Greece is heading towards bankruptcy. There is nothing left to do about it, it is inevitable, and the only question is how many other countries Greece is going to take with it when it goes down. Greece has been given all the opportunities in the world to reform and privatize its holdings and still nothing is happening – in fact, the country only needs more money to stay afloat. The chair of the European ministers for finance is saying that Greek bankruptcy could be realized within two months if the agreed upon changes are not made. The latest development is that the triple-A countries are demanding that Greece starts its reform no later than March. Of course, this is after the rest of Europe has repeatedly threatened and demanded things from Greece before, only to be ignored and do absolutely nothing.
The problem is that the only thing Europe has done so far is talk the talk. At this point, letting Greece go bankrupt no longer seems like an option to anyone. It would be the equivalent of going all-in during a game of high stakes poker but folding before the other player shows you their cards. There is not much else that Europe can do save but try to throw money at a country that does not appear willing to stop the bleeding itself anytime soon.
Now Greece is saying that they need an additional 15 billion Euros to avoid bankruptcy. The sad truth is that the European Union already pumped 130 billion Euros into Greece and banks were told to waive an additional 100 billion Euros if there is any hope that Greece ever comes back from its financial deficit.
The problem is that we are dealing with a country that is on the verge of bankruptcy and only stopped paying pensions for 63.500 people that have been dead for years. Family members would still collect the pensions of those that passed away, why did this work you asked? Because the Greeks did not think it was necessary for people to identify themselves when they collected their pension or to ensure that the reicipeint was in fact – alive. The savings on average each year? 450 million Euros just for something that seems like it would be common sense. The social security foundation IKA stated that in the past decade, 8 billion Euros have been paid out in fraudulent pensions. Apparently, no one decided to investigate why Greece supposedly had the most citizens aged over 100 years old in the entire European Union. This is the type of country that has to be brought towards financial stability?
Something else of interest? Banks are already willing to cut 70% of their losses with what they have invested in bailing out this nation. If there was ever an indicator that Greece has zero chance of recovery it should be that banks are willing to take a massive loss in order to get a little bit of their money back. While the consumer is ultimately going to have to repay the money that banks lose, it is not something we see every day.
At the most basic level, financial aid to Greece is not going to help. The aid provided by all the other European nations (most notably France and Germany) is just another loan. Greece is a country that is unable to pay its current debt to the point of financial bankruptcy and the only solution that a bunch of supposed financial European geniuses can come up with is to create more debt?
The problem with Greece is not even letting the country go bankrupt. It is what happens when Greece goes bankrupt? Spain is likely to be next, and perhaps Portugal or Italy next. These financial moves are not only going to do long-term damage to the European economy, but the world economy as a whole. While the American economy may be digging itself out of its hole gradually, we should all be ready for another economic disaster that is just around the corner.
Blogger: Joost Doevelaar |
