There's certainly been no shortage of discussion, comments, advice, opinions, etc.., etc.., of late, regarding the Greece, or Grexit, situation.
It seems that, as things stand, it's a "lose-lose" situation. The lenders won't get all what they want, i.e. pay back, and the borrower won't get all what it wants, i.e. less austerity and more credit, either. Probably this could be defined as an "impasse".
But just maybe the emphasis needs to be placed on what may be a possible solution for all concerned ... especially when one considers the fact that all those involved within the European Euro community appear, on the surface at least, to want to strive towards this "happy family of Nations" concept, where they all combine to help each other and contribute to each other's welfare, and lend each other money via their contributions to their Central Bank, etc.., etc.., .... Or so it seems.
So if that is, in fact, the case, then maybe one needs to consider the example of an Income Statement ...
At the top end is Revenue coming in, and at the bottom end is what is left over for the benefit of the country.
In Greece's case it's already in the red at the EBITDA level. And things only get worse and worse as one moves down the Statement, ... especially when one gets to the "Interest Expense" level where there's this whopping great Debt Burden that is contributing, to such a large extent, towards the current crisis.
And if Greece has to be honest with itself, there is just no way of improving the situation, ..... Unless ....
Because the way I see it, what Greece needs, for all practical purposes, is a way to increase, over time, that Top Line Revenue number so that the rest of the levels below it can slowly but surely move out of the red and into the black.
But it seems that that is where one of the major problems lies with Greece. The country doesn't appear to have much in the way of a Revenue earning Industrial capacity. It may have kilometres of golden beaches and numerous attractive islands that bring in tourist revenue, but that's just not enough to sustain its appetite for social benefits, pension payouts, and the like.
In addition, only so many of its population can eke a living off the tourists. After all, what about those Greeks that live off the beaten (tourist) track. How are they supposed to earn a decent living and thereby contribute to Greece's tax revenue ??
So now one gets back to that "spirit of European Unity" and "collective trade benefits", etc.., etc.. Maybe this is where and when those 'Noble Principles' can really be put to the test.
If one thinks about it, a country such as Germany is the Industrial powerhouse of Europe. It has a plethora of industrial capabilities and centres and financial institutions coming out of its ears. That's probably one of the reasons why so many European presidents and prime ministers cosy up to Angela Merkel, ... and her deep pockets. France also doesn't do too badly, nor, currently, does the UK and some of the Scandinavian countries.
With all of that in mind, wouldn't the best practical way to help Greece be for its European neighbours to contribute some of their Industrial capacity to Greece. In other words, maybe Greece can be given a certain amount of the continent's capability to produce Volkswagens, or Nissans, or Toyotas, or Samsung products, or LG products, or .... , whatever. In other words locating some of those industrial plants and industrial capabilities to within the boundaries of Greece.
Maybe these "host" European countries can still retain, say, 20% of the "profits" with the balance going to Greece. In that way a greater number of the Greek populace can be put to work earning both foreign exchange for their country as well as adding to their country's tax revenue from personal taxes. And from that tax revenue should come the means to slowly but surely pay back what they have borrowed.
A "win-win" situation ??
If the above is a practical proposal then it will take a certain amount of Magnanimity from the collective European leaders. It will mean looking outwards towards the greater good of Europe, rather than inward towards insular benefits. It could also mean being a truly United Europe instead of one dominated by self interests .... and the demands of the IMF. |
