Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Sunday, 28 June 2015

The Greek Tragedy



With a public debt of $ 320 Billion , and unable to raise fresh loans ( to pay off old loans ) , Greece is on the verge of bankruptcy - and exit from Euro-Zone


Dire predictions are being made by the Economists / Bankers / Politicians etc , as to what will be the impact on :


*    Other debt-ridden countries like Portugal / Italy / Spain etc

*    Economies of the European lender-countries 

*    Balance Sheets of Financial Institutions ( eg : IMF / European Common Bank etc )

*    Economies of Developing countries , unable to export to Europe


But hardly anyone seems to be asking :


*    Why did Greece land itself in such a trouble ?

*    Will Spain / Portugal / Italy - and other debt-ridden countries - soon find themselves in a similar condition  ?
      

You don't need to have a Ph D in Economics to know the obvious answer  !


Greece finds itself in this trouble for the same reason that a person would , if he starts spending far in excess of his income


Usually by borrowing lots of money from friends / relatives , who , oblige without asking :


>    What is your current income ? What is your current savings ? 


>    What is likely to be your future income ?


>    What do you need this loan for ?  When - and how much - will you repay  ?



If there are no satisfactory answers , then you know that either the borrower has no capacity to repay

or , ( worse ) , no intention to repay  !



Apparently , Greeks have been living beyond their means ( income ) for many many years


Generation after generation of Greeks thought :


>   Let us enjoy today .  Why worry about tomorrow ?  Let our children worry about that  !



The 20+ something Greek youth ( of which , 26 % are unemployed ) , have " inherited " that debt of $ 320 billion , from their fore-fathers


Hence , it is reasonable for them to say :


"  Hey ,  I did not borrow / spend all that money  !  Why should I be made to suffer for the sins committed by my parents / grand parents  ?  "


Problem is not that the lenders cannot accept this argument and agree to , even write-off $ 320 billion


All that the lenders are telling the Greek Youth ( thru Greek Government ) , is :


"  No problem , but no more money either , 

   Just learn to live within your own income . Learn to fend for yourself .

   Stop living on borrowed time ( - and borrowed money ) "



Here , there is a lesson for us Indians , as well  !


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hemen  parekh  /  29 June, 2015


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