Cochrane is a long way from Greece, much like Canada is in general, but the financial crises gripping the country could happen anywhere if governments and residents ignore the simply numbers in front of them.
For those who haven’t been following the Greece situation, here it is in a nutshell:
Greece is flat broke. The country has no money left and banks have shut their doors and are only allowing a maximum of 60 euros to be withdrawn from ATMs per day, per person. The Greek government is looking for another bailout from European creditors – that bailout came with some stipulations…pension cuts and tax increases. There was a referendum vote last week, and Greece’s governing Syriza party campaigned for a ‘no’ vote, and that’s exactly what they got, with over 61 per cent rejecting the bailout terms.
Let’s recap: Greece pays out more money than it brings in and has gone broke as a result. They have clearly let this go on for far too long and relied on bailouts to get them by (if this was not the case, and the Greek government was being proactive and addressing the issue, they would not be in the position they are today). Now, European creditors have said they will bail them out if they make cuts to their pension plans and raise taxes, presumably to help avoid the country from going broke yet again and holding their hand out for some more money. But, Greek residents said ‘no.’
Now, imagine if you did the same thing.
Imagine if you spent more money than you were earning from your job and continued to do so until you simply could not any longer…your money and credit ran out and you had no way to pay for anything.
You walk into a bank (or you go to a family member) and ask them for money so you can get out of the mess you created, but that bank or family member say, ‘Sure, I’ll give you the money, but you have to make changes so that you don’t come to me again with the same problem.’
Could you even imagine telling them ‘no,’ that you refuse to make those changes and you want them to just give you the money and leave you alone?
This is essentially what 61 per cent of Greeks and their government told their creditors.
According to the BBC, youth unemployment in Greece is 49.7 per cent, and more than one in five citizens are pensioners – and that number is rising – with 17.5 per cent of its GDP being spent on pensions. The average monthly government pension amounts to 833 euros ($1,165 CAD); so, with a population of 11.125 million and around 22 per cent (or 2,447,500) of its residents receiving a government pension, that amounts to over $2 billion Euros ($2.85 billion CAD) being paid out every month.
There are not enough young people working in the country to pay into its pension fund.
Greeks do pay quite high taxation rates, with individuals paying 22 per cent (25,000 euros and under), 32 per cent (25,001-42,000 euros) and 42 per cent (over 42,000 euros). The corporate tax rate for 2014 was 26 per cent.
Most people would be comfortable paying these tax rates if they knew when they retired they’d be getting 833 euros from the government each month until the day they die.
If you look at the demographics of last week’s referendum vote on the bailout, you would see something that is not all that surprising – the vast majority of Greeks under the age of 65 voted ‘no’, with 85 per cent of those aged 18-24 rejecting the bailout terms.
In other words, young Greeks (nearly half of whom do not work) want their cake and they will eat it right in front of the baker without offering even the slightest taste.
The moral to this story is simple, and you don’t need Athena, the goddess of wisdom, to help you figure it out: if you can’t pay for something, you need to make changes, either to enable yourself to, or realize that you simply can’t afford something.
The sheer audacity to say on one hand that you want to continue receiving something, but that you don’t want to pay for it, you want someone else to, is mindboggling, egotistical and downright frightening.
This is not a liberal versus conservative thing; it’s a matter of responsibility.
This issue is certainly not this simplistic, nor can it be fully detailed in an editorial. There are more issues at play here, and perhaps Greek voters need to look more closely at how and where their elected government is spending their tax dollars.
This is true with any government in any country, just like here in Cochrane. We need a lot of services for our growing community, and council’s primary job is to make sure we have the money to pay for all these wants and needs.
