Cutting back is never pleasant.

I don’t see Federalism or a 2 currency solution as fixing anything, while those elsewhere suggesting the Greeks would be better off overprinting current Euros in cicrulation with “New Drachma” signs are off their rockers.

Whatever the solutions are though, it would really help if instead of dancing around the thing, someone would come out and tell the Greeks the Facts of Life: move out of the Euro and lose 70% of your wealth, or stay in it and lose 50%. Politicians though find it hard to say anything that is not positive news in case they don’t get reelected, while journalists generally only print what is told to them by politicians.

It’s time for straight talking. The Greeks cannot live in denial forever.

Tells us everything we need to know about our “democracy”…

One thing I have heard is that there is no real independent civil service in Greece – each administration brings in its own people right down to the level of police chiefs, and the new folks don’t know where the last lot hid their skeletons. That can’t help things. Also, if you think your political opponents are corrupt, you aren’t going to want to pay any taxes to them if you can hide them somehow because if they were like you, they’d hide them in the costs of building a swimming pool in their gardens for instance.

Prices in Greece did go up rather quickly when the Euro was introduced, I remember news reports with shoppers in markets complaining the stall holders would move a price from, say, Dr. 1,495 down to something like €4.95 rather than the €4.40 it should have been, and this typically drove wages up too. It’s hard for most people to divide numbers in the thousands by 340.750 to buy their daily bread and there seems to have been widespread abuse of the situation.

One thing is for sure, many billions of Euros worth of funds have flowed into Greece from the EEC/EU over the last 30 years. The legitimate and effective use of these funds transfers has not been adequately monitored or audited by the negligent bureaucrats of Brussels and Euro politicians. These funds have oiled the wheels of political corruption. They have created an illusion of economic growth and enabled the explosive growth of the public sector and sustained the private sector inefficiencies that ultimately can be borne no more.

The EU actively helped promote this disaster. But now regular people in the streets of Greece are being forced to pay when they are denied healthcare by doctors who in turn are not paid by the state and when their children have no school books to study. When spring comes again the old women will be picking chorta (a sort of wild green grass-like salad) in the parks to eat, as they were last year – that’s if they survive with no heating in the current freezing temperatures.

Some honest reflection by the authors of the EU project and their successors would be welcome.

What the Greek people want will certainly never be articulated by their so-called political representatives. While many might not understand the finer nuances of Euro-level economics, the Greek people do understand some basic realities of life in Greece and realize that nobody (Troika or Greek political class) is talking seriously about fixing many obvious root causes of the current malaise, which if addressed would make the adjustments easier to achieve:

1. They know that if retail prices of goods and services were to fall by a similar order of magnitude as the targeted reductions in labour costs, the required adjustments would be far more palatable. They know that prices of Greek goods and services are generally very high relative to most countries in Europe (with a few exceptions such as fresh fruit). There are clearly cartels at work in retail and transfer pricing games are being played by international retailers. Regulation of business is extremely weak. The Troika simplistically focus on input costs such as transportation, and argue that restructuring of such sectors will drive costs down. It could help if the reforms were actually implemented (they never are), but without competition amongst the large retailers such changes could just increase the monopoly rents earned by these retailers. THE GREEK PEOPLE KNOW THAT IF THERE WAS AS MUCH ATTENTION DEVOTED TO DRIVING DOWN PRICES IN THE MALFUNCTIONING MARKETS FOR GOODS AND SERVICES AS THERE IS TO DRIVING DOWN COSTS IN LABOUR MARKETS THEN AUSTERITY WOULD BE A LITTLE EASIER TO TAKE.

2. They would like the Troika to focus on what really matters and stop attacking institutional feature in Greece that have nothing to do with competitiveness or total labor costs, and indeed are shared with other Eurozone countries. For example, the Trokia are fixated on getting rid of the 13th and 14th “months” salaries that are standard practice. This might seem a less transparent way of reducing labour costs but people are not stupid. They also know that identical arrangements are in place for a large proportion of the workforce in France, among other countries. They would be more prepared to listen if they were treated in a consistent manner to other countries that are attempting to dictate to Greece how things should be done.

3. They want to see the current political class replaced by a new generation of principled, ethical politicians (possibly an oxymoron?) who put society first. They seriously mistrust all senior politicians of all persuasions, who collectively have got Greece into the mess it is in and many of whom are believed to have misappropriated significant levels of wealth through corrupt activities.

4. They want to see the Troika insist that the Greek political class address the major injustices that are being inflicted on the private sector in the interests of protecting the public sector. Frankly the Troika have been negligent for the past two years in turning a blind eye as increasingly the costs have been shifter onto the private sector in the interests of protecting the public sector so closely-aligned with politicians.

5. They want to see a meritocracy where the best-educated and smartest Greeks have incentives to stay in or return to Greece, rather than make their lives in other countries. And where equal opportunities in employment are legislated and enforced (this does not happen now).

6. They want to see a fair tax system where taxes are collected from those who owe, rather than form those without connections or the ability to pay a back-hander.

If only the Troika has insisted on structural, business regulation, public sector and employment law reforms from day one, instead of focusing on deficit reduction through tax increases like first year economics students. They would have earned credibility among the people who matter and the political blocks to reform would already have disappeared. Instead what they have done is sustain the politicians who have caused the crisis and who have vested interests in avoiding the necessary solutions.

So I reiterate, just what is the outcome that Greece and the Greek people want here? I don’t understand.

Not really, Chris08, German politicians on all sides of the German Parliament are supportive of plans to save the Euro. Last time they voted there was something like 90% support for providing funds. And Germany has very deep pockets. Exports reached the record level of €1.06 trillion ($1.3 trillion) last month while inflation is half that of the UK at 2.1%.

Tseko, I think you are indulging yourself in wishful thinking.

A question for pcubed: what do you think the Greeks will do when faced with no handout – when it really hits home there might be no payout? Will they fold like the Republicans did over the US debt finances, or go for penury and political mayhem? Just because the Germans have the money doesn’t mean they will spend it if there is any thought the Greeks are playing games.