Letter published in FM

" Learning from Greek Myths"


You say in your Editor’s Notes ( FM 28/5/12) that with the Greek crisis it’s very difficult to decipher a road ahead. But there are some known knowns, in the words of Donald Rumsfeld, and they all contain lessons pertinent to South Africa. They are as follows:
1. The European model of the welfare state is ultimately not a viable one, as the ability of the state to pay for it declines along with demographic change. Eventually the money does run out.

2. When you are the US, with strong demographic prospects and a culture of entrepreneurship, people will still lend you more money in the absence of anything else on offer on the same scale. Europe, not so much.

3. Voters and governments can be complicit in their own mutual downfalls, as people continue to believe that they can have their cake and eat it, and politicians reassure them that they can.

4. Greece within the EU always was a long shot for an economy that doesn’t produce anything. However, outside the EU, there is no future for Greece. Plan you next holiday there – it will be very cheap.

5. Business can take an awful lot of punishment before the private sector collapses. But when it does, the speed and irreversibility of the process will surprise you.

6. The EU crisis has its origins in the financial sector. There are few signs that this has been adequately addressed yet. So expect more trouble for Spain, Italy and Portugal.

7. Regional unity must always rest on naked mutual shared self interest. Otherwise it is a figment of your imagination, whether that be a pan European or a pan-African idyll. Sentiment wont butter your parsnips, not now, not ever.

8. There is no free lunch, for anybody, anywhere.