Greek Crowd funding – A story worth spreading.

Pic source : http://beforeitsnews.com/alternative/2015/06/greece-debt-crisis-greeks-refuse-to-pay-debt-calling-it-illegal-illegitimate-and-odious-3172184.html

At a time when reading a news website has become anything but pleasurable and inspiring, there is one story that is worth sharing and appreciating. This is the incredible story of a simple man starting a crowdfunding to bail out Greece. While the world leaders are busy trying to find a solution for this mess, there is this young brit who has started this crowd funding with an intention to actually do something about it.Till now there have been more than 98000 contributions in less than 6 days. Realistically speaking this will not collect the required 1.6 billion € that is required for Greece to pay back IMF and in another month or so have to pay the EU twice the amount. This by no means it the complete number. Greece owes well over 250 bln €.  People have different opinions about this crowd funding, ranging from being highly supportive to be completely ridicule the idea. I personally support this as this represents basic human courtesy. But before one can make up his/her mind about being supportive or being against crowd funding/bailout it is important to understand the complete picture of the crisis. And tomorrow is an all important day as Greece vote on the referendum.

Disclaimer : This is just my understanding of the whole situation. If there are some figures, you will get the reference for that. And the final conclusion is just my opinion.   

What is this crowd funding for?

Crowd funding is raising money through anonymous donations for a particular cause. The Greek crisis has almost reached tipping point which could begin the end of European union. Here the cause is to make sure, Greece can pay a part of their debt (1 %)

What will happen if they don’t pay ?

·           Just like a defaulter, Greece would have to say to the creditors ( ppl who lent the money like IMF) sorry dude, we cant!!
·         Greece cannot use euro anymore.
·         Greece should choose a currency of its own and start minting money(Just to create a source). This would mean that currency has little value.
·         Greece would start from zero, just like a newly formed independent country.

What led to this mess?

There are many reasons why Greece is in this mess.

·         ·           Right from the time when Greece joined the EU, back in 2000, it had a huge debt. As the concept of EU was built on a no inflation policy, meaning only way a country can get fresh capital is by taking credit. All was good till 2008 crisis when there were enough finances, giving Greece ample scope to borrow.
·          The problem was also, that Greece had borrowed much more than what they could pay back and their asset value tanked almost overnight.
·         Add to this mess corruption, bad policy, lack of natural resources and a weak industrial base, it is the perfect recipe for disaster.
·         As much as politicians were corrupt, well educated professionals were no different. Just read this article (http://www.theguardian.com/world/2012/sep/09/greece-tax-evasion-professional-classes). These professionals had evaded tax to the magnitude of 30 bn €/year.

How did Europe Respond?
Eurozone countries and international banks gave Greece lots of money to save her, with the condition that Greece will buck up. Some criteria include deep budget cuts and raising taxes.  Here is a list of austerity measures (http://www.bbc.com/news/business-13940431). Greece cut budgets, and increase taxes. Citizens protested against it because nobody likes to pay more taxes. The 'bailout' money was mostly spent on repaying her debts, and it was not enough to revive the economy. Only 10% was used in reviving economy. (http://www.theguardian.com/world/2015/jun/29/where-did-the-greek-bailout-money-go)

What is it for Europe?

In Greece simply put, there are very few people working to pay for a large number of people who are either retired (a retirement age of 55!!, while in Netherlands it is 67) or unemployed. Simply put at the grass root level people not very happy about their governments paying up for Greece. But on the other side,the "Euro" reputation will be tarnished because investors just lost lots of money with Greece walking away. Investors will be deterred from investing into any countries that carry Euros, and it is bad for economic growth. This impact will ripple through the world economy.

Other than the monetary issue the whole concept of European Union is under threat. The whole concept was based on regional cooperation. A good example is Indian Union of states. India is country of 29 states with a strong federal government, distributing the wealth from rich states to poor states. While Europe has nonexistent federal government, it was started plainly put based on mutual trust and coorperation. Here is the first sign of this going south!!

So why do I Support this crowd funding?

Inspite of the fact that there is no way a crowd funding can help solve the problem, its about symbolism. If I were a greek, I would be so happy that there are about 100,000 unknown individuals who want to help the people of Greece as are willing to fund and want to do something to improve the condition. There have been examples in the past, Germany 1950s, US 1930, India 1991 all these countries came out of deep shit. India is great example because, inspite of corruption it managed to come of an economic crisis.  And this crowdfunding is an amazing show of solidarity for the people of Greece.  Here is a realistic, but though provoking interview from the guy who started this, (http://www.theguardian.com/commentisfree/2015/jul/01/greek-bailout-crowdfund-politicians-euros-people)

Inspite of the inherent flaws, I support this crowd funding. I want interested people to make a contribution. We humans are not perfect and this is like a group of flawed people trying to help another group of flawed people to make a flawed system tick.

https://www.indiegogo.com/greek-bailout-fund.html