Mathieu Labrèche is a corporate communications manager based in Toronto and a graduate of the Brussels School of International Studies. He argues in this piece that a Greek exit from the euro would have serious geopolitical ramifications and would strengthen Russia’s hand in Eastern and Central Europe.
Putin and the Greek debt crisis — A Grexit could play into Moscow’s hands
Author: Hungarian Free Press
The Hungarian Free Press' news service offers fresh, original English-language reflections and summaries on current events and culture in Hungary, East Central Europe and beyond, complementing the informed op-ed pieces published by the HFP's contributors.
The Greek Tragedy
With a public debt of $ 320 Billion , and unable to raise fresh loans ( to pay off old loans ) , Greece is on the verge of bankruptcy – and exit from Euro-Zone
Dire predictions are being made by the Economists / Bankers / Politicians etc , as to what will be the impact on :
* Other debt-ridden countries like Portugal / Italy / Spain etc
* Economies of the European lender-countries
* Balance Sheets of Financial Institutions ( eg : IMF / European Common Bank etc )
* Economies of Developing countries , unable to export to Europe
But hardly anyone seems to be asking :
* Why did Greece land itself in such a trouble ?
* Will Spain / Portugal / Italy – and other debt-ridden countries – soon find themselves in a similar condition ?
You don’t need to have a Ph D in Economics to know the obvious answer !
Greece finds itself in this trouble for the same reason that a person would , if he starts spending far in excess of his income
Usually by borrowing lots of money from friends / relatives , who , oblige without asking :
> What is your current income ? What is your current savings ?
> What is likely to be your future income ?
> What do you need this loan for ? When – and how much – will you repay ?
If there are no satisfactory answers , then you know that either the borrower has no capacity to repay
or , ( worse ) , no intention to repay !
Apparently , Greeks have been living beyond their means ( income ) for many many years
Generation after generation of Greeks thought :
> Let us enjoy today . Why worry about tomorrow ? Let our children worry about that !
The 20+ something Greek youth ( of which , 26 % are unemployed ) , have ” inherited ” that debt of $ 320 billion , from their fore-fathers
Hence , it is reasonable for them to say :
” Hey , I did not borrow / spend all that money ! Why should I be made to suffer for the sins committed by my parents / grand parents ? ”
Problem is not that the lenders cannot accept this argument and agree to , even write-off $ 320 billion
All that the lenders are telling the Greek Youth ( thru Greek Government ) , is :
” No problem , but no more money either ,
Just learn to live within your own income . Learn to fend for yourself .
Stop living on borrowed time ( – and borrowed money ) ”
Here , there is a lesson for us Indians , as well !
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hemen parekh / 29 June, 2015
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