Wednesday, May 13, 2015

13 May 2015 - Greece stuck between protected labourers and EU, heading towards cash crunch



In a sign of the resistance Tsipras will face if he makes more concessions, the Communist-affiliated group PAME called on unions to stage rallies on June 11 and prepare a strike to protest any new measures accepted as part of a deal with lenders.

https://uk.news.yahoo.com/greece-taps-imf-reserves-pay-imf-debt-sources-133448801--business.html#FpPk8KN

Editorial comment (JP Blankert)

99 Percent of press misses the point, regarding Greece. Its government spending is just over 50%; in that case we think one should speak of a 'centrally led economy'. It relies on the premise that most 'intelligence' of how to guide to economy, lies within the state. In fact one could say it is a 'semi-communist system', because communisme inholds that a) state knows best b) everybody is treated equally; in semi-communism however, like Greece nowadays, b) is dropped.

To word it in political terms: over 50% of Greece has the interest to keep things as they are, and live through government funding. The current crash crunch hurts the private sector only - and hurts people in a very inequal way. Public workers and pensioners are totally not hurt by the current crisis, and they tend to vote, and behave such, that their rights continue.

The minority is increasingly suffering, and cannot vote itself 'out of it' because the majority of the people gains by current government policy.

It reminds one of circumstances as in the UK in the 80-ies. Public spending in the UK may at that time not have been over 50%, but if government expenditure PLUS collective bargaining can form a 'coalition' of over 50% that 'dictates' what should be done, this is a horror scenario for the minority.

The 'majority coalition' repeats voting on itself, the minority are private sector and private citizens.....but in a recession, their economy decreases, and so do tax incomes, which even more pressures the majority to become 'rigid' and hold its majority.

This is exactly what is the case in Greece; EU and IMF are right in the sense that this 'rigid majority' has to be 'broken', before the economy is further sustained. If the majority does not bend, it must experience a crash before economy can be made 'fluid' again.

We think there is elegancy in communism; the weakest are well taken care of. Unfortunately, 'central intelligence' is nearly always more 'stupid' or 'faulty' than markets. Thus: a social market economy wins, and the public role is to correct for the weaknesses and the weakest. But in latter process, it should never be allowed that public expenditure together with collective bargaining form a 'block' of over 50% - because then, 1) unfairness is introduced because the block is not covering 100% of the people (!) 2) private economy is hurt so much that tax income fall, and shocks of public lay-offs MUST take place in order to bring back economy to 'fluency'.

Additionally, we think that who holds the 'most certain jobs' should be payed a bit less than who hold 'private jobs' that are far more at risk.

http://euro-drachma-grexit.blogspot.nl/



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