Below is how Der Spiegel is reporting on the prospect of Greek left-wing party Syrizas good chance of winning the upcoming election there. I still personally think that only by reverting back to the drachma and its subsequent devaluation - with all its intial and painful consequences and despite the increased corruption and manipulation possible if a greek government can again control its own currency - will money flow back into Greece. New jobs will be created, the building industry will recover, Greek industry will be competative, and tourists will flock in droves once again. And, importantly, no-one will lend money to any irresponsible Greek Government, which is what got them into this situation into the first place. The alternative is continued economic misery and brain drain, which might go on for decades. Heres the article: NEW GREEK ELECTIONS: GOOD LUCK MR. TSIPRAS Der Spiegel, 29.12. In the Greek debt crisis, Europes politicians proved to be masters of denial. And so a new lie has been spun in Brussels, Berlin and Frankfurt in recent months: after initial difficulties, the Athenians are implementing imposed reforms. The state budget has a primary surplus, the economy is growing. The combination of carrot and stick is having an impact. But now, with the prospect of new elections, the repressed truth is surfacing: The debt crisis in Greece is far from settled, the impending collapse of the euro zone by no means averted. Greece still groaning under an intolerable long term sovereign debt load of 175 percent of economic output. The primary surplus, i.e. the increase in the state budget before interest payments, is based in part on creative accounting. And simply wrong if we subtract the billions that Greeces creditors have to be transferred at some point. Greece needs a new haircut. At the same time, the reforms go ahead painfully slowly, and almost always only if international donors threaten again to stop a transfer. How low the acceptance of the reforms among the Greeks really is, is expected to show in the early elections at the start of 2015. Then the leftist candidate Alexis Tsipras has a good chance to become the new prime minister. His clear election promise: stop debt service, stop the privatization, instead create new jobs in the public sector and lower taxes. Much of this is economic suicide. If there is one thing that Greece certainly doesnt need, then it is additional public servants. But in one thing Tsipras is to wished good luck: Greece really needs to restructure its debts. This is the result of a mistake that had already been made in 2012, when Greece was only forgiven some of its debts. Meanwhile, the debt burden has already piled higher than before the initial debt relief. If Tsipras gets all debts forgiven (or just stops transfering Greeces creditors their money) it would have a second important effect: the Greeks can and must finally take her economic destiny into their own hands. Finally Greece could no longer make Angela Merkel / Mario Draghi / EU / the International Monetary Fund / the troika responsible for their plight. Then this convenient mechanism of denial would not work anymore.
Posted on: Sat, 03 Jan 2015 21:14:58 +0000
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