I was reading the BBC business news site last night and I saw a news related to the Greek debt crisis. The fitst paragraph had this to say. “While Greece is in the news now because it desperately needs another bailout it is not the only country in the eurozone that has had to be rescued. Ireland, Portugal, Spain and Cyprus have all been in the same boat. However Greece was the first and its problems have been the longest lasting. The Greek government gave misleading financial information to get into the euro in the first place and then manipulated the figures to mask the extent of its deficit right up to the time when the credit crunch exposed its deep-rooted problems”.
It also went on to say that “Greece is also accused of having squandered the years since its bailout: it has failed to reform its bloated pensions system and failed to push through privatisations or reform the notoriously inefficient and complicated tax system.
In the other countries that have had to be bailed out it was far more a matter of an economic recession and a collapsing banking sector which had to be rescued by the state. The governments in turn needed to be bailed out because they ran out of money or could not borrow it in the financial markets at a reasonable price but they have, as a result, reformed their economies”.
I couldn’t agree more with the report. I think Greece is being a cry baby. The Greek crisis has gone on for too long that it is no longer news to me. Other Eurozone nations have pushed through with reforms and austerity measures successfully and are now recovering. The Greek government on the other hand has failed to push through with its reforms. Neither has its austeriry measures yielded any fruit.
The country is in more debt than ever and always have a good reason to ask for more without paying what they owe or having a clear cut plan to pay what they owe. And all the nonsense I hear about debt forgive is, well nonsense. For those who don’t know, greece owes its debtors over €320 billion Euros. That’s a lot to ask your debtors to forgive and too much to forget in my opinion. What really amazes me amd irritates me at the same time is how proud they seem in their mess and how they turn it to a political and national fiasco.
Their removal from the Eurozone does not clear their debt. So also if they choose to continue with the Euro or choose to go back to their vomit the Drachma. What they need is a clear cut plan to repay most of their debt if not all. Then they can start talking about debt forgiveness. That’s what they are missing. If not, in not too long a time, they will be back like Oliver Twist asking for more.
For entrepreneurs reading this, remember that debt has the ability to kill a business and ruin lives in ways you can’t even imagine. Never use debt to buy liabilities, luxury and the likes because it is hard to pay back. Rather, you can use debt to buy assets and investments because you could use the profits to pay back the debt. The former is called bad debt and the latter good debt by Robert Kiyosaki.