THE GREEK SITUATION AND ITS CHILLING EFFECT
ASIDE FROM CLASSICAL MYTHOLOGY, GREECE HAS ANOTHER LESSON TO SHARE. A few weeks ago, the Greek economy got into a tailspin. Greece ran up of a major debt and must pay. Greek government however failed to pay its international loans from World Bank and from its European creditors until the latter declared a penalty for default. The Greek government needs more than a bailout and could not ran away from its commitments. As a consequence, the World Bank and creditor banks ordered that all banks in Greece have to be closed.
Thereupon, all those who transacted through banks were nowhere to go. Businessmen, depositors and worst, those dependent on bank assisted services were lost and got confused. Those senior citizens expecting monthly pension drawn from banks were seriously hit. Greek tourists were virtually helpless and got stranded elsewhere. Even ordinary household with savings could no longer withdraw cash in emergency situation. In other words, a single government flaw became an outright national nightmare.
The chilling effect of bank closure pushed Greek government to redefine its financial policies. It must meet the requirements of its creditors even if it means courting rebellion. Pension benefits have been cut and the retirement age raised to 67. Over the past five years, Greece has cut spending and raised taxes on a scale equivalent to 30% of GDP. Against this polarizing effect, Greece must also improve its economy, a proposition which contradicts the demands of its creditors.
Of course, it happened in Greece and our country has barely any trade relations with said country to merit a response. Although most of the countries in Europe with business in Greece are active trade partners in this country like Germany and Britain, what happened telegraphs a chilling message.
The Phlippines like Greece is also saddled with loans from various international banking communities, principally with World Bank. Should we default or be remised in our responsibility to pay, we may suffer the same fate as what happened in Greece.
As it were, Greece is already experiencing what for years our country has been mired in. Decrease in GDP. 1 in 5 Greeks can’t meet daily food expenses. Homelessness is rising. Unemployment pushes more young people toward drug use. Medical services are sharply cut. And there is a significant and sustained increase in suicides.
In the event, although politicians are quick to dismiss the scenario as unlikely, that the Greek situation would similarly rear its ugly head on our economy, then our country would just collapse. Our main resource, the OFW, which makes our country’s financial profile above the waters, is facing countless dilemmas since their jobs in the Middle East have been threatened by political bickering and military warfare. As it were, there were thousands to be repatriated and had escaped if not evacuated towards other fledging countries. Their inability to remit dollars to the country can easily be felt. Loss of remittance is fatal to our economy.
Our leaders must spell this out to the people so that they are prepared to meet any exigency in the future.
As for me, this early, I will not imagine myself as being dependent on a fledging government and get saddled by the local banking system. I will just deal with it using the old school way—makapag alkansiya na lang!