Economy - The Greek financial bailout was due to be finalised last night. Greece will get 130bn euros to pay its debts in March. In exchange Greek creditors have taken a 70 per cent 'haircut' on the value of their bonds. Austerity cuts will slash 150,000 public sector jobs and cut the minimum wage and pensions. Greeks are furious. There is already 20% unemployment. The improvement in living standards that they have enjoyed since joining the EU has vanished.

Greeks politicians have over-spent, practiced political patronage, and created government jobs for their supporters. It is the politicians who have destroyed Greece.

The Greek economic crisis is hurting Kenya. It is the main reason why the Kenya shilling collapsed forcing the central bank to introduce punitive interest rates. But the euro crisis also offers important lessons to Kenya. In the end, government subsidies, weak tax collection and over-spending hurt the country.

In December the Kenya government made some token cuts on travel, advertising and Christmas cards. But Kenya now needs to tackle the big ticket items of subsidising parastatals that do not make profits.

They should all be sold off or closed down as soon as possible. Otherwise Kenya risks going the way of Greece.

Quote of the day: " When Fortune smiles, I smile to think how quickly she will frown." - English Jesuit poet Robert Southwell was hanged on February 21, 1595.

By Star Editor

Nairobi Star/22/02/2012