Even so, Greeks have a tendency to exaggerate and everywhere I go I keep hearing the same. But if we were to be level-headed we would find that the Greek debt is not that bad, comparatively speaking. Assuming that 2009 statistics are reliable (and this time they might be), the situation is indeed bad as the country has a deficit of over 12 percent of the GDP and a debt of 109 percent of the GDP. Nonetheless, this does not make Greece unique as there are other countries, too, that have even bigger deficits than this (take for instance the UK) and others that have even higher debts (take for instance Japan).
With all the austerity measures the government seems hell-bent on taking it seems unlikely that Greece will default. The only bad news is that those who are forced to cut back are not those who got us into this mess in the first place who are none other than corrupt politicians and tax evaders. Unfair, isn’t it? (Side note: This kind of reminds me of an infamous comment made by former Liberal Party Australian prime minister Malcolm Fraser who had said “Life wasn’t meant to be easy!” before getting ousted as head of the government proving yet again that brutal honesty is not what voters want).
Regardless of who will end up paying, the only thing essentially that worries me is that the Greek debt risks may end up being a self-fulfilling prophecy. All this panic is bound to get markets worrying and the more this happens the higher the yields will go in a vicious cycle.
In Australia, such economic banter wouldn’t even make its way to dinnertime conversation, but in Greece it’s all the rage. Indeed, this speculation is the stuff casual dinnertime chit chat is made of. How can one enjoy one’s pizza with all this talk of belt-tightening? How can one sleep? How can one remain smoke free?
Photo: Protesters clash with riot police during a demonstration in Athens. Police fired tear gas and clashed with youths as tens of thousands protested in Athens, Thessaloniki and other main Greek cities against austerity measures to tame a public debt crisis.
3 comments:
I find it very interesting that you post so often about the debt in Greece. Of course, the deficit in the United States is ridiculous, too. The difference is that I have NO IDEA what it actually is, and I don't want to know. I realize that sounded terrible to not want to know what my country is doing with my money. It is because it is one more thing I feel I have no control over, and it would only make me angry. My step-dad listens to the radio (and TV) about this sort of thing daily and mutters under his breath about the president and his wrecking of the economy, and he spends a lot of his time being really pissed about the whole thing. I already have MIGRAINES. I can't imagine how bad I would feel if I devoted even 1% of my day to thinking about how Obama is raising the national debt. So I don't. I believe I mentioned my tactic of avoidance. You might want to try it.
In spite of all that, interesting post. Oh, I also find it amusing that smoking found its way in. You Greeks are a funny lot:-)
I forgot to mention that I noticed the new background. I am taking that to mean that you were unable to recover the old one. I am sorry. I wish I was more techy and could have been more help with that one. Alas, I just learned the nifty link feature today. I the equivalent of an infant blogger. It's sad.
Get ready for the hedge fund hyenas, "PIIGS" (as the Soros/Goldman boys have callously named all of you). They're cooking up ways to attack sovereign debt and the bonds of your governments as we speak. America may even be next. I wonder how many sheep in the United States will still be echoing big business by chanting "down with big government" when the bankster billionaires intentionally collapses our entire system.
Greece does not need an austerity program, as the Greek labor movement has eloquently argued in the course of their successful and admirable general strike last week. Greece does not need a bailout from Germany, the sinister International Monetary Fund, or from anyone else. Least of all does Greece need to accept the advice of Austrian school or Chicago schools charlatans who recommend the catharsis of a deflationary crash that would destroy an entire generation through unemployment, poverty, and despair. Greece needs to defend itself with a 1% Tobin tax on all derivatives and other financial transactions. Greece should take the lead in outlawing credit default swaps, which amount to issuing insurance without meeting the capital requirements of being an insurance company. Greece needs to enforce EU and national antitrust laws. If Soros and his gang succeed in breaking up the euro, Greece should make the best of it by immediately imposing heavy-duty exchange controls and capital controls to protect the new drachma, on the model of Malaysia a dozen years ago. Greece should shut down domestic zombie banks and seize its central bank and use it to issue 0% credit for industrial and agricultural hard commodity production. If the Greeks made plain what they intend to do if they are forced to fall back on the drachma, the financiers who fear such an example would have another reason to relent.
Another obvious expedient is that of a bear squeeze or short squeeze. Soros, Goldman Sachs, and their gang of hedge fund allies have now used derivatives to establish short positions against Greek bonds and the euro, betting that these latter will go down. Political pressure is now being brought to bear on the European Central Bank and the Greek central bank to undertake an unannounced large-scale purchase of Greek bonds and euros in the forward market, causing the Wall Street predators to lose their bets, thus punishing them severely with extravagant losses. This is normal central bank practice, and it will be astounding if the Greeks do not execute such a maneuver very soon.
The world now faces a stark choice between two alternatives, with Wall Street forcing the issue. The first is that the zombie banks and hedge funds, having been saved and bailed out by national states and their taxpayers, will repay the favor by driving the national states and all forms of state, provincial, and local government into bankruptcy. This will be synonymous with the destruction of modern civilization itself. The second and preferred alternative is that the national states summon the political will to use the inherent powers of government to place the zombie banks, hedge funds, and related purveyors of derivatives into bankruptcy receivership and shut them down once and for all, relying in the future on nationalized central banks for the provision of credit. The second alternative would allow the preservation of modern civilization as we have known it. But in the meantime, the derivatives-based speculative attack on the southern flank of the euro has accelerated the arrival of the second wave of depression, which now appears likely to strike the world before the end of 2010.
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