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|Posted on June 15, 2015 at 2:52 PM||comments ()|
When you hear talks have broken down between Greece and the IMF-ECB consortium (and other creditors), straight away the worry appears that Greece may default - that will become clear on the crunch date, 23rd July.
Greece has been lucky to have received bailouts worth 270 billion Euros and some 'haircuts' to lessen the burden, plus more from the Trillion Euro stimulus ECB President Mario Draghi announced just a few months ago.
The Greek Finance Minister has stated that it has been difficult to keep up with the repayments for at least the last twelve months, but the repayments have been made, on schedule, with the IMF and the ECB and other creditors being fully aware of the circumstances. Everything being equal, Greece will probably pay back the instalment due on 23rd July, the crunch date.
In the meantime, of course Greek Ministers have been trying to wrangle any advantages possible out of the negotiations.
The IMF-ECB consortium were seeking (1) the capping of Greek pensions, so not more has to be handed out of the depleting public coffers; and (2) Greece hiking the VAT rates. Both these the Syriza government cannot possibly agree to, as their mandate has been to improve things for the people, and not impose any austerity measures.
In fairness, I believe the IMF-ECB consortium should perceive the difficulties people have with a bare 700 Euros per month pension - reducing this would bring untold misery to the people. As for the VAT, any increase would not encourage people to spend or pay more - paypackets are already cut to the barebone, and money is tight to most Greek families. Hiking the VAT would merely squeeze the spending - that would bring untold misery also, and create inflation in a nation that is going through very tough times. The recession in Greece has been the longest to afflict any nation.
At this stage, I would suggest a sensible balance has to be struck. The Greeks have to be trusted with the last tranche of bailout funds, and the previous tranche which was not paid to them. This would enable them service their debt, and also spend something on job-creation, training, and enterprise - those would surely like in all other economies provide the foundations for a quicker Recovery, and from thence to Prosperity. There is huge scope for Greece harnessing the abundant sunshine it receives, and building solar technology to gather this and perhaps transmit to other nations? Their unemployed youngsters, a lot of them university educated, can surely create work for themselves and start industries if they have the finance? Only 40 years ago, the first billionaires the world had heard of were Greek : Aristotle Onassis and Stavros Niarchos. These people have it in their blood to be successful on a huge scale. Only the lack of funds must be holding them back. I would suggest to our friends and brothers and sisters in the ECB and IMF to consider this, and give the Greek people the chance they deserve. Instinctively I feel they will not be let down. If they continue to receive finance which will enable them to pay the repayments and grow their economy, in due course of time they will create wealth and repay their debts, that's something I sincerely can believe.
In these simple words I am making an appeal to all concerned to help Greece, and to Greek Ministers to agree to any reasonable and fair terms, so the phantom of a default does not cause undue concern to the world at large. With the monetary policies of the major nations, the world is doing well. By helping the Greek nation at this time, which is a turning point for their Recovery, I believe the world will be doing itself some good also : As the Euro holds proud, and all the Euro Area nations stand shoulder to shoulder, we can help uplift each and every one. That I believe, and that I pray for.