21 July 2018

Apparently the Greek crisis is not over yet!

07 January 16 | Tim Worstall
Tim Worstall



Investment - GREECE


Public entity - GREECE

Eurobank Property Services

Consultant - GREECE


Dimitris Andritsos

CEO of Eurobank Property Services S.A Eurobank Property Services
The idea that the roll over by Syriza to the troika last summer was going to be the end to the Greek economic crisis was always somewhere between hopeful and deluded.


For what really happened was that said troika of the IMF , the ECB and the EU said that, if you’re very good boys and girls and do everything we say then we’ll drip feed you the money you need.

And of course Syriza, along with much of the Greek population it must be said, were not going to be happy with some of the things they were to be told they must do.

And so it is turning out: today the issue is over pensions: Greece has promised not to implement controversial cuts to pensions, putting the debtor nation on a collision course with international lenders just months into a new bail-out programme.

Athens’ left-wing Syriza government said it would not slash expenditure on its main and supplementary pensions as part of a reform plan submitted to international lenders on Monday night. The reforms have been demanded by lenders in return for the latest release of bail-out cash.

There’s nothing new about this at all.

The Greek pension system has always been a bone of contention in these talks. It was one of the major stumbling blocks this time last year when Syriza swept into power at the election, one of the major issues in the fall of the previous government that led to the election.

Whatever the rights and the wrongs of what that pension system is (and, to be fair, it is over-generous at a large cost to the state finances) this has always been one of the main bones of contention.

And that we’re here in January 2016 discussing it again, as we were even in the autumn of 2014, shows that the deal in the summer of 2015 simply wasn’t the end of the Greek debt saga.

Instead of there having been a deal, a grand bargain, what actually happened was that everyone declared victory and then sent in the negotiators to haggle over the details. You know, minor details like, well, is Greece actually going to curb its spending as demanded?

Those very same details over spending that caused the cliff hanger in the first place. It was always true that Greek default and exit from the euro was going to be the better solution.

And that it didn’t happen is the cause of all of this now. And thus the prolongation of Greek economic pain as they are continually forced to knuckle under to the spending demands of that troika.

It really is true in economic policy, as it often is in something as different as dentistry, that often it’s better to take the shock of intense pain now and get it over with rather than string things out over the long term.

That second way the pain arrives in the end anyway, often worse.


You must be logged in to make a comment
WAVE MEDIA OPERATIONS IKE © 2001-2017 | Όροι Χρήσης
Internet Business Hellas