Economic Policy Imposed on
Has Just About Succeeded – In Destroying the Economy Greece
For the past year economists who actually understand economics and base their economic analysis on facts, logic and reason, (like this one) as opposed to political ideology have commented that the program of austerity imposed upon the people of
will produce a disaster of an economy. As 2012 moves ahead that forecast is becoming more and more evident. Greece
|Homeless people at a New Year's meal in Athens. |
Poverty is visibly growing in the capital, but
European officials say Greece still has not put
into effect needed austerity measures.
“It’s an implosion — it’s an endless sequence of implosions from bad to worse, to worse, to worse,” said Yanis Varoufakis, an economics professor at the University of Athens and commentator on the Greek economy. “There’s nothing to stop the Greek economy losing 60 percent of its G.D.P., given the path it is at.”
Wow, how can that have happened? Easy, it was the result of deliberate policy designed to do exactly what it has done, it is just that those whose economics is based on faith rather than logic were unaware of it, or maybe they just didn’t care.
The markets have taken into account a voluntary default by
, most experts say. But financial experts fear the possibility of an “involuntary” default if the negotiators are unable to reach an agreement. That could unleash violent market reactions that could conceivably produce another market cataclysm like the 2008 bankruptcy of Lehman Brothers and throw the world into another recession. Greece
So what is everyone doing now?
Officials from the so-called troika of foreign lenders to Greece — theEuropean Central Bank, European Union and International Monetary Fund — have come to believe that the country has neither the ability nor the will to carry out the broad economic reforms it has promised in exchange for aid, people familiar with the talks say, and they say they are even prepared to withhold the next installment of aid in March.
And what are the prospects for the future?
About a year ago, after missing earlier fiscal targets,
promised to sell off $65 billion in state assets as a condition for receiving emergency loans. So far, though, it has sold only about $2 billion worth, because of domestic opposition and a reluctance to part with assets at what the government says are fire-sale prices. Greece
The country also pledged to lay off public-sector workers, overhaul tax collection, and make its economy more competitive. But it has fallen short in those areas as well. A law passed in the fall called for cutting 30,000 public jobs by shifting workers into a labor reserve at much lower pay, but only 1,000 workers have been so assigned.
Adding to the sense of déjà vu, last week, the Greek Parliament began debating a bill that would streamline some state entities and open the professional associations governing lawyers and truck drivers, among others — measures it passed in 2010 but never put into effect.
Now in Europe Italy,
Spain and Portugal are following the policy lead of . Anybody want to take a guess where that path leads to? Anybody?? Greece