Greece – Economic and Political Turmoil Amid Eurozone Conundrum

May 15, 2012

By Padmini Arhant

Greece continues to be in spotlight for economic woes and election results with no decisive victory.

The political parties inability to form a viable coalition has left the country under caretaker government.

The symptoms in the ailing economy were overlooked leading to status quo in Greece.

Greece problems originally associated with hedge fund debacle tracing roots in Wall Street and Goldman Sachs, borrowing funds on fictitious financial presentation ignoring revenue and expenditure…are fundamental errors in the burgeoning meltdown.

The successive governments failure to recognize the avalanche from preventable deficit spending combined with stagnant taxation policy in the absence of economic measures to stimulate growth could be attributed to prevalent distress having ripple effects on politics.

Whenever national economy neglected hurting the population, the voter backlash imminent against incumbent and potential aspirants without solutions to serious problems inviting chaos and unrest.

Greece is at the crossroads on economic and political front.

On the economy – Regardless of grand troika i.e. the IMF, ECB and EU bailout,

Greece could start with review of erroneous policies that caused the economic mess.

The government bears responsibility for not exercising prudence.

Simultaneously the private sector for tax evasion and capital flight overseas rather than job oriented domestic investments shifting the burden from public sector employment and catering to local business expansion.

The government tax reform blocking loopholes and retrospective collection from those not having paid any amount let alone fair share could open the channel for national wealth recovery.

In conjunction, companies in Greece and foreign entities could be offered concessions on corporate and payroll tax – incentives to create jobs absorbing the massive federal layoffs providing some relief to deteriorating situation.

Thorough assessment of income and expense to increase and decrease avenues respectively in the budget,

While maintaining key programs such as health care to the weak and vulnerable,

Youth education for qualified skilled labor force enabling productivity and exponential taxpayers in the economy,

Substituting bureaucracy with efficient technology in expediting government approvals on projects, business licenses, leasing government lands to industries within environment laws are some initiatives guaranteed to alleviate dire state.

Underemployment over unemployment would be a better alternative i.e. retrenchment replaced with furlough (hours cutback) in the small, medium and major corporations with trade unions participation limited to workers safety, healthy conditions with standard benefits, minimum to reasonable wages and anti-discriminatory environment could stimulate economy and consumerism necessary for retail, wholesale and eventually manufacturing sector.

Reiterating earlier proposals on attracting capital inflow for economic development is favorable against harsh conditional bailouts compromising sovereignty due to deprivation of negotiations with euro zone power.

Furthermore, funding towards job promotion and economic revival contrary to lending for government survival would benefit population and nation considering severe austerity tied with IMF, ECB and EU intervention aimed at vested interests.

Once forming Greek government, the political leaderships could convene a meeting with multi-tiered business community seeking their cooperation to resurrect economy initially with tax remittances saving government from pursuing them utilizing the legislative course.

Then granting subsidies to certain industries with a requirement to hire workers in addition to exempting trade tariffs and barriers would address the current soaring joblessness exacerbating citizens plight.

International financiers could be invited to invest with a well-organized business plan and risk evaluation methods to sustain gains facilitating peace of mind and definitive positive returns for investors allowing direct operational management.

Besides fostering venture capital dividends re-investment would energize market for pervasive economic recovery notwithstanding much anticipated employment in the process.

With lower inflation from deep economic recession in the past five years, the investment prospects are higher for any investor at home and abroad not to mention the substantial work force availability making overheads more affordable.

The primary goal is to introduce robust economic policy encompassing fiscal and monetary oversight.

Concurrently targeting trade activities related to national resources and areas expected to generate proceeds viz. tourism, hospitality industry…each nation might vary in this regard and largely dependent upon unique endowments.

Most importantly taking control of money supply by printing money with precious metals like gold backing would emphasize sovereignty relieving nations from private ownership discretion.

Greece and neighbors with common economic strife could approach potential creditors with conversion debentures / bond Swap or shares convertible bonds maintaining flexibility for both debtor and creditor to transform debt into capital for the former and the latter with opportunity to become shareholder in economic undertakings moving away from debt servicing with stringent enforcement – specifically austerity.

The creditor declining conversion could be settled with cash reserves given the pre-determined fixed interest rates on these debt instruments are lower than market rate.

France and PIGS (Portugal, Italy, Greece and Spain) dilemma on euro zone membership bound by rigorous terms imposed by unelected external authority predominantly responsible for mayhem triggering main street demonstration in state capitals with political impact in Greece.

Euro zone is a modern day conundrum with seventeen nations’ economies intertwined and forced in a tug-of-war.

The performance or the lack there of particularly negative trends contagion evidently significant and deserves careful analyses to ascertain pros and cons for member nations contemplating voluntary exit or facing punitive expulsion by dominant powers behind the Union.

Euro zone is a prototype for one world government under single monetary unit envisaged for global dominance.

The model inherently lacking in effective strategy to deal with upheavals and apparently designed to serve the privileged at the remaining members detriment.

As for the beneficiaries – the central banks, IMF, World Bank and prominent western financial institutions are protected from brink of collapse by riding on taxpayers worldwide.

Trading through common currency and safety net perception enticed nations classified subordinates in the hierarchy.

Those cashing from trading without boundaries are now saddled with the weight of the same economies that imported goods until the euro zone fate started hanging in balance.

Euro zone boosted the high-end export economy like Germany and the currency deutschmark in the short run.

However, the disintegration is inevitable given the discord among members and public outrage denouncing EU actions thus far described as draconian for driving their economies to point of no return through deficit reduction and spending cuts demand unaccompanied by economic output.

Moreover Greece and other nations sharing similar predicament thrived before EU and euro zone formation.

The dependency on euro zone as rescue operator not necessarily achieved in practice
irrespective of nations willingness and majority exemplified thrusting Brussels unreasonable recommendations in legislation on the people worsening en masse suffering with no end in sight.

EU and Euro zone architects could perhaps explain the purpose in broader aspect on parallel government run by plutocracy conspicuously oblivious to mainstream adversity from extemporaneous policies formulated in secret chambers for sole advantage.

European nations – the victims in euro zone experiment reverting to national currency adapting United Kingdom principle that opted out of adopting euro for internal or external use to retain sterling pound value even though EU and euro zone conceptualized by oligarchy and Europe’s monarchies network to be applied in global establishment.

Euro artificially contained in volatility via currency manipulation – unlike the open discontent expressed against China on trade imbalance.

Political Stalemate – Greece elections delivering no conclusive outcome interpreted as electoral frustration against main political parties for prolonging misery understandable.

Nevertheless the country needs governance and a sense of direction to lift the economy and move forward with pragmatic remedies not only to salvage in the interim but also in the long term averting repeat events with relevant safeguards and fall back options that are absolutely essential to independently steer out of quagmire.

The existing scenario barring political factions to form coalition premised on different platform could be overcome in accepting reality – austerity alone would not work to reset economy.

As highlighted above, stipulations on loans to Greece and counterparts right now are for debt reduction and core administration functioning to liaise with Brussels brushing aside hemorrhaged economy and representatives – the citizens across the spectrum.

Unless economy is financed for GDP improvement and job creation, the band-aid treatment would not heal the overall manifestation.

Opposition to austerity is responded with prompt replacement of EU choice witnessed in Prime Minister George Papandreou – no confidence vote brought upon by outside influence.

The outgoing head of the state Lucas Papademos was ECB ex-Vice President appointed to implement Brussels extremities obviously unsuccessful and revealed in political uncertainty amid economic turmoil.

Greece – the civilization that contributed modern political system to the world – Parliament and Democracy cannot be disoriented in the new age.

Greek electorates desire to be part of euro zone barring European Commission’s rules specifically austerity – the position met with criticism per news report.

Holding frequent elections is expensive for nations at any time. Greece under duress could no longer perpetuate economic downslide.

SYRIZA and Socialists Party could forge alliance with a paradigm shift in political and economic structure focused on departure from euro zone and adhering to self-disciplined resolutions for change to come into fruition.

The above-mentioned economic guidance could impetus the desperately needed surge.

Streamlining cuts – abandoning redundant, costlier government involvement ranging from military to civilian commitments would spare divestments in the economy.

Prioritizing job arrangement and crucial services is a necessity and practical endeavor for government and business leadership.

Policy framework could be regularly monitored for appropriate modifications and renewal.

Political perspective – crackdown on corruption that stigmatized Greece credit history apart from default speculation is paramount for new beginning with checks and balances conforming to transparency and accountability.

Greek republic rising to the occasion defending individual liberty and national identity would set precedence for others to follow suit.

Greece has weathered storms before as a free nation and could do it again in the likened spirit.

Progressive motion terminating procrastination and polarization would revitalize economy with lasting political stability.

Good Luck! To people and political leaderships in Greece for stable and prosperous economy.

Wishing Greece a brilliant future ahead.

Peace to all!

Thank you.

Padmini Arhant


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