economy, europe, World Politics

Greece will recover if the EU is realistic and pragmatic

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Violent protests are choking up streets, almost a quarter of the nation is unemployed, and taxes are at unprecedentedly high rates. A country which has faced economic despair for over eight years, Greece is still in need of a realistic, long-term, and sustainable plan in order to rejuvenate its ailing economy. It is time that the European Union accepted that it should not bring Greece to adhere to unrealistic conditions. Instead, it is in the Union’s interests to – albeit begrudgingly – hand the Greek people the support they need.

Greece’s economy has barely improved even with international ‘aid.’ There must be something going wrong with the present strategy. Greece’s level of debt is eating away at the livelihoods of ordinary people, sitting at around 180% of output. It is estimated that as much as 75% citizens’ earnings is being taken in tax revenues, alongside other harsh, EU-imposed austerity measures. Greece’s unemployment is now more than double that of the EU average. Austerity is not working, and the lives of citizens are not improving. It may, in the long-run, make a stronger economy, looking at only the macroeconomic situation. But for the average Greek, their personal income and quality of life will not markedly improve. Surely this should be the primary goal of the EU.

The national economy can only recover through investment and employment, in the same way that many of the world’s greatest economies started. The Greek parliament last week was backed into approving €5.4bn of controversial budget cuts. For a nation that voted “oxi” – or “no” – to extensive budget rescaling last year, this is surprising. But is it that surprising, really? The international press and our leaders will keep telling us that Greece has no other option. But really, this is just highlighting the crippling monopoly of the European Union.

The time for a review of the supposed Greek recovery has come, but quarrels between the European Central Bank, Eurozone, and International Monetary Fund are continuing to stall any workable progress. The EU has the chance to serve one of it’s most important functions – to uphold its true values of solidarity, and support its member states in calamities. With particular reluctance on the part of the German government, it seems that Greece and its people will not come back to life unless a form of compromise is made. A harsh economic dictatorship, being orchestrated by Merkel, is neither an intelligent nor viable strategy for a Greek recovery. Amidst worrying social unrest, the Greek government simply has no choice but to succumb to the rigid conditions of troika.

This week, Christine Lagarde of the IMF has reported a significant contraction in the Greek economy, and that the aspirations of the EU for Greece are largely unrealistic. In order to progress to the next stage of bailout, the Greek government must repay €3.5bn by July. But achieving any form of budget surplus means harsh austerity measures, passed as parliament grit their teeth. The only option which could lead to true stability and progress is if member states contribute to a stronger Greek economy, by aiding with debt relief, and if the EU’s expectations are reduced.

Selfishness from the European Union will only lead to increased calamity, and not only financially. Supporting Greece is in member states’ interests. Economic solidarity is necessary in multiple respects, and is what the European Union ought to stand for. Without true moderation and aid, Greece will decline in many ways. Less investment and support will mean more unrest. Greece’s streets have already become increasingly violent, and there is no sign of the chorus of opposition waning. Does Merkel really want to lug around a socially unstable state? Furthermore, chances of tyranny and political instability would only grow.

Unless the EU comes truly to the rescue, the current left-wing government will grow more unpopular, and the anti-establishment, austerity-defending hard right will succeed. Without a good cash flow from Brussels, economic growth will never be high again for at least the next decade. The lives of Greek citizens will become arduous and their prospects weak. There is no denying that it will be a long, hard slog. Choosing to ignore Greece to the furthest extent possible is not a realistic or pragmatic option. Money must be used as an incentive for growth and rejuvenation, not just something to tick a box. The focus must turn to getting people back into work, and reducing austerity to a more acceptable level. Only with a long-term plan which combines components of balance and sustainability will Greece be able to emerge re-energised.

No decision will be favourable, and no form of austerity desirable. But at the moment, the EU is in its own bubble. Christine Lagarde and the IMF have the power to pop it. The creation of a realistic plan should be fast sought. There is no quick fix, but if the government can present a collective strategy with visible, incremental improvements, Greece will be slowly reincarnated. The European Union needs a reality check. It is undermining its own principles of solidarity, support and prosperity. When realistic and pragmatic strategy emerges, with a plan spanning the next decade, the Greek people may finally be a little more content. By ignoring the seriousness of the Greek crisis, the EU is only creating more problems for itself. Unrest will plague communities, government popularity will further decline, the hard-right may well conquer another European region, and individuals will become tired. Surely the nurturing of economic demise is not something the EU wants to credit itself with.

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economy, Industry, UK Politics

Ideologies and EU unease prevented an easy win over British steel

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Entering the third week of the British steel saga, the Conservative government’s indecisiveness over Brexit has begun to show. Tory Business Secretary Sajid Javid, alongside a wealth of government colleagues, has pledged to support a strong British steel sector. But shouldn’t the government have grasped the European Union’s hand in order to nurse the steelworks’ wounds?

The answer is most definitely ‘yes.’ Needless to say, evident Tory laxity over British steel  has proven that many see no merit whatsoever in saving Tata Steel. With strong international imports from the East, along with a heavy government focus on business and services instead, steel girders are no longer used as the supports upon which the UK stands.

The British government’s handling of the ailing Tata Steel has been arguably problematic. Hearing the piercing blare of alarm bells set off by a slowing of European exports, the international community has been moved to protect substantial parts of their economies.

Britain seems to have taken a different route, however. Several days ago, Conservative Party-affiliated MEPs were amongst a select few within the European Parliament to block the imposition of import tariffs on set products entering Europe – especially those products delivered at a cheaper price than those of EU nations’ workforces. The Tories did have their chance to rival the emerging Chinese heavy industries monopoly, but interestingly enough chose not to.

Whilst I don’t doubt that those in government truly want to better the national economy, political tactics and ideology have prevailed just too much. Actions have certainly spoken louder than the words of the Conservatives over the past fortnight have. It is clear that a tactical statement of British EU resentment has markedly backfired. A vote which showed a standing up for hardworking people which the Conservatives insist on assisting, and a pledge to continue with the Tories’ British economic rejuvenation could well have scored the party points in the British steel sector. It seems that the responses of Sajid Javid to events currently battling with him are a cry out for a reformed European Union, or perhaps even a reiteration of the hefty Conservative Eurosceptic presence.

In addition, it is evident that the Conservatives have toed their traditionally laissez-faire line once again. Minimal state ownership has proven to be a key part of Cameron’s administration, as reflected by increasingly privatised housing, amenities and health services. This time, the Tories’ opinions on British manufacturing have similarly been presented loud and clear. But small-scale investment seems to have produced a measly gain this time. After the Business Secretary has adamantly refused to directly fund British steel, it seems that the government will now have to at least ‘co-invest’ in the industry.

Political advantage and European Union protest have sharply backstabbed the Tories. The current steel saga continues. The Conservatives should re-emerge relatively unscathed, somewhat covered over by Cameron’s tax revelations shifting the media’s focus. This time, however, the playing of party tactics has caused Javid problems, and the adoption of strict Conservative ideology has become an evident setback.

Today, Managing Director of the International Monetary Fund Christine Lagarde preached that the UK’s possible exit from the European Union could prove detrimental to the global economy. In relation to British steel, this must provoke a Conservative rethink. Economic solidarity and political compromise are the way forward. Sajid Javid’s team has fatally rejected a perfectly viable EU solution for progressing the repair of Britain’s manufacturing sector. The most unforgiveable part of his oversight is that it may well have been willful. Haunted by the possibilities of Brexit and the party’s strict ideological traditions, David Cameron’s government could have scored easily here with even the most hardcore of Conservatives.

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