This is a quote from Athens News today
“If Greece unilaterally rejects the bailout deal it will be isolated for years. It will have no food, no drugs, no fuel. It will have to live with permanent power cuts,” Samaras told party faithful at the ND conference on Saturday.
Talk about getting into line with Provopoulos, the Greek central bank governor.
What happened to Samaras. Less than 2 months ago he was saying Greece was a strong country, that Greece could grow its way out of recession, that Greece did not need to be dependent on foreign aid.
And now he has completely and utterly folded by repeating the words of his former competitor Venizelos. You could even argue that Samaras has out Venizelosed Venizelos with that quote.
Now I like to base my articles on fact and then throw my opinion into the ring and this article will be no different.
If I did not know better, I would say that Greek politicians are having their strings pulled by the Greek central bank.
Why do I say this?
The closer a politician gets to power the more they tone down their position to the point where it is impossible to tell the difference.
Samaras was keen on saying how he would reduce taxes but that seems to be off the table.
Samaras was keen on saying how the country was strong and could climb out of the recession on its own, now he is saying country is doomed if it does not get foreign aid.
If you believe that the Greek media were in bed with the countries financiers it is very easy to imagine how subservient the politicians would have to be to the financiers if they want to get elected.
And as an outsider looking in, that is what it looks like to me.
Samaras is pandering to someone, the question is who?
And you have Tsipras. A rebel without a cause if ever I saw one.
I agree with a lot of what he says but his solutions are completely dependent on outside aid, he has more or less admitted it.
He, in my opinion, quite rightly says that the measures are self-defeating, and you could argue that they are this way by design, but he himself says, his position only stands up to scrutiny through Greece being dependent on foreigners.
His position is that Greece can do whatever it wants because Europe & Germany cannot afford to let it leave the Euro.
He says nothing about Greece being able to become a self sufficient country, his whole argument rests on his belief that the EU and Germany will have to give Greece money no matter what so Greece does not need to change.
In other words he is just as bad as Samaras & Venizelos.
All three, Tsipras, Venizelos and Samaras are all saying the same thing just in different ways, Greece needs help from foreigners.
This kind of rhetoric is extremely hard for me to swallow.
I mean it was not so long ago that Greece had its own currency, and from the people I speak to, and from my limited experience of the country during this time, things were great, at least for tourists.
So why after only 10 years to the main political parties seem to have forgotten this simple fact?
They way they speak it is as if Greece never had its own currency.
And not only that, you think Greece has never existed outside of the European Union and yet it is only just over 30 years ago that Greece joined but again, listening to the politicians from the main parties you would think that Greece had always been a dependent country and the thought of Greece being outside of the EU was a complete fantasy that never happened.
As I have said many times before, Greece’s problems are self-inflicted. The problem is that these self inflicted wounds have only been possible by foreign entities supplying the knife.
Without funding from foreign banks the Greek political class would never have been able to afford to run the country into the ground in the way they have.
The sad fact is, is that whoever if pumping money into the Greek economy ultimately controls the country. These parties that are funding the country supply “their” politicians with the cash that these politicians need, to employ their supporters in government in order to get elected.
And again, something that I have been constantly saying is that Greece has many soltutions, which are easy to implement, which would get the country out of the hole it is in within a year, the only thing stopping Greece from recovering are the bailouts.
The government bailouts are perpetuating the inefficient organs of government that are sucking the Greek people dry.
Greece needs to reject the bailout money for the Greek government.
Which brings me back to the title of this article. Why Samaras won’t change anything.
By admitting defeat as completely as he has, he is saying that he will not implement the measures required for Greece to recover should the next tranche of government bailout cash not arrive.
In effect he is saying, that if Germany refuses to give any more money he will not slash taxes and government in order for Greece to become self-sufficient and balance its trade deficit.
I keep talking about the trade deficit but it is the core of the problem. Unless Greece balances its trade account with the rest of the world it will always be dependent on foreign aid to replenish the Euros the country is sending abroad.
I will repeat myself, Greece has the potential to be a super power in Europe, if not the world on a per capita basis, the government simply needs to allow people to pay taxes voluntarily, the day this happens, I promise you, the country will be booming.
There is only one party in Greece that I know of that says anything like this, the Greek liberals. This is the only party that have sound fundamental policies based on personal freedom and not policies based on their belief that they know better.
They believe each individual is best placed to make decisions which are in their best interest. Until Greeks can get on board with this mentality I cannot see an end to the current recession.
Also Papanikolaou takes a simillar stance at 3min 22 seconds here.
http://www.youtube.com/watch?feature=player_embedded&v=3fi6w1C7uMs
To Samaras? Yes.
But I think if you asked him why the currency would have to devalue he would not be able to answer and perhaps, neither would Nigel Farage.
The only reason a currency would have to devalue is if the worth of Greek labour and resources would simply drop overnight which of course it would not.
A meal at a restaurant would not be worth 50% less overnight simply because the currency changed. A pint of milk produced in Greece would not reduce in value by 50% overnight simply because the currency changed.
Assuming the trade deficit was fixed when the currency changed there would be no reason for the prices of anything in Greece to change. Same amount of money, same amount of services and products = same prices.
The whole issue is clouded though by the catastrophe that the Greek government is causing introducing taxes which are not related to income. Things are now so distorted that the politicians do not know which way is up, which is why I believe things have to get back to basics.
It is impossible to make any decision based on current events because you are looking at massive bailouts of the government and huge taxes unrelated to income. Its a mess.
To come up with sensible answers you have to ignore what is happening now and go with what is certain and the only things that are certain is the currency is in finite supply because Greece cant print it and the country is sending 20billion Euro of that currency out of the country. If you are reducing the amount of money in circulation and at the same time you are implementing taxes which are fixed and not based on income you are asking for a situation where either people choose not to feed themselves or they stop paying taxes.
The taxes solution would not necessarily bad as long as the government fixed the deficit problem but all the evidence points to the opposite. I mean how are people going to pay 600Euro in property taxes and pay income tax when they don’t have a job? (that is not a typo, people still have to pay income tax in Greece even if they do not work)
Either the Greek government is going to get bailouts forever and everyone ends up working for the government or people are going to stop paying taxes, the government seizes their possessions and everyone becomes dependent on the government. These are the only 2 options that look likely.
Of course the sensible solution would be to simply default and sort the trade deficit. Listening to the media though, I think this would be classed as completely loopy.
“The only reason a currency would have to devalue is if the worth of Greek labour and resources would simply drop overnight which of course it would not.”
The produce of labour defined in output would not change but defined in curreny units it would change.That is the heart of the matter. An hour of labour in Greece does actually produce less material goods than an hour of labour in Germany. That is not a critisism but it is what is behind the Trade deficit. Ambrose Evans Pitchard, Daily Telegraph has the back story on this, in articles going back 4 years.
this is the typical argument that’s been going in Greece concerning the euro
If we leave the eurozone we’ll run out of fuel, milk, drugs, electricity. We’ll go back to the 1800s. We’ll have to live in caves. The eurasian and arabian plates will collide resulting in a huge earthquake that will cause Thera’s volcano to erupt and a gigantic tsunami that will destroy Samaras’ seaside palace.
Don’t worry I see light at the end of the tunnel… could it be an oncoming train?