Bah! Humbug!

16 December 2016 9:24:06 AM

By: DailyForex.com

Charles Dicken’s classic “Scrooge” is the tale of a curmudgeonly old soul of a miser who, eventually, sees the error of his ways and brings Christmas joy to his entourage with a little seasonal generosity; so the story doesn’t quite fit with the current Greek situation, but its close enough!

Greece has benefitted from years of financial support from the IMF and Eurozone group which has prevented the nation from sovereign bankruptcy and being forced out of the Euro and quite possibly, the EU itself. Had any of these things happened, the situation for Greek citizens would have been far worse than anything that they have had to endure to date. The economic woes of Greece are of Greek making and the EU/IMF loans had strings attached to them which were designed to reform the Greek economy and return it to a stable path and economic growth. The adherence of the (various) Greek government to these reforms has been less than enthusiastic and patchy, but progress has been undoubtedly made.

At the start of the month, goodwill towards Greece was such that the creditors agreed to ease terms of the loans to further assist the Greeks, but within days, this new package has been frozen because Greece has announced a previously unheralded Christmas give-away to poor pensioners and reversed a planned VAT increase for certain islands.

The Christmas bonus would see €617 million given to pensioners living on less than €800 per month, some 1.6 million people, working out at about €385 each. The creditors’ objection, looking a little like unreformed Scrooge given the season, seems not to be about the gift per se, but more the fact that it and the VAT relief for islands struggling with an influx of migrants were not discussed at the time.

In what has become a typical “democratic stunt”, Tsipras pushed a vote through the Greek parliament which strongly endorsed the Christmas give-away: this might have been impressive if he had had the vote prior to the announcement and better yet if he had informed the nation’s creditors first which is surely what both prudence and courtesy would demand – even at this time of year.

Dr. Mike Campbell is a British scientist and freelance writer. Mike got his doctorate in Ghent, Belgium and has worked in Belgium, France, Monaco and Austria since leaving the UK. As a writer, he specialises in business, science, medicine and environmental subjects.

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