Sunday, July 5, 2015

How do you want to die? - The Greek Referendum

How do you want to die? Slow or Instant?

This was my first reaction when I read about the Greek government's decision to hold a referendum  asking the Greek people to decide whether they agree or not to a draft agreement document submitted by the 'Troika' - The European Union, The IMF and The ECB.

The first document is called Reforms for the Completion of the Current Program and the second one called Preliminary Debt Sustainability Analysis.

The ask is to vote "Not Approved/NO" by the citizens who reject the institutions' proposal and "Approved/YES" by those who accept.

What fun is this? Just few months ago; the people elect a new government in the hope that the leaders would guide them in the right direction. Now the government has delegated such a risky huge responsibility at the hands of the 18+ public eligible to vote and make decisions. No, I am not undermining the decision making or the right to exercise the decision of the citizens; but what does it mean for the government to just leave it to the public?

These documents in question were not made public earlier; how many Greeks can understand the highly technical document? Well; there is no need. All that they have to vote for us is whether they accept the creditors' conditions for far more austerity measures and high taxes and ensure a bailout or no.

I am no economist; I can't even manage my own money. But I have been reading about the Greek crisis for a while now out of curiosity. Aah how sad; the word "crisis" itself was given to us by Greeks. Its upon them now. So far; the best I have understood are two words - "Nai" or "Oxi" - Yes or No that could decide the future of Greece and the Europe.

More questions than finding answers. How can anyone be bailed out by more loans? Its funny really. Dont you end up in a quagmire of hopelessness and distress? But in the event of no money; what happens? Why can't the Europe and allies help Greece restructure and pave way for growth; generate more jobs and improve the economy? More austerity means lesser capital to invest. So how can there be growth? With the troika functioning the way they are; shouldn't they just be negotiating loans? Why is the political interest in there?

Does not mean Greece can continue to get free lunch. Remember; Iceland was in a similar situation few years ago but they managed well. Agreed; can't compare Greece with Iceland. But if one Euro nation can; the other can as well right? Maybe not. Now how about Greece going into more austerity and high taxes.

Why not? Why should the rest of Europe pay for their freebies? Healthcare, housing, education, pension and other securities....from where would they come from? Of course! government doesn't have unlimited supply of money. How can entitlements keep coming? You would run out of welfare and loans dry up as well isn't it?

The citizens seem to be fed up of austerity measures; but they do want to stay in Euro. Guess it also depends on who has invested in the system. Retirees; who are owed big pension, people who have saved a lot and have money in banks have a higher stake. A NO means banks closed, deposits lost, less money than saved due to devaluation of Drachma if its introduced if Greece exits Euro.  Would a NO mean they dont have to pay back the $250 billion debt? Not possible at all. Basically it is a free fall of the economy.

A YES means bailouts with more austerity which means more unemployment, weaker economy and eventually fallout. Either way; it seems to be bad for Greece. Been reading up jokes and memes on how Greece can get written off if we were to start paying for their ideas and inventions - democracy, modern medicine, art, mathematics, science....Its very sad.

How are they finding it possible to hold a referendum? Where did the money come from for facilitating the voters?  Its beyond my understanding of economics how Greece got into such a situation. She spent around 9 billion Euro on 2004 Olympics; when the public debt was at 168 billion Euro; within days of closing of games; Greece warned that the public debt and deficit would be worse than expected.

Borrowing is unsustainable and when spending is unchecked; you are in for a disaster. This is simple common sense; is it that tough? On a lighter note; some of the biggest corporations have billions of $ in cash; they could buy Greece!


  1. Very nice to see/visit your blogspot after a gap. All the best wishes.

  2. Very nice to see/visit your blogspot after a gap. All the best wishes.

  3. Yes big Corporates can buy Greece.
    B, I have no sympathies for the Greeks. What were they up to when the deficit and debts were mounting. This 300 billion did not come about last week. It is rather bizarre that a borrower , defaults and then dictates to the lenders. One guy who is more Greek than the Greeks is Vijay Mallaya

    1. Agree Anil. You can't borrow on top of loans. And then expect others to write off your loan or provide more. Haha Vijay Mallaya probably now has some money now that Kingfisher is sold off.

  4. Welcome back to blogosphere.. AsGreece crisis is really scary and I cant imagine what ordinary people would be under!

  5. Insi,we are talking about tip of iceberg thing.Who to be blamed is kind of confusing.The frequent socialist pattern changes in Greece,the eventual emergence of Germany and it's debt policies,the lack of objectivity within European Union..Everything has contributed.The blunder of 'Euro' will have it's consequences in the coming years too,eventually tearing EU apart.Insi,what more we can expect from a growing 'heterogeneous' EU there ? With Germany's GDP 300 times more than that of Malta and Luxembourg’s per capita income is nearly seven times higher than Latvia’s and five times higher than Greece’s ? When the size,population and economic resource of each country is immensely different ? And the referendum,just another eyewash,nothing more.Bottom line though is lack of visionaries in govt everywhere ! (Hey Insi,welcome back dear..Good to see you back)

    1. Well put Melange. The group that set a common economic policy failed to set a common fiscal policy and what you mentioned are exactly the reasons. Greece is in a quagmire. Thank you! I suppose it was wrong to have suspended writing and expressing and thanks much for your constant support and encouragement :)


I'd love to know what you thought :-) Please shoot!