Syriza, the neo-communist party led by Alexis Tsipras, has won the elections in Greece. The party is a collection of Marxists, Socialists, Maoists, Trotskyites and Greenies. In other words, Syriza is the party of the moochers. They oppose the austerity measures that the troika of the EU, European Central Bank and the IMF imposed on them in exchange for loans.
The Greeks, who cheated their way into the EU, are fed up with the austerity measures. They remind me of someone who maxed out his credit card and had to depend on his relatives to save him from bankruptcy.
As a condition for fresh loans from the troika, Greece had agreed to drastic cuts in government spending. This caused 5 years of recession and a drop in their standard of living. Greeks cannot afford the cushy welfare state they had grown accustomed to. Leftist governments had given away free health care, generous pensions and early retirement to win elections. That was how they went broke. See my earlier article on Greece and what it means for the US.
Now, the Greeks had thrown a temper tantrum against the troika and voted for an ultra leftist party. Syriza promised them a roll back of the spending cuts and to persuade the troika to continue lending them more money! What cheek.
That was the snake oil Syriza sold the Greeks and they bought it. Germany, Europe’s largest economy, has a lot of clout in the EU because they contribute the most money. The Germans are fed up with the Greeks. This is not surprising. According to marketwatch, the German retirement age was 65 as of 2010, while the retirement age in Greece was 57 years.
According to the top 10 list, Greece has the second lowest retirement age in the world. If they work till 57, they are entitled to a generous pension from the government. The outgoing Greek government had promised to raise the retirement age to 63 this year to save money. That’s still lower than the retirement age of the Germans who are the biggest lender to the Greeks. So the Greeks expect the Germans (who have to work till 65) to lend them more money so that they can retire at 63 (assuming Syriza keeps the previous government’s promise).
German Chancellor Angela Merkel will tell the mooching Greeks to …. off (choose your expletive). That is my prediction. The Greeks have an outrageous sense of entitlement. Years of leftist government have taught them the idea that the world or somebody owes them a living and a good living at that. They think they are entitled to mooch on other people’s money.
The Greeks will have to face reality. The first reality is the Socialism does not work. Obama, please take note. As Margaret Thatcher once said, “The problem with Socialism is that you eventually run out of other people’s money.”
I think the EU and especially the Germans are running out of patience. Syriza ran on the election campaign promise to renegotiate the terms of the loans that the previous government led by Antonis Samaras had signed. The troika had reluctantly agreed to lend them more money in exchange for spending cuts because a Greek default on its debt would bring down European banks. The loans were more for the purpose of saving the banking system from collapse rather than to save Greece. But after five years, the European banking system can withstand the shock of a Greek default.
Therefore, Alexis Tsipras does not have the threat of Mutually Assured Destruction (MAD) to force the troika to lend them more money. The Greeks who voted for him will have to face the hard reality that they have finally run out of other people’s money.
Tsipras has to choose between the devil and the deep blue sea. He has to either renege on his campaign promises to abandon austerity, or leave the EU and default on Greek debt. If he chooses the latter, Greece will go back to the Drachma instead of using the Euro. Then they can, like the US, print as much currency as he wants to pay for the lavish welfare state that the Greeks desire.
But this will cause a decline in the Drachma and the inflation will be terrible. The Greeks can retire as early as they want, but they will find that the Drachmas their government pays them can’t buy much. The Greeks will become poorer. So austerity or not, they will end up poorer.
It is what they deserve. So don’t cry for them. The economic suffering they will get will make them yearn for the good old days of austerity.
The moral of the story is that if you want a good life, you have to work for it. In the end, your nation has to sell goods and services to someone to earn a living. Growing rich requires years of hard work, first in school and later in your job or business. The welfare state that the Greeks built up cannot give them a better life. Obama, take note.
Greece is the birthplace of Democracy. According to Karl Marx, “Democracy is the Road to Socialism.”
That’s what happened in Greece. But Socialism brought ruin to Greece because it has finally ran out of other people’s money. The moochers may have won the elections, but in the end they won nothing but more suffering.