No free passes to debt freedom

on . Posted in English texts


Even our collective sentiment is no longer in our hands, as we look to others, Germany especially, to give us our cue. A favorable comment from German Chancellor Angela Merkel delights us, while a "bad" statement from the board of the Bundesbank sends us into the pits and a stern warning from any foreign financial analysts becomes the source of a constant headache.

This constant shift in collective sentiment points to two facts. Firstly, that we yearn for the days when Greece could borrow cheaply, waste at will and produce nothing with impunity. Meanwhile, even if Greece, by some miracle, did manage to find a way to pay back its 350 million euros’ worth of debt, it would still be impossible for the country to continue borrowing at German interest rates in the long run, unless it began producing as much as Germany does.

Greece, therefore, has two options: to increase production to the levels of consumption or to decrease consumption to production levels. Hopefully it will opt for the latter, though it will take more work and organization.

The second fact that transpires from the collective shift in sentiment is that we have no faith in ourselves. So many people have become so addicted to easy borrowing that they can’t imagine the country ever making it without help from outside. They don’t believe that Greece can be made productive nor that the state can be knocked back into working order. They tout tricks for restructuring, without, however, thinking about tomorrow. Because even if Greece gave the debt a buzz cut, the deficits it would continue to produce would bring it right back to where we stand now.

There is, however, one thing that everyone agrees on when it comes to discussing a solution to Greece’s debt crisis: that Greece needs to implement reforms and restructure the public sector. They may not put as much emphasis on these two points as they should, but they always say it. This means that there are no free passes to freedom from debt and that we can’t turn the clock back to the year 2000. On the contrary, we need to grab the end of the reform thread that was abandoned by PASOK in 2000 and never picked up by New Democracy.

ekathimerini.com , Friday March 11, 2011