Few years back, Greece was known for many good reasons. Its history, connection to India with invasion of Alexander, Olympics, Amazing and beautiful nature, Touristic islands. But now it is known for altogether different reason - Bankruptsy!!
Greece is under a great debt nearly 330 billion euros. It is on the edge of being declared Bankrupt or should we say it has already crossed that line. Fellow countries in the European Union are trying to help Greece by bailing out extended loans hoping Greece will recover from the Economic crisis at some point. But it is a long and difficult struggle which nobody is sure that Greece will manage to win.
The main obstacle in the way to recovery is its well nurtered corrupt system. Along with Bulgaria and Romania, Greece is among the most corrupt countries in the 27-member European Union and the main challange infront of Greek government is to bring this corruption under control.
Corruption exists at every nook and corner of Greece:
- All the transactions are done in cash, without any written record. It allows one to avoid declaring their actual income, thereby, paying less tax.
- As good as 33% of economic activities in the country are not accounted for. It reduces the possibility of government earning through revenues to 67%
- It is said that tax evasion comes to Greeks as ancestoral gift. It shows connection back to Ottoman empire, when tax evasion was obseved as a resistance to foreign powers.Back then in 1800s, a British ambassador paid Ottomon officials in Athens to smuggle marble friezes decorating the perimeter of the Parthenon, the scared temple.
- Bribery in public offices is very common. Even the rates are fixed for most of the common tasks. People get fed up and finally succumb to the demands of public officers for bribe. It just delays all the activity and hampers the interests of different
investors which ultimately leads to slow growth of economy.
- Even the ministers are not spotless. The prime minister comes from a prominent political family which at more than once incidences have been involved in the cases of corruption.
The greek government is trying to curb corruption and trying to bring the situation under control. But in doing so, they have to take strict decisions which may not be go well with the public.
- It is planning to put heavy taxes on leisurly articles, tobacco products and alcohols.
- It is also planning to cut down the number of jobs in public services.
This may lead to anger among the public which might end up with the revolt against the Government. Its a vicious cycle and nobody knows how to break that.
The situation is so worse that even the members of European nations are rethinking whether or not to help Greece anymore. It may ultimately lead to the expulsion of Greece from the European Union.
But even that is not so easy.Greece is just a beginning. If they are expelled from the European Union, what happens to all the loan that other countries and institutes offered to Greece. How will Greece repay back with no more security avaible from European Union. This will effect the economy of the conutries lending all the loan.
Other than that, there are other countries (Portugal, Ireland, Spain, Italy) which are following the same route as Greece. If Greece exits, European Union will be compelled at some point of the time to take similar actions to them. Considering the dependency of all these countries on each other, with no idea of repaying capacity of these countries, it may lead to another economic catastrophe, this time centered on Europe instead of USA. Ths situation will be worse than what happend 3 years back in USA.
Nobody knows the solution to this crisis and apparently everybody is confused about the coming days. The future of ecomonics is gloomy and globalization is showing its adverse effects.
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