I have been asked to give my 2 cents worth about the whole situation of Greece and the EU.
After Euro323Bn worth of financial support to Greece, EU and its member countries, together with ECB and IMF have proven their commitment to the Eurozone, however, this ‘bottomless pit’ cannot continue, as it will cause a financial drain to Euroland.
More importantly, the monies can be better allocated to other EU member countries for economic growth.
We know the debt is not sustainable and it needs to be restructured to include a ‘haircut’ and deferment, otherwise, anything else simply doesn’t work as Greece has no engine of growth.
What are the engines of growth for Greece; shipping, commodities and tourism. Can these pillars of the economy generate sufficient income for Greece? Structurally, the problem in Greece is the fact that civil service and pensions ballooned in the past 8 years, sucking the lifeline of the country. Less and less people are working in the private sector as prospects are so poor, so all flock to become civil servants for the ‘iron rice bowl’. The wealthy has always escaped taxes and probably will continue to do so.
What is interesting is that post EU in the early years after the millennium, capital and investments poured into Greece and it actually enjoyed prosperity in the early and mid 2000s. What happened to all that good work? Where did all the monies go?
Going forward, they are talking about ‘Marshall Plan for Greece’ where E35Billion will be used to rebuild the economy through investments. The real issue is who is going to drive this? Will the monies really go into the working wheels of the economy or just into the fat pockets of politicians and bureaucrats? This is dangerous proposition, and may well be another delay tactic to postpone the inevitable.
I feel that Tsipras should have a heart to heart discussion with ECB, EU and IMF about how to rebuild the Greek economy; identify engines of growth or potential engines of growth, invest in these potentials, as it will be the income generators for the economy. Forget about collecting taxes and reducing outrageous pensions, these is only a stop gap measure.
There must truly be sincerity from both parties, not just more politicking.
The Panthenon Investment Group 