i understood it differently. Greece had a history of living beyond its means. Indeed, when the European union started, it was almost denied entry. Pre-Euro times had seen greece accumulating substantial debt to cater to its recurrent expenditure with loans avaraging in the double digits (13% hivi kuna zenye waliborrow na 18% like me n u). Now what they did, waliclean books waka.meet EU entry conditions.
Vile waliingia, they now borrowed funds na single digit interest (3-4%) hivi. Now mafala instead ya ku.borrow funds ku.retire old debt, or kufinance infrastructure (read investment), walidecide kugo shopping ka madem. They spent so much on recurrent expenditure. Public wage salaries zika.double within a decade.
Sema inflation.
Sema wao ku.default on loans
Sema rating yao kwa CRB ya ma.countries kuwa downgraded
Sema kuborrow more loans kuwa expe
Sema madeni …madeni …madeni …madeni
Sema wasee kupanic na kutaka kutoa doh zao zote from banks
Sema banks kufungwa na kuopen na limit unaeza toa
Sema akina Angela Merkel kusema ndo tukupe doh, manganga wife yako christmas pekee (Ok, hizo maconditions zilikuwa zinakaa hivyo but waliita austerity)
All true, the difference is their loans are in a currency they don’t control. Nations zikilemewa na debt an easy way out is devaluation, for Greece that ain’t an option.
Importantly too, corruption had bedeviled Greece and tax evasion was high too.
The story of greece seems so eerily similar to Kenya’s. Atleast where we seem headed.
Take this for instance, Moi left us with about 600B debt. We have over 2 Trillion now. Plus, next financial year we will borrow 500B debt to finance budget deficit. In that next year, out of a 2 Trillion budget, recurrent expenditure will be 1T while development will be 900B.
They say figures say a lot, but they also hide a lot, looking at absolute debt figures doesn’t paint the whole picture. For example USA debt stands at US $19trillion while that of Uganda is around US $7billion. Does that mean USA is in a worse state than Uganda, the answer is no. A better comparison is debt to GDP ratio,
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Now Moi is no longer a genius, huh?
I remember seeing a documentary on Greece and that is what happened, they went and took over the profitable parastatals and are using them to pay back their debt. I gues that is what austerity measures are all about…we will loan you some more money but you need to lay off workers or you need to change management of this and that parastatal or govt services…
Sells assets like greece was being told to. How about privatizing mombasa ports for a few billion dollars? but if continuously do that you will be owned by foreign corporations. That is why greece were kukaa ngumu. You are told to compromise very important sectors.
repaying international debts is a must unless they are waived. ramifications for refusing to pay are serious. Even Germany had to pay world war I and II reparations until recently. nazi germany had however refused but little could be done because it was an unchallenged super power in europe then.
Lakini Shocks if all the moneys we spend, especially the debt, was properly used, si the GDP-Debt ratio ingekuwa better? In other words, the U.S is more efficient on the use of its debt compared to our country. I feel in future, this inefficiency (read Corruption & tax evasion) will catch up with us
wewe wacha history is replete with example of sovereign defaults, like Argentina, when they couldn’t pay their debt they offered the investors a deal where they would pay a percentage of the debt, wengi wakakubali, the few who refused are still trying to do all manner of things to try force Argentina to pay their debt in full na nikama wataambulia patupu
The key point to note is that countries are sovereign as per UN. If a country refuses to pay your debt, you can make all the noise you want but you cannot touch any of their assets. Kukulipa deni ni kwa hiari yao.
Whats your point? There are ramifications for not paying. And sometimes very serious. What if we refuse to pay that Eurobond and we cant get a loan from anywhere? Achana na UN. kwani what is UN. Didnt US go to war in iraq against their will na hakuna kitu walifanya? Sovereignty my ass. What they have written somewhere doesnt mean it applies or is even real.
What about lowering your National Credit Rating?
I thought you knew what you always spoke about But i am totally disappointed.
Ever heard of Moody`s, Standard and Poors, Fitch?..
Sometimes its very important to keep quiet Rather than Mislead…