Saturday, May 1, 2010

Greeks Riot in Advance of a Wednesday Strike

NYT has details:
Tens of thousands of demonstrators took to the streets across Greece on Saturday, including hundreds of black-clad youths who clashed with the police here, as Greeks vented their rage at tough new austerity measures aimed at securing aid and avoiding a debt default...Police estimated that 17,000 people protested in Athens. They said 10 people were arrested and reported no serious injuries..On Sunday, Prime Minister George Papandreou is expected to announce cost-cutting measures totaling 24 billion euros (about $32 billion) that will include freezing public-sector salaries, raising taxes and slashing pensions. In return, Greece is expected to receive up to 120 billion euros in aid over three years.
Keep in mind that this is only the first inning of what will be a long crisis. Along with the bailout money comes the higher taxes, pension cuts etc. of the IMF demanded "austerity programs." The Greeks view this , quite correctly, as their money being taken from them for the benefit of international banksters. That's what the riots are about, which adds an element of potential social breakdown. The Greeks aren't docile Icelanders. No one really knows how this will end up. No one.

As for the money, a bailout of 120 billion over the next three years for Greece will delay the Greek debt crisis for awhile, but that only means the money focus turns to Spain. Spain needs 179 billion euros, not over three years, but this year. And they know how to throw a pretty good riot, themselves. With 20% unemployment in Spain, they have a pretty decent ready made army sitting around doing nothing that can take on the government. Then there is the unknown quantity, Italy. Italians are big savers, so they have been absorbing a lot of the debt the Italian government has been kicking out, but this year that number will  balloon to 338 billion euros (87 billion via an increase in the deficit, the other maturing debt). No one knows how much the Italians are willing to absorb of that. In 2009, the deficit of the Italian state budget made up 5.3 percents while the debt of the country reached 1.761 trillion euro or 115.8 percents of GDP. Thus, we are talking at least a 5% increase in the debt of the country.

Bottom line the Greeks, Spaniards and Italians all no well what the Greek, Sophocles (496 -  06 BC, meant when he warned  in Ajax:

Foes' gifts are no gifts: profit bring they none.

The modern day translation would be something like:

IMF bailouts are no gifts; There will be profit for us none.
Indeed, they will end up taking, and that, oh woe, won't be fun.

1 comment:

  1. I like the beat poetry!

    Here's an interesting quote lifted from news reports of statements from a 24 year old greek: “We will live much worse than our parents,” he said. “Why should we be made to pay for their mistakes?”

    By the way, has anyone seen the SS trust funds lately? Oh that's right; they're in the "lock box"...LOL