Still No Coverage Of Peaceful Protests in Greece

Even though we are into the 6th day not a word has been mentioned in the the international media. The protest show no sign of shrinking and if anything they are increasing in size.

Athens News took a closer look at the protests in today’s issue but one point really stuck with me was the fact that it said there was not one unifying idea that united all the people who are attending. It is simply a massive group of people who are disatisfied with the way Greece is being run.

The young do not have the monopoly on the protest, families with children, elderly, students, 20 and 30year olds. The protests really do cover the whole spectrum.

It is a damning judgement of democracy in a country where people believe that none of the politicial parties are suitable for the job. One protester was quoted as saying we don’t want the government to fall only to be replaced by another government.

If there was ever a time for a liberatarian revolution in Greece I would have to say it is now.

The problems that Greece is facing are simple, despite the best efforts of the mainstream media and politicians to make it sound complicated. The simple fact of the matter is that the Greek government spends much more than it takes in in taxes.

The solution is equally simple, it must stop spending so much money. This I think everbody agrees on this, the IMF, the EU, the World Bank, the Greek politicians, the Greek people, people looking in on Greece, analysts on Wall Street, everyone.

The Troika are saying to the Greek government, you must balance the books or get close to balancing the books. Nothing wrong with saying that but the method is where disagreement comes in.

The cuts can come quickly or the cuts can come slowy.

Quick Cuts – Method 1 Voluntary

The Greek government can say overnight that from tomorrow x amount of government employees will be made redundant and x amount of services will no longer be provided by the state.

This type of quick cut has the benefit of guaranteeing that Greece gets the bail out cash from the IMF. Indeed the money may not even be needed if this measure was taken. But there are a number of problems for the politicians if they do this.

First of all you would have to expect massive strike action from all government employee unions across the country
Secondly the legality of doing such a thing is highly debatable, at the end of the day there are contracts in place
Thirdly the government would still have the burden of paying there redundant employees severance packages and in some case pensions.
Fourthly the massive debt still exists which means Greece will have to continue to pay massive interest payments and possibly not even pay down the debt, ensuring on ongoing burden to future generations of Greeks.

So while there would be a benefit in an immediate cut there are some huge hurdles and even if the measures could be made the benefits would not really be as big as they could be. Because of the severance packages, and interest payments on the huge debt.

Quick Cuts – Method 2 Involuntary

The government throws in the towel, admits that the burden of debt is simply too much to expect the Greek people to pay, and it is certainly too much to expect future of generations of Greek to service.

So the Greek government defaults meaning that immediately the Greek government has to cut services too a level that is in balance with the taxes it take in.

This has the same consequences as method 1 but this time all contracts are null and void PLUS the debt can be renegotiated to something like half it’s current value meaning interest payments are slashed and the government doesn’t get saddled with the severance packages for government employees.

Some will claim that the government will grind to a halt if the Greek is not lent more money. This of course is nonsense. The Greek government will still be collecting taxes it will simply have to stop spending more money than it takes in.

Slow Cuts

This is the course the current government will have the Greek people believe is the best and only solution to Greece’s problems.

The Slow Cuts method aims to get to the same point as the Quick Cuts ie balanced government spending but it takes around 5 years to get there. Or maybe longer, no-one really knows for sure.

So what is wrong with the slow cuts method? Well it has all the negative points of the Voluntary Quick Cuts method, ie severance packages for government workers, pension payouts for government workers, legals issues and long running protests.

Plus it has some extra negatives. Because making the changes slowly involves begging for money from other countries the people giving Greece the money will want a very big say in how the money is spent and on how the country is run. Now you have to remember that the people lending Greece the money are not doing it for charity, they want to make money. So you will have to question the motives of the things that they will be asking the government do.

For example, at the moment they are asking the Greek government to sell it’s shares in OTE, something which actually makes the people money, ie it helps the country having shares in OTE it does not make the country worse off.

So in summary, the slow cuts method also opens Greece up to massive pillaging from mutlinational companies who will want to take control of the government’s most profitable businesses.

And what if Greece gets to the end point, a balanced budget in 5 or 10years time. The debt burden will still be there and massive parts on the country whether it be land or profitbale bunsinesses will have been sold off to the foreigners who created the finiancial problems in the first place by making loans to Greece (that they knew would be hard for the Greek taxpayer to service and payback).

I for one do not think that the mistake of bankers should be paid for by Greek taxpayers, I do not think that the Greek poeple be forced to sell their profitbale businesses because of mistakes made by bankers and I do not think the Greek people should be forced to sell parts of their own country to bail out the mistakes of foreign bankers.

And when I say these things I do not mention the fact that it is not the place of the current ruling politicial party to sell parts of the country. It is not theirs to sell, if the question is on the table then it should at the least be put to a referendum of the Greek people.

There is also one very important thing to remember when considering what it means for one party to lend monay to another party with interest. And when I say this I am refering to the Troika lending money to Greece.

For the borrower to be able to pay back the loan with interest the borrower must create something or make the same thing but do it more efficieceintly. For example the Troika are expecting Greece to be able to provide the same amount of services and products as it does now but a lower cost. The savings will then form the interest repayments of the loan.

So not only does Greece have to balance its books, which with the current plan is a long way off, it also has to go even further and start making a profit in effect in order to cover the interest payments.

Now anyone living in Greece over the past 2 years will have noticed the exact opposite. And I do mean the EXACT opposite effect.

The cost of living in the country has actually gone up, not down. The Greek economy is actually becoming less competitive, less efficient not more efficient. Sure the government will say they have reduced the government deficit. Yeah sure, through the increase of taxes and it is a fact that increasing taxes only gives a government a short term boost in revenues.

And this increasing of costs also has a massive knock on effect for any government that insists on making social security payments. Unemployment rates in Greece are balloning at an alarming rate. The unemployment rate has increased by 50% since the crisis so the government now has the headache not only of a huge drop in revenues from people not paying tax but also having to pay money out to these people, a double hit.

So having said all this the plan of the Troika to lend a 100billion dollars to Greece seems absolutely crazy for the following reasons. And these points are sure to happen if the current course is continued.

1. Falling tax revenues
2. Higher unemployment payments
3. Higher pension payments
4. Increasing the uncompetitiveness of Greece through higher taxes
5. Reduction in government revenues from state owned industries
6. Huge pension obligations for government employees
7. Huge interest payment on huge public debt
8. The spectre of increasing interest rates on a global basis

The only real solution for Greece is to default and renegotiate its debts. This way Greece gets all the benefits of the current Troika solution and more but without the negatives.

Claims by the government that a default will lead to the Greek economy collapsing is complete rubbish. Greece as a country and as a people are amongst the most prepared for a crisis of this kind. The black economy will be a massive bonus.

But if the Greeks do decide to default the government will not be able to continue as it is. The social security system, the pensions, the education system and the healthcare system may have to be left to the private sector. The bonus of this being that taxes can be slashed for the average person. Imagine no VAT or personal income tax, no fuel duty, no property tax and so on. The conditions will allow Greece to drastically reverse it’s trade deficit with the rest of the World. How many people do you think would want to work and live in a country with no VAT and no income tax?

The alternative is for the government to try and continue as it is now after the default which can only lead to poverty for the Greek people. With rules and regulations the same Greece’s trade deficit will continue, meaning all the money is sucked out of the country and with the government unable to borrow more money to replace it.

The choice is stark but it is also easy.

Of course outside interests will want to stop any such revolution but it can happen if the people are focussed and if the people are ready to take care of themselves, their neighbours and family and not expect the government to do it for them.

Get the latest updates in your inbox