Now that a new bailout deal has been offered to Greece, the questions naturally arises : Who should finance the Greeks?
Certainly not the United Kingdom, though it is part of the European Union, according to Chancellor George Osborne. Logically, it seems, the finance should come from the Reserve currency of the Euro Area - that is to say, the Euro, whose parenting organisation is the European Central Bank.
The ECB should cater for this monetary expansion, just like the Fed did in the U.S. for the Quantitative Easing and the Bank of England has done the Credit Easing and the Bank of Japan has done the Stimulus.
But because the European Union is politically structured in a different style, the ease of an egalitarian monetary allocation is so much more difficult, I imagine.
The funds given to Greece already are the 240 Billion in the two original bailouts, plus another nearly 100 Billion that they have received in Emergency Funds since December 2014 as an anticipated start of the ECB's Stimulus which officially launched in April 2015. This was of course for the express purpose of circumventing a crisis that may have developed had Greece not received those funds. If the Central Bank holding the Mother Currency can not supply the currency, who can?
I am sure Mr Draghi and the European Union Ministers would have worked out a formula before Greece was offered the new deal, totalling some 87 Billion of new money, including the Juncker Plan, which I assume is based along the inspiration of the Marshall Plan in the 1940s. The Juncker Plan seems a magnificent gesture that should enable Greece create growth, jobs and enterprise, as well as new industries. The concept of it is inspiring, and it should create much good for the Greek economy and her people. The necessary capital can of course be expected to come from the E.U., via the ECB, under the blessings and aegis of the European Commission, whose President is the magnanimous Jean-Claude Juncker. Having welcomed Alexis Tsipras with an avuncular hug, this grand gentleman has shown the big-heartedness of Europe towards Greece by designing this plan.
The financing arrangements will evolve and become a reality when its architecture is crafted, to ensure it helps Greece take the course of actions and reforms that will benefit the nation most in its economic development, leading to growth, to Recovery, and then onwards to Prosperity. That whole cycle could take 10-12 years, but I see it becoming a reality for Greece. Through faith and vision it shall be so, that I believe in God's grace it shall be so.
The Greek government under the very popular leadership of Alexis Tsipras, who is responding to reality and acting accordingly, now needs to align themselves to accepting the new bailout, agreeing to the reforms necessary in the taxation etc, and then implementing the reforms. Then, once the framework of reference is there, the economic Recovery can start. The 23 percent VAT will seem very harsh, as will capping pensions for the meantime; not allowing people to retire too early will not seem very popular, but if the work is there, I trust people will not mind to work...the whole nation will help create wealth and Recovery for themselves and their nation. In that effort, all have a cause.
How wonderful it will be to have money in the ATMs again, people able to withdraw spending money, their pensions, business expenses and such like, with the banks recapitalised....How wonderful it will be for people to collect the container loads of imported goods sitting at Piraeus docks at the moment...How wonderful it will be for the shops to be open, for dinners to be sitting at the tables in the restaurants....How wonderful it will be for the estate agents to be showing properties to people who could rent or buy?
I hope these wonderful scenes are a reality in Greece in the next few days, once their parliament accepts the new deal and the Juncker Plan offered to them with blessings of the European Union.
And all can celebrate that the Euro has been saved from any question of its strength and integrity
as the Mother Currency of the Euro Area nations. I'd raise a glass of champagne to that.