Restless Europe’s leaders constantly looking for solutions. However, the expiration date of the euphorically proclaimed solutions is becoming shorter and shorter. Two weeks ago, because it was decided to increase the financial capacity of the EFSF to using a lever to two trillion euros. The policy celebrated itself on the stock markets there was a price firework.
Now, the policy is no longer in a party mood and the rally in the stock markets has proven to be temporary success. Still, the policy is not ready to think about the previous “solution strategy” to basic. It adheres to the way to try to solve the over-indebtedness of states by more money that is new. In the search for new sources of money, the political focus is now clearly on the so-called Special Drawing Rights.
These are financial claims of the several States to the International Monetary Fund. Together with the treasure and the foreign exchange reserves, they form the financial reserves of the Bundesbank. Once the special drawing rights called into question, then the Going for Gold of the Federal Reserve is expected to soon be no longer taboo. Nevertheless, this would be nothing more than the beginning of a state financing from the central bank, because of rising inflation. It is time for politicians to take stock.
Trying using loans to buy time, they actually did not receive that to which they aspired. The supply of fresh capital has so far led only to the fact that the pressure on the necessary structural reforms in Greece has lost touch.
At the sametime, Greece is in a vicious circle. The austerity are for measures. The negative impact on the economy is that tax revenues are collapsing while there is increasing the debt. Nevertheless, it seems likely to continue along this difficult path. The Greek economy needs to shrink because they are not in an economic crisis there but rather in a structural. Greece should be saved with future growth and it will be compromised as little as possible. This will affect on government spending pensions and various social benefits.
The economy-encrusted structures are broken now. Only more competition creates more long-term growth. In addition, wages must fall, but in the same time, the Greek tourism industry becomes more competitive. Finally, the administration also must be modernized. Without a doubt, this is a major challenge for the Hellenes. Greece should return path of growth but this time there where this return is not built on sand.