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What is the Greek Problem? Politics destroying Economy?.

Below is an article I found about the Greek Problem. Picked it up from The Market, a website about finances. Enjoy!

The Greek problem: Politics destroying Economy…

Lack of action leads to loss. This loss is even greater when it takes place at a national level. The absence of such a philosophy in the Greek “left” (but also “right”) government is what led to the greatest contraction of the Greek economy in the fourth quarter of 2016.

Time is not on Greece’s side, and the negative effects of the current reforms are amplified every day as Greece comes closer to its upcoming debt payments, due in July (€7bn).

The Need for Liquidity

Cash is what Greece lacks right now. Deposits are at a ridiculously low level and falling.

The recent increase in the ceiling of the Emergency Liquidity Assistance, a liquidity facility set by the ECB to help “solvent” institutions that face temporary liquidity problems, signals the incoming inability of the Greek government to repay its debt, the need for a new bailout, as well as a possible tightening of the capital controls imposed in June 2015.

The role of a government following a recession is to provide incentives for growth. The current government is doing the exact opposite. The lack of negotiating abilities and the absence of innovative and prosperity-enhancing policies is what led Greece to this situation. The worst part is that all these have the norm long before Alexis Tsipras became Prime Minister in 2015.

Political Scenarios

There are two likely scenarios. The first one is Alexis Tsipras resigning and allowing for another election to take place, the third in two years. Kyriakos Mitsotakis, the leader of the opposition and a Harvard graduate, would likely become the new Prime Minister, given that he is leading in every poll, and will negotiate on behalf of Greece with a more capable team behind him. The other scenario is for Tsipras to keep his position for the following two and a half years.

In the first case, Tsipras will leave the government with a greater level of dignity. This will increase confidence, and the creditors will be more willing to negotiate a new and better deal. This option will leave all parties involved better off. The other will not.

The faster Greece gets a new government, the fastest its economy will recover from the 9-year recession. What happens next? Only time will tell. (TheMarketMongul)

In this sense: We can solve the Greek Problem… and we should accept that it is better we cancel politic(ian)s altogether and invite leading financial institutes take over power in Greece? Should we send  our Tsipras, Mipras and Whateverpras  to our beautiful islands for good?

Although I read also something else in this article about the famous Greek problem: the current opposition leader from New Democracy “will negotiate on behalf of Greece with a more capable team behind him.”

So I suppose it’s the Tsipras Politics destroying Economy… right?

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One comment

  1. This article is yet more garbage about the Greek economic problems. It is far from simple to understand how the Greek economy used to operate, why it was so, and what happened with eurozone membership. After that, it is still complex enough what the illegitimate eurogroup did, that many people fail to comprehend even the outline of the arrangements and persist with crap about “bailing out Greece” — when the people being bailed out were banks and the very rich. Of course, idiot Diesel-Flower is a large part of that propaganda.
    But yet, prior to the eurozone mess, it is indeed true that all Greek governments put politics before the economy. That includes all ND and Pasok governments, for as long as I know Greek economic history. The political parties of Greece have never wanted the private sector economy to flourish and be self-sustaining, with good exports: they preferred it to limp along, hampered by excessive taxation where needed, so that everyone in Greece (with the exception of shipping magnates) was dependent on a political party. Greece was a state-led economy, pretending to be capitalist: this was why it could not survive eurozone membership.
    And is there any political party that has seen the error of this style of thinking? Or apologised for past mistakes? No. None. There is, therefore, no political party suitable to govern Greece and lead it out of economic crisis. Not that it makes any difference, since the eurogroup displays a similar level of arrogance and incompetence as well.