Monday, June 06, 2011

How Would You Vote on Austerity? Look out, Greeks May Get a Chance.

Supposing your country had a referendum and the issue was this: "Do you favor the increased belt tightening and all the austerity measures we have recommended in order to ensure we keep getting loans from other nations so we can stay afloat?"

That's the general idea (although we do not know the exact nature of the question) that Prime Minister Papandreou of Greece is saying he'll put before the people, "if necessary" to get broad acceptance of his proposals. The Wall Street Journal already seems to be implying, "Good luck, George!"

The word "austerity"in this sense is defined as "difficult economic conditions created by government measures to reduce a budget deficit, especially by reducing public expenditure".  In Greece's case, I'm sure it includes up to three other significant aspects -- selling off national assets and entities; increasing taxes; and reducing existing benefits, salaries, pensions.   So, you can see that much wisdom will need to go into the wording of the question if Mr. Papandreou's government wishes to get a certain 'positive' answer.

But if he does have a referendum -- something I doubt will happen -- he better include in his question and associated premises, all the measures he intends to take.  They should include plans to punish severely all government officials, civil servants, and even their representatives at all levels of government -- national, regional, and municipal who are on the take in Greece.  And that includes the young fellow at the corner kiosk last month when I was in Athens who said he didn't care at all if I simply bought and used the half-price "senior's tickets" for local transportation when in fact I had told him I was two years short of being a senior.  It's "I don't care what you do" attitudes like that which have contributed to Greece's terrible state of affairs today as well as the "big" sins like corruption and greedy unions and the lack of tax payments by some great majority of the Greeks, which is all the foreign press seems to focus on.

So, for all the above, I doubt very much that this so-called referendum will come to pass, and even if it did, it wouldn't pass at all.  No, Mr. Papandreou, in making this suggestion, must have some other scheme up his political sleeve.  Of course, the threat of a referendum may well get some of his opposition to play ball.  But having watched Greek opposition parties over the years, I doubt it.

Anyway, here's the article.  You may find it interesting or you can just take my word for it.  The author of the article is offering to sell you the Parthenon at the end -- it just may be the best deal you'll get this century, but don't expect an easy go of it -- the Greeks and their political parties will see to it that it transforms into the Gates of Hades for you, in the process.

Greece Talk Frightens Market, Pt. 2,439 - MarketBeat - WSJ
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