Later tonight the Greek parliament will vote on a five-year plan of budget cuts, tax raises and privatization in order to win a bailout package consisting of EU/IMF funds. While the prospects of the parliamentary vote, its expected passage, and the subsequent saving of the French banks, have somewhat calmed the markets; I am somewhat surprised how easily the market seems to swallowing the will of the Greek people to go along with the bailout plan.
I personally don’t buy it. I think, at best, it is nothing more than the proverbial “kicking the can down the road,” only it is very likely to make things worse in the future. Basically the problem is going to be far worse then than it is now. I am not convinced the Greek parliament is going to pass the austerity plan; and even if they do, I do not see anything that prevents the Greek people from voting in a new set of parliament members who reverse course with the next government. Then What??? Who will trust the Greeks enough to bail them out a second time?
However, I would not be surprised to see the Greek parliament vote down the austerity package. Based upon everything I have seen or read, the Greek economy is systematically a mess. They report taxable income on a voluntary basis, and from what it appears with the pool issues and property taxes there is no enforcement activities either. In a nut shell, you have an extremely top heavy socialist government where no one really works or pays taxes. The Greeks have grown soft and unmotivated, they have bought into the leftist Keynesian economic garbage. My bet is that the Greeks are going to resist any real changes until they have no choice; and even then I doubt they will have what it takes to follow through and build a solid, stable economy. I could be wrong, but time will tell, and we shall see.