Sunday, October 2, 2011

Why & How Greece collapsed : Are we heading there too??

Bureaucracy :

Greece's bureaucracy is famous in the whole of Europe! To open a cafe or pub there are 25 processes to go through! This is a country of many unnecessary rules and regulations. Sounds familiar?

A Bloated Civil Service :

There are 1.05 milliion civil servants (excluding police and armed forces). The population of Greece is only 10 million!! More than 10 % are govt. servants !! Salary increases every year & benefits for Greece civil servants is one of the best in Europe !! More and more money is needed to upkeep these unproductive bloated civil servants . The retirement age is 62 yrs old.
Does this also sound familiar?

Corruption :

Greece is the most corrupted nation in the Eurozone. Citizens pay "under table " money to:
# admit into a public hospital
# pass a driving licence
# to enter public service
# renovate your business premises or your home
# avoid income tax
Hey, are we sure we're talking about Greece here ?

Every govt. project is awarded to political cronies and at hugely inflated prices! Transparency International compared the prices of the construction costs of stadiums built for the Athens Olympics recently with similar structures in China - 500% more expensive than the Chinese , compared to Los Angeles and Sydney - 50 % more expensive ! All these with tax payers money ! And borrowings !!
This sounds like very close to home.

Tax Evasion :

Officially 80% of its citizens are supposed to pay tax but only 37% are doing so. Big businessmen and corporations have refined tax evasion to a fine art (or have the tax men taken some coffee money ? Over here, Dr. M said that the Chinese pay most of the taxes.

No transparency in Governance :

The politicians and bureaucrats falsified economic data and painted a rosy and manageable picture while the economy was rotting away. This is too similar to our politicians' style here. Unabated borrowings : Meanwhile, the politicians and bureaucrats continue to issue govt. bonds to keep afloat, series after series.They were trying to cover up the financial mess they have createdcreating one big holeto cover up the previous!!Like bailing out the cronies . . . ?

Lacking political will power to reform : To keep hold on to political power, politicians are prepared to lie, commit economic and political fraud.If reforms were taken some five years ago , the country need not go bankrupt andits citizens need not suffer so much. Political expediency and greed to political power over-rides everything and hence Greece is now abankrupt country. Luckily, it is part of the European Union and its currency is EUROs, otherwise Greeks will have to eat grass to survive !

Tourism is THE ONLY industry in Greece and over the years the Greeks have had an easy time. Many flocked to see the historical sites, enjoy summer vacation on the islands.

But they forgot that not many tourists will return after visiting the sites - there are so many other tourists attractions in the world, maybe more exotic and perhaps cheaper ! So once tourism wanes and coupled with higher costs of living - the Greeks could not and refuse to adapt and transform - still partying and having a nice time - maybe the Greek Gods will bless them ! Greece have no natural resources, no electronics industry , no R & D - no anything !

They were so laid back - cannot see what is coming and crashing down on them. Even now, the civil servants refuse to take a pay cut - because they feel that the world owes them a living ! Now does the above sound very familiar too?

Without immediate remedies and reforms, that's where we're headed too. . .it's still not too late.

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