Archive for July 15th, 2015

A possible solution for Greece

An open letter to the Greek government:

It’s obvious to me that more preparations should have been done to switch currencies. It’s obvious that the European situation had no remedy, no matter the amount of negotiations that would take place. I believe that the way out of this tomb is to innovate. You can’t use old methods to fix old errors. You need new methods. And technology can provide those.

I know that printing a new currency would be difficult, and even more difficult would be to build trust. I’d suggest this: No actual printing of new currency. Make everything electronic. I’m NOT talking about bitcoin (which isn’t modernized in principle, as Mr Varoufakis has pointed out). I’m talking about people paying with credit cards (for large amounts) and smartphones using NFC (Near Field Communication) for up to 20 drachma (I’m assuming a parity with the Euro, at least in the beginning). Regarding notes, these can be in euros (since they’re already out there circulating anyway).

People WILL trust this new form of paying because of the same reason people in the States prefer to use credit cards: they don’t see the money, so they feel that they didn’t pay much for the goods. It’s a psychological trick. In fact, the NFC trick, where you simply touch your phone to pay a micro-payment up to 20 drachma/euro, is even more painless. People will use that, even if for convenience. Most people already have Android smartphones in Greece, and one can buy such a phone for 100 Euros today (Archos brand). Within a few months, people will be using this new system, and they will even like it. They won’t even realize that there was a change in currency. Overtime, all the euros will end up in banks, especially if you offer them a sweet buy-back program.

Now, regarding corruption in Greece: Since all businesses and micropayments in shops would have to happen via NFC/cards, it would be very unlikely that people will be able to not pay their taxes. In fact, the taxes could be calculated automatically in such a system. Who needs an accountant (that most people can’t even afford), when the system takes care of that for you?

And regarding the rest kind of corruption (e.g. fakellaki, rousfetia etc), since everyone would now have these smartphones, they should be fully supported by law to RECORD every chat they have with civil servants, taxi drivers, doctors, police etc etc. And I don’t mean just audio recording, but full video recording. Who ever doesn’t accept the new kind of currency, or wants “extra”, they should be admitted to court, given the video proof. Russia does the same with the dash cams for car insurance purposes. It works.

I would like to re-iterate: you have an old Europe in new lipstick, and an old style financial problem (debt). The problems Greece has are not novel, they are in fact the status quo throughout history. So in order to go around these problems, you need the tools of today, not old tactics of the yesteryear (be it diplomacy, negotiations, politics). It needs swift action, and mobilization of technology.