Alexis Tsipras says he’s had enough of cuts and from now on it’s spend, spend, spend.
What it means: After eight years of austerity, or big cuts to public spending on everything from wages to pensions to building new roads, Tsipras says Greeks deserve a break. He’s promised backdated pay rises, lower taxes and increase welfare benefits.
Greece’s bailout program ended in August, which means the EU and IMF think its economy is now good enough that they no longer have to give Greece money to pay its debts. They’re unlikely to be happy about Tsipras’ plan to end austerity though, as they think the reason Greece got into trouble in the first place was that its wages were too high, its taxes too low, and its welfare too generous.
But Tsipras says the extra spending will boost the economy, and plenty of economists would agree with him. They point out that one person’s spending is another person’s income, so the more money Greeks have to spend the more jobs and business will be created to make and sell stuff for them to spend money on.
Brits, who have also spent the last few years being told that austerity measures are the best way to make them all richer, should be watching Greece’s spending experiment closely.
We’ve moved beyond a world where your country was all that matters. Our economies have become bigger than we realise. Things we use are less and less likely to come from our own country and more likely to have been imported from a country across the globe – this has become so normal that we’ve forgotten what a huge implication this has for how our economies work…