Tuesday, 1 November 2011

Bad decisions…

When I was young I had the feeling that whenever something very good happened, something bad would follow. It’s like the action – reaction effect to equalise all phenomena. I’m not exactly sure how and when this notion started. I remember it vividly though. For example when a new birthday toy was given to me, soon afterwards I would have a massive fight with my brother or mother. This expectation wasn’t something healthy because it was taking away part of my excitement and happiness but I eventually grew out of it.

This memory came back to me when I spoke on the phone to my brother and mother. I was so happy coming back from work to my new home that I now share with JJ. However, the news from Greece were not very good to say the least.  In case you hadn’t noticed, Greece has been in a very bad financial situation for some years now. The country was bailed out and the current government issued lots of austerity measures to tackle the problem and minimise the debt.

For many reasons, some of which are the global bad financial situation and the series of bad governmental decisions, the austerity measures taken by the government didn’t work that well. Lots of families in Greece struggle at the moment financially but still the country’s debt is increasing. Last summer the country borrowed even more money from the IMf and the EU but that didn’t help much either.

Last week, on the 26th of October for better or for worse a 50% cut on the country’s debt was decided by the Eurozone. This decision was not easy and was made to strengthen Europe’s bailout fund and was well received by stock markets around the globe. It would work as a painkiller to Merkel and Sarkozy headache called Greece. In theory, it would work to loosen up some of the austerity measures. So, as far as I can see with my limited economic knowledge it would help towards finding a solution to the country’s problems.

However, yesterday the Greek Prime Minister decided that the people should decide on whether they should accept the debt write off with a referendum! I was shocked when I heard about it. After the negotiations last week and the deal already closed, he thinks that a referendum is the way forward that will take place after January!

In case people decide not to accept the debt write-off, Greece must exit the Euro and go back to its old currency, called drachma (lovely name, I know). That will allow the country to default with unknown consequences. All values will drop and people will be poorer than ever before, going back to a post war era. In addition, a country exiting the Eurozone might have unpredictable consequences to the value of the Euro, affecting other markets already in danger like Italy, Spain or Portugal.

Unfortunately, most people and unions oppose the austerity measures, the current government or the way Europe is handling things and might decide against the write-off and the Euro. They believe that going back to drachma will mean a new fresh start for the country. They’ve seen that the austerity measures have not been helping anyone and would agree to any other solution.

What surprised me is the timing of the referendum. Why now? What could have happened inside the government party to force the PM to take such a controversial decision now, when some progress has been made! That could have happened long time ago, before the series of bail outs. I can’t believe that the masses will see logic and support him. Also, the Euro leaders taking part in the negotiations last week will not see favourable the gamble that the PM is trying to play to cover his own back. Since he decided to join the dance with Merkel and Sarkozy, he should have kept the pace…

So, I had a talk with my mother and brother yesterday. My mother’s freaking out seeing her pension plan diminished and is very worried about her future during her retirement. My brother’s worried that the country might end up in an abysmal situation, much worse than now. He laughed about it saying that I could be sending him £100 a month to cover all the family’s expenses. That of course could happen if I can keep a work permit and Greece stays in the European Union. The Prime Minister is doing all he can to make more enemies than friends with the rest of the members at the moment.


  1. I had to take a suit to a tailor last weekend for an alteration. I found one nearby. I went in and found out the family who runs it were from Greece. I was thinking of you the whole time I was in there.

    Nik, the situation in Greece is indeed dire. The PM needs to resign tomorrow if he continues to insist on this referendum bullshit. Everyone knows exactly how the vote will turn out, so it is economic suicide to proceed with it.

    I fear Greece will soon be ejected from the EU and will be regarded as a third-world nation. I hope for the best for your family if the PM continues his foolish pursuit.

  2. Nik,
    I'm so sorry. We hear about this in the news here in the US every day, but your post is the first time that I've seen a human face put on the crisis in Greece. Its a terrible situation and I have no idea how to resolve it, but it breaks my heart.


  3. what a mess.
    On the other hand, drachma is an ancient coinage, and nothing to be ashamed at. Small comfort I suppose.

  4. I understand the frustration you must feel; a new home and life with JJ and yet you want to help your family. It isn't easy. And the answer is a mystery to me. I will continue to send good thoughts to you & your family. Behr Hugs

  5. @Cubby that's very sweet of you. The referendum's canceled after EU's pressure. The situation is still a bit uncertain though...

    @BosGuy The situation is very bad indeed. Unfortunately even with the referendum withdrawn it will take years for the deficit to improve...

    @Ur-Spo lol... You're right... :-)