The Greek Tragedy

di Finanza Operativa 17 Giugno 2015 | 13:00

di Walter Snyder, Swiss Financial Consulting

A recent ruling by the Council of State, the highest Greek administrative court, has decreed that the government’s pension cuts in 2012, part of the second round of savings, were unconstitutional and incompatible with the European Convention of Human Rights. This decision will cost the government about 1.5 billion euros. Pensions in the private sector will have to be reset to what they were in 2012.

The court had before decided that earlier cuts were acceptable because of “extraordinary conditions”. The logical conclusion from this is that the court now views the situation in Greece as no longer extraordinary, and therefore pension cuts are unconstitutional. One can only wonder at the fatuity and naiveté of the judges. The country is hopelessly bankrupt, and this is a normal thing in Greece. It should be no surprise that this Newsletter has often had unfavorable things to note about the current situation in Greece

What is normal in Greece is that pensioners receive practically the same amount as their last salary, which is an absurdity because neither the government nor private companies can afford to pay for such generosity. The ECB, IMF and EU Commission have insisted that one of the main priorities necessary in order to put Greek finances in order is a total reform of the pension system of the country. The great mass of debt that has been heaped up has gone to finance, at least partially, the outrageously lavish pension schemes excogitated by Athens.

The Greeks have been living beyond their means for several years and now insist that they deserve to continue enjoying the benefits that they have become accustomed to. People in Greece stopped paying taxes in January because they thought that a deal would soon be made and that somehow they would not be made to pay what they should have paid. Withdrawals from bank deposits have accelerated, and Greek banks are facing a liquidity crisis with the result that the ECB has to provide for them. Their debts continue to increase instead of decreasing.

The ECB, IMF and EU Commission should not throw away good money after bad. Greece will have to default. Let the Greeks pay for their own pensions themselves instead of stealing money from other countries. Stupid bankers should lose their jobs. The Greek government should declare a state of emergency and reverse the court ruling. At a certain point one`s patience reaches a limit. The Greeks have been bloated with unearned overabundance (ate), sinned because of pride (hybris) and must now suffer the consequences (nemesis). That is the way Greek tragedy unfolds. The Greeks will have to pay for what they have done.

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