Gary's News and views

Gary Streeter MP for South West Devon

Gary writes a weekly article which appears in the Plympton Plymstock and Ivybridge News in South West Devon. The articles are published here.


Thursday, 18 February 2010

The shots of the stunning walkway surrounded by crystal clear blue water on which Pierce Brosnan and Meryl Streep sang "the winner takes it all" in Mamma Mia will have given tourism in Greece a real boost. It must seem a long time ago to them now as their public finances spiral out of control.
What lessons can we learn from their plight?
First, if we don't get our own debt under control we will end up in the same position. Once the international credit rating agencies downgrade your credit status, you are on a long a long road to financial disaster, with interest rates going up and an inability to fund your deficit. Sovereign debt (a country going bust) is not impossible. So we must take decisive action now if we are to avoid the horrendous scenario that is unravelling in Athens.
Second, for all the talk of solidarity, in the end the EU is still a collection of nation states. Even the euro zone countries have not put their hands in their pockets to bale Greece out, nor are they likely to do so. Greece has been unwilling to take the tough decisions that other countries have taken. You can still retire at 60 in Greece and get a full pension. Why would tax payers who have to work till nearly 70 in other countries want to support them if our Hellenic friends won't bite the bullet? In the end politicians are elected and can be removed by their own electorates and this is the reassuring reality of democracy beyond which governments find it hard to stray. 
Third, it is easy to be generous with other people's money during times of plenty. Times of hardship drag you back to first principles. Governments cannot forever spend what they have not got. The public sector workers who marched through Greek cities last week had a point: they did not cause the crisis and should not alone have to pay for it. But in the end, we all caused this crisis by signing up to a decade of borrowing and spending too much. Whether it is fair or not, we all now have to accept the consequences of rebalancing our public finances.
As we approach the election, it is important that all parties are honest with the electorate. Whoever wins, there will be cuts. The Greeks have woken up too late to their nightmare. We have been warned.

posted by Gary @ 09:05