Dear Mrs. Merkel

by Capricorner

Frugality has taken Germany a long way, in fact it, combined with good economic administration, accounts for the strong financial position you enjoy, one that puts you to the leadership position of Europe as a whole, the Eurozone in particular. This leads you to the conclusion that the Greek overindulgence accounts for the horrendous debt load of Greece. Not right. The Greek debt load is the result of the two bits worth of governance that Greece had had from 1981 onwards. Bad governance created corruption, waste and populist politics, coupled with irresponsible labor leadership. The Unions took it upon themselves to make Greece a case of disinvestment, rather than investment. Manufacturing therefore moved north to Albania and Bulgaria. Industry in general has stayed in Greece, but no one decided to invest in expansion, not with the Unions unofficially, but effectively, co-managing. In Germany Unions have a seat in many boards, which helps them see the realities of the companies and thus become supportive of the true interests of their members. In Greece the Unions perceive their role as the hand that grabs, not as a guardian of the interests of their members, which begin with security of employment. Never the less the Greek Economy has moved forward based on consumption which to a certain extent has been powered by the financial potency of the Public sector. It is this very part of the Greek Economy which is squarely responsible for the Greek Debt. It is the sector which is the exclusive domain of the politicians. They created sinecure jobs to accommodate their voters, staffed the sector with incompetent people (party operatives since their student days) inexperienced people, borrowed to overspend on wherever the sector spent funds, neglecting at the same time their duty … to provide good governance, ergo the appallingly low level of capability the EU, ECB and IMF executives are faced with in the Greek ministries. Of course part of the problem is also the Banks which bought the Greek Bonds without wandering about the excess of the Greek debt and the “Greek Statistics” are not a good excuse.

No body is perfect, Mrs. Merkel.

Now that the problem is endemic to the Eurozone what have you and your competent officials done about it? Not what you should have done from the start, according to the markets. You have displayed a remarkable lack of understanding how they think, how they operate, until now. Your finance minister has even displayed resentment for the American “intervention” which is totally justified, given that if drastic action is not taken at once the fire will turn to conflagration with damaging effects to the global economy, something not clearly understood, it seems, in your finance ministry. But now you appear to exercise enlightened leadership and so the hope is that the Eurozone debt crisis, Greece is not the only snake-pit, will not get out of hand, which makes enlightened leadership all the more important, putting the onus squarely on you to address the problem with pragmatic, not political thinking. Facts to be treated as such.

For Greece to fully utilize the help it is receiving it is not enough to send a few of your experts to assist the Greek authorities. You must send a number of experts from your ministries to literarily take over the administration and train their Greek counterparts who are shamefully unsuitable for their jobs, having secured their positions with party, not professional, credentials. You should also address the problem of the Greek “leaders”. All they know is politics. To compound the problem they live in a world of their own, removed from reality. They face the situation as a phase of history which will be succeeded by the good old politics they know. It, therefore, behooves you to shake the Greek people to a state of alertness. You have already spread the fear that the sixth installment of the help may not be forthcoming and that there is a plan B for Greece, so you should not stop there. You should come out and speak openly about the incompetence of the Greek public sector and of the government itself, suggesting that a government of technocrats be formed and run the country for two years, to restructure the Economy, re-institute from scratch the public sector and inform the Greek society to enable it to see the facts of life. Such a Government could communicate with the people, explain why the return to the drachma is catastrophy and how the country can move forward and out of the present painful situation. It could help the Nation understand the benefit of Unity (Greece is a totality of separate groups each vying for its own interests and indifferent- sometimes even hostile- to every one else) and it could help the nation understand that politics is not a quid pro quo but, in the reality of present times, the provision of administrative leadership.

If you do nothing to change the “Greek ways” the country will continue on the road to self destruction, unable to distinguish between pragmatic and wishful thinking … an easy prey to the demagogy of the left and the turmoil it will create. Greece needs to be helped to restore its vision which has been impaired by sick politics where even absurd notions were regarded and treated as facts. Greece needs a new political system, with all those presently involved to go to where they belong. So please be pragmatic in your handling of the Greek “problem”. Address the roots of the problem. Greece has a token government which spreads pain needlessly, thus igniting a fire and unless it has competent leadership, which will create a new political system, Greece will remain a thorn in the garden of the Eurozone. You CAN do what will avert that.

Within Germany there are forces opposed to the help Germany should offer to the Eurozone, Greece in particular. These forces, as you obviously know, are a threat to Germany and the German people should be properly informed that Germany stands to loose the most if the Eurozone crumbles, because half of German Exports, German Prosperity, come from the Eurozone. Furthermore should the Eurozone Banking sector cave in it will include German Banks as well. Germany stands to loose the most from a Eurozone failure. This simple fact you, no doubt, can make abundantly clear. As for those claiming that Greece is better off with the drachma they can be silenced with two simple facts:

1- The drachma will be devalued by the markets within weeks, rendering extremely expensive all the materials imported in Greece for processing, thus bringing up the cost of Greek production, wiping out the currency advantage.

2- Greece does NOT have a cost problem. The unprecedented 40% jump of the Greek Exports and the bumper year Greek Tourism is enjoying attest to that. All it took was a jolt from the contracting domestic market.

Yes, nobody is perfect.

To plan and implement a growth plan for Greece, with the help of the experts you are sending, is not enough. To alter the mentality and so the “modus operandi” of the country is of PRIMARY importance and there are ways you can help this come about.

Dear Mrs. Merkel. You know the difference between fact and moot in politics. Here is hoping that you choose to proceed with axioms in mind, both within Germany and the Eurozone.