Greece is the Maker of its own Peril

Posted in Group Discussion (GD) Topics with Answers, Total Reads: 556

6 people are having a discussion on the topic (Andrew, Bharat, Claire, David, Ekram, Fergus)

Category: Economics, Politics

Group Discussion Starts

Andrew: Good evening! I think at the outset, before we start ascribing blame, we must realize that there is no single party to take all the blame. Just as it is not possible to clap with just one hand, both sides have committed mistakes that have led them to this situation.

Bharat: While that seems like a good point on face value, I would like to disagree. It was Greece that indulged in runaway spending in the years preceding 2008 crises.

Claire: While that may be true, you have to realize that the punitive austerity imposed on Greece has destroyed any hopes they had for a recovery. The punishment in this case, has far exceeded the mistake they committed.

David: Well, they entered the Euro monetary union by deceit. They made false claims about the condition of their economy.

Fergus: Not only that, they borrowed way more than they could ever hope to repay. This reckless borrowing is equivalent to gambling with other people’s money.

Image: pixabay

Ekram: Well, the EU should’ve also let go of some part of the debts payable. They’ve instead chosen to impose on Greece completely unpayable debts. They have also turned a blind-eye to the increasing suffering and helplessness of the Greek people.

Bharat: Well, you have to consider that in the view of Greece’s track record. Government jobs in Greece pay three times of their equivalent private jobs. And when they tried to cap salaries, the Greeks invented the thirteenth and the fourteenth month just to get around that rule. They literally pay salary for fourteen months every year. Which creditor would now trust this country?

David: Also, point to be noted, they told their creditors that they had a deficit of 7 billion euros. When it was actually counted, it turned out to be a deficit of 30 billion euros. It was later found that Greece had no independent agency to track economic statistics. Their government was coming up with whatever numbers it wanted to cook up.

Claire: But one cannot blame Greece for misusing bailout money. Most of that money was given exclusively to pay EU lenders. So EU gave these bailouts so that Greece could repay EU for the time being. The money actually never got to Greece. So the EU does not have the right to act holier than thou all of a sudden.

Andrew: Yes, and these international lenders who claimed that their austerity conditions attached to the bailout funds would boost spending and spark growth were either deceitful to start with, or misty-eyed optimists. Austerity almost never works and it was apparent from the start that this was set up to fail.

Fergus: Yes, but it did work for Ireland. And Greece should have taken the bail-outs as an opportunity to enforce structural reforms the way Iceland and Portugal did.


Ekram: I think in conclusion, we can say that there was plenty of blame on both sides. While the fact that Greece landed into trouble was out of its own actions, the fact that it hasn’t been able to recover is the fault of its creditors.

Facts related to the topic

• Greece currently owes about $1.7 billion to the IMF(International Monetary Fund)

• The official “bailout” loans of some 240 billion euro were mainly used to international debts mostly back to the EU, especially Germany, which did not provide any actual boost to the Greek economy

• Greeks have voted an ultra-left wing party called Syrizia to power, which refuses to follow the terms set by the previous bail-out


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