Greek dilemma

Once the proud nation of its glorious ancient history of civilization, Greece is the poorest, not based on GDP or per capita income but based on political, debt and public fund management, nation in the Eurozone at present with a debt to GDP is 175% that lead to political instability in the country since 2009. Greece was not qualified to join the giant business union of the European countries, Eurozone but the politicians persuaded to become a member of the prestigious forum. The public expectations of Greece soared overnight as high as other big European nations like Germany or France. The government increased public expenditure beyond their capacity to maintain the euro standard living to fulfill the people’s expectation. Most of them were non-productive. People’s living standard became high but there were not that much production and government borrowed money but could not manage the public fund effectively. Once the living standard becomes high none can degrade them overnight.

Greek parliament passed two austerity packages in February and March of 2010 that included a freeze in salaries of all government employees, 10% cut in bonuses, cut in overtime, increase on sales tax on some goods etc. George Papandreou, the prime minister of Greece failed to convince the people that the financial situation of the country was critical and the citizens should sacrifice a lot to survive, as a result there was a political unrest. He tried to solve the problem by borrowing money from International Monitory Fund (IMF) as a $143 billion bailout with tough conditions such as pension plan reformation, jobs cut etc. that results public anger. As a result, George Papandreou’s government survived less than two year from his disclosure of the financial crisis.

In the next general election in May 2012 Greeks had thrown the former ruling party, PASOK (160 seats to 33 seats: 43.92% popular vote to 12.30%), out of the politics and New Democratic party won the election and formed coalition government but the anti-bailout SYRIZA party got a surprise gain in popular vote and kept the hope for the jobless people. Antonis Samaras of New Democratic party became the prime minister and could manage the country in life-support with renewed bailout of $320 billion from IMF, European Union and European Union Central Bank, so called troika. And finally, SYRIZA won the election in January 24, 2015 with 149 seats just 2 seats shy to form a government and declared to form coalition with independents. SYRIZA leader Alexis Tsipras declared the end of the vicious cycle of austerity. He would be the youngest prime minister in 150 years in Greece. However, as a young and inexperienced politician, he has no clear plan or idea, how to get rid of the austerity without bailouts. He has two options: Greek euro exit (Grexit) or bargaining with Eurozone leaders such as Germany, France, and Belgium etc.

People lost their jobs and jobless soared to 28% in Greece. Those people supported SYRIZA on the hope to get the job again as Tsipras gave the hope of the end of austerity. It would be impossible for him to satisfy these people with current bailouts from Troiks Bank with tough conditions. Therefore, a Grexit is obvious to give the jobs back to the jobless people. However, it would be impossible to survive as an isolated member of European Union without Eurozone now because as a Eurozone member for more than a decade it lost its production capability and became a Euro quality importer. Moreover, Greece must repay the debt. The living standard will fall again that will grow public anger. People will withdraw support to SYRIZA. The second option would be viable for Greece and for SYRIZA too. Greece will be benefited if Tsipras can negotiate with Troilks for bailouts without tough conditions: create more jobs rather than jobs cut and some welfare for the retirees. Again it is impossible to implement without public support which means Tsipras must convince the Greeks to accept the degradation of their living standard. Greek should understand that the dreamt Euro standard life is not for them but it was something virtual for them. They have to go back to the living standard they enjoyed before becoming a Euro member otherwise no doubt that Greece will be bankrupt soon. Tsipras can tell the people that they learnt the lesson from the joining to the Euro that their real living standard would be lesser than they enjoying now. For the sake of the nation people must accept some tough decision such as high tax on luxury commodities, cuts of bonus and overtimes. Tsipras should convince the employee unions that if Greece exits from Eurozone and go back to drachma they will suffer lesser salary by devaluation of drachma to Euro. In fact, the new drachma would be the worst currency in Europe. Therefore, they should accept lesser salary within the Euro as Papandreou cut 10% salaries above €1800. Moreover, Tsipras can implement a mandatory maximum workload of 35 hours per week for regular employees to accommodate the jobless people and offer them at least 10 to 15 hours of works. As a left-leaned party SYRIZA leader Tsipras can do it though it would not be easy for him. Euro leaders may afraid of such communist like activities and make some barrier. However, Tsipras may seek help from the China to invest in manufacturing and tourism in Greece to create jobs.

Finally it can be said that either Greek must accept the lower living standard within Eurozone or become a failure nation. SYRIZA must convince the people to accept the lover living standard and create jobs for the jobless people. Tsipras can train the jobless people to become a Euro nation by learning English, French and German and migrate to those countries. For long term Greek should reform their education system by implementing more language such as English, French, and German etc. in elementary school so that more people can migrate to other European countries for better life. These will give Greek two fold benefits: first of all help reducing jobless rate and secondly increase remittance. It would be difficult to live as a Greek only in Eurozone. Therefore, they must be Euro citizen by learning more European languages and gaining skills to work in other nations. The slogan should be “be a Euro citizen to live in Eurozone”.

The writer is PhD from Edmonton, Alberta, Canada.

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