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Greece's new government must act fast, before the honeymoon is over.

By       Message Farid Khavari     Permalink
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With all of the media attention focused on Greece's negotiations with creditors, it would be tragic if the new government were distracted from its more urgent mission: to create employment, rebuild the Greek economy, and reverse the devastation imposed by years of "austerity".[tag]

From Visit Greece this summer!
Visit Greece this summer!
(image by danichro)

Pundits cluck that if Greece leaves the Euro, its economy will decline by 10% (why not 9% or 15%?), Greece will face rampant inflation, capital flight, chaos, social unrest, and the downfall of the new government.

Whether Greece agrees to this or that ultimatum, extends or does not extend the "bailout", leaves or does not leave the Euro, will be moot unless the government of Greece finds a way to put its unemployed people to work and the results are felt at Greek kitchen tables.

Whatever agreement might be reached with creditors, it will not create one job in Greece. And the creditors know that by the time the next negotiations roll around, they will likely be dealing a different, more compliant government in Greece.

The new government in Greece is in that happy honeymoon period of euphoric optimism, hope and great expectations, when a government can get great things done. Whether the honeymoon lasts for weeks or months, time is running out.

The government needs to show the people a credible plan create jobs immediately and to bring prosperity back to Greece, before disappointment ends the honeymoon.

This initiative would sustain the support and enthusiasm of the Greek electorate, and would far outweigh the political fallout of whatever results are achieved, or not, in the current debt negotiations.

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Despite the warnings of the pundits, Greece is in a unique position. Greece need not worry about backlash if she decides to leave the euro or to undertake any other drastic or radical measures. The government must be more concerned about addressing the needs of Greeks than those of bankers and Germans. This is where time is crucial.

Even in the best case, no miracles will come out of any short-term solution negotiated with the creditors who imposed the austerity that crushed the Greek economy and brought misery and poverty to millions of Greeks. The solution to Greece's high unemployment and economic misery can only be found in Greece. Finance Minister Yanis Varoufakis has no time to waste on negotiations with creditors until he charts a course to massive employment and economic security. Economic philosophy must be replaced by pragmatism.

To achieve these goals, Greece need not remain in the Euro or even the EU, nor obey demands of the EU, predominantly the Germans. Greece need not take on more Euro debt and interest obligations, either.

Before the honeymoon is over, the government of Greece should announce that it will withdraw from the Euro and activate a central bank owned by the people of Greece, returning to the drachma for domestic transactions. At the same time, the government should present a credible solid economic plan to jumpstart the Greek economy, creating massive employment, leading to prosperity and economic security for all the people of Greece.

We can be sure that the people of Italy, Spain, Portugal, Ireland and France are rooting for Greece.

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Greece has the resources to realize these goals with little outside help. What Greece does not have is time.


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Farid A. Khavari, Ph.D., is a noted economist and independent candidate for Florida governor in 2014. He is the author of 10 books including Environomics: the Economics of Environmentally Safe Prosperity (1993) and Toward a Zero Cost Economy (more...)

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