viernes, 1 de noviembre de 2013

On the Greek problem and the alternative(s) available.

Greece has returned to the polls and, somewhat surprisingly, had decided for the option to remain in the Eurozone, despite all the troubles and its thrown-upon pariah status amongst the euro countries.
The leftist, young leaders of Syriza told the world and Greece they wanted to reject EU bailout and go it alone, pretending they had a chance at it. They wanted to see Greece return to the drachma and go back to how things were. Now, that is simply not possible. The dismounting of the drachma and the insertion of the euro brought with them the single largest restructuring of Greece’s way of life. To change the value and cost of things overnight, as well as the salaries and the fair remuneration for people´s labor, it all changed and the country was not ready for it. Syriza wanted to have the country go backwards full  speed through the same path it had already traveled. What Syriza and its firey/fiery supporters willfully ignored was the economic isolation to which they would be dooming their country by taking it off the euro.
Considering the weakness with which the drachma would have entered the arena again, no one would like to continue doing business with Greece, save perhaps the companies whose manufacturing facilities are in Greece. Oh, yeah. Most of those are German, e.g., Skoda, BMW, IKEA. All this added to the fact thatGermany hosts 571700 refugees according to the UN Refugee Agency. These refugees most likely make a living out of money transfers or by serving as cheap labor in German factories. If the euro were to destabilize, Germany and everyone else would have to evict refugees and become protectionist, a model which has already failed spectacularly.
Let us examine one of the sectors affected by all this: tourism. That industry suffers laterally from a harsh problem springing from economic downturns, which is insecurity for travellers. Both Europeans and non Europeans alike travel to Greece to spend their holidays and are attracted by the country’s natural beauty. But poverty and harshness make for a difficult environment for foreigners. The first counter action taken is a greater presence of the military. But in a country undergoing what Greece is undergoing that seems only a good dream. Pensions, salaries, training, facilities, feeding, etc. for the miitary are unpayable and only the conservatives would advocate for it. Were Greece under leftist control, the solution of choice would probably be education programs and citizen control, which unequivocally makes for power abuses. But it would be cheap. All this while promoting national industry, unsuccessfully.
All this stated, the best option for Greece is to become austere and remain in the euro, for its sake and everyone else’s. The terms of the bailout must be renegotiated, no doubt. But the fact is that Greece is part of an economic bloc that already constitutes a large portion of the economic and financial arenas, leaving England out of the latter for a moment. Let us forget about Royal Sunalliance and many other corporations clenching silently the rest of corporations and societies, and all reporting back to London.
The euro may have been a mistake in the first place. To pretend that countries with such differring cultures and habits coexist in the same ecosystem and following the same rules was a very long shot.

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