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Euro as an ancient Greek drama in four acts

29 September 2011 / 22:09:32  GRReporter
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Macedonian Thrace Brewery is just one example of these phenomena, when its management decides not to succumb to corrupt practices. Beyond flat tires of trucks transporting the goods and the sabotage in the provision of working facilities, the stone that turns the cart of the entrepreneurs is when they decide to introduce a new product in production, forest tea lemonade. Then the authorities invoke the law of 1823 (?!), which says that breweries are not allowed to produce anything else than beer and close the company. Increasing abuse of public power and the lack of effective state system create all conditions for the development of informal economy, which leads to annual losses of taxes of over € 20 billion.
Third act: The crisis of the euro (2010-2011)

Downgrading the Greek government bonds to junk seriously disturb society. The aid package from the international community in Greece is related to strict austerity measures and unpopular reforms unexplainable to the average Greek. For decades, politicians have been telling that the country has no serious problems and until recently, everything seemed possible in the Mediterranean country. If not through the front, then through the back door as the "Balkans" say. Therefore, the reforms, acronyms and structural changes set out in the Memorandum are as a bolt from the blue. The Greek public sector must be reduced by at least one fifth, other economic sectors must be liberalized or become accessible to all qualified, not for a number of people, enterprises must be recovered or sold. Not all this is clear to the ordinary man from the outset, and those who are aware but it does not suit them begin fierce resistance. This is the case with the liberalization of the profession of drivers of trucks and containers for public use. Approximately 30,000 permits are handed over in the last 35 years and it is not possible new and more players to enter the game. Strikes and protests begin and the image of Greece takes the first big blow. The media show the country on the verge of a nervous breakdown with a picture of angry tourists, empty shelves in food shops, blocked roads, soldiers supplying fuel in the country. A country is shown, which does not operate and will not work for long. It becomes clear that society does not trust the state.

Fourth act: The future of the Euro (2011 -?)

For now, it remains unclear with gloomy outlook; it seems as if the dark ages of medieval European currency are ahead. Fighting for survival is the primary motive in this act. The main character is Greece. Torn by the sins of the past and the vague desire for change and a bright future, the country is in the middle of the next economic cyclone. Although it is still not clear where the balance will tip, the creator of the Euro idea Jacques Delors says he believes in the euro area. The Harvard professor and former Economic Counsellor of the International Monetary Fund Kenneth Rogoff is not so sure in the happy end of this story. He believes that no matter how much money are flown in Greece, its foreign debt should be haircut by 50% to 75% before the country gets on its feet and the area calms down. They warn from Pimco that due to the lack of bold political decisions from Brussels the crisis will continue to spread from the periphery to the heart of the euro area and a new world problem will come.

Der Spiegel gives two possible options for the end of the euro drama with main character Greece. The first scenario presents a new type of distribution, in which rich countries pay for the debts of poorer counterparts in the context of European economic governance or even the United States take over the task at the expense of Europe. The pawn in this case is much stricter economic discipline for the mischievous from now on. The second option suggests a new smaller euro zone, created only by its strongest economic members. However, both options, in one way or another, will cost a lot to all involved in the story.


Tags: EconomyMarketsGreeceCrisisEuroDer SpiegelDrama
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