Greece’s elections are now over with the winners vowing to
stay in the Eurozone and thus stabilizing global financial markets in the short
term. No one believes the crisis is over
in Europe, however.
Greece’s four biggest banks have recently received an 18
billion-euro injection of funds “but may need a lot more” [1].
In Greece, as it is around the globe today, private banks possess
superior status and receive preference over ordinary private companies. A moral
hazard of always being saved by governments has set in for the larger financial
entities. Governments then present the
bank bailout bill to their taxpaying citizens. The obvious question is why are they not
allowed to simply fail? Why aren’t these
private institutions being nationalized? But these questions seem never to be explored
in current mainstream media coverage.
Isn’t it clear that the problem in Greece is that of
globalization itself? Financial
institutions operating in individual nations are now a part of a much larger global
network. Therefore any process of
nationalization and any measures to limit the mobility of capital (to avoid
dangerous and unpredictable capital flight) go completely counter to the
interests of the world’s financial actors – not
just those of Europe and Greece.
We can see now that the predictable and catastrophic results
of passing on these enormous bailout costs to the general public are playing
out. Business is simply not managing in Greece. With 400 - 425 million Euros a
day disappearing from Greece’s banks (during the last 2 weeks) even healthy
business units in Greece cannot guarantee their working capital. Any goods being brought into Greece have to
be prepaid for.
Solutions are being proposed such as implementing ‘the right
tax policy’ and even further deregulation for business and the general
reduction of ‘bureaucracy’. [2] Solutions that don’t address the actual cause
of the crisis are very unlikely to work.
Greece is also left vulnerable because it is no longer a ‘production-based
economy’. 48% of Greece’s food comes
from elsewhere for instance. Who will
guarantee continued supply if Greece’s financial credentials are destroyed?
It’s been a long time of not thinking about the wrongness of
abandoning many local methods of resilience and productivity. As Thomas Paine noted in the late 18th
Century [3] the longer the social habit
of not thinking about a wrong “gives
it a superficial appearance of being right.”
Time, rather than reason, has made many of us converts to the ideology
of globalization. Formerly prosperous
middle class families in Greece go hungry tonight while they finally have more time to
ponder on the validity of ancient strategies for basic survival.
REFERENCES:
[1] Bailout of Greek
banks is good, but not enough
02/06/2012
With an 18 billion-euro bailout, Greek banks are now staying
afloat. But losses and political instability could easily sink the ship.
By Andy Dabilis for Southeast European Times in Athens --
02/06/12
[2] Lateline, ABC
TV. Monday 18th June 2012.
11:25pm
[3] Thomas Paine,
Common Sense (1776)
No comments:
Post a Comment