The Eurozone and Expats - Is there a Problem?

Well, is there a problem for us expats? Simply put, yes and no. Yes in that these days whatever happens economically in one part of the world can affect other areas of the world such is the interconnectedness of our modern fiscal world. On the one hand, no, because it depends on one's financial muscle; in other words is your budgetary house in order? It would be quite cynical of me to state that, what the hell, it has nothing to do with me. I sit here quietly earning a good living, daily per diem, wonderful apartment, insurance and medical cover and other expenses covering most of my outgoings, and all seems right with my world. So, should I give a damn about Greece, Portugal, Ireland, Italy and whoever next requires bailing out?
You see what afflicts the aforementioned countries is simple mismanagement of their economies. Okay, possibly 85% of all countries have to borrow to keep their economies going. Unless you are Saudi Arabia or United Arab Emirates, et al, the simple fact is that countries have to borrow due to public spending and income tax / Government bond sales deficits. It's a bit like a householder whose salary is not enough to fund his/her monthly outgoings. What to do? Borrow the extra money - simple as that.
With Greece the problem stemmed from years of unrestrained spending, cheap lending and failure to implement financial reforms that left the country badly exposed when the global economic downturn struck. This whisked away a curtain of partly fiddled statistics to reveal debt levels and deficits that exceeded limits set by the eurozone. Again, spending beyond its means.
With 'normal' people, they are in the same boat. In the UK, it was published yesterday: 1-11-2011, that private debt has ballooned to £1.3 trillion! That is a hell of a lot of debt. And you have to consider just how all this debt is going to be paid back. Unemployment in the UK has surged past the psychological 2.5 million barrier with no sign of abating. And if there are no jobs, people cannot pay off their debt, and the double whammy is that it cuts into the Government's income tax revenues.
And then there are us expats. I think if you were to walk down any high street in the UK today and ask passers-by how much money they thought expatriate workers earn, they wouldn't have a clue. In fact many of those window shoppers couldn't even tell you what an expat is. I could tell them that it was no guarded secret that the majority of expats do what they do to earn higher salaries than back home with the added bonus that it is tax-free. And yes, most of us enjoy other perks: free medical insurance and health care, free accommodation and air fares and in many cases a daily living allowance. I knew one chap who worked a 28-28 rotation job in Qatar who only spent about £100 a month of his own money. Mind you he was a bit of a loner and one got the impression that the thought of his spending money was a sin! This basically left him banking nearly his whole salary - quite remarkable.
In my own experience I detect a certain resentment amongst some segments of society who begrudge us the lifestyles we've been accustomed to. But what they don't appreciate is that at the end of the day, many expats are away from their families and friends for extended periods of time, sometimes working in hostile environments, but then we contribute to the local economies of the countries in which we work: there's car hire, in some cases car purchase, food and beverage sales, bar bills, clothes - you name it - we have to buy many things and in some cases paying more than UK prices.
Here in Baku, Azerbaijan where I work, the cost of living is about 25% higher than the UK. So there are pluses and minuses on both sides. So am I personally all that concerned with the Eurozone crisis? No, I am not because I don't have one single pound note tied up in stocks and shares or any other volatile investment for that matter. Keeping a tight grip on my personal finances is a high priority and a similar control on my spending is tantamount to living a clean, debt-free life. These are two prudent fiscal basics of expenditure that the Greek government has nonchalantly disregarded in recent times. It could beg the question, would I be going to Greece on holiday any time soon? Hmmm, I will leave that to your imagination.