Greece Without Banks
From Anastasios Avranas, CEO International Association o f Financial Management.
With the majority of the world holding its breath around the “Greek” issue here’s a list of notes why we got here and how the situation is summarized.
Greek governments aligned the inefficiencies of the public sector with the future of their people.
In principle what the Greek government managed to do is to equalize a nation to the future of the public sector. The Greek government maintained the client-centric relationship of civil servants with the administration; never a healthy relationship.
Using this as a pretense, the Greek government presented the incapability of the Greek state to change as a wish of the country’s people.
On the Market side what we experience now is a derivative of.
There is a deep damage to the private sector in favor of public spending.
A major delay in negotiations that hit Greece on its most sensitive period (tourism season) causing many to change their plans and not come to Greece. This has been generating even worse economic results (surplus to deficit) – and a contraction of GDP of 5%-10% is expected as a result of these dramatic and traumatic political maneuverings. The numbers stack up as follows – surplus and 2BL in need in Jan-Feb, in June and after delays 8BL in need due to deficit – on top of increased public spending, deficit and recession in July around 12BL or 18BL according to other sources are needed to help with the banks liquidity crisis.
Politically they failed to plan ahead.
(I love the quote “people do not plan to fail, they fail to plan”).
The government lacked coordination and planning within and on what they presented to their counter parties. In effect they rejected a plan via the referendum and got back with a plan after the elections with the result of the elections as its main negotiation tool. The Greek government has focused on the fiscal and economic elements rather than breeding the reforms needed for the Greek state to flourish.
On the negotiations side.
The Greek government showed lack of discretion and killed the idea “where there’s a will there’s a way” even when the counter parties extended the grace period (two weeks now). The government than blamed the EU and the other authorities for the treatment of the Greek case, in essence they blamed the lenders for the debt behind the money they took.
More to come in the next days and weeks and months; where the majority of Europe and member states will decide on the Greek future against a renewed combined plan of reforms and financing.
Leaving the Euro and the EU will be a disaster for the Greek market and society, loosing not only its purchasing power but also diminishing the geopolitical prospects of Greece via a self isolated status.
Please visit INTERFIMA – http://www.interfima.org
Editor’s Comment. The Greek Party In Power, Syriza, ran on a platform of no more austerity and the heck with the IMF and ECB. They managed to win the election and betrayed the people of Greece, not one, not twice – but three times. The Greek people have a right to be furious. The people of Greece have been betrayed by Socialism, Corruption, Pseudo – Marxism and nearly every administration since 1967.