The Greek Trap !

Kurt Lykke Lindved Ph.D Culture and Development - UN Lecturer and Writer Honored Dutch Counsel Former CEO in EAC Entertainer and Event Management

Kurt Lykke Lindved Ph.D
Culture and Development – UN
Lecturer and Writer
Honored Dutch Counsel
Former CEO in EAC
Entertainer and Event Management

Trying to save Greece has become an exercise in the absurd. Greece is near-enough bankrupt. Most Greeks know that. It can never repay its debts, no matter how many deals with creditors are pulled out of a hat.
The country is now run by a radical left party whose ministers have close to zero executive experience. Their executive experience nonetheless exceeds their diplomatic experience. This stands at less than zero — and it shows. The party, Syriza, includes people who want to re-fight the Greek Civil War (1946-49) in the belief the Communists will triumph this time.

For now, the party’s main enemies are international creditors and of course the Germans, who want the Greeks to present a plan of some sort to balance their books before doling out more cash — about $8 billion in fact — as part of an enormous bailout program. The thing is, however, that Syriza was elected precisely to say foreign-imposed austerity had already done enough damage to Greece – The country, which desperately needs the $8 billion, is drowning under a welter of statistics that present a devastating picture of unemployment, unpayable pensions, youthful pensioners, uncollected taxes, drastic fiscal adjustments, and of course debt. Given all this, Alexis Tsipras, the prime minister, declared the latest proposals from creditors “absurd” — you see what I mean about diplomacy — a view that reportedly caused Jean-Claude Juncker, the chief executive of the European Union, not to pick up a call from Tsipras over the weekend.There’s one thing about reality: It tends to come back and kick you in the teeth.

_83409114_027525940Forcing Greece and Germany to coexist in a currency union will always be an exercise in smoke and mirrors. Their economies are mismatched, their temperaments even more so.Many Greeks are awaiting the worst. The rich, of course, already have their money elsewhere. Just about everyone has a few thousand euros stashed away — 5,000 per person where possible.

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Stores are taking out anti-looting insurance. Public hospitals are making contingency plans for operating when money dries up. More than $5 billion was pulled from bank accounts in April alone by companies and individuals.Speculation is rampant — absent a debt deal — of a bank run, capital controls and the issue of i.o.u.’s (that will promptly lose 50 percent of their nominal value, especially if adorned with the face of Finance Minister Yanis Varoufakis).

Shortly thereafter follow economic collapse, unrest and new elections.That sounds terrible, but I’m not sure. It would represent reality rather than the repetitive evasion of it. Things are very bad here. But just how bad is not clear because it has not been fully tested. The surface has a way of glimmering.It is unfortunate the author exhibits little to no 264798_23161498understanding of modern finance and economics; let alone the environment that brought the…The Greek bailouts have given time to other countries in the Euro Zone — including Italy, Spain, Portugal and Ireland — to either get their houses in order or embark seriously on the task. Euro-unraveling contagion is now far less likely. One thing is sure: If a deal is reached with Greece, it will only be the prelude to the next crisis in a few months or so.Creditors could tell Syriza: You have a century to repay the debt, but now you’re on your own. Fix the country, whether inside the euro or out. Get foreign corporations to put their money in Greece. You want to try the Putin route, with Gazprom stepping in for the I.M.F., go for it! We’re off your back now — so find a way to make Greeks believe in Greece again without the ready excuse that Berlin, or the International Monetary Fund or the European Commission is to blame. The European Union has done its healing work here. There will not be another civil war, come what may.

The sun will still shine; a gazillion islands will still delight; Greeks will still curse every form of authority; they will still smoke in every restaurant in defiance of the law; they will still have more money than they appear to have; tables in cheap “tavernas” will still offer _80692186_yanisviews that have no price. A Greek meltdown is not the same as a Slovakian meltdown. Life is not just.So many mistakes have been made. They began with the sentimental illusion that the cradle of Western civilization was also an economy competitive enough to join the euro. It was not. Then came all the easy credit handed out in the era when the view was that risk had ceased to exist. The inevitable Greek implosion was followed by austerity measures whose symbol was Germany. These failed to offer Greeks a positive vision of what all the sacrifice might produce. The consequent anger created Syriza and its election victory and incoherent promises of a new way forward. Everyone is now caught in the web of their own contradictions. More of the same might gain a few months. It will resolve nothing, sapping Europe’s energy, and Greece’s potential, for years to come.

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Professional – Career * Qualified as a Charter Agent in the East Asiatic Company - Became a State Authorized Shipping Broker in 1969 * Captain in The Sirius Patrol – Greenland at Thule Air Base, 1969-1971 * Postings in New York, New Orleans, Toronto, Rio de Janeiro, Lagos and London as Charter Agent and Manager 1972 – 1983 working for The East Asiatic Company Ltd. – Copenhagen * 24 years with The East Asiatic Company Ltd and subsidiary companies as Charter Agent, Marketing and Development Manager; and General Manager * Supplementary courses and examinations in Maritime and Commercial Law Management. * Founder and Owner of Sonata Production, Art and Music International Inc. – France & Denmark 1995 – present - Entertainment, Lectures, Concerts, Exhibition Events, CD, DVD and Video Recordings. Professional – Freelance * Qualified as trumpet player at Aarhus Music School – Denmark * Professional musician with several orchestras and bands – including the Matadors, Saratoga Jazz Band, Rice Wood Jokers and Aarhus Brass Band. * Leader of ”Show and Entertainment Group 28 Carat” and the Evening & Theatre School 28 Carat * Self-taught Artist (painter) Lecturer and Writer * Responsible for several large Theatre and Exhibition Events Worldwide Awards * Dutch Consul, Denmark * Goodwill Ambassador – Various Non-Profit Organizations
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One Response to The Greek Trap !

  1. Stephan says:

    Maybe I can also add to the discussion by addressing the issue from the perspective of a German-Greek or Greek-German, which ever you prefer.
    So my basic argument is that I agree with much more of what is written in the article than with what most Syriza enthusiasts believe to be the true solution. However, I still believe that this article is not just missing the point, but is also wrong at the heart of its argument. But maybe I should warn both of you first, because I fell that neither of you really understood the problem.
    Well I think I’ll start with what I think the article got right first, namely pretty much all arguments addressing Greece’s inability to push the painful BUT NECESSARY reforms, having any form of diplomatic empathy towards other European nations (better the lack thereof) and last but not least the Greek’s illusion of its own importance in the European Union (which in reality is little to none, Europe would not change very much with or without Greece).
    Having lived in Greece for over several years, I strongly felt that the country’s bureaucracy is not just holding back any private sector growth back, but actively trying to diminish it by enforcing a whole range of unparalleled regulation. So from my point of view any leftist views opposing deregulation and favoring a state based solution to the economic problems of the country is not just obsolete (and proven to have failed over and over again), but in fact counterproductive, as it will achieve the opposite of what it intents. It will lead to an inflexible, unproductive and generally not very prosperous economy, including shortage in various supplies, very high priced imports and consumption levels way below current standards. What Greece needs is a much smaller, more deregulated, but at the same time much stricter government (that is in terms of actually enforcing the law).
    Regarding the diplomatic fine tuning, concrete mistakes can be seen all the time reaching from Syriza’s newspaper depicting German politicians in Nazi-Uniforms (remember this is the governing party) to the amazingly arrogant show Mr. Varoufakis is constantly putting on. He is truly annoying the world, by acting as if he was the only person on this planet, who actually understood the problem, while all other finance ministers are still completely clueless despite dealing with the Greek problems for the last 6 Years. It is as if the whole world was just waiting for him to come along and finally explain to us all how the world works.
    Also, I find it completely absurd, how some Greek politicians really think that the EU and the Euro will implode once Greece leaves the common currency. Let alone, how they really see that absurd fact as a fit bargaining tool, when asking for more financial aid at the same time. Trend analysis suggests that this won’t happen, as Greece has and is isolating itself more and more in the Euro-crisis, which can now be reduced to “the crisis the EU has with Greece”. Using this blackmailing argument is more than anti-social, as if one could plead for European solidarity and threaten the EU with a collapse at the same time. The very last point against Greece I want to make is that against the German reparations, which falls into the very same category of absurdity. Have you ever tried barrowing money from someone, who you’re planning on suing at the same time? This is not just complete nonsense on the Greek side, it also makes no strategic sense. If Greece was able to come through with its claims (against all odds), then it would never receive any support from Germany ever again in any EU related matter. And it is also funny how some Greek politicians claim that it is not up to the Germans to kick Greece out of the Euro, as this is exactly the case! And in fact not just the Germans, Greece has to persuade each and every Euro-country individually, as the Euro group decisions on extending the ESM payments are taken unanimously, so any Euro country could pull the plug on Greece technically.

    Well now that I’ve said enough against Greece -and believe me there is still much more- I want to get into the Problem I have with your article, as you seem to care about criticism. By far the greatest Problem I have with almost all Authors (especially from northern European countries) is that they try to debate on a moralistic and very superficial level based on stereotypes. Most of those writers who on the one hand “exhibits little to no understanding of modern finance and economics” but on the other hand also claim to know that Greece was not an “economy competitive enough to join the euro” and to whom it is obvious that the “economies are mismatched”, as though you’d know when economies can be perfectly aligned and when the match is simply wrong. One can’t help but wonder, what made you an expert on macroeconomic competitiveness all on a sudden.
    Now to my economic arguments and why I believe the article got it wrong. First we have to clear the basic facts, namely Greece put itself in the initial misery, all the cheaply barrowed money was not forced upon them. I don’t care about any Siemens or German Submarine story, which to me is all white noise. They signed the contracts and it’s their own fault they accumulated such debt. Be that as it may, this argument has ABSOLUTLY NOTHING to do with the current debate on how Greece should be helped and restructured and does not contribute in the slightest to solving the problem. However much northern Europeans like to mention that fact and thereby point fingers, so that everyone knows who is to blame.
    But it’s not always that easy, when a smoker eventually gets cancer, we all know how he got it, but the question is how to proceed and what treatment should be applied is much more urgent. In the case of Greece the worst possible Treatment has been applied , over and over again complete economical non-sense, what I imagine you refer to as simply “balance their books”. Germany has dealt with a bankrupt state before. We had to revitalize the whole of East-Germany and how did we do it? Not by cutting all investment and increasing the VAT. We did it by investing tons of money (were are talking trillions, not billions as in Greece) into infrastructure projects and other forms of subsidization and yet no one ever complained about the money. This is because it really isn’t about the money it’s about the fact that one would rather take the risk of Greece leaving, as long as one doesn’t feel the slightest inch of decline in personal wealth.
    If one would really be interested in building up an economy, than there are basically only two options 1. One invests heavily in the country’s Infrastructure and know-how, Universities etc. (same as in Eastern-Germany) and thereby creates a high-quality /high-wages job market (and I mean real investment not EU agricultural subsidies) or 2. One simply pushes down the prices to the point where the productivity level and wage level meet, in other words rather than making Greece high-tech try to make it a second china, where the level of quality is rubbish but the price level makes up for it. Now I strongly criticize that the Germans do not in the slightest appear to be interested in creating a number one version economy, which is exactly what they did choose for eastern Germany. But actively demand to decrease the economic power of Greece by draining the liquidity out of the system. It is common economic logic that taxes DO NOT AND SHOULD NOT go up during regression, let alone depression, the opposite was also the case in Germany’s 2009 mini regression. If you want to stimulate the private sector, which Greece really should be doing, than taxes should be reduced drastically. However, this does not mean that the amount of Government employees can’t be reduced as well.
    So to sum up, many people in Greece feel left alone after the supposedly good medicine, prescribed by the successful European nation has not only failed them, but made everything worst. But when looking closer one can see that there are two types of medicines and Greece is not getting any of the medicine Germany prescribed themselves when having to deal with bankruptcy and on top of it all the northern European countries have this weird smugness about them -and which to me can also be seen in your article- whereby they feel that if the help is not wanted then, we should just let them be. Ignoring the mess that they have (along with the Greeks themselves of course) have created. I personally hate that attitude of feeling that the Greeks have been nothing but ungrateful to ones help, because it shows how little one knows about the impact of the troika reforms, which are economic non-sense. The only thing these reforms manage to achieve is that the bills gets paid quicker. This is how hedge- fonds and some private equity investors work too quiet often. Yet, I don’t recall them being celebrated as “Rescuers” who send out loans labeled as “Rescue-packages”.

    I know this comment is probably even longer than your article, but this only shows how complex this debate really is. And if I could have one wish it would be that people would stop thinking in those ridicules teams. There is no team Germany or team Greece which has to be defended at all costs, something that seemed to be the case with the other commenter here. If everyone could just view the situation for what it is rather than choosing and defending a team, that would really be great.
    Cheers!
    Stephan

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