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The Weekend Neos Kosmos : 30 May 2015
DIGITAL.NEOSKOSMOS.COM THE WEEKEND NEOS KOSMOS | SATURDAY 30 MAY 2015 27 OPINION OPINION ASHOKA MODY The IMF’s big Greek mistake The Greek government's mounting financial woes are leading it to contemplate the unthinkable: defaulting on a loan from the International Monetary Fund. Instead of demanding repayment and further austerity, the IMF should recognise its responsibility for the country's predicament and forgive much of the debt. Greece's onerous obligations to the IMF, the European Central Bank and European governments can be traced back to April 2010, when they made a fateful mistake. Instead of allowing Greece to default on its insurmountable debts to private creditors, they chose to lend it the money to pay in full. At the time, many called for immediately restructuring privately-held debt, thus imposing losses on the banks and investors who had lent money to Greece. Among them were several members of the IMF's board LETTERS Greek Australians In the late 19th century and the first half or more of the 20th century here in Australia we Greeks endured much discrimination, hatred and racism. Our ancestors, grandparents or parents came here for a better life for themselves and their children. Our ancestors worked very hard to make a living, usually doing the heaviest, most difficult and dirtiest jobs. In time they became very successful. For the children of these early migrants life was very difficult also. They also endured racism and discrimination. They were also faced with an identity problem, a confusion of a kind. Some suffered more than others, many found a way to handle it without compromising their Hellenic identity. Others felt a sense of shame and insecurity, so they tended to hide their Hellenic identity and began assimilating into the broader AngloSaxon population. This was not a solution as it did not really solve the problems, but just created new ones for them! As time went on, we, the children of these early migrants, began to question our role and our place in Austral- ian society. We were brought up to have a love for Greece ‘our motherland’, to love the Hellenic language and to be proud of our Hellenic identity. This we embraced. But we and our parents and grandparents also developed a great love for Australia and its many other peoples. We were truly grateful for the opportunities that Australia gave us. Yes, we also wanted to be a part of this country, as full citizens, not visitors, not permanent migrants, or outsiders and second class citizens. We also wanted the future generations of Greek Australian to feel good about themselves, to feel proud, to feel comfortable with their place in Australian society. We did not want them to feel the confusion and the pain that we suffered as children. And we came up with the ideal solution. A way to maintain in a legitimate way our Hellenic identity and heritage, and at the same time to be Australians, on an equal footing with other Australians. A solution that would give them strength, courage, security and most important of all, an understanding of who and what they were or are in this great country! We decided that we were 'Greek Australians'. And we would call ourselves 'Greek Australians'. This is who we are. We make no apologies to anyone for this position. We love our mother country Hellas and we love our country Australia. We are very proud to have our rights, and we are even more proud to take on board our obligations and responsibilities as citizens of Australia. We do not only believe in taking, but we also believe in putting back into one’s community, society in general and giving back to the country that has embraced us and offered us so much. Savas Grigoropoulos, Victoria Visa saga and Karl Otto Pohl, a former president of the Bundesbank and a key architect of the euro. The IMF and European authorities responded that restructuring would cause global financial mayhem. As Pohl candidly noted, that was merely a cover for bailing out German and French banks, which had been among the largest enablers of Greek profligacy. Ultimately, the authorities' approach merely replaced one problem with another: IMF and official European loans were used to repay private creditors. Thus, despite a belated restructuring in 2012, Greece's obligations remain unbearable - only now they are owed almost entirely to official creditors. Five years after the crisis started, government debt has jumped from 130 per cent of gross domestic product to almost 180 per cent. Meanwhile, a deep economic slump and deflation have severely impaired the government's ability to repay. Almost everyone now agrees that pushing Greece to pay its private creditors was a bad idea. The required fiscal austerity was simply too great, causing the economy to collapse. The IMF acknowledged the error in a 2013 report on Greece. In a recent staff paper, the fund said that when a crisis threatens to spread, it should seek a collective global solution rather than forcing the distressed economy to bear the entire burden. The IMF's chief economist, Olivier Blanchard, has warned that more austerity will crush growth. Oddly, the IMF's proposed way forward for Greece remains unchanged: Borrow more money (this time from the European authorities) to repay one group of creditors (the IMF) and stay focused on austerity. The fund's latest projections assume that the government's budget surplus (other than interest payments) will reach 4.5 per cent of GDP, a level of belt-tightening that few governments have ever sustained for any significant period of time. Following Germany's lead, IMF officials have placed their faith in so-called structural reforms - changes in labour and other markets that are supposed to improve the Greek economy's longer-term growth potential. They should know better. The fund's latest World Economic Outlook throws cold water on the notion that such reforms will address the Greek debt problem in a reliable and timely manner. The most valuable measures encourage research and development and help spur high-technology sec- tors. All this is to the good, but such gains are irrelevant for the next five years. The priority must be to prevent Greece from sinking deeper into a debt-deflation spiral. Unfortunately, some reforms will actually accelerate the spiral by weakening demand. On April 9, Greece repaid 450 million euros ($480 million) to the IMF, and must pay another 2 billion in May and June. The IMF's managing director, Christine Lagarde, has made it clear that delays in repayments will not be tolerated. "I would, certainly for myself, not support it," she told Bloomberg Television. Inevitably, debt relief will be provided - but in driblets and together with unrelenting pain. The Greek government will need to withhold payments to suppliers and workers, and will raid pension funds. Five years from now, the country's economic and social stress could well be even more acute. The question will be: Why was more debt not forgiven earlier? No one is willing to confront that unpleasant arithmetic, and wishful thinking prevails. Having failed its first Greek test, the IMF risks doing so again. It remains trapped by the priorities of shareholders, including in recent years the UK and Germany. To reassert its independence and redeem its lost credibility, it should write off a big chunk of Greece's debt and force its wealthy shareholders to bear the losses. Source: Bloomberg Email your letter to: email@example.com LGBT marriage The sorry saga of the paltry few working visas for Hellenes in Australia has been dragging on far too long, and it ill behoves all Hellenic politicians both here and overseas who have not fought for this program to become a reality. If the holdup is the fear by Hellas of Australians requiring equal rights to work in Hellas then the solution is simple and clear. Any and all Australians who seek to work for a time in Greece must be of Hellenic parentage. They must either have jobs before they leave for Hellas OR they must be able to self-sustain their own new jobs. A. Kenos, Victoria Have Your Say LAST WEEK’S QUESTION: Should Australia remain in the Eurovision Song Contest? 50 % YES 50 % NO THIS WEEK’S QUESTION: Should same-sex marriage be legalised in Australia? Yes/No Vote online now. Go to neoskosmos.com Published by Ethnic Publications Pty Ltd (ABN: 13005 255 087) of 169 Burwood Rd, Hawthorn, Victoria 3122. Printed by Rural Press Printing, Ballarat. NEOS KOSMOS Published since 1957 Contacts Reception Phone: (03) 9482 4433 Fax: (03) 9482 2962 Email: firstname.lastname@example.org Phone: (03) 9482 4433 Email: email@example.com Web: www.neoskosmos.com Advertising letters Email: firstname.lastname@example.org NEOS KOSMOS - English Publisher: No. 5583 Address: Level 1, 169 Burwood Road, Hawthorn, Victoria 3122 Mail: PO Box 6068 Hawthorn West, Victoria 3122 Subscriptions Phone: (03) 9482 4433 Email: email@example.com Fax: (03) 9482 2962 Letters should not be more than 200 words and they must indicate your full name, address and a day time telephone number for verification. By submitting your letter to us for publication you agree that we may edit the letter for legal, space or other reasons and may, after the publication in the paper, republish it on the internet or in other media. Editor-in-Chief: Sotiris Hatzimanolis Graphic Design: Peter Kelidis Fotis Petsinis Contributors: Dora Kitinas-Gogos Christopher Gogos Journalists: Proof Reader: Angela Costanzo Helen Velissaris, Michael Sweet, Nelly Skoufatoglou, Anastasia Tsirtsakis, Alexandra Manatakis, Theodora Maios I refer to the comments under your recent article about Ireland's referendum on the legalisation of same sex marriage. I'm just a little bit embarrassed that so many Greeks are so homophobic. The world is a particularly screwy place at the moment; we need MORE love out there, not less. I'm not going to get into a debate about religion or parenting (your beliefs are your own, and you're welcome to them). This decision does not affect me, I'm straight. I have a few friends who would be affected by this, though, and their relationships are just as strong and as loving as any heterosexual one I've seen. So, I say congratulations to the Irish for being openminded and accepting of people's preferences. I can only hope that Australia is that progressive one day! Cindy Nitsos, Victoria Please note that the submission of a letter does not guarantee that it will be published. We reserve the right to edit your letter for clarity, grammar, spelling and style. Letters that use inappropriate language will not be published. All letters published will include the author’s name and location. Comments posted on Neos Kosmos’website, Facebook and Twitter pages can also be included for submission at the editors’ discretion and will be edited accordingly.
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