Aristoteles, Plato and Socrates, where are you ?

I had promised myself not to write anymore about the „Greek Affair“

I wasn't going to say anything about the fact, that the country borrowed way above its ability to repay and that both parties knew, or should have known this.

The recent developments, however, make me renege on this promise.

I am not an „Economist“, nor am I particularly well informed about lending practices between countries.

I am very well informed, however, about lending practices in business life, where it is quite common to borrow money, either from a bank or a private institution or individual.

This is roughly the way it happens:

In order to complete a transaction, say the purchase of real estate, the purchaser may use some of his/her own money as well as some obtained from outside sources.

During negotiations between the Lender and the Borrower, the principal amount, the interest rate and the repayment time of the principal amount ( amortisation period) are agreed upon.

A contract, containing all pertinent points of the loan is signed by both parties and the ownership transfer of the property is registered.

Borrowing between countries may have some idiosyncrasies of its own, but I am certain that the principles of „agreement“ are the same.

As I understand the way it happened between Greece and the European Union (of which Greece,of course, is a member) was not much different with one small exception:

Since the Lender knew that the Borrower was in serious financial difficulties, it placed certain conditions upon the modus operandi of the Borrower.

Everybody agreed, the papers signed, it was „a done deal“.

Not so fast, buddy !

The management of the Borrower changed and the new 'President' was of a different, political cut from the outgoing.

To him, previous promises meant little to nothing. He simply announced that the conditions under which the loan was granted would be disregarded, and it would be 'spending as before.'

In fact, he announced large increases in minimum pay, substantial increases in pensions and other empty unfulfillable promises which made every nonthinking Greek yell: Yeah!

Based on these fairy tale promises the Greek Communist was elected to head a minority Government by two seats. He promptly allied himself with an ultra right wing party, clearly demonstrating his political and moral lack of integrity.

( I find it interesting to note that nobody uses the noun 'Communist' anymore. The modern terminology is 'radical left wing“ and I wonder where does one end and the other begin ?

In addition to the promised increases, the loan amount would have to be substantially reduced and the interest rates and amortisation period would also be changed in favour of the borrower.

The Lender, however, suggested that 'a deal is a deal' and there would be no reduction in principal nor in the already very low interest rate. An extension of four month, however, was granted.

So, the Greeks announced in their country: „The battle has been won, but the war is far from over.“

Is this really the way to talk about the outcome of negotiations between an impoverished country, Greece, and the Lenders, the rest of Europe, who came to its rescue with substantial infusions of cash and credits?

This kind of bravado, of misrepresenting the facts shows a lack of integrity but also a large degree of political acumen. He knows what his electorate wants to hear and, true or not, he gives it to them.

Oh Aristotle, Plato and Socrates, where are you ?