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EU's Greatest Problem: Greece

By Prof. Dr. Faruk Sen- Having received EU membership in the year 1982 with the help of then President of France Valery Giscard d’Esteing, Greece lived through a serious golden age between the years 1981 and 2005.  Along with the regional and social development funds, the EU also gave agricultural funds in the amount of 104 billion euro to Greece during these years.  While Turkey was borrowing from the IMF and other international institutions, Greece stood firmly on its feet with these grants.  With the help of the EU, living standards in Greece were in much better condition in comparison to those in Germany, France, and England.
On Mondays, stores open in the afternoon in Greece.  They used to close again in the afternoon on Wednesdays and they used to take off Friday afternoons off.  Government employees used to have the same hours.  Especially given the framework of the EU’s efforts to accept Spain and Portugal as full members, ‘father Papandreu’ had requested a Mediterrenean fund in serious amounts and he benefitted from this fund the most.  In the EU, which has consisted of 27 countries since 2008, we see that the source is diminishing gradually.  First, Hungary and Romania began to present economic problems for the EU and they ended up having to agree with the IMF.  Not being able to transfer much money to Bulgaria, one of the new members, Germany invested greatly in Turkish transporation companies and transporters in order to provide more opportunities to the Bulgarian transporter fleet, and, because of this, many owners of transporter fleets had to start a business in Bulgaria.  At the end of the year 2009, we see that Greece’s foreign debt exceeded the limit of 295 billion euro.  According to experts on the subject, this debt reached nearly 350 billion euro.  Greece needs 53 billion euro for the year 2010.

If Greece were a business, it would have been seriously considered to be bankrupt.  However, as it is hard for countries to go bankrupt, especially since the European Central Bank (ECB) does not allow such a thing, the President of the ECB, Jean Claude Trichet, sought, through a new summit, for opportunities to help the euro country Greece.   Accordingly, by following a plan for the next 10 years, the 27 EU countries will try to eliminate the concerns of the investers, which are due to the weak countries in the euro zone.  After Greece, Spain, Portugal, and Ireland rank among the countries that are problematic.  According to recent developments, Italy’s condition is also becoming difficult, day by day.

Greece implemented certain discretions.   Under these, it increased the retirement age from 61 to 63.  Beginning in 2011, for every five government employees who leave, one new person will be hired.  Short term benefits of stocks will be taxed.  The salaries of the Greek prime minister and other ministers will be frozen.  The same sanctions are being applied to the salaries of other workers.  Greek society, who had been used to conveniences, responded to these regulations by holding a 24-hour strike.  The task of saving Greece from this situation has been left to the EU, and especially to countries like Germany and France. 

Greece owes German banks nearly 30 billion euro.  Greece’s inability to rise out of this crisis is bringing serious problems into the euro zone and demonstrating that the euro’s value is compromised relative to dollar and is decreasing day by day.  In spite of this, Greece continues its spendings on war planes and defense nonstop.  In order to ensure France’s support under these circumstances, it was announced that the Greek army would buy 6 war ships from France in the following years. 

EU funds have not bee marked by any serious increase over the past few years.  However, the number of countries that request a share from these funds has increased to 27.  While 6 countries still pay more to the fund than they receive from it, the other 21 countries are trying to get as much as possible from the EU.  Despite all of its problems, Greece is in a condition to be saved by the EU in the year 2010.  In addition, the major countries of the EU will provide Greece with certain assurances.  
We can take into account that in 2011 Spain and Portugal will also knock on the door of the Union with the same problems.  The EU, in which Turkey has been trying to become a full member for the past 50 years, has entered into a phase of economic decline.  Although Greece, with its population of ten million, has been the country that has benefitted the most from the EU funds, it has not able to prevent the decline.  If there were a chance for an EU member to be removed from the Union, the country that would have left first would have probably been Greece.  As a country that does not have an economic policy regarding production, Greece will most likely knock on EU’s door to be ‘saved’ in 2020.

* Prof. Faruk Sen is the President of TAVAK (Turkish-German Educational and Scientific Research Foundation), based on Essen, Germany.
Last modified onSaturday, 06 May 2017 10:07