOJO The interception last Sunday by the Nigeria Customs Service of cache of high calibre arms made up of 661 units of brand new Tomado pump action rifles on the street of Lagos has once against raised serious concerns among the agitated industry stakeholders who have now renewed their calls for the review […]

  • Michael Ajayi: The bridge-builder bows out of NPA

    FUNSO OLOJO “I am a Marxist-socialist who believes that a common man deserves a better life”. That is the philosophy which underpins the life and actions of Chief Micheal Kayode Ajayi, the retiring General Manager of Nigerian Ports Authority(NPA). The ebullient image-maker of the super-rich government agency bows out of the organization this March after […]

  • N4bn 7UP loss exposes rot in real sector

    Okey Onyenweaku Seven up Plc, in a result that has kept investors shuddering, recently posted a mind-boggling N4.8b loss for the third quarter of the year 2016. The result, a total collapse from its 2015 third quarter profit after tax of N2.2b, signposts one of the worst operating performances for the carbonated soft drink manufacturer […]

  • Skye Bank crisis worsens

    …customers, shareholders’ express anxiety Okey Onyenweaku Against the background of an implosion in the earnings of commercial banks in Nigeria, Skye Bank Plc has again grabbed headlines for unsavory reasons. Indeed, emerging developments in the bank underscore a deepening operating and management crisis and has set up the stage for an epic battle to save […]

  • First Bank leads four Nigerian banks in Top 500 Global Banking Brands

        First Bank of Nigeria Limited has been named as the most valuable banking brand in Nigeria in The Top 500 Banking Brands of The Banker magazine of the Financial Times  and Brand Finance, London, United Kingdom for the sixth consecutive time.   According to a press release issued on Sunday by the Country […]

  • N4bn loss: Guinness Nigeria faces more challenges

    Okey Onyenweaku The once cheerful faces of shareholders of Guinness Nigeria Plc has suddenly turned gloomy as their company’s fortunes continues to fall into a never-ending hole. Unable to ride on the back of an increasingly weaker consumer market for alcohol, the company found its 2016 financial statement dipped in red ink as it posted […]

  • Forex crisis: $30bn loan in jeorpady

      Okey Onyenweaku Anxiety is beginning to cloud the possibility of international lenders to give Nigeria the $ 30 billion she needs to restructure her sagging economy. The Nation’s economy which slipped into a recession in the first quarter of 2016 has continued to deepen the government’s desperation for far reaching solutions. The recent drop […]

  • Anxiety over Banks’ year end results

    Okey Onyenweaku Anxiety has begun to drench the expectations of analysts and other stakeholders alike as they continue to fret over the release of year end 2016 results for banks listed on the Nigerian Stock Exchange (NSE). The anxiety of investors reflects the adverse impact a full year of falling gross domestic product (GDP) growth […]

  • Prospects of market recovery bleak

      .           Stocks lose N4trn in 3 years; Blue chips shed 47% value Okey Onyenweaku Nine years after the melt down of global financial markets in 2008, the Nigerian stock market has taken a frightening tumble as the Nigerian All Shares Index (ASI) dropped by an astonishing 60% or -10.7% per annum on a compound […]

  • NICON Insurance, micro finance banks sign MoU to boost Nigeria’s business frontiers

      NICON Insurance has signed a memorandum of Understanding with the National Association of Micro Finance Banks (NAMFB) in order to stem the harsh effects of economic recession on small scale businesses in the country. The pact, sealed by NICON with the umbrella micro finance body, composed of 978 members, is said to be targeted […]

  • Lloyd’s threat: Anxiety as AON struggles to save Nigerian airlines

    There is unease among domestic airlines in Nigeria following a threat by Lloyd’s of London, the world’s leading insurance market, to blacklist them over irregular payment of premiums. This is another unfortunate consequence of a biting economic recession Nigeria is currently undergoing which has among other things thrown the nation into acute shortage of foreign […]

  • Ports get harmonised support portal

      Maritime activities closed last Friday with the Nigerian Ports Authority (NPA) saying the nation’s ports are ready to absorb increase in imported vehicles expected from government’s ban on importation of vehicles through land borders. The Managing Director of NPA, Ms Hadiza Usman, gave the indication in Lagos to mark her 100 days in office. […]

  • NDIC, CBN set up committee to study digital currency

      The Managing Director, Nigeria Deposit Insurance Commission (NDIC), Alhaji Umaru Ibrahim, has said that the commission and CBN had set up a committee to look into the trending “digital currency, ‘Bitcoin’. Ibrahim said this at the ongoing 2016 Workshop for Financial Correspondents in Kaduna. The theme of the workshop is “Economic Recession and the […]

  • Rice smuggling thrives in spite of ban

      The smuggling of rice through the land borders has continued to thrive in Badagry area of Lagos State in spite of the Federal Government’s ban on the practice. Markets along Badagry Expressway close to Seme border, are stocked with various varieties of smuggled rice, especially as the Christmas season approaches. A smuggler, who identified […]

  • Ugwuanyi’s fate hangs in the balance as Appeal Court fails to decide

    The protracted legal tussle between the Enugu State governor, Hon. Ifeanyi Ugwuanyi and former senator representing Enugu North senatorial zone, Ayogu Eze is poised to last longer than anticipated as the Appeal Court sitting in Abuja and presided over by Justice Tinuade Akomolafe-Wilson last week Thursday, reserved judgment on an appeal filed by Eze seeking […]

  • Hallmarknews Backpage

    On November 8, 2016 Americans elected Donald Trump as their 45th president.  By the time you’re reading this, Mr. Trump would have named all his nominees for leadership of various government departments. The president-elect, who will be inaugurated on January 20, 2017, has not only unveiled the lineup of his cabinet, he has also specified […]


Take a Poll

Please wait...

Subscribe to our newsletter

Enter your email address and be the first to know when our article is published.