In 1983, IMF imposed conditionalities on Nigeria. These are set of austere measures, supposed to facilitate the repayment of Nigeria’s external debt. A major point of the austerity measures was for Nigeria to privatize her economy. The argument was that privatization is the only way market efficiency is possible. Buhari, the current president, was Nigeria’s military Head of State at the time. IMF refused to assist without Buhari adhering to all the austere measures. For months, Nigeria’s economy remained paralyzed. Babangida cited the inability of Buhari to reach a consensus with the IMF as one of the reasons for his coup. Other nations that have defied the IMF since then haven’t fared better.
This, is the reason that the stance the Greeks have taken matters. It’s of interest that the two major stumbling blocks to any agreement between Greece and its Creditors are for the Greeks to raise their retirement age above the current 55 years and to raise taxes. The retirement age appears to be the most important. Why?
Life spans in most European countries have increased. Most statistics has plugged it at around 78 years. As such, a Greek that retires at 55 years has another 23 years to collect retirement benefit. Interestingly, most retirement plans are held by private institutions under the privatization mantra of the ’80s. The longer a Greek lives and collects retirement benefit, the less profit the private institutions holding Greece retirement portfolio makes. This is a bridge too long to cross for these big boys, so, Greece stance is untenable. After all, other European nations have increased their retirement age to facilitate adequate profit for these big boys. Even, in America, you’re not qualified for a full retirement benefit if you retire anytime before your 67th birthday. So, I have about ten years to collect retirement benefit rather than the 23 years in Greece.
Greece’s stance is consequential; it’s a new world economic reclassification. Would Greece lead the new world as it led the old? Could Karl Marx be right after all when he predicted the destruction of capitalism by Capitalism?