"Greece's financial situation is dire. And since they are part of the European pact, that is a pan-European problem. Fearing a major European crisis, the predicament has urged the EU countries and IMF to loan a whopping 110 billion euros in financial aid to Greece. And according to some specialists, another 60 billion is going to have to be added to that.
IMF-top economist Antonio Borges indicated that Greece wouldn't need to "restructure" its 327 billion euro state debt. It can repay its debts by even stronger expenditure cuts and selling its state properties.
Greece has already announced to privatize 50 billion euros worth of state property. According to the IMF, that's not even 20 percent of what they could be selling."[source:
www.nu.nl/economie/2513378/griekse-...kernlanden.html (in dutch)]
These are all staggering numbers and radical proposals... And yet, the Greeks in the streets are not celebrating. On the contrary.
They are protesting the loss of jobs, salary, pensions and the looming price inflations of what used to be public amenities. For we have some experience with privatization now and you have to be well educated to believe prices and taxes go down while service goes up after such a move. This has never happened as far as I know. They are also seeing taxes on fuel, tobacco and alcohol go up, along with their retirement age, and the government has
"applied tough new tax evasion regulations". [According to
cnn]
But it's really quite scary to see that they now have a 110 billion euro wedge into their economy with the label "privatize!" written on it. This is the kind of aggressive free market approach which has wrecked many a country in history, and they're just implementing it, here, in Europe. This brings South-American situations and many an African 'failed state' story to Europe's doorstep, in my view.
The prime minister of Greece, when inquired on the government’s action to implement the changes and lead the country out of crisis had this to say:
“Obviously Greece is doing its work. Greece is on track. And what we believe is we have to be able to stand on our own two feet. And that’s why we are making changes, innovating in our economy, and we believe this will bring back jobs and security”. [source:
www.primeminister.gov.gr/english/20...ess-conference/]
I can't really find where the money is going. But I understand from a Greek friend that it's helping the financial institutions: the banks mainly. That, too, is a familiar tale, and we can see its effects in America. The 'bailed-out' banks have turned record profits, and their managers have seen their salaries multiply drastically. There's money to spend and so you must, as a corporate bank. The risk is now completely negligible, because if anything goes wrong, you file bankruptcy and you're either bailed out again by tax payers across Europe, or you no longer exist, at which point other banks may also collapse and savings disappear and people start dying...
"Heading for a viable economy" they say... I can't say I see that happening just yet?
Edited by Iccarus - 19/5/2011, 01:34
