Doubtless their current crisis hasn't been helped by the international trading market having a bit of a punt, but fundamentally it seems to me they've dug themselves into it with great enthusiasm.
Reported by Malcolm Brabant, BBC News Athens:
"On Planet Greece, some civil servants get a bonus for turning up to work on time. Foresters get a bonus for working outdoors. At least they show up.
There are civil servants called ghost workers because they never go into the office, head to a second job and still claim a state salary. They can't get sacked, because a civil service post is for life. Unless the incumbent decides to retire in his or her forties, with a pension.
And the government can continue paying for the afterlife. Unmarried and divorced daughters of civil servants are entitled to collect their dead parents pensions. Another lucrative sinecure is to belong to a state committee. The government has no idea how many there are. It has been estimated that they have 10,000 employees and cost nearly £200m a year, and that includes the committee to manage a lake that dried up 80 years ago."
You mean Greek foresters have to work outdoors? Dear me, I can see why they'd need a bonus.
OK, having got the undoubted pleasure of smirking at foreigners out of the way, let's have a look closer to home.
EU estimated figures reported by the BBC here put the Greek budget deficit at 13.6% of GDP. That's appalling, and the Eurozone economies are supposed to observe a limit of 3%.
Ours is 11.5%. What saves us from being exactly in the same boat as Greece, with nothing in the coffers and a credit-rating of sod all, is the total debt. For Greece, it's 115% of GDP, while ours is a little under 70%, and a lot of ours isn't repayable right now but a fair way off. Those from whom our Government would seek to borrow money are - so far - taking the view that we have sufficient time to sort things out such that we can afford to make the necessary repayments when due. We therefore still have a good credit-rating and, accordingly, don't have to pay too much interest on the loans. But that can change quite quickly.
The size of our national debt is a huge, urgent concern - or should be - as it's now of a size where just servicing the debt consumes a terrifying amount. I've seen a figure for 2009 of £35 billion, about the same as the defence budget. We get nothing for that £35 billion, that's just to stand still without defaulting.
All the time we run a budget deficit, the total increases and the amount that has to be dedicated just to paying the interest increases.
This is not rocket science. It's exactly the same principle at work as if you keep on using your credit card and repaying less each month than you've put on it. We all know how that goes. OK, for a while you can roll it over by getting a new card and new credit to pay off the old debt, but eventually the merry-go-round grinds to a halt and you become more intimately acquainted with your local soup kitchens than you really intended. At a national scale, you have emergency measures which often fall hardest on the most vulnerable, riots in the streets and lots of foreign correspondents wandering around trying not to laugh. Oh, and if you're a public sector worker, or on a public sector pension... sorry, we can't pay this month. Not sure about next month, depends on the IMF chaps, so don't spend too much, eh?
The politicians competing for your vote on Thursday know this full well. *Pause* OK, I bet some of them don't, but they really should. Most voters don't - one recent poll suggested that 50% of voters think no spending cuts are required at all.
We're spending beyond our means as fast as the Greeks were, and it will end up the same way unless drastic action is taken. Taxes can only go up so far, the 'recovery' growth in our economy might or might not happen, so serious, painful cuts in public expenditure cannot be avoided. We can do this in a planned way that seeks to mitigate the effects as much as possible for those who really need public help (and only those - means testing will be a way of life soon), or we can have it thrust upon us chaotically by the IMF a few years down the line. You choose.Still, one bright spot is I suppose we can be thankful that unlike the Greeks we haven't got a huge financial clusterf**k of an Olympics to pay for.
Oh, wait... bugger...
No comments:
Post a Comment