Greek Tragedy - Rebuilding Greece's Economy. A work in progress.

The Greek problem, has many features:

i/     A lack of effective Taxation systems.
ii/    A past history of dubious Finance deals.
iii/   An economy in Recession/Depression.
iv/   A liability as a 'Military Buffer Zone.'
v/    A Migration crisis.
vi/  Dogmatic differences on Social Policy.
vii/  An Unfinanceable Debt Liability.


So, point by point.


i/  Taxation Systems.

      A fair and honestly applied Taxation system is needed. If the will to do it, is even there, it would take considerable time to implement, but in the long run, it will have to be done.


ii/  Dubious Financial Deals.

     Many people have raised issues regarding the propriety and motivation, behind some of the lending to Greece, in past years. These things should be investigated, however, they are no help to the present, as it is likely 'middlemen' would have been the beneficiaries, and the other parties involved would probably be found to be 'victims', in any event.
     Future financial deals should be publicly scrutinised, and held to a high standard of proof of need.

iii/  Economic Problems.

     Greece is tied in with the rest of Europe, especially in regard to Tourism. These matters are largely out of anyone's individual control.


iv/  Military Buffer Zone.

     Greece has maintained quite a fair sized army, in regard to it's size, but historically, with Greece's position by the gateway to Asia, and the Middle East, it is quite understandable. If Greece is to stay within Europe, perhaps the European Union, should agree to help fund Greece's military, as they do sit behind Greece's shield.


v/   Migration Crisis.

     Again, the costs of this Greece should not, and I believe is not shouldering alone. Turkey's role in facilitating the passage of economic migrants (ie non Syrians) should be looked into. Allowing free passage of large numbers of people with an Alien culture, and unknown personal provenance, from a War Zone, with a strong potential guerilla/militia threat, would seem to me to be unwise at best, and stupid, at worst. Clearly, interfering indecisively with Assad's Gov't is a bad policy, and should have been avoided. The Refugees should if possible be helped as close to their original home as is feasible.

vi/  Dogmatic differences in Social Policy.

      It seems to me rather crass to use Greece's indisposition, to arbitrarily insist on cuts, and redefinitions of Greece's Social Policies. Greece of course, must live within it's means, but it is the democratic right of the people Greece to decide what their prorities are, that of course, is just what Freedom, means. The IMF, and others, are apparently insisting on changes before providing assistance. This is a bad idea, and will build not a future of cooperation and mutual growth, but one of resentment, rivalry, and antagonism. What Europe does, through it's institutions will be remembered for many years to come.

vii/   An Unfinanceable Debt  Liability.

       There is no way, all things being equal, that Greece can pay it's current debts. It's that simple. In my opinion, debt relief, is needed, possibly as much as 75% write down. That, of course, is if Greece is to remain in the Euro.
       If Greece is allowed to have her own currency, and independence from Europe, then conversion of existing Euro debt to say New Drachma, with a floating exchange rate, may offer, longer term, a better deal, but there are bound to still be considerable losses, at least in the short term.
       Drachma denominated debt could be given a nominal coupon of say 0.1% in order to maximise the likely hood of longer term capital returns.
      If Greece stays within the Euro, then serious consideration to point iv needs to be given, plus the debt write offs, or Greece will remain the poor relation of Europe, for many generations to come.
      Another option, that could be used with Greek Currency, would be a purchase surcharge on currency purchases, say 5%. So, 1.05 Euro's would buy 1 Drachma, providing five cents to the IMF for distribution to bondholders. This would assume that all Greek debt, as currently standing would be assumed by the IMF, with the IMF reimbursing creditors as funds allowed. In reverse, no levy need by made on Drachma purchases, so 1 Drachma would buy 1 Euro, so as to not disadvantage the poorer people of Greece directly. With no interest or capital repayments to concern themselves with, the Greek Government could focus it's efforts, and tax revenues on Social and Economic programmes. It would be hard to estimate any timescale for returns to the IMF on this idea, but improving Greece's economy, 'should' boost returns on the exchange rate levy, as economic activity increases.






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