Skip to main content

SUGGESTION TO THE GREECE FINANCE MINISTER EVANGELOS VENIZELOS 2011

SUGGESTION TO THE GREECE FINANCE MINISTER EVANGELOS VENIZELOS


To:               The Right Honorable Finance Minister Evangelos Venizelos

From:            Athinarayanan Sanjeevraja

RE:               Greece Austerity Program

Suggestions:

Good Morning Finance Minister. When I wrote to you in the month of June, I recommended Greece must continue on the path of reform - a refurbished economic structure is essential to restore growth and competitiveness along with an austerity drive to restore the budget to primary surplus. Whenever deficit and debt of a country get out of control, fiscal consolidation must occur in order to stabilize the economy. This means that government should run a surplus. Fiscal consolidation is having a government that controls the country not only the obvious activities of law, defense and foreign policy but also spending and taxation at all government levels. Both are goals of the austerity plan. But however the tax raises have been noted as unfair. It is a big issue. By increasing taxes, the disposable income becomes lower, thus decreasing the money demand. And this will go on until there is a balance between money demand and supply.

Another big problem in Greece is the lack of liquidity which is less known. The money supply which is the amount of coins and deposits that circulate in the economy is much less than the money demands.

Another problem in Greece is the lack of productivity. The unit labor costs are too high. You keep in mind, the high unit labor cost is bad and vice versa. By lowering the wage through the tax rises, the gab between the wages and productivity becomes smaller. Thus it will have a positive effect in the long run. This is where the austerity plan is roughly aiming. However you may have noticed that there is no indication about output growth.

Let me conclude it Finance Minister, your austerity plan carries immense implementation risks to address lot of the structural reasons of the Greece situation. I would recommend you to consider all sides first to build better structures, a better nation. Structural reforms, efficiency and cost cutting are the solution to the problems of Greece. To enforce the program of austerity and structural reform, you need a strong government as well as a competent and professional civil service.

Thank you very much for your kind attention to this issue Finance Minister.

Sincerely,

Athinarayanan Sanjeevraja

Comments

Post a Comment

Popular posts from this blog

INDIA'S FARM BILL 2020

To:     The Right Hon. Indian Prime Minister Mr. Narendra Modi   From: Athinarayanan Sanjeevraja Date: February 15, 2021 RE:     India’s Farm Bills 2020 Suggestion: Hon. Prime Minister, let me start paying my respects to you and through you to. India’s farm reforms have been advocated for many decades by the Indian farm economists. In fact, I’m strongly in the favour of the farm reforms when I was in Indian financial market 2007. The farm laws are very good in intent and end ecologically unsound practices. Farm law needs to be welcomed as farm laws are free market laws which allow private players to directly purchase agriculture products from farmers. In other words, farm law eliminates middlemen and gives the right to farmers to sell their agriculture products to whoever they want and they could decide the price but your government proposal on farm laws which fear that it refrain small farmers have freedom to negotiate to...
Post a Comment
Read more

SUGGESTION TO THE PRIME MINISTER OF JAPAN YOSHIHIKO NODA

SUGGESTION TO THE PRIME MINISTER OF JAPAN YOSHIHIKO NODA To: The Right Honorable Japanese Prime Minister Yoshihiko Noda From: Athinarayanan Sanjeevraja Date: 30.09.2011 RE: Japan Energy Policy Suggestion: Changing Industrial Policy Good Morning Prime Minister. BBC World broadcasted your speech regarding alternate energy sources. I agree with your approach to reduce nuclear power in the medium term because having the nuclear reactors in an earthquake prone zone is not safe for the environment or the communities that live near them. Japan is struck in a difficult situation concerning energy. If you want to eventually move away from the nuclear energy, you’ll have to invest more alternative energy sources. If you can’t invest, then it may have to say with a nuclear power for a while. You need make the right decision because source of energy is dwindling. You have one more option which is Japanese people depend on nuclear power with only 1% but 9% including hydroe...
Post a Comment
Read more

SUGGESTION TO THE BANK OF ENGLAND GOVERNOR SIR MERVYN KING

SUGGESTION TO THE BANK OF ENGLAND GOVERNOR SIR MERVYN KING To:               The Right Honorable Bank of England Governor Sir Mervyn King   From:           Athinarayanan Sanjeevraja Date:            October 17, 2011 RE:               QE Suggestion:    Identify and correct the fundamental factors that are behind low economic growth.  Good Morning Sir. The Bank of England has decided to undertake more QE. I agreed that during the financial crisis of 2007-2008 monetary policy was effective in re-establishing liquidity in the main developed economies especially US, UK and Europe. But current economic conditions in developed economies reveal problems whose solutions are far beyond the scope of monetary an...
Post a Comment
Read more