February 2023
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I don’t think most outsiders realise how bad things are in Greece

Greece: There are two sides to every argument:

greece argument

1. Make them pay back the money they’ve borrowed and wasted

The Greeks are only victims of their own corruption, greed, stupidity, nepotism and economic mismanagement.

For decades the Greeks have been siphoning off EU money for crops that never existed, for roads that were never built and for all sorts of other regional development projects that were outright frauds.

The huge flow of EU and borrowed money into Greece has enabled most Greeks to avoid paying any taxes while funding a massive over-paid, over-pensioned bureaucracy, that no other EU country could ever afford.

Greece joined the Euro so that it could reduce its borrowing costs on the back of being in a currency union with disciplined Germany. However, while they wanted unbelievably low-cost borrowing, the Greeks didn’t want the kind of fiscal discipline that goes with it. So, instead of being so belligerent, perhaps they should eat a bit of humble pie and take responsibility for the whole mess, instead of suddenly and insultingly demanding belated war reparations from their major creditor.

Perhaps if the Greeks weren’t in such a rush to get back to the policies that got them their huge debt, then there might be room for negotiation. But the Greeks want everything. They want to stay in the EU and the Euro but ignore the ECB and their major creditors and expect to get their own way on everything.

Conclusion 1: Sod them! Make them pay!


2. The Greeks are in a debt spiral that continued deep austerity will only worsen. Something must change

How can more austerity help? Let’s look at the figures so far: one million people have lost their jobs; there has been a 38% salary reduction and a 45% pension reduction; GDP has shrunk 25% and 30% of all businesses have closed. Household income is down 30% and construction a staggering 84%.

Let’s look at what has gone up: 43% increase in child mortality; public debt up 35.5%; unemployment up 190% (1 in 4 people are out of work, for the 18-24 age group, over half have no work); 272% increase in depression; poverty rates 98% up; 2 people commit suicide every day. All this would have been worse except for mass migration.

Greek and EU leaders gladly allowed Goldman Sachs to construct some ludicrously-contrived deal with derivatives so that it looked like Greece qualified to join the Euro in order to drive their dream of creating a great EU superstate.

For over twenty years EU officials have known that Greece was running an average budget deficit of 5.2% GDP. Meanwhile it was receiving approx. 3.3% GDP in EU aid every year. So that makes an average deficit of around 8.5% GDP. But nobody said anything about this economic madness while the EU economy was growing and all the EU officials could get rich while claiming the EU and the Euro were huge successes. And now everything has gone t*ts up, everyone is blaming each other and nobody is accepting responsibility for anything.

Conclusion 2: It’s time for a change, for debt forgiveness and time to reflate the collapsing Greek economy to address the social and financial misery being imposed on the country


What to do? I know a lot of readers would agree with Conclusion 1 “Sod them ! Make them pay!”. But in business there’s the concept of ‘sunk costs’ – costs that have been incurred and can never be recovered. When dealing with sunk costs, the best strategy is to write them off and move forward making the best of a bad situation.

Personally, I believe the hundreds of billions that have disappeared into the pockets of corrupt Greek politicians and their business cronies and that have paid for Greece’s ‘retire at 55’ delusion are ‘sunk costs’ and it’s time for Conclusion 2 – debt forgiveness and reflate the collapsing Greek economy.

But clearly most European leaders believe they should stick to Conclusion 1. As Einstein said “insanity is repeating the same thing and expecting a different result”. EU leaders can never admit to ever being wrong about anything or ever having made a mistake. This forces them into behaviours that closely resemble insanity as defined by Einstein.

5 comments to I don’t think most outsiders realise how bad things are in Greece

  • John Fields

    In the future there may be several other EU members who may be in the same
    position as Greece. What happens then if Conclusion 2 is applied to Greece?

  • Paul

    I might agree *if* it wasn’t for the ” rush to get back to the policies that got them their huge debt”.

    Its one thing to say “yes, we stuffed up, can we be let off”, it’s entirely different to say that and “but we want all the goodies as well”.

    Isn’t this simply going to recreate the same problem a few years down the line ? Your argument on sunk costs is fair enough, but it’s not an argument to sink more.

    Austerity ; well that much abused word (austerity = having an iPhone 5 rather than an iPhone 6) can’t continue unless the wealthier Northern states fund it. Greece has to realise that if it doesn’t produce anything much it can’t have the goodies. As do we, of course.

    Then there’s all the other EU states in hock ….

  • NoMore

    I wouldn’t normally be in favour of debt forgiveness due to the moral hazard it creates and it is unfair to those who buckle down and pay their debts or never build up unaffordable debt in the first place.

    However caveat emptor and all that – the dim bulbs running the EU and our first rate national leaders were defrauding the long-suffering voters (not that they could vote directly in most cases) of the net contributing states by allowing Greece in in the first place.

    I’d like to think Cameron and UK banks have made good use of time it has taken for this extended car crash to unfold there and get our own money out before the others accept the inevitable and fold their hands. But maybe that’s me being unrealistic.

  • Greece its the realative poor who have been hit. With high priced medicane. Hundreds of Doctors and other trained medical staff have left. The state officials who plunderd the Economy use loans to syphon off money from nemerous projects such as the Athens Olypics keep all there loot, Note property prices are suprisingly high and even if Greece exits the Euro property will continue to be overpriced.

    off topic see this very sinister legislation being passed.

  • Peter

    Eurocrats fear Greece leaving Euro because it might prosper

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