…but it’s Chinese to me! Then for us, Greeks, the idiom “It’s all Greek to me” makes really no sense. However, whether in Chinese or in Greek, the Greek crisis makes no more sense to anybody. The Eurogroup in Luxembroug postponed its decision to release the 5th tranche of 12 billion euros until the Mid-Term Austerity Programme is being approved by the Greek Parliament. They even gave the Greek PM just ten days to make it happen . Jean-Claude Junker made a statement on Monday afternoon claiming the “Greek debt is sustainable”. He also announced an extraordinary meeting on Greece for July 3rd, to give time to Greek PM to get the needed vote at the Parliament.
PM George Papandreou is adamant to ‘save the country’ even by pushing the Mid-Term voting through by boxing. This will grant Greece with a 12 billion euro tranche in the beginning of July, because state funds will be empty by July 15. So the 12 billion will enable the state to pay salaries and loans interest rates. The total collapse will be avoided for a couple of months. No, the tranche wont’ solve the crisis. It will just give a breath to the captain of the sinking ship.
The Parliament approval will also enable a second bailout for Greece. I’m reading about exorbitant amounts like 120 billion euro. This will make the total bailout (a)mounting 230 billion euro. The bailout amount will have to be added to the 360 billion euro debt that drove the government right into the arms of the International Monetary Fund, the European Central Bank, the French and German usurers as well to give in the blackmail of rating agencies and their respected friends.
In this amount, the interest rates of the loans are farily excluded. Nevertheless, it is money that has to be paid back. An ambitious privatization plan of state assets will bring the state 50 billion euro that will go directly for repayments. A peanut in an ocean of monkeys.
220 billion euros will land in Greece to pay salaries and items that keep the country functioning like hospital and school equipment, for example. The rest will flow to Greece’s lenders.
A big question is where the repayment money will come from. As Greece has no fields to grow euro-bank notes neither any any fields to grow anything profitable enough, it is the citizens of this country that will have to give their contributions to the movement “Save the Country” through taxes. Who will save the citizens however?
Honour Without Dignity
Recession and unemployment are already on the rise. Shops and enterprises close down one after the other in a vertigo speed. Wages andpensions face new cuts, taxes are increasing. Just one 80 sq m home will be loaded with four different taxes. This money burdening the citizen will be cut from consumption. Sunk consumption will lead more enterprises to close down, more people to unemployment. Insurance funds will face losses, state revenues from taxes will tremendously suck down. maybe not in 2011, but certainly in 2012.
The well-dressed ladies and gentlemen in Eurogroup do their outermost to save Greece through new loans. Why? Just because each and every night they have the same nightmare: The Euro collapse! Then an insolvent Greece, one of the 17 Eurogroup-members enjoying the benefits of the single currency union, will trigger a domino of collapses. Portugal and Ireland will collapse the next day after the Greek Doomsday, Spain and Italy at the end of that week, Belgium will fall apart. That will be the end of the Euro.
Trapped in well-polished bureaucracy and legislative inflexibility, unable to take risks, the Eurogroupleaders, pretend to act like technocrats, whereas they just politicians, who thus take decisions about the fate of people who have not voted for them. In Greece they create an example of how debt-ridden countries can be saved or not.
That’s an easy task with a Prime Minister suffering under a self-destruction syndrome… Then show me another PM who would go around and tell the country’s lenders that his own people are corrupt and evade taxes. Show me another PM, whose only care seems to be that the country proves its credibility to its partners and it is a matter of ‘honour’ to pay back the loans. This special concept of “honour” drives millions of Greeks to poverty, to Middle-Ages working conditions, to salaries that will soon be similar to those of Chinese workers.
Of course, they are other Euro-group candidates keeping an Argus eye on the Greek crisis. Debt-ridden Ireland, for example. Irish finance minister Michael Noonan insisted during Sunday’s Eurogroup meeting that any burden-sharing in Greece’s case should also be extended to Ireland. When Ireland gotits bailout with lower interest rates in winter, it was Greece demanding the same conditions. The Portuguese? I really have no idea what they’re up to. But my impression is that they keep a low-profile strategy, a stand-by stance, for reasons they only know.
I read and hear in the news amazing terminology like “voluntary participation”, “private investors involved in bailout”, “credit event”, “Euro-bond” and other terms that are Greek …ops! Chinese to me. And they have nothing to do with my everyday life, the life of my friends and neighbours.. All that I know is that my income was cut by 30%, that my contribution ot the state increased by 40%, the prices for groceries and utilities have increased as well and I see no way out of the crisis other than with new loans. I see not a single sentence boosting development and growth in the Mid-Term Austerity Packe that will rule our lives for the next decades. This is a horror for me personal as I have never got a loan even of one hundred euro through my whole life!
Lost in Eurogroup
Greece is lost in Eurogroup and the Eurogroup in lost in bad translation, and ugly feet in wrong shoes that make walking impossible. I see nothing but a bombardment of controversial statements falling on my head. One day the Eurogroup agrees to give the 5th tranche, the next day Merkel and Sarkozy hit a deal on 2nd bailout, the third day, all these is refuted and there we go again with a fresh start. EU’s Finance Commissioner Olli Rehn made another direct intervention in the internal politics of Greece asking ‘consensus’ from all political parties.
I wouldn’t wonder if one day in no far future, the prime minister would declare a halt on payments.
Then what vote of confidence for the government, what vote of Mid-Term Programme. New loans and new bailouts create just a vicious crise. The society is boiling and the “Indignant” Greeks keep chanting at the squares “Eheheh, Ohohoh, Take the Memorandum and Get out of Here. Shoo!”
Greek economists have made alternative proposals* for the soluton of the Greek crisis. I cannot say that they are economicall totally right or wrong. But they are options. Options never considered by the government or the EU-parnters. Then this is what we can call “the third way”. A way that seems to have no place in a conservative economic system that has reached a deadlock, a stalemate. It hit the wall of its boundaries.
Save the Euro on the backs of the Greeks? No, thank you!
*You can get some ideas Here, Here and Here.
A vicious crise.
My opinion of what is happening is that the Euro zone is doing what they can to move the Greek public debt onto their tax payers in order to save the banks. Of course there are German and French banks, but lets face it, worst hit in a default today would be the Greek banks, and the Greek state would not be able to save the banks, so the Greek savers would loose their savings. The problem of the Euro zone is to explain the need of this for their tax payers, who in the end will end up with the bill.
Greece will struggle to get a primary balance in the budget, then it will default on the payments (or, in other words, Euro zone will write off the debt). The point here is that the terms of the loans from the euro zone does not really matter, since in the end I don’t think it will be paid, and therefore I disagree when you say that it is the Greeks who save the Euro. With or without Euro, Greece can not long term spend more money than she has.
It’s of course *very* tough for everyone who gets affected by the austerity measures in any case.
Thank you for writing this. What you say is so true.
Last week, when the Eurogroup (I think it was) said Greece would get its 5th tranche regardless of what Parliament did, people started saying– See, all we need to do is play hardball, and the troika folds like a cheap suit. Well, the folks in the troika obviously realized they made a mistake in their strategy and have gone back to their old ways of threatening Greece.
Sadly, I have been reading that Greece is selling its assets. How will the economy improve in the long run when these assets (sold at rock bottom prices, I imagine) are gone and the government receives no revenue from them, as it would have if the government continued to own them? No one, including the PM of Greece, seems to be thinking about what the situation in Greece will be in a few years. I am very angry. I live in the US, but I’m of Greek origin. The people of Greece deserve a leader who will think of their interests first and foremost, and the interests of the rest of the world second.
Most of protests are Staged and very well Orchestrated, they pretend fighting but do not hurt each other. This is worth it to get hundreds of billions from EU. Greeks are very smart; the deception started with the Trojan Horse and is going on with very well orchestrated “PROTESTS”. If you want Greece to be paid off, for the Enormous Army, Universal Free Health Care, Lucrative Pensions, and Taxes that they never Pay, then you pay them by yourself, PAY THEM OFF, BY YOUR OWN POCKET.
DON’T LET GREECE TO DRAG YOU DOWN. CUT OFF THE ROPE, AND LET THEM GO FIRST…