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Greece and Gadfly

Editor: Li Kun 丨CCTV.com

08-13-2015 15:50 BJT

By Zhou Dongyao, researcher of Eurasian Social Development Institute, Development Research Center of State Council
I visited Greece during its debt crisis which inspired a deeper philosophical outlook on the circumstances. Greece is the birthplace of European civilization. Nevertheless, Greece had recently stood on the verge of bankruptcy.
Greece is an attractive country but full of conflicts. Most parts of the country are mountainous and with arable area covering only one fourth of the land. There is almost no large-scale modern industries and advanced technologies here. Meanwhile, it’s rich in marine resources with plenty of scenic spots and historic sites. The per capita GDP for Greece is 22,000 dollars, which ranks 12th in the European Union. So, why does Greece have so much debt that it cannot pay off?
When Greece joined the euro zone in 2001; they covered up its high debt. Its economy has shrunk by 30.2 percent for seven years beginning from the world's financial crisis in 2008. Newly elected-governments made too many pledges on social welfare, salaries, taxes, employment and so on. When they assumed office they had depleted the national treasury and continued to borrow more money.

Statistics show that Greece's debt has hit 315 billion euro, 30,000 euro per capita. The high welfare mechanism has made people feel accustomed to consumption. Office workers get a 14-month salary a year and stop their daily duties at 2 or 3 pm. The retirement age is several years earlier compared to other European countries. In the first half of this year, the unemployment rate reached 26 percent in Greece. The IMF has also lowered Greece's economic growth rates from 2.5 percent to zero.

At the end of June, Greece had experienced several negotiation failures with creditors, and Prime Minister Alexis Tsipras called for a referendum. On July 5, the referendum voted against the creditor's proposals. Accordingly, Greece carried out capital controls for three weeks: banks closed; the stock market was suspended; medicine and food lacked; tourism industry had fallen by 40 percent.

Anyways, the debt needs to be paid. However, the new salvation agreement was harsher than the terms of the referendum, and people doubt it can be implemented.

In recent years, the recovery of the European economy has been slow. If the Greek debt crisis cannot be solved properly, it will influence the debtor nations in southern Europe and other countries outside the euro zone. In addition, Germany and France have different opinions on salvation methods. People have less confidence in the euro zone mechanism and its reforms, which increased uncertainties to solve Greek debt problems.

The Greeks could only solve the debt crisis with salvation. More than 2,400 years ago, Socrates referred himself as a "gadfly", a gift bestowed by Gods. He said Greece used to be a fine horse, which grew fat and lazy due to improving economic conditions. A gadfly should sting them to make them sober and feel inspired to recover. All of Europe should learn important lessons. Perhaps, this is the remaining asset left over from the Greek debt crisis. 


( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )



Panview offers a new window of understanding the world as well as China through the views, opinions, and analysis of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.



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