Wednesday, April 13, 2011

Greece Still in Hot Soup



The Taman Indrahana Toastmasters meeting was another buoyant affair, and this time around, Extol’s SK Ratnam was the General Evaluator. There were twenty-eight attendees yesterday and as I had come to expect, speeches and evaluations were pretty good. I had taken on the role of the third evaluator – Yeoh Cheng Lim was delivering a “Speak Off the Cuff” speech from the Specialty Speeches manual. I particularly loved Alice’s table topic speech – her message was stunningly simple “Live It Up!” and Lim Thian Seng’s project speech which had the Garden of Eden Bar & Grill as a setting for his “play”. I had an enjoyable time!

I was intently reading about Greece in Gavin Hewitt’s blog (Webpage http://www.bbc.co.uk/blogs/thereporters/gavinhewitt/2011/04/greece_still_in_crisis.html, posted April 12, 2011). If we recall, Greece succumbed to a dire economic situation that compelled the government to plead for a bailout. Yes, Greece was staring at bankruptcy a year ago. It got a reprieve with a debt mountain that was about 300 billion euros. And the hard-pressed government took the axe to the bloated and over-sized public sector. Hewitt described this blood-letting as a “cultural revolution”. The world of early retirement, holiday payments and tax evasion would be cleaned up. But over time the reforming zeal has faded. And austerity has reached its limits.

In a country that relies heavily on public spending the squeeze has dampened demand. Greece cannot escape the debt trap. The tighter the squeeze the more the economy contracts and the greater the debts pile up. GDP will shrink this year by 3%. Unemployment heads towards 14%. As far as Hewitt is concerned, Greece is still heading for bankruptcy. Debts are higher now. The debt-to-GDP ratio is over 140% and heading towards 158%.

The only way out for Greece before it implodes is to re-structure the growing debt. The reforms have been too painful and the people cannot take it any more. The Greeks will soon revolt, already there are stirrings of discontent. What choice is there? This can serve as a useful lesson for Ireland and Portugal too.

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