Crisis solutions; back to the basics. Part two.

Since my last blog in August a lot has changed. A recession in Europe has become reality and the crisis jumped fast from Greece to Italy and now even Spain is closer to a default than ever. Though this did not come as a surprise what remains unbelievable it the lack of decision making.

What is clear is that the baby boomers or still their parents - very old politicians are still too common - simply do not have the leadership to make fast decisions. Instead their management style, not too long ago embraced and heavily rewarded, looks now very fragile without confidence.

While the economic, political and social situations in Europe go further down many other countries call for leadership. Why do we allow our politicians to keep on trying with finding consensus? Where are the leaders that dear to take a decision, even if that would be a controversial one?

What is wrong and should change in 2012?

1. What happens now is that the crisis will not be defeated but extended because the old boy school network is not willing to accept change. It took years for local, regional and country politicians to get the seats they wanted. They and their parties are not willing to give up their power, not even in legimate four yearly elections.

To reform change has to be undertaken from top to bottom. From changing laws to reform local boards and committees which require good guidance and planning. There is no evidence this takes place while everyone expects governments to act. This is not enough.

2. The weakest part of country must be changed first. Only providing funding is insufficient. Those who were in charge the past years need to be replaced. Unfortunately that is again the problem of the whole system as these people find themselves too important.

Like mentioned before when going back to the basics new people are required; not managers but experts. From schools and universities to hospitals and semi-government. The management culture of the 90s has failed; high costs but no results!

3. Admitting guilt! Apologies to the public! This is what should be done but those in charge for many years burning tax money, committing fraud, being corrupt and enjoying overpaid non result jobs simply refuse to give up or share power. This is a mentality problem.

Despite the mismanagement in the financial sector problems are mostly seen as caused by products but it were the directors and managers that approved taking too high risks, to re-sell mortgages and to give loans to anyone. There is no product problem but a “who is in charge” problem. Greed has become a product, a tool and now we pay the real price.

4. In line with all the above to solve the problems in Europe harder measurements are inevitable. Yes, Greece has to default and maybe Italy or Spain too. These countries are responsible but expect members of the same club to constantly rescue them against any price.

Companies that got declared bankrupt often try to restart and are successful when doing that with a new management and new investors. Unfortunately no European leader wants to take this unpopular decision to be remembered as the one that pulled the plug. Cowards!

5. Of course this is not child play! Any default has lots of consequences. Many banks will be forced to default as well. Finally this is the result of wrong behavior, wrong management, wrong decisions, wrong people and the wrong place and wrong moments. How more wrong is acceptable?

To let them “exist” and save them all by constantly avoiding the hardest injection of the sick patient Europe (or US) the future will remain more uncertain. More funding will be needed while we run out of it. Currently decision makers do not look ahead but backwards.

Conclusion:

Looking back success and failure go hand in hand but it looks like doing a step back is out of the question. Save the euro! Save the EU! Save the banks! Save all that did wrong! Save, save, save....

The most difficult task for humans is to change, to dear turning the ship, call it the day, throw the towel, to tell others they are wrong and to replace them. Look around! Countries that changed the past decades could do that thanks to a few of these leaders, others still fight domestic wars.

The biggest challenge comes when countries become rich and wealthy. Their population becomes spoiled and fat while most politicians only deal with personal interest. What is my future after politics? What board can I enrich and become financially independent?

A regional or global crisis is needed to get rid off these egoists but to get rid off them the nation has to choose for change. That is often impossible because the majority of the voters are less educated or easier to manipulate by the system of politics and media. "When voting me I will guarantee unemployment will be solved". Excuse me? My fridge has a guarantee, not you!! Can we sue them after elections, please?

Change takes more time when heading for the abyss than when enjoying a long period of prosperity. We are so impatience!! Small changes will help though but finally it will be inevitable that an unexpected event or decision will tremor the whole world. So, my advice for 2012 will be: Fasten your seatbelts! This is going to be one hell of a roller coaster!