Let it be clear that Greece is in trouble. There is no mistaking it and there is certainly no doubting it. Yet, there continues to be the contingency of those who believe that either bailing out the country economically, or allowing them to break away from the European Union – ending the Euro in Greece – would even remotely answer the question. We’re not talking about problems that were created because the Euro existed. We are talking about economic policies that were created – which diluted the entire entity that is Greece.
Greece is the definition of building a country’s economics on a series of falsehoods. We aren’t talking about a better life for people – we are talking about a diluted life for people. Inflation skyrocketed, and even that was the least of the concerns that those inside of Greece had. Banks were not giving people money at the ATM – and the banks themselves had been shut down for days. Again, this didn’t create the problem – the problem already existed at this point.
There are a few basics to understand here that make it completely clear why the Greek debt crisis was even a “thing” to start. The biggest and most obvious problem had to be the fact that there was over $85 billion in unpaid taxes. Citizens simply refused to pay taxes. While many conspiracy theorists argue that this is something that could happen here in the U.S., it remains highly-unlikely that any such scenario would play out – without there being several mechanisms stopping it from happening – before it actually did.
Greece was asking for roughly the same amount as they had in unpaid taxes in form of a bailout. As if lumping over what people refused to pay – even though they are citizens of a country – would solve any of the problems that existed in Greece. They can get a bailout – but this reaffirms that they will not solve their problems by doing that. The next issue that is raised has to be the unemployment rate.
For those who are under 30 the unemployment rate is north of 50%. For the general population, the unemployment rate is around 25%. Again, people can argue that this is something that could happen anywhere when the economics and finances of a country become so capsized that there is no value inside the country any more – but let’s not forget that this is something that was brought on by utter failure by Greece to even slightly regulate what was happening inside their walls.
In essence, if Greece was completely unable to compel their citizens to pay their taxes – what ever would make them qualified to handle any of the other challenges that have come along the way with their economic demise? Furthermore, what would ever make them qualified for creating their own currency, and what value would that currency ever have – if the country who establishes it has no financial credibility. A very basic way to approach valuing a currency would be by understanding how much confidence the people have in it.
Also, don’t forget that Greece has had a retirement age of roughly 45 years old, with universal health benefits for some time now. This was one of the first concessions, which was talked about beforehand – when the crisis first reached the mainstream. Economists have agreed for some time now that the solution, long-term, that probably will work best is for Greece to leave the EU.
However, it doesn’t mean that simply exiting the EU will fix everything. It is a process that is going to take time, and as many have said already – will likely see things get significantly worse, before they ever get better. There is no clean answer. There is no perfect answer. There is only uncertainty for a country that doesn’t really have anything major to hold onto at this point. We’re talking about weakness at a fundamental level. We’re talking about financial and economic weakness for a lack of effort, and a lack of planning for the future, which remains incredibly bleak.