Another beautiful day on the Greek island of Santorini , and as he lies back soaking up the sun and retsina, Contractuary’s CEO David Crawford finds it hard to believe that he’s in the middle of one of the world’s most financially stricken countries.
As holidaymakers hustle past to find their perfect sunbathing spot, you may be forgiven for forgetting that this typical holiday resort is at the centre of one of the biggest economy failures of the past decade. David laughs off the idea that the depression has not yet reached the beach.
As a leading member of the “Piigs” (Portugal, Ireland, Italy, Greece and Spain) community, the Greek’s problems erupted from an insatiable greed! Heavy borrowing, expensive spending sprees, massive public spending, the doubling of public sector wages and an absurdly generous pension scheme, soon saw the country racking up billions of euros in debt. As money flowed all too readily from the frivolous government, tax income was hit by widespread tax evasion! Once the global financial downturn hit, “Greece was just not prepared!” claims Crawford.
“Once Greece was hit, there was a fear of a catastrophic domino effect, especially for those countries who had lent so heavily to the greedy Greeks”. The Euro Zone was put on a state of high alert, with neighboring governments reassessing all recent spending.
It seemed the greedy Greeks had bit off far more than they could chew, borrowing and spending like there was no tomorrow with no actual means of paying it back if necessary – “I wonder does this have anything to do with the fact that it was a male dominated government?” jokes David.
Just as it seemed they had hit rock bottom, a rescue attempt was launched in order to help save the country from the ultimate depths of despair and to motivate further reform momentum. David feels however that the bottom line is that even if the Greeks do everything that is asked of them, another crisis will loom before long – a case of problem diverted but not dissolved!
David reflected on the issue that many in the actuarial profession believe that another effect of the Greek crisis will be the failure to implement Solvency II regulations on the set, 1 Jan 2013, date. “Many colleagues have approached me suggesting their lack of confidence in the belief that the regulations will go ahead, because the world’s banks and Finance ministers will be too preoccupied digging greedy governments out of their deficit holes” says David.
As the CEO of the innovative Contractuary brand, David feels that such creative thinking would not go amiss for governments who are faced with the headache of reconciling a self-inflicted financial disaster!