Tuesday 20 August 2019

Maeve Dineen: Five good reasons why we're not as bad as Greece

WHO would want to be the Greek prime minister George Papandreou right now?

After receiving the mother and father of all tongue lashings from his European counterparts for failing to keep Greece on course for EU/IMF bailout, he must now win parliamentary approval for the new €28bn austerity plan by the end of the month. If he fails, the deliberations taking place in Luxembourg today will be meaningless, since EU and IMF officials have made it clear that no new aid will be released without Greece implementing newly agreed reforms.

If Greece doesn't receive the €12bn in aid, it risks defaulting. A premature default would cut the country off completely from EU/IMF aid, from international capital markets, and possibly also from ECB lending. It would lead to an immediate collapse of the state. The government would not be able to pay salaries and pensions.

While our Finance Minister Michael Noonan managed to inadvertently drag Ireland into the crisis last week with talk of burning unsecured unguaranteed senior bondholders, Ireland is still a million miles away from being Greece and here are just five reasons why what happens to Greece does not necessarily have to happen to us:

The first reason is that the Greeks don't make anything; we do. Total Greek exports last year were worth €15bn. Irish exports were worth €161bn. That's almost 11 times more than Greece, despite that country's larger population; its location in the heart of Europe; and its shipping tradition.

The second reason is that Ireland is an infinitely more honest country than Greece. We may moan about the corruption that is endemic in the planning process, but we are in the ha'penny place compared with the poor Greeks, who encounter petty corruption on an almost daily basis.

The authorities there are losing between €20bn and €30bn a year from income tax fraud. When tax officials checked one wealthy part of Athens after just 324 residents admitted to owning a swimming pool for tax purposes, they counted 16,974. Bribes are routinely used to get state jobs and pass exams; the sort of thing that is completely taboo here.

Reason three is that Greece is a country that is dying on its feet. Eurostat projected last week that the population will shrink 0.1pc to 11.2 million by 2060, when 13.3pc of the population will be over the age of 80. The same forecasts see the population here jumping by 46pc to 6.5 million in the same period.

The fourth reason is that we have a better education system; far from perfect as the EU's Pisa reports show all too clearly, but still much better than Greece.

Indeed, the system is so bad there that Greece leads the world in terms of student exports. Some 60,000 young Greeks go abroad for their college education every year -- the highest percentage in the world.

The final reason is that Irish people are just more realistic about what is happening. One can admire the protests in Greece, but in truth, they are a big distraction. True, a €28bn austerity package is ferocious by any standards, but the Greeks seem to think the world owes them a living, while people here understand that this is not the case. For reasons that will never be fully understood, people here are, for the moment, more accepting of the crisis. But without some light at the end of the tunnel, this acceptance won't last forever.

Irish Independent

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