Greek Finance Minister Evangelos Venizelos announced, on September 11, that a new property tax will be in place over the next two years.
The new property tax is supposed to make up for 2.6 billion dollars in lost tax revenues. Funny how politicians think that the answer to people not being able to pay taxes, because their incomes are down, is to increase or create new taxes!
To try and placate the Greek masses, the government said politicians will give up one month of pay, big whoop!
September 10, tens of thousands of Greek protestors turned violent when they confronted Prime Minister George Papandreou at the Thessaloniki Trade Fair.
Greek police say the protestors are armed with sticks, stones and guns. Six thousand police are guarding the Greek city of Thessaloniki.
There have been several reports out of Europe that say Greece has no choice but to default on its debts, this is because the latest bailout loan is still awaiting final approval. If Greece doesn’t get the loan within days it will default.
“The government has surrendered all sectors of public life to the country’s creditors. Everything is being demolished by austerity … All our hopes of recovery have evaporated!”-Christos Fotopoulos, National Police Officers’ Association
September 9, in the Greek city of Thessaloniki 5,000 police prepared for massive protests, the problem is that some of the Friday protestors are police officers!
At least 1,000 Police, emergency personnel and even the Greek Coast Guard joined the protests!
“Not only is it difficult, it is impossible to live on the wages we make. And don’t forget we are also called upon to provide our services in other parts of the country….and we pay for that from our own pockets!”-George Drigakos, Coast Guard Union Representative
On July 13, the International Monetary Fund issued a report in which they said Greece needed to cut even more public spending, and that it needs a third bailout. European officials are still hammering out the details of the second bailout.
The IMF says Greece needs a third bailout, consisting of at least 71 billion Euros from the European Union, and 33 billion Euros from private creditors.
Enough! Just let the dominoes start falling!
“We can’t go on for many more days like Friday. We’re very worried about Italy.”-European Central Bank official
July 11, European Union officials are in emergency mode, after it became clear that the second bailout loan for Greece will arrive too late to stop default, and now Italy is on the verge of financial collapse.
EU officials are scrambling to figure out how to get the bailout money to the Greek government faster, because it is now clear Greece is in much worse shape than thought, and will officially default soon.
“We need to move on this in the next couple of weeks. It’s not a case of waiting until late August or early September as Germany is saying. That’s too late and markets will make us pay for it.”-European Union official
EU officials are also scrambling to plan a possible bailout of Italy’s collapsing economy. On Friday, July 8, there was an unexpected sell off of Italian government assets. Italy is considered the EU’s third largest economy.
Both EU officials, and Italian officials say the bond markets are actually making things worse. That’s because a lot of the money for the Greek bailout, and now a possible Italian bailout, is coming from private sources (like investors). Now many of those private bailout sources are having second thoughts because it’s very possible they won’t get their money back.
It’s not helping that Germany is pushing for a rethink of the second Greek bailout. They say the problem in Greece could take 15 years to fix: “It [second Greek bailout] can’t be something that will suffice for a three-month period but rather has to offer solutions to the problem that will cover the next 10 to 15 years.”-Christian Wulff, President of Germany
Germany has a lot of power in the EU, because they seem to be the only member country who’s economy is booming, thanks to their deals with China.
Standard & Poor’s is warning that a French plan to “rollover” Greek debt will force Greece into default. The plan was put forth by the Fédération Bancaire Française.
S & P’s is not the only finance rating company to make such a claim. It’s complicated, but basically they claim the French plan would result in current “investors” in Greek bonds receiving much less of a return on their investment, so much so that S & P’s is willing to declare Greece in default.
The plan was approved by the only economic powerhouse in the European Union: Germany.
“In our view, Greece’s near-term reliance on European Union and International Monetary Fund official financing, the government’s difficulty in reducing its sizable fiscal deficit, and the current pricing of Greek government debt in the secondary market all underscore the Hellenic Republic’s weak creditworthiness and, consequently, point to a ‘realistic possibility’ that financing option would fit the ‘distressed’ category.”-Standard & Poor’s
“The measures that have been adopted are not to avoid the default, the default already took place, but it was not declared.”-Paolo Raffone, Secretary General of CIPI Foundation
Greece has cut even more social services and programs, and has jacked up taxes, in an effort to get more bailout loans approved. The problem is that at least 16% of the Greek people are unemployed.
Analysts say most of the loans that Greece has gotten, have been going to pay previous loans. Nothing is being used to try and build the Greek economy, like creating jobs. The result is that the Greek government is just digging a deeper and deeper debt hole.
One analysts says what the Greek government is doing is called “virtual economics”, meaning the economy is based on loans, there is no true economy in Greece: “Economic specialists are trying to prop up an inherently unsustainable project, which is based on sometimes virtual economics.”-Sahara Ali, Green Party
Ali warns that continuing bailout loans will only make things worse for Greece, it’s really being done to save the European Union, and the Greek people know it: “That is what the general population has realized, that it’s increasing its indebtedness in order to prop up the Euro Zone.”
Ali suggested that part of the bailout loans require Greece to buy more products from other European countries, which actually works against building a Greek economy.
Paulo Raffone says the situation in Greece is heading towards a civil war based on class, rich vs poor: “The leadership in the country is always the same now for more than 40 years, and they’ve been profiteering on the People. There’re a few families that are sharing large shares of take in the national wealth.”
Raffone also says the control of Greece by the elites extends to the rest of Europe: “You have external European profiteers, which are the banks from Germany, France, Belgium and others, that have been profiteering on the Greek situation no matter what currency is there.” He says the elites don’t really want to change the current situation, because they’re making money off it.
Sahara Ali says the elites have revealed the “stupidity” of their economic reasoning: “Nobody’s actually able to eat the number of zeros, the negative zeros, in their bank balance. What they actually are faced with, on a daily bases, is making ends meet. Are we really thinking it’s reasonable to demand extra taxes from people in Greece who are on the minimum wage?”
Regarding the recent vote in the Greek Parliament, supporting their president’s latest efforts to get more loans, analysts point out there is a huge gap growing between the People and their government officials. The People do not want any more bailout loans.
More and more analysts are thinking that default, by many countries including the United States, is inevitable. The problem is that the ruling elites of most countries are not being realistic, and are trying to pass the buck of responsibility of their bad choices onto the People/taxpayers. This could result in class/civil wars on a global scale.
“Given the euro area’s role in the global economy, success in addressing the sovereign debt crisis and raising growth has a significant impact elsewhere.”-IMF report
June 21, a new report by the International Monetary Fund says European economic collapse could bring on a Global Great Depression.
All international finance eyes are focused on what happens with Greece. There could be a domino effect if Greece defaults. A check of history will show that a similar situation happened prior to the U.S. Stock Market Crash of 1929, which eventually led to the Great Depression in the U.S.
Here’s a little reminder: Germany was forced to pay the United Kingdom and France (and some other countries) huge reperations after losing the First World War. The U.K. and France owed the United States big time money for saving their butts during the war. U.S. corporations were banking on that money from U.K. and France, and actually ran their businesses on debt thinking ‘no problem the French and British will pay up’ (it was called “The Roaring Twenties”). Well, the victors of the First World War made things so bad for Germany there was no way they could make the reparations payments, so they defaulted. As a result, the U.K. and France defaulted on their payments to the United States. As a result, U.S. corporations defaulted leading to the Crash of ’29.
Basically the IMF is saying we are in a similar situation with the current debt crisis in Europe.
European Union finance ministers are holding back on another bailout loan for Greece. They’ve decided that Greece to needs to make even more cuts to social services, and other government spending (which is called “austerity”, something that’s going on in the U.S., but U.S. officials and media have avoided using that term).
The EU decision came even after Greece announce it would sell off government properties, like airports. In July, Greece is supposed to make a payment on the bailout loan they got last year.
EU finance ministers are worried that Greece will experience a “catastrophic default” if it does not make even harsher cuts in spending, and so are holding back on the second bailout loan.
Last week the International Monetary Fund warned that the global economic crisis had entered the “political phase”, meaning that only governments could save us now. Not good when you see what’s happening in Europe.
The insolvent government of Greece has just discovered that 4,500 dead people have been receiving government retirement pay, for years.
The government is now investigating whether there was a slip up on their side, or the families never filed notifications of death. At least $23 million was paid out to dead people.
The Greek government is also investigating another 9,000 possible dead recipients of retirement money.