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Extra Virgin - January 2010

MoneyIf the international financial markets were a football team, it would currently be one suffering at the hands of repeated own goals by a member of its squad, Greece. Craig Gill wonders how we can learn from this miniature Greek tragedy.

Greece’s challenges, and indeed those of the whole “international markets” team may seem a distant concern to us here on the southern tip. But just as the beautiful game has become a global phenomenon - with Premier League matches as enthusiastically supported in Soweto as Southampton – so has the financial world become an interlinked international web.


In essence, then, Greece’s current form is the result of a few key behavioural flaws:

• Overdoing it when the times were good (Borrowing far too much as a country after joining the EU)

• Relaxing on past glories during the off-season (Allowing the economy to remain inefficient, corrupt and bloated during the boom times)

• Avoiding the “get fit regime” when the fat rolls started to show (Doing very little to change the economy and the country’s finances despite signs and advice that theirs was an unsustainable path, and debt repayment would become impossible)

• Relying on the strength of the team, and on strong players to carry their poor play (Reliance on the EU and in particular Germany to come to their financial rescue)

What is generally applicable to huge players on the global scene, are equally applicable to us humble participants in the domestic game of (economic) life. What are the important lessons to be learned from this situation? What can we take to the strategy board for our next team planning and survival session?

It’s simple: Avoid excess borrowing. The World Cup will be an amazing and privileged experience for us all, but don’t bankrupt yourself trying to enjoy it. Plan a little. You are going to spend more over this time; it’s going to be a huge jol. Save a bit now so you can enjoy it then. Avoid schemes that are too good to be true - they usually are.

Over optimistic estimations of business opportunities around the World Cup are going to cause many people some heartache. Don’t score any financial own goals. Be responsible. Tomorrow is another day, or as the Mexican’s say ‘manyana manna’, but problems allowed to fester will hurt in the future more than now.

Look after your finances; hoping to be bailed out by others at a later date is not a winning strategy. And for goodness sake, smile. Relish the experience heading our way.