Thursday, July 11, 2013

The Situation on the Ground in Greece

By Simon Black

Athens, Greece

My friend Illias took a drag of his cigarette as he contemplated my question.

"Our government tells us that this will be a better year. No one really believes them. But all we can do is be optimistic. Too many people are committing suicide."

His statement probably best sums up the situation in Greece right now. It's as if the hopelessness has gone stale, and the only thing they have to replace it with is desperate, misguided, faux-optimism. And anger.

There are roughly 11 million people in this country. 3.4 million of them are employed, of which roughly one third work for the government.

1.34 million people are 'officially' unemployed. To put this in context, it would be as if there were 36 million officially unemployed in the US.

More startling, if you add the number of 'inactive' workers (i.e. those who gave up looking), the total number of unemployed is roughly 57% of the entire Greek work force.

And as you probably know, the situation for young people is even worse. Only 1 in 3 people aged 25 and under has a job.

This phenomenon, sustained for several years now, has cut deeply into the psyche of an entire generation that is growing up without productive work experience or the prospect of improving their lives.

The middle class here has been completely gutted. Aside from a few pockets of wealth, the country is either unemployed or working poor, hamstrung by debilitating debt.

The ugly consequence of all of this is that people have been driven to desperation. The suicide rate here has skyrocketed, crime is noticeably higher, and prostitution is rampant.

The government is limping along based solely on handouts from the rest of Europe, adding to the country's already untenable debt burden. Given the rate at which they keep increasing the debt, they'll still be paying it off ten generations from now.

They've taken some baby steps to attract foreign investment-- most notably by offering residency to foreigners who purchase Greek real estate in excess of 250,000 euros.

(Side note: Be cautious. When valued against both rental prices and income, Greek real estate is still overpriced. The housing markets in Portugal and Ireland have far more compelling fundamentals, and both have similar residency programs.)

But such initiatives won't move the needle much. And the Greek government has no real options other than to continue defaulting on its debts or to leave the eurozone and inflate its own currency.

Given what I'm seeing on the ground here, it's clear that the situation is more explosive than it has been for years.

And it comes at a time when fears of a 'Grexit' have subsided. (Do you notice how few people ever talk about this anymore?)

This strategy of living hand to mouth until the next bailout comes has failed. They've tried it for three years. Yet the labor market continues to deteriorate, and the debts continue to pile up.

As a result, life for the average Greek has gone from bad to worse.

People are angry. Not the 'I'm going to vote you out of office' anger from 2010-2012. I'm talking 'I'm gonna go postal 'cuz I have nothing to lose' anger.

Imagine millions of people that angry, and you can understand that this country is close to reaching the activation energy necessary to make a revolutionary change.

In fact, from the terrace of my hotel I can see yet another protest beginning to form on the streets below. I'm going to sign off for now and go check it out.

Take a look for yourself here:

Simon Black writes and is Senor Editor  at

1 comment:

  1. The three news reports presented below, illustrate that Eurozone leaders are only kicking "the can" that is the "Greek fiscal budget crisis” down the road. Greek socialism is the most extreme form of all socialism as its constitution forbids firing of any state workers; and there are very few private workers in Greece because of massive anticompetitive rules in place. The only reform presented currently is one of administrative leave and possible dismissal, which is coming up for likely Parliament approval, which is being met with a general strike set for next week, the WSJ reports.

    The WSJ reports Greece's economic future uncertain, creditors say. And The Miami Herald presents the AP report Greek creditors say agreement on reforms reached. The Troika said “Policy implementation is behind in some areas" and that the Greek authorities have said they will do more to ensure delivery of the fiscal targets for 2013-14, noting in particular efforts to restrict overspending in the health sector.

    The government has also "committed to take steps to bring public administration reforms back on track," including pushing through plans to reduce the number of civil servants, one of the required measures that has been among the most contentious, and delayed, in Greece's reform program.

    The government must put 12,500 civil servants on administrative leave by the end of 2013, with the possibility of dismissal. Those targeted include 2,200 school security personnel, 3,500 members of the Athens municipal police, which will be disbanded and most of its members absorbed into Greece's police force, at least 2,000 local government employees, 1,500 teachers and several employees of various ministries. They will be paid 75 percent of their normal salary and if they aren't transferred to other state agencies within eight months of being put on leave, they will be subject to dismissal.

    The WSJ writes, The coming Greek write-off: The EU will never get its money back. It is slowly becoming clear even in Brussels and Frankfurt: Greece will never repay the money it's been lent to "save" it. The current debate over whether Greece has done enough by way of reform, tax hikes and spending cuts to have earned the next tranche of bailout funds is largely beside the point. Greece's external debt position is far worse than when the bailouts began, when its debt stood at a mere 129% of GDP. Any talk of debt sustainability in Greece has become a joke.

    Not only in Greece, but in every one of the Eurozone’s periphery states, treasury debt is unsustainable. With the meteoric rise in the Interest Rate on the US 10 Year Government Note, ^TNX, beginning in May 2013, the PIGS Treasury Rate has been skyrocketing, resulting in a boiling over credit crisis.

    Simon Black writes "the Greek government has no real options other than to continue defaulting on its debts or to leave the Eurozone and inflate its own currency".

    Apparently Mr. Black has not read or does not believe in bible prophecy.

    There is waiting in the stage of Europe’s wings, the most capable of sovereigns. Soon, Jesus Christ as presented in Ephesians 1:1-23, will open the curtains, and into the limelight will step the Sovereign, the Eurozone’s Leader as foretold in Revelation 13:5-10. He will be accompanied by the Seignior, the EU’s Finance and Economic Minister, Revelation 13:11-18. Out of Eurozone sovereign insolvency and banking insolvency, the word, will, and way of these two will provide the way forward as public private partnerships form to manage the economy of a Eurozone Super State. While Greeks cannot be Germans, both will be one, living in a regional gulag of debt servitude and totalitarian collectivism. According to bible prophecy of Daniel 2:25-45 and Revelation 13:1-4, Regionalism will replace European Socialism and Greek Socialism as the engine of economic and political life.