Blue Greece

Greece is great for holidays. Blue sky, blue sea; no wonder that the Greek flag is substantially blue.. Unfortunately, when you scratch the surface, the people are pretty blue too. It’s busy here now, lots of holiday makers, (so much so that there is a shortage of cars for hire) spending lots of money but of course at the back of everybody’s minds in the coming winter, no tourists, no money and no relief from the punishing austerity. Of course Greece has been poor for a very long time and really only got a sense of prosperity with the introduction of charter flights for Northern Europeans looking for a place in the sun, which they found together with simple, low cost food low cost wine and boundless hospitality. And of course the EU, which funded most of the infrastructure projects designed to modernize the county. The Greeks are friendly people and welcomed the EU as they did the tourists, with open arms.

When thing go wrong, who is to blame. The answer is now as has always been, the management. In the case of Greece, the management was the politicians, both from Greece and the EU, but can you really blame them? Let us be honest, the average IQ is 100 which, a very brief check will show that this is not very smart. It would be nice to think that the smart ones are the politicians, of course that is usually not the case. In fact, they are usually perfect examples of ‘foolish’, perfectly defined as keeping doing the same thing and expecting a different result.

I’m half way through my first week of my very long Greek summer holiday. It’s hot, very hot which means my typing is a bit slow. The good thing though is that my thought process can operate in all weathers so I am going to do a bit more thinking about the Greek crisis, economics and politics and hopefully write some more.

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2 thoughts on “Blue Greece”

  1. I hope that you have a great holiday.

    Many commentators have been painting Germany as the villain of the piece but I am not sure that this is the case. Of the money that is owed by Greece over 50% is owed to the Eurozone. Some €20bn is a joint liability via the ECB but the vast majority is owed to just 4 Countries. Germany €56bn, France €42bn, Italy €37bn and Spain €25bn. The last three of these currently have Debt:GDP ratios ranging from 95% to 132%. Writing off the Greek debts will add a further 2% to these ratios and may affect the all important ratings. Germany would suffer a big hit but would move up a couple of points to 77%.
    Schauble can see that the money is not coming back any time soon and like a prudent accountant would like to take the hit and write it off. Greece outside the Euro would need help but might become competitive in time. The other three countries cannot afford the hit to their balance sheets and just want to kick the can down the road. Like the Japanese corporation that massaged their balance sheet they are desperate to be able to keep the asset alive. Thus the warm arms of friendship from Hollande, Renzi and Rajoy may seem like the embrace of fellow club med members but the German solution is the most pragmatic and possibly the best long term route for Greece, they just don’t see that yet.

    I look forward to further considered postcards from Greece

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