Greece: Nec Plus ultra

Greece: Nec Plus ultra


Share on Facebook
Share on Twitter
Share on Google+
Share on LinkedIn
+

It is a Latin expression to signify the absolute end. It means “nothing further beyond” and in three words describes the Greek situation.

After two months of intensive talks between Greece and its European partners, both parties are now convinced that that they have come to the point to take the next step.

That means that the Greeks must awake-up from their nirvana and accept the change they need to survive.

Both parties are aware that compared to the magnitude of the Greek problem, very little or nothing is left to tax and over taxation will not help and in any case, will not solve the problem. Therefore the solution is not there and there is no more time left for the government to continue to give psychotherapy to its dreaming citizens.

Reality is ugly and hard. All what is needed is to reverse the situation, abolish once and for all over-regulation, which makes progress and every day life impossible, and drive the country to growth and development.

Greece must abolish all elements and institutions impeding development and must perform real structural changes, not aiming at tax collection, but to growth.

The authorities of the Council of State, the Forest Service, the Archeological Service and countless other, otherwise noble institutions, should be curtailed to the minimum necessary. Today, as the whole of Greece is an archeological site, the only place one can safely build a factory, is on a floating platform provided the …Forest Service will allow it and no one will appeal in the Council of State, claiming that the shadow of the platform bothers the growth of the algae in the sea bed.

Mass dismissals in the over-populated public sector are needed which must be reduced to one third. Thus the salary costs of the budget will be dramatically reduced. Furthermore as the physical contact between Citizens and civil servants will be eliminated and replaced with electronic transactions, corruption will be reduced significantly.

Unemployment will not be an issue as red tape and corruption will be minimized, growth will start, and for each civil servant dismissed, two unemployed from the private sector, will find a job.

Furthermore cartels must be abolished, all at once, as they are solely responsible for the paradox of keeping consumer prices rising frenetically after five years of deep recession. Greece is the most cartelized market of Europe. Milk, cement, construction materials, sea and air transport, supermarkets, electricity, telephony, most food items and many other consumer goods, are all cartelized.

By abolishing all cartels, cost of living will be reduced by approximately 40%, which means that the relation between salaries and pensions to purchasing power will return to the status quo ante the crisis.

These are the efficient measures that will cure once and forever the Greek problem. Yet, under the present social structures (i.e. trade unions) and perceptions (i.e. the new government, after hard negotiations has solved all problems of the Greek economy!), such measures are impossible to take.

This may happen only after the Greeks return from the wonderland, realize their situation and will accept a grand coalition government composed by the two big political families of the country, left and popular, to carry on all needed changes, without discounts or exceptions.

For the Greeks may return from their wonderland, only if a social shock occurs. This is something that both parties, Greeks and lenders, understand. The shock however, should not be of such nature to compromise the social stability of Greece or the stability of the Euro. Therefore, a premeditated credit event proper should be excluded but something similar, without serious collateral damage, is not ruled out.

Under the circumstances it should not be ruled out that during the four-day weekend of the Orthodox Easter (Friday 10 to Monday 13, April) the central bank introduces capital circulation restrictions.

This means that cash withdrawals will be limited to some €200 per week or €20 per day, as certain sources close to the Bank of Greece claim that would be the right number. Furthermore, if the European Central Bank grants no cash facilities to Greece immediately, to face its salary and pension obligations, the government should be paying its future obligations, partially in cash and partially in State Bonds.

That will be the shock, which will awake the Greeks without affecting the Eurozone or placing the country in bankruptcy. Under the circumstances, it may not be coincidental the rumor recently circulating in Athens (and Brussels), that on Wednesday 9th of April, Greece will run out of cash. This hypothesis now, has become a general understanding.

If this happens, a grand coalition government between SYRIZA and Nea Demokratia should be established, immediately.

It is worth noting that while such ideas are maturing in the minds of both Greeks and their European partners, the leader of New Demokratia, Andonis Samaras, smelling the gunpowder in the air, two days ago out of the blue, offered to participate in a coalition government. This offer was not considered at all.

On he contrary, it seem logical and practical to have a replacement of Samaras in the party leadership in the next days and have a new Nea Demokratia leader originating from the hard core of the party which is highly disappointed from the current leadership.

The fact that on April 8, Prime Minister Alexis Tsipras will be meeting Russian President Vladimir Putin in Moscow is an element to add to the picture.

All in all, it seems that during the recent visit of Greek Prime Minister Alexis Tsipras to Angela Merkel in Berlin, all scenarios and possibilities for Greece exit from the crisis without Grexit, were considered.

“Shock therapy” with possibly minimal collateral damage, is needed for the Greeks to return to reality.

And, last but not least, a grand coalition government without the “leftist components” of the ruling party and without the current leader and its “entourage” of the leading opposition party may prove the best, if not the only, Greek option after the “storm.”

The Greek orthodox Easter festivities, with the crucifixion of Jesus begin in one-week time. Thus, we will see.

 

Share on Facebook
Share on Twitter
Share on Google+
Share on LinkedIn
+