Well the media is awash with all the news of the Greece crisis. It seems instead of slowly climbing out of the large financial hole, Athens seems to be digging down deeper making the hole even larger than it was to begin with? The rest of the eurozone, thought mainly Berlin secretly think are they just throwing ever good money after bad money down that very large Greek hole? Trouble is there is no magic wand to this problem.
Athens is now planning a massive fire sale of many of its state run industries and public assets. Well it should have liberalized its state run monopolies years ago. Greece as cocooned itself from real outside competition and enterprise for many years, constantly blocking any reform proposals form the ECB or EU. In Greece truck drivers are protected and shielded from competition, its the same with lawyers, transport and electricity companies, and many more. I call it the Mediterranean disease, don’t change or reform anything until there is a national crisis, well that day as come with a vengeance.
This kind of national structural protectionism is not just part of Greece’s major economic problems, just go across the Adriatic sea to Italy and then on to Spain and Portugal. Reform is a dirty word in these EU countries, and they will resist any type of changes to their industries and daily working practises. The problem is Brussels and the EU are not really very pro free market,as the French culture pervades many corridors of the EU institutions, yes its that dastardly evil Anglo Saxon conspiracy again. All this amounts to is a culture of delay, excuses, and deception as evolved in many Meditereanean EU countries like Greece, Italy and Portugal.
Will Greece survive this crisis, well no one really knows, not even the high brow IMF and ECB economists really know. Contagion is the fear word, no one wants to look into that black euro abyss. If Greece falls or decides to leave the euro it would shatter the eurozone and do major damage to its credibility throughout the world. Merkel and Berlin are the real decision makers if the euro in the end lives, or the euro dies? I personally think there will be a kind of hard northern euro and a softer southern euro, basically north and southern Europe will split into two separate currencies. We all watch and wait?