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Ottoabasi Abasiekong: Debt Management And Economic Sustainability (17)

By on November 2, 2012

The recent statistics for the EU unemployment is not pleasant, the report reveal a 11.6% surge with Spain having the highest unemployment rate of 18.6million people a terrible outlook for the European labor market and is in its worst shape since the inception of the regional economy.

This could also sound a warning signal to the European leaders especially the debt plagued nations often called the ‘PIIGS’ axis , because the austerity measures implemented during these period would be hurting than soothing considering the outlook at the moment.

One issue to look at is Corruption one of the factors for the unfortunate debt crisis scenario in the ‘eurozone’, Italian Political Generalisimo Mr Silvio Berlusconi (Former Italian Premier) was convicted by a court in Milan for tax evasion fraud.

This means while well-meaning and hardworking Italians were paying their tax , rich oligarchs like Berlusconi tried to be smart by evading his tax payment which is an accelerated case of corruption. With Italy as one of the Country’s in a debt crisis saga, questions will be asked to how accountable he was with public funds, if he avoided paying his tax.

So his sentence to a Four year jail term, which was later reduced to one year is a reflection of the kind of leadership Italy has had for decades needless to say why the country is reeling through the mess of austerity and uncertainty.

Another unfolding event is the publication by Greek journalist Kostas Vaxevanis on Monday the 29th of October in his Hot.Doc magazine the names of 2,000 top citizens of Greece that evaded tax and have Swiss foreign account.

The top citizens list range from parliamentarians, businessmen, celebrities, government officials etc, and despite the fact the Greek Government had been privy of this information, the perceived inaction compelled Vaxevanis to boldly publish the list.

Despite his arrest for breaching privacy law and subsequent charging to court, (Has been acquitted)Kostas Vaxevanis is defiant that his commitment to ‘Investigative Journalism’ especially on issues of corruption will not be suppressed. His courage and determination is commendable and remarkable.
This underscores the disaster in the ‘eurozone’ and the debt plagued countries. If the Vaxevanis report is authentic then the sufferings, pains and anguish of the Greek people is being caused by their own people.

It shows that these people who have been evading tax and operating foreign accounts have no compassion and heart for their Nation and the Government will also take the blame for not tackling corrupt practises in the economy effectively.

Based on this it will be advisable for the Debt-plagued nations to slowdown their austerity measures and restructure the economic system in a way that can close the loophole of corruption that leaks the public finance structure, because without proper institutional framework, reforms will have little or no impact on the growth of the economy.

The rage and protests over cuts in the budget and the pensions is not because the people don’t understand that there is need for reforms, but they are fuming at the lopsidedness of it.

If further investigations into the revelations of Mr Vaxevanis is done and all the culprits brought to book and the diverted funds recovered, it could go a long way in boosting economic growth, if used judiciously and Prime Minister Antoni Samaras will be saved the stress of travelling to Brussels to plead with International creditors to soft-pedal their conditionalities.

There must be a change in approach to the management of the debt crisis situation, beyond the clamour for EU budget cuts the leaders must remember that growth has been very slow and the youth will not become as productive, energetic, industrious, and viable instruments to driving the economy, if there is drastic cut in Youth empowerment programs .

An auditing of the entire banking and financial operations of the ‘PIIGS’ nations is needed and investigations into tax evasion should be taken more seriously, because there could be more Berlusconis ripping the system.

A global economic system that thrives on greed, corruption, and injustice can no longer be sustained, it therefore implies that should the European leaders fail to take proper action on these issues, they may set the ground for more protests, strikes, and crisis in the region.

One of the wise quotes asserts that ‘He who calls for equity, must come with clean hands’, if the Leaders say austerity and cuts are good they must show the citizens how prudent they are with state resources and how bold they are to confront corruption.

For the Greek Government if they play mind games with the people over the ‘Vaxevanis revelation’ and refuse to thoroughly investigate and act appropriately on the report then they could be in for another shocker, if further cuts are introduced.

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