I know it is impossible to share in a single post the history, geography and mentality which has brought this most beautiful corner of our Continent to its knees and has turned one of the oldest civilisations in the world from a source of inspiration to the punchline of cheap jokes. I know it is impossible to impart the sense of increasing despair and helplessness that underlies every conversation I have had with friends and family over the last few months. But it is vital that I try, because the dehumanisation and demonisation of my people appears to be in full swing.
In the 1920s, the bureaucracy had become so big that the public sector grew not only in numbers, but also in power. A law was enacted where from the moment you became a civil worker, you effectively couldnâ€™t get fired.
This quickly created a two-tier citizenship in Greece. The powerful civil workers (who retire early, some of them work few hours, some of them working in offices are indeed lazy etc), and the private sector, which remained very underpaid, very hard working, and whoâ€™d retire at the age of 65. When Europeans today complain about the lazy Greeks, they must understand that Greece has a virtual cast system, and that not everyone is equal in it.
I kindly invite our readers to go and read both posts. Hat tip for the first post goes to Sargasso.
You do not always need to write long essays to explain the current financial crisis, the following video sums it all up quite well in a few minutes. Money quote: “It’s not us that will suffer, it is your pension fund.” BTW, this was originally broadcast exactly one year ago. Some of you may already have seen this.
Question: how would you have known they were holding a referendum on the government’s difficult and unpopular economic adjustment package in Hungary on Sunday? Answer: just take a look at what happened in the Hungarian financial markets last Friday.
It should not have been too difficult to see all this coming, yet financial analysts seem to have been strangely silent on the potential implications of the latest political twist in Hungary’s ongoing economic agony. And where they have not been silent they have generall been trying to downplay the referendum’s importance. Only last week Goldman Sachs’ Hungarian analyst IstvÃ¡n Zsoldos was busy reassuring us that the coming referendum would have no lasting impact on the evolution of Hungary’s long drawn out economic crisis (although he did admit that the short-term political noise was â€œlikely to intensify”). I beg to differ. I think the consequences of Sunday’s vote are going to be important and long lasting (indeed I had the referendum pencilled in in this post as the third of my potential tipping points for Hungary’s economy, with the the second one being the last interest rate setting meeting of the central bank, when, of course, they did scrap the currency band), and they are going to be important and long lasting regardless of whether or not the Hungarian authorities manage to plug the now growing breach in their credibility and the value of HUF denominated instruments in the short term. Continue reading →