OPINION

How can we break the cycle?

The market has found itself in the thick of the global financial crisis due to a lack of liquidity, and the most recent available data are telling us that the situation – a self-perpetuating vicious cycle that drags down orders, production and employment – will only get worse. Is there any way to break this cycle? In times of crisis, the loss of income coupled with insecurity lead to a slump in consumption and liquidity, as a result, is reduced. In Greece the problem is magnified by the way the state operates. Instead of being in a position to help the situation, the heavily indebted state ends up being a burden. In fact, the state right now is depriving the market of some 12.5 billion euros in badly needed liquidity as this is the concealed accumulated debt to all sorts of enterprises with which it does business. The state itself never went short of money in order to fund the sources of its political patronage. And this is precisely why it never had the money to settle its debts to those who do business with it. So, the question is: Will we ever break free from this cycle?