By Beatrice E. Rangel
As Greece starts down a road full of unknowns, the EU suddenly realizes how destructive complacency can be.
Indeed, current headaches originated in an ill-conceived agricultural policy aimed at restricting supply to artificially maintain higher prices. Policy proponents listed among its many virtues national security.
These individuals indicated that should agricultural prices level at the cross point of demand and supply, farmers would leave their land to come to the cities thereby producing a modern wave of urbanization that would, on the one hand, trigger the sprouting of Hoovervilles while, on the other hand, promoting all kinds of undesirable trade such as that of drugs, human beings and arms.
Nobody seemed to notice that Europe, as a whole was trading value creation for rent extraction and that the system could only work under two conditions.
First, the GDP had to continually grow, a condition that ceased to exist around 2006.
Second, there needed to be more young people than old people to sustain the transfer system.
The European demographic snapshot however tells us that citizens are living longer and healthier lives thus expanding the region's lifespan. This remarkable development came about with a substantial reduction of fertility rates that have gone below the replacement level thereby beginning a process of population shrinkage that has eroded the sustainability of welfare services.
And, as we all too well know, adjustment of expenditures in welfare services to tax receipts is very difficult.
It however is even more so when you need to withdraw income from people who are at the end of their lives. As the referendum results in Greece tell us, Europe is initiating a bumpy economic and political road marked by increasing polarization and complex governance.
The brunt of the hurricane will be felt by Mediterranean Europe, but not even Germany will be safe from political discontent.
For instance, it is quite difficult if not impossible for Germans to gauge how any authority could lend so much money to Greece when it was quite obvious that the country could not pay it back.
This will prompt a debate about Germany's role in Europe that would directly point to adjustments in the EU Charter.
Meanwhile, In the UK, the results of a EU referendum are now more likely to be isolation than before the Grexit crisis.
France will soon learn that its youth is about to be taken by the spirit of 1968. But in this century it will not be the students but all Millennials who are victims of unemployment and reductions in safety net protection.
Thus the Greek decision is nothing but the rising of a curtain in a drama that will keep European societies polarized for the better part of this century up and until new generations with a better understanding of the information economy take the public policy helms and begin remodeling the European economic edifice.
Until then Grexit will impact almost every corner of the region.
Overseas across the Atlantic Ocean, Latin America will also be impacted by the Grexit .
Contesting political parties and leaders will meet success -- detractors of the Washington Consensus will have a field day. The much maligned IMF and World Bank will bear the brunt of the Latin tradition of blaming others for their predicament and will be made responsible for every inequality, all poverty and every wrong. At the same time, the new BRIC Development Bank and the Asian Infrastructure Development Bank will be swamped with projects to finance. In the end, a new political and economic landscape will emerge from these choppy waters but expect severe slowdowns in the route to progress.
Meanwhile, in America, baby boomers are bidding adieu to Donna Karan, the lady who made it possible for them to be women at the work place. Prior to Ms. Karan's foray into fashion design, apparel wise women simply were female clones of their male colleagues. Then Ms. Karan came along with her seven piece magic kit to rescue femininity. Seven pieces of clothes with the body suit at the center turned robotic male replicas into real women.
Thirty years since Donna Karan's launch, her creation of feminine, comfortable, and interchangeable pieces is the best business platform for women who have to juggle office, travel and family. But as more and more jobs can be conducted from home, Ms. Karan's legacy is bound to become a legend just like Chanel's "little black dress" now is.
But as generation C becomes the majority of the work force and their time is divided between home and travel with decreasing appearances at offices, Ms. Karan's seven pieces are bound to make an astounding comeback just as Diane's von Furstenberg wrap dress came back when baby boomers began to see their bellies grow in spite of the popularity of tummy tuck procedures.Beatrice Rangel is President & CEO of the AMLA Consulting Group, which provides growth and partnership opportunities in US and Hispanic markets. AMLA identifies the best potential partner for businesses which are eager to exploit the growing buying power of the US Hispanic market and for US Corporations seeking to find investment partners in Latin America. Previously, she was Chief of Staff for Venezuela President Carlos Andres Perez as well as Chief Strategist for the Cisneros Group of Companies.
For her work throughout Latin America, Rangel has been honored with the Order of Merit of May from Argentina, the Condor of the Andes Order from Bolivia, the Bernardo O'Higgins Order by Chile, the Order of Boyaca from Colombia, and the National Order of Jose Matías Delgado from El Salvador.
You can follow her on twitter @BEPA2009 or contact her directly at BRangel@amlaconsulting.com.
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