Remember meForgot password?
    Log in with Twitter

article imageOp-Ed: Between a Rock and a Hard Place for Greece

By David Amerland     Aug 23, 2012 in World
Greece finds itself with its back against the wall and no one to turn to. A shrinking economy and outside pressure for austerity measures translate to extreme hardship for the bulk of its population base.
Rarely has an adage fitted a current situation so well. With a newly elected government in place trying to carry out hugely unpopular reforms against the backdrop of a shrinking economy, Greece has often been help up as the pariah of Europe, chronic evaders of tax and recipient of generous bailouts which have gone to fund its peoples lifestyle.
The granular picture on the ground is a little different. In order for Greece to “get its affairs in order” it needs to reform its system of tax collection and public spending. For that to happen it needs to have increased revenue from direct taxation levied on businesses. This is a dicey proposition even in growing economies, where the rate of taxation needs to be carefully calibrated so as to not strangle growth.
In Greece the economy has been shrinking for the past five years and is almost 7 percent down on a year-on-year comparison with last year. This has left the government fewer opportunities to raise revenue and no options other than to cut salaries to the bone, cut back on essential services (doctors in the country’s state health system have not been paid for seven months) and try to plug the gap through indirect taxation.
While the outside world sees Greece receiving generous bailout funds what it does not see is that the bulk of that goes to pay Greece’s outside lenders, a solution which has Greece receive gigantic loans "on condition of austerity measures that would shrink the national income from which that huge loan would have to be repaid", requiring yet more loans and more austerity."
You’re not alone in thinking that there is little logic to that. Then again there has been very little logic to the Greek crisis from the word go. The fact is that the country and its people have become a political football in a game played by politicians in the EU from the one end and the money markets on the other.
Arguably, this is not the way to run a lemonade stand, let alone a country. With time running out for Greece and the EU something, obviously will have to give.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
More about Greek crisis, EU Crisis, Greek bailout, Greek cutbacks
More news from
Latest News
Top News