Greek tragedy on China's horizon
- By Jonathan Jones
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China.org.cn, July 14, 2011
After all, China's only real exposure to the crisis is that it holds a fraction of its considerable foreign exchange reserves in the Euro currency. Most experts believe that even when Greece is finally forced to default, the euro itself will not be fatally flawed. Although a restructuring of the Euro zone will take place there are just too many people with a vested interest to allow the currency to collapse altogether.
The main long term problem facing China isn't the stability of the Euro but what happens if a political force emerges in Greece who is actually prepared to act upon the wishes of its people.
There is a groundswell of popular opinion within Greece that the country's debt figures are illegitimate. Citizens are demanding an audit of government accounts, believing fraud and political corruption have pushed the Greece's national debt to the extreme.
If they get their wish and an audit proves their theories to be true, Greece would be able to claim that parts of the debts are odious. Therefore they would not be required to repay the entire amount. A significant proportion of the debt would be wiped from the books and creditors would not see most of what they consider is owed.
As unlikely as this seems, there have been other cases throughout the 19th, 20th and 21st centuries where removal of debt has been sanctioned by the international community.
In the most recent occurrence, America and her allies toppled the regime of Saddam Hussein in Iraq and decided to declare null and void 80 percent of the country's existing debts to allow for the new government to begin rebuilding the nation without the burden of meeting payments to creditors.
If the Greek people can turn the tides and push through the audit, the governments of other embattled nations, including Spain, would be seen by their own people as being totally corrupt if they did not to follow suit. The resulting write-off of debt could be enormous.
For China, who is increasingly exporting high tech products and enhanced engineering capabilities, the warnings of back room deals are clear.
In the murky world of international governmental procurement, dealings will have to be increasingly transparent. If not, further down the line, an audit could slice through expected revenues and leave Chinese companies and even the State itself with nothing to show for all their hard work but a worthless IOU.
The author is a communications professional, film maker and published writer with a keen interest in life.
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.
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