The Greek crisis or I should say, the
'Eurozone Crisis” has come to a new level now. With the leaders
secretly pointing Greece the way out the European Union is showing
its fear to the world. And their fear is very genuine. If we go back
to the start when all of it had just started there was a point when
Greece was threatening the EU by saying that if they don't give it a
bailout, then they'll approach the IMF. At that time it worked, all
the leaders sat down just because of that one statement and if Athens
would have gone to the IMF for a bailout it would have seriously
affected the Euro. That is the crux of everything. None of the
countries are doing it to save Greece or will do to save Italy or
Spain in future. It's all about the Euro.
Right now Greek are not able to form a
majority at their center because of all of these problems. Greece,
which initially thought that EU would help them by bailing them out
is now facing a great deal of problems with the EU and the biggest
problem out of everything else is 'Austerity'. The word of the year
2010 is now haunting the Greek with its implications on the future of
Greece. Athens has passed two 'Austerity' bills and this can be quite
detrimental for the economy. Where on one side Prime Minister David
Cameron and Dr. Angela Merkel are supporting this decisions and
calling it the best way for Greece, there are experts who say that it
might do more damage than good to the Greek.
Right after the bill was passed there
were massive strikes, burning down of more than 45 buildings, riots
and clashes between the police and the people. If this remains the
scenario then something like austerity is going to tear Greece apart.
What actually happens in case of austerity is that the government
spending is cut, starting from pension benefits, certain allowances
etc. and the taxes are increased say, at the airport or in the
market. By this the government tries to raise a certain amount of
money which is eventually be used to wipe out its debts. Now this
seems all nice in one front where the Greek are expected to work
harder and work their way upto a point when everything will be stable
but the basic point of contention is that how? How can a country with
such measures sustain in the market later? If taxes are increased and
even if eventually the austerity policies look promising (I doubt),
the basic problem that might arise will be the the FDI pull out which
might worsen the situation.
If a country is not allowed to give
benefits to its people, if its not allowed to give what it has been
giving to its people for years now and is now forced to put on a mask
where it will extract more money out of people, the people are ought
to be mad at it. Now the government formation in Greece is anyway
very difficult because the Greeks don't know what to handle,
Economics or Politics? Although both are very well interconnected but
each has a thousand sides to it.
Some have suggested that Greece should
go its own way with a separate currency and kick austerity. This
seems the most unlikely that Greece by choice would do something like
this. It has reaped all of the trust that the investors still have in
its markets only due to the fact that it is a part of the European
Union. If it weren't, it would have fallen long back and right now
might as well have been rebuilding. Its association with the so
called great 'European Union' has been the only reason for its
current status(which is better off than if it weren't a part of EU).
For what is to happen to Greece is
something which is going to teach the world a big lesson and if Spain
and Italy continue with their downfall the same way the so called
European Union would be doomed because this crisis which is occurring
well, connects each of the European economies because Italy, Spain
and Greece are indebted to Germany, France and Briton. Now why would
any country give a debt to another one? The reason is just one, to
expect a better return and on those calculations their economies
would have certain other investments planned. Now the scenario is as
such where that money seems distant and lost and due to that the
development plans in the creditor countries get affected. So, Germany
has no other option but to ask Greece to follow austerity and not
repeat this mistake ever because if a bailout is given, it will be
the money of the German taxpayers which goes into filling the needs
of the Greek, which seems highly unfair to the Germans.
With Hollande meeting up with Merkel
soon to finalise the relief package for Greece and the web being
filled with the so called 'similarities' between 'Mr. Normal' and
Merkel page results, it all depends on both of them to decide the
future of the EU. Hollande who in his campaign has openly talked
about the fact that he would not let Germany be the only deciding
power for the future of Europe is going to need to come up with some
new tactics to deal with Merkel as she has been rejecting most of
Sarkozy's plans and eventually had turned softer to 'Mr. Bling Bling'
when 'Merkozy' agreed on certain conditions. During his grand visit
to Berlin, where he will dine on the eighth floor of the Chancellery
and would need a miracle to turn things around and come out as the
new champion for the French. Maybe after all of this, the page
results with 'similarities' might be a good ground to start talks
with her.
So is the great European Union's time
up? Is it the end of the Euro that we see in the near future? Is
austerity the 'necessary evil'? Or is it the beginning of the end?
Stay tuned.
Photo: The Greek Parliament.
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