Greeks and the Euro
A lot of talk went through the media about the Greek crisis. Yet most of it is how to solve, or not to solve the problem of Greek debt, which is in its essence a monetary problem, that can be solved relatively easily by monetary tools, that as were shown can be very effective if implemented correctly. But as it happens to be, monetary policy influences the physical scenery too, mainly if it is all about greed, deception and theft, and for very long time, like in the case of Greece. The mounts of loans that the Greek politicians took, since they entered the Eurozone based on false statistics, where used mainly to enrich the Greek plutocracy. To be able to do so undisturbed, they corrupted the whole Greek nation by enabling to them standard of living of Germany, without to be productive like Germany. This policy not only did not prepared the Greek economy for the D-day, when eventually the creditors will ask for loan repayments, but in contrary. The wages, the pension system, the business environment, were all formed not on economic achievements but on protective incorporation of employment associations, to protect those who are members of the incorporation from those who are not. These incorporations could be workers or profession unions or association of drivers, etc. When the hangover day came, all this associations and their members, will stuck together even more tightly than ever before. 50% youth unemployment is direct result of this situation.
These phenomena evolved in decades and there is no monetary policy, which can resolve it. So even if most of the Greek debts would be erased it couldn’t help to create a long term sustainable Greek economy.
Economics is not just about curves and numbers. It is also about people, their intentions and their acts within an economic, political and social system. If certain senior employees created in an organization where they are employed an union, which prevents from more talented new employees to bring positive changes to the organization (and I am not against the unions as principle, only if it fights for self destructive policy ) its damage to economy can’t be quantified. If certain entity becomes a monopoly and increases the prices of the products, it’s negative influence is also not measurable in the GDP. If highly educated young Greeks can’t get jobs, because the senior less educated and less effective Greeks are protected by laws, unions, professional guilds, etc. the negative impact of this state on the GDP is also not measurable.
So if Greece wants to overcome its problems, reduction of its debts is not enough. Somehow this economic train has to be relocated to a different track.
One other issue, there are commentaries in the media, where “professional economists” pointed out, that at 2008, Greece debt was “only” 100% out of the GDP, and now with the shrink of the GDP, even after its reduction it became 170%. This claim is worse than a lie, it is professional deception, done intentionally our out of ignorance. Before the crisis, the Greek GDP per capita was close to that of Germany, mostly financed by loans. The GDP can be sometime a very sleazy measure instrument, since it measures the short term economic performance calculated out of national income. Out of definition General Domestic Product equals to General Domestic Income. But this income doesn’t makes difference between income generated out of merchandise or service production an the income created by financial operation which creates indebtedness. So the Greek GDP did not represent real values, but values generated by debts, which became the very core of all the economic problems of Greece.