Greek politicians do not see the debt as being debt. They see it as income
By Steven R. Earle
The problem with much of the opinion surrounding the Greek financial crisis is that few writers actually have any experience in Greece, in dealing with its politicians, its bankers, its systems, its cultural proclivities and its people.
I personally have such experience, as between 2003 and 2008 as chief executive of a startup airline we invested €20-million ($26.7-million) in the country to develop seaplane operations between isolated islands. This was an essential service that was important to the economics, health and safety of its people and state. This project gave me and my partners direct access to all ministers of the government, senior bankers, all local government officials, bureaucrats and the media. At the same time, we were exposed to the Greek employment culture and business operating regulations and systems. We were, as it turns out, “Alice” in Wonderland.
Based on this lengthy, expensive and in-depth involvement in the “Greek Reality” I can conclude there is no bailout solution for Greece because the Greeks and their unsustainable beliefs and practices are not fixable under a bailout situation. As a start, their entire political and economic system is designed to bleed foreign investor corporations, banks and other nations of cash. In effect, debt, financial aid, development funding and the acquiescence of others to their faulty system is part of their business plan. The politicians do not see the debt as being debt. They see it as income. The Greek state accepts money it cannot, will not and never had any intention to pay back. It is a hybrid of a Ponzi scheme, a beggar and an addicted relative.
I personally have such experience, as between 2003 and 2008 as chief executive of a startup airline we invested €20-million ($26.7-million) in the country to develop seaplane operations between isolated islands. This was an essential service that was important to the economics, health and safety of its people and state. This project gave me and my partners direct access to all ministers of the government, senior bankers, all local government officials, bureaucrats and the media. At the same time, we were exposed to the Greek employment culture and business operating regulations and systems. We were, as it turns out, “Alice” in Wonderland.
Based on this lengthy, expensive and in-depth involvement in the “Greek Reality” I can conclude there is no bailout solution for Greece because the Greeks and their unsustainable beliefs and practices are not fixable under a bailout situation. As a start, their entire political and economic system is designed to bleed foreign investor corporations, banks and other nations of cash. In effect, debt, financial aid, development funding and the acquiescence of others to their faulty system is part of their business plan. The politicians do not see the debt as being debt. They see it as income. The Greek state accepts money it cannot, will not and never had any intention to pay back. It is a hybrid of a Ponzi scheme, a beggar and an addicted relative.
Think about it. On the surface, they accept money on promises to act in a certain way, pay it back with return, and act a good steward of the funds. However, any funds they do pay back have been paid back with other debt. Now they have no one else to feed the pipeline and it all collapses. This is a Ponzi scheme. As evidenced by GDP per capita, there is no productivity created with the funds which would be necessary to pay back the money, and as such, like many heavily in-debt people, they kite debt to stay afloat until they cannot, and they go bankrupt or to jail.
Like a beggar, on the surface they ask for financial support because they are poor folk in a bad situation and they need it to fund basic necessities. Just made few mistakes and had a run of bad luck. Wasn’t my fault, actually (It was the political party before me). They just need a break to turn things around. In reality, as soon as the funds hit their hands, the politicians spend it to buy votes and they create fictitious mechanisms to funnel the money to patrons of the party in power or their own pockets. It is like a beggar running off to the liquor store once he has begged enough funds. No intention of buying food or essentials as stated — rather, he is focused on his next fix. Stay in power, stay high!
The truth is that Greece must be removed from the European Union. In order to save Greece from permanent damage and in order to strengthen the EU the two must part ways. The perception is that fixing Greece keeps the union strong. After all, Washington would never expel Alaska for a little financial mismanagement.
But the EU is not the United States. If it wants a strong euro and de facto nationhood, it needs to demonstrate to these Third World economies like Greece that it is serious about the rules and their behaviour. It’s too late for a little counselling and some pocket money.
To suggest that the financial bailout of Greece will work reflects a fundamental misunderstanding. Bailouts are a sound mechanism, provided the entity being bailed out can be saved. In the case of Greece, the EU billions proposed, be it 60 or 200, will suffer the same fate as the €20-million we invested in trying to help that beautiful country. You want to save Greece, cut it loose.
Financial Post
Steven R. Earle is former chief executive of AirSea Lines International Canada Ltd.
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