Aug 19

Its All Greek To Me: Why Greece Could Be A Microcosm Of The Entire World


As the world economy continues to try to move forward, many countries across the Eurozone seem to be sinking or stuck in neutral. Countries like Greece, Spain and Portugal are responsible for their situation due to the fiscal irresponsibility they have shown over the past decade.

In the last year we are increasingly seeing a large wave of anti-foreigner sentiment across the European Union as nationalist waves have struck a chord. Citizens of Greece particularly are responding by blaming a part of the economic conditions on foreigners and refugees in the country. The crime rate and growing unrest are being looked at as a foreign problem and not one inherent in the make-up of the country.

Why the Americans, Germans and English Maybe More Greek Than They Think

While the focus has been on Greece, the economic fundamentals that brought down Greece’s economy can be found everywhere around the world. Countries, like the US are maintaining larger levels of debt that are unsustainable and have destabilized many parts of the economy.  As the US continues to try to jumpstart the economy, further unmanageable levels of debt are being taken out. What this means for future generations is a potential Greek-like occurrence. One day this debt will have to be paid and future generations of Americans, Germans, and Englishmen alike will have to shoulder the burden of this debt.

The only thing separating first world countries like the US, Britain and Germany from Greece and Spain is the perception and reputation of their fiscal and economical situation. At present we are seeing the beginning austerity measures and the same reactions present in Greece. Immigration policy and border controls in the UK, Germany and the US have tightened tremendously in the past year. The same knee jerk anti-foreigner sentiment and economic frustration found in Greece, can be found across large swaths of the US, Germany and the UK. No easy answer or quick solution is possible.

Why Market and Investor Confidence Are Not Important As The Fundamentals

At present market investors dictate the wealth of countries by deeming their net worth based on the value and classification of their government bonds. German and US bonds are seen as safe and stable investments largely because investors believe that these countries will fulfill their debt obligation.

The underlying problem that is affecting the march for a more responsible, efficient and progressive world economy lies in patience in fundamental economic reform and long-term policy. As is the case with public companies, many countries’ governments are anxious to gain support and investor confidence in their bonds. This coupled with the need to win election votes for  politicians leads to short-term economic planning and short-term gain. The need for instant results has hampered the ability of not just Greece’s but all the major players world economies in recovering. The hope for our future economic and social wellbeing lies in recognizing these short-lived economic solutions and creating new sustainable reforms that truly have a chance to succeed.

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