The last few weeks, in the Western print and visual media we have seen a feast of commentaries on the Greek tragedy. The Indian press, baring a few of substance and the visual news media were totally oblivious to the tumult in Greece. As usual they had ample matters to feed upon that were of local flavour. There was also a fair bit of postings and comments on the social media too on Greek bankruptcy.
In the end though I had devoured most of the lead articles and the incisive reporting of the BBC, I simply cannot help not wondering about the Greek economic mess as simple issue of a recalcitrant borrower who displays arrogance and a fair bit of credit immorality. The leftists, people like Noam Chomsky and the capitalist baiters will disagree and say that it is grossly offensive to brand the Greek attitude as dishonourable unwillingness to repay debts. Astonishingly, I have not seen an article from the quintessential Arundhati Roy who would generally have reveled in an opportunity to blast Western economic policies directed at developing economies.
One need not have to be an Adam Smith or a Keynesian disciple to discern the Greek mess and it should not take a great deal of acumen to see that whosoever lives beyond their means- be it an individual or a country as a whole, capitalists, communist or socialists you will soon reach a cul de sac and have your back against the granite wall; lenders will snarl and all hell will break loose. Further lending will generally be ruled out in case of individuals whilst corporates and governments will have to sing the tough tunes lenders dictate. It is simple reasoning here that nobody wills, to throw good money after bad money unless strict assurance is available. Then, why are the cries of betrayal and cries of capitalist conspiracy? Did we hear a murmur of disapproval when the lenders were letting credit lines open to Greece and the ECB was generous?
This reminds me of the Indian situation which is akin to the EU. Many states have run up dangerous levels of overdrafts with the Central government and in a way is forcing printing of money .Monetary policies like that the ECB prescribed for its members including Greece was negated by the latter’s fiscal application. Going slow, weak and timid on tax collection is all the more dangerous for a State for instance like Kerala that has no industrial output to bring in revenue. In the case of Greece, one could watch on television that citizens were aware of the hole their country had got into and the austerity & belt tightening they will have to grin and bear. Back here we simply are oblivious to economics and are gaga when corrupt, dishonest and inefficient governments in States keep providing doles and freebies. Every meal that is free will have to fetch resources from elsewhere to make it stay free!
At the end of the acrimony with Greece will there be an honest and dispassionate appraisal of what went wrong for the Greeks to be indebted by over more than 350 billion Euro? Indeed the multi- billion dollar Athen Olympics was a luxury that wrought deep holes in Greek pockets. Like the Roman denizens twenty one days of round the clock circus briefly cast away reality. But that was just one of the many leaks and extravaganzas for which Greeks may have used borrowed money.
I was reminded of this necessary inquisition by a real time story of how a galloping business entity that nose-dived? Fortunately for the promoters the Banks intervened favourably and offered a life line of credit restructuring. Meaning to include the precise antidote ECB might prescribe for the Greeks – strict austerity and deferred interest and debt repayment.But here again neither the Banks nor the promoters seemed to investigate how the mess came about? The safeguard against the repetition of history is to find the culprit within if not show him the door.
There is indeed a simple quotidian moral in this Greek tragedy.