Greek Conundrum


The Grand Coalition on the Constitution must be careful what they wish for, because it may just be granted.

The Greek people have just had a referendum and the answer has been a resounding No!

Seemingly credible institutions in the name of the Troika, representing the European Commission, European Central Bank and International Monetary Fund, presented conditions to Greece to solve its immediate debt crisis – a proposal highly thought of and recommended by all but the Greek people have rejected it because they refused to acquiesce to any further austerity that has already brought the country down to its knees.

Following government propaganda and campaign they have answered with a resounding No to a European Troika- brokered debt settlement programme that may for all intents and purposes see Greece out of the European Union and certainly out of the eurozone.

In one felt swoop the referendum has decided No. 

There is no reason therefore for the Grand Coalition to assume that their demand for a referendum will be met with a resounding approval from the Zambian people.  They must have a credible and convincing case for the referendum.  They must first convince the people why there should be a referendum and on what grounds it would be held.

The truth is that there is no Constitution that is cast in stone, not even the American Constitution has been spared amendments.

The tragedy about Zambia is our copycat politics which are devoid of research and in-depth study.

 The debate on our current debt is instructive.  Zambia is nowhere near the extremes that the Greek economy has experienced.

By 2008, the Greek debt-to-GDP ratio was 146 percent.  This forced  rating agencies to downgrade Greece, to junk bond status because the sovereign debt was virtually unsustainable.  The bonds were meaningless, not even worth the paper they were written on.

By 2010 a number of bailout measures were attempted with loans amounting to 110 billion Euros on the conditionality of implementing austerity measures.  The situation has since continued to deteriorate, resulting in the current standoff whose end point is as of now unknown.

This certainly is not the case with Zambia, whose economic foundations remain sound, hence the attraction of bonds floated by the government.  It is not enough to criticize borrowing without offering alternative financing for the myriad of capital and infrastructure projects that the Government has so far implemented because any attempt to stall, however temporarily, will incur both a capital cost which will continue to increase with time.

This is in addition to the political cost in retrenchments and unfulfilled campaign promises.

In a democracy this scenario is anathema and most certainly this Government which has less than 18 months would not wish to commit political suicide by opting for a Greek solution, whose end game is unknown.


Categorized | Editorial

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