Monday, May 23, 2011

What Hope Looks Like In Greece

After muddling around with the latest news from Greece on Bloomberg and the WSJ, I Googled greek newspaper english language and came across and the Athens News. Bloomberg and the WSJ had hinted at Greek "asset sales", but it was unclear just what that meant. Were they selling gold bars or state-run corporations? The answer is much deeper than asset sales. They're moving away from the Paul Krugman, progressive economic model that has clearly failed and towards a more Milton Friedman-esque one.

First up, they're ditching lots of regulations.
The Finance Ministry has made public a list of 136 professions that will be liberalized from July 2 as part of the economic reforms Greece has been encouraged to make by the European Union and the International Monetary Fund.

The reform means that those seeking to enter these professions can do so freely, without restrictions on the number of people in the sector or limits on where they can set up their businesses.

The professions in the list published on Monday range from taxi drivers to beauticians but do not include some of the key so-called closed professions.

Notaries, lawyers and civil engineers will see their professions liberalized at a later date, yet to be set by the ministry.
Second, while dangerous to draw conclusions from a single paper's editorials, here's discussing the crisis.
The rapid deterioration in economic conditions has made it clear that changing Greece’s economic model will be more painful than previously thought.

The delays in overhauling and downsizing the public sector, which is key to changing the Greek economic model, will entail even greater economic and social costs than envisaged even six months ago if the government does not convince party loyalists in state-controlled corporations to accept privatizations and vested interests everywhere else to accept competition.
Corroborating this point of view is the Athens News' reporting from the inner sanctums of the EU.
The head of the Eurogroup urged Greece to set up an independent privatisation body overseen by the European Union to bring down its ballooning debt level.

Jean-Claude Juncker told German news weekly Der Spiegel's edition to be published Monday that the EU in future will monitor Greece's privatisation programme "as if we were conducting it ourselves."
People adapt. It may take them a generation or two to see how screwed up they were, but in the end, we all learn from mistakes and figure out what worked and what didn't. Unquestionably, the Greeks have made a mess of their economy, but it looks like the light is dawning on them. And lest we be too harsh on them, or on the Greek-like progressives in our own country, they smashed the place in an effort to be kind to the "less fortunate." They were trying to give security to all, not realizing that salvation, both spiritual and economic, is a personal thing. Now that collectivism has failed yet again, it looks like they're figuring it out.


Foxfier said...

For now. Somehow, the lessons never stick....

Can we get some of this "opening professions" thing going on here? I'd love to be able to do something out of my house without worrying about the law smacking me for existing....

K T Cat said...

Yes, for now. Such is the human condition, no?

Dean said...

"The reform means that those seeking to enter these professions can do so freely, without restrictions on the number of people in the sector or limits on where they can set up their businesses."

Wait, what? That's what they're finally coming around to?

No wonder there so hosed?