Syed Tosharaf Ali :
As Greece has plunged into deep financial and management crises, easy treatment by applying antibiotic may not work, as usually do the World Bank and the IMF in case of third world countries. The economic problem is no less complicated than any chronic disease in human body. New outlook of different forms and marks is required to address the problems in a changed condition. Old theories are failing to solve new problems of our time. Small scale reforms will bring no useful results. Total overhauling is required, as both theories and practices of classical economics have already been proved outdated. In this context, Greece’s PM Tsipras is trying to heal the economic management crisis of his country. He is also trying to protect the lower income group. A sense of financial insecurity is haunting the nation. The depositors withdrew more than four thousand crore Euro from banks since December last. Banks are facing serious crisis of liquidity. The PM met with Chief Executives of banks. Moreover, he is facing opposition in his own party. His government will not survive unless he gets 120 MP’s support. Now he is enjoying support of 123 Parliament members and piloting reform bills with the support from opposition MPs for staying with European Union. Political observers are speculating that this time he will not face serious opposition in the Parliament. Proposals will be placed for debate about reforming of the judiciary, overcoming the liquidity problem in the banks and government’s auctions procedures of public assets etc.
Banks closed earlier reopened after two weeks. A provision is coming in the new bill that maximum deposit will not exceed one lakh euro. EU has imposed this condition. If the Parliament of Greece passes this bill, then discussion will start with IMF, ECB and EU to pump new fund in banks. At this critical juncture, the left leaning PM of Greece, is critical of his own Parliament members. Those who are opposing the new bail out contract with international loan giving agencies are the target of his criticism. Tsipras said, ”I have signed the agreement and they are saving their skin taking shelter under that.” He is fortunate that the second bail out bill has been passed without bitter debate, although it was opposed by one fifth of his Parliament members. Ex-Finance Ministry Yanis Varoufakis was among those. But economic reform is a must, because without reforms Greece will not be able to get the proposed 8,600 crore euro from the creditors.
It is reported that when Parliament members were opposing the bail out preconditions in the House, thousands of angry people were protesting outside. Now it is clear that tax will be increased and retirement age will be delayed. Other items will also be included in the reform list.
Everyone knows that Greece is a member country of NATO. In addition, when euro was introduced in the year 2002 with the initiative of 10 European countries, Greece was one of them. Now EU member countries are 28 and euro is common currency of 19 countries. Greece now looks forward that European monetary system will help them build up a self-reliant economic base to overcome the insolvency and loan default. But EU has earlier failed to foresee the crisis of this magnitude, although it was warning Greece during two previous bail out programmes. No one can deny that some small countries belonging to eurozone earlier faced mild crisis of similar nature. But countries like Finland, Ireland, Cyprus and Portugal successfully overcame their crisis. Now their economy is stable. Thanks to the politicians of these countries who have correctly motivated their public and successfully avoided economic bankruptcy.
But unfortunately land of Socrates, Plato and Aristotle did not learn anything from the experiences of Finland, Ireland, Cyprus or Portugal. For more than a decade, Greece has neglected to come out of deficit financing. They did not develop even the tax collecting culture. They are not willing to review expensive pension policy. They did not stop to provide subsidy to many national organizations of service sector. Now it is bearing the huge default liability of 320 billion euro. So it will not be so easy to overcome the crisis.
We know that Germany is playing a leading role in European Union. Germany alone will give 90 billion euro to Greece. And Greece promised to repay the amount by 2020. If she fails to fulfil the commitment, then chain reactions will start. The people of Germany obviously will go against Greece and create pressure not to sanction any more loans to Greece, which will certainly worsen the situation. We only guess that prolong default, inflation and unemployment problems are aggravating Greece’s situation. It should be mentioned here that Greece is occupying the 110th position in world corruption list out of 174. Nothing there moves without bribe. Six hundred rich men without paying tax, deposited huge amount of money in the Swiss banks, creating deep liquidity crisis in banks. It is needless to say Greece is a country where politicians are corrupt, businessmen do not serve the nation and intellectuals are self-seekers. The present crisis has its roots there.
We are living in an age of globalization; no country can achieve prosperity in isolation. In this way or that way, world market economy is controlling every state, big or small.
Earlier we have seen that in capitalism and free competition, liberal thoughts and ideas flourish. Now opposite trend is developing and intolerance is becoming dominant. A few powerful states are busy to export financial capital. Creditors are in commanding position to dictate terms and conditions. No limited economy can smoothly function defying influence of monopolistic capital. Creditors intention may be good, they may intend to serve the less developed country, but in reality we see the opposite result to happen.
Prime Minister Alexis Tsipras is passing a very crucial time. He is facing opposition from inside and outside. His government may not continue. Reports from Athens said, civil servants union staged protests outside the Parliament during emergency debate. On the other hand, Greece’s creditors like EU, ECB, IMF are keenly watching the developments from safe distance.
The so-called left are only giving suggestions and creating pressures to come out from the eurozone. But will this solve the problem or serve the country? Creditors are not in a position to salvage Greece unless the government takes drastic measures to reform. We are indeed going to observe a number of paradoxical scenarios married with antagonisms, frictions and conflicts in Europe.
(Writer: Journalist & Free thinker )
