Wednesday, 26 October 2011

Greek debt haircut will lead to pain for Greeks, if there is no growth initiative

The massive 50-60% haircut to the greek debt is, definitely, an act of necessity: there is no way Greece could pay off the huge mountain of debt, rising to almost 170% of GDP, while in the midst of an ugly recession and soaring unemployment.

However, greek people will suffer for at least another 10 years, while budget surpluses are being established, salaries and pensions are demolished, and a massive sell-off to the sovereign assets is being carried out.

Greece is a rich country. Unfortunately, corrupt politicians and a widespread habit of tax-evasion (mainly due to the crippling bureaucracy and the low level of public services) has led the country to bankruptcy.

Growth initiatives are the only way that Greece can secure it's future, based on our national competitive advantages: renewable energy sources, selective agriculture, and tourism.

The sooner we realise that and switch from a strict austerity plan to an aggressive growth plan, the sooner Greece will be able to meet its international obligations.

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