Tuesday, 7 July 2015
Monetary Union Needs People's Union
Looking at the Greece crisis I feel more confused on the likely unfolding of events in times to come. For the last five years the events have been oscillating at its pace and symptoms being kept away from public scrutiny by interventions and promises from strong and comfortable neighborhood partner economies. Well at the time of joining in Euro-currency union Greece seems to have qualified on the strength of its parameters on hold over deficits and price rise. Public enthuse on likely benefits partnering with strong economies in terms of financial, economic, industrial and its positive effects, in terms of employment and income may have allowed citizens to compromise on sovereignty of policies for gradual streamlining into European stability and prosperity. It is natural to think a weak economy may have cost advantages due to labour abundance as we assume skills travel and assimilate. Return in capital output ratio may increase in relation to the advanced economies. New Industrial enclosures may come up in the vicinity and purchasing power doubles alongwith tax potentials. In short as you become a part of a Union, a united force complements your attempts to grow and provide you employment opportunities. It is time to analyse how Greece has really benefited from being a member. Or simply pockets of Greek superiority in labour and capital (if any) whether limited or plenty moved to destinations where it is offered bigger rewards in short time. With more unemployment left and rising, Greece ended as leisure picks for others (market for goods and services in return for easy tourism).
It is interesting to observe possibility of a likely varied type of self rule within monetary union emerging out. A 45%-43% or 47% to 49% referendum divide (with some undecided) cannot be termed as a regime of free and equal Greeks within the nation. With population over 40 and above is staying almost 50% above (roughly) the below 39 years, the promise to face austerity now to sow seeds of future growth with bigger allocation to capital seems remote possibility. Here compulsive economic forces deciding in favour of world expectations will be countered by political allocation of democracy. It may be observed that Greece also had adopted similar social and benevolent policies of other developed Europe.
Analysts who rate economy looking at the ratios be it Debt/GDP, fiscal surplus, Capital outlay, spending on subsidy or pension or income are only moved by technical measures. They hardly look at the stress on current output or even contraction of output due to falling quality and decline of goods and services from government to its people. This affects cost, quality and standard of living of all sections of the populations. And importantly a big morale let down for the promised or anticipated investments. Liberal and representative democracy can only respond by a hang in balance unity in phase-II of single currency adoption to proposed “circumstances of politics and policies”. Hope Greece is extended another long hand of hopes by IMF and Europe.