Saturday, June 25, 2011

Greek Economic Crisis - Reality Behind Protests

As Greeks we know that we have an opinion about EVERYthing. We are usually the first to play devil's advocate and to engage in boisterous discussions about anything. Even taboo topics others may shy away from - politics and religion - are fair game. So it's no surprise that we all have an opinion about the current economic crisis in Greece.

But the wise philosopher should actually know the facts before jumping in.

As diaspora (or dashes as I like to call us Greek-Americans, Greek-Australians, Greek-Brits, Greek-Canadians), most of us visit Greece during the summer, spend only a bit of time in the city and escape to the countryside or islands to soak in the sun before we hop back on a plane. We judge prices based on conversions against our respective currencies and assume a relaxed state of mind since we are here to see our families and have fun.

So of course it frustrates, even hurts, us to see graffiti on the walls near Plaka, strikes clogging Syntagma Square and witness an already weak infrastructure rendered useless because the workers are pissed off at the government. I am the first to condemn all of these acts as they usually hurt the "every" man more than they hurt the "big" guy. But before I can whole-heartedly get pissed at every protester, I need to understand, what are they so mad about and are they right? The answers are not easy.

From the outside looking in, the reality of Greek economics is simple.

The country spends more than it takes in.

From that perspective, austerity should work.

Cut your spending so you can balance the budget and pay back loans.

Stop your wastefulness, work as hard as they do elsewhere and problem solved.

But economic variables rarely operate in a vacuum, and it seems that when it comes to Greece, global leaders are plugging their ears to the cacophony of variables at play and expect to squeeze "blood out of a rock."

Time for the Monday-morning quarterbacks to sit down, where are the economists?

Since all we are getting is medley of opinions, let's try to sort through the inputs/outputs to see that the problem is perhaps a bit different than what we'd like to dismiss as lazy, angry, Greeks. Over the course of the next few posts, we'll take a look at some of the variables that make revenues and expense management a nightmare in Greece.


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