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Europe Demands More Austerity Measures From Greece As Critical Bond Auction Looms

Tyler Durden's picture




 

A delegation consisting of EU, ECB and IMF "experts" came to Greece, saw and said "more cuts." Greece, in turn, is doing all it can to soft circle enough support to come to market with a €3-5 billion 10 year bond issue, and has no option but to oblige. The troubled PIIGS member has so far proposed a 5.5% maximum cut in gross salaries to civil servants via entitlement cuts, while the EU is now suggesting an average 7% cut. How this will be accepted by Greece's already striking unions, whose protesters earlier barricaded and shut down the primary building of the Athens Stock Exchange, is unknown but will hardly inspire enthusiasm for wage cutting programs.

As Dow Jones reports:

Already, public-sector umbrella union ADEDY and its private-sector counterpart, GSEE, have announced plans for a 24-hour general strike Wednesday.

The strike is seen as the first major test of the government's commitment to push through its harsh austerity program. So far, the government has resisted demands by farm groups seeking further handouts, while separate strikes by tax collectors and customs officials have been called off or else ruled illegal.

Here are more details on what the revised austerity package may end up looking like:

The new package that may come next week is likely to include an increase in the current value-added tax rate of 19%, more cuts in civil-service entitlements and higher duties on luxury items such as boats and expensive cars. Greece is also mulling a further hike in fuel taxes, while  the EU has also asked Athens to cut one of two extra months of pay that  public-sector workers now get over and above their normal 12-month salary--a  move the government is resisting.

Yet with carrot of a critical funding requirement over the next month being all that is needed, it is certain to make the government promise anything and everything just to be able to auction off its upcoming bond issue, which will likely require EU bank support in some version.

Greece needs to raise about EUR54 billion this year and has so far borrowed EUR13 billion. It plans to raise EUR3 billion to EUR5 billion as early as this week through a 10-year bond issue. In the event that the bond issue fares poorly or fails, one possible idea being considered, is that EU members such as France and Germany would cover any shortfall, the person said.

And so the bandaid rescue operation of Europe (and the world) continues: each day we don't see a sovereign default, thank you Rogoff, is a day seen as success. Alas, the event horizon of this particular debt black hole is approaching closer.

 

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Tue, 02/23/2010 - 10:17 | 241409 Jeff Lebowski
Jeff Lebowski's picture

Remain calm.  All is well.

http://www.youtube.com/watch?v=zDAmPIq29ro

Tue, 02/23/2010 - 10:32 | 241431 Anonymous
Anonymous's picture

perhaps they should cut into the 95% pay retention they give to govt employees.

Tue, 02/23/2010 - 10:42 | 241438 Anonymous
Anonymous's picture

The Federal Reserve is a criminal organization. The biggest criminal organization in the history of the world. First they stole our money. Then they stole our gold. Now their little bitch Whiz Bang is here attacking truth-tellers.

Tue, 02/23/2010 - 10:51 | 241448 perchprism
perchprism's picture

 

"...the EU has also asked Athens to cut one of two extra months of pay that  public-sector workers now get over and above their normal 12-month salary--a  move the government is resisting. "

 

What?   What?   And the IMF funded with my tax dollars is over there right now "assisting"?   WTF??

Tue, 02/23/2010 - 11:22 | 241488 Anonymous
Anonymous's picture

Ha ha, better to use YOUR tax dollars than MINE tax euros .
You Americans have sooo muuch more experience with your beloved "bail-outs", we Europeans gladly defere to you to to any bailout.

Grüsse aus Deutschland
Werner

Tue, 02/23/2010 - 12:29 | 241607 A Man without Q...
A Man without Qualities's picture

They need the extra two months to make up for the fact they can't evade income tax like normal people (apart from what they get in brown envelopes to get them to leave the cafe and go into the office and put a stamp on whatever document somebody needs.)

Tue, 02/23/2010 - 11:04 | 241463 MsCreant
MsCreant's picture

DEFAULT BITCHES.

DEFAULT HERE, DEFAULT NOW.

Let's see where the chips fall, we may be shocked how bad it is NOT to let this shit heap burn.

Tue, 02/23/2010 - 11:34 | 241517 Gordon Freeman
Gordon Freeman's picture

LIQUIDATE! 'It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people. . . .'" 

Mellon's words resonate yet again, but all Europeans are now soft and impotent, bleating their various discontents.  How do they think their "strikes" look to the people holding their increasingly worthless paper?  Go ahead, strike, you worthless morons...

Tue, 02/23/2010 - 12:47 | 241629 bugs_
bugs_'s picture

One side laying new austerity requirements
down at the last minute.  The other side
admitting they have more debt and they are
deeper in the hole at the last minute.

Lather, rinse, repeat.

Tue, 02/23/2010 - 14:17 | 241851 Anonymous
Anonymous's picture

Everyone is way in over their head, we are heading for an economic depression, of which I think we are in already. Every man needs to take matters into their own hands and do something about there lot in life. If you're interested in benefiting your family financially you need to read this book on the FX Market and trading in the Foreign Currency Exchange.
go to this link to learn more.

http://bit.ly/bULttP

Wed, 02/24/2010 - 18:19 | 244000 jmc8888
jmc8888's picture

Like austerity cuts of 100 percent (or everything) would solve ANYTHING about this financial tsunami.  It won't.

 

Let's cut social spending worldwide to 0, and watch the economic problems still unfold just as they are now and get very much worse than present.  (but they tell me that can't happen if we cut social spending...says the people who built the system and watch it run aground)

Maybe then people will realize it isn't lazy, or leftist, or gov't safety net policies that created this predicament the world is in. 

Allowing them to divide us is exactly what they want. 

Get us to become scared, to want to protect ourselves, and thus point fingers at each other (on why it isn't our sides fault...we spent less...we did this or that) and waste time complaining about merely symptoms, because that's what they are, while we miss the overall problems.

It's sad so many people say, 'oh they spent too much' or 'they are too liberal', because to them it allows them to feel the problem was self caused, and that thus they deserve their fate. 

The above is a sad position to take.  Maybe if there weren't 1.4 quadrillion or numerous other factors this side would have a small claim.  But the fact is, no social spending program alone or in total caused this problem.  The system failed.  It already has, now until we replace it, good companies and countries will fail until it is replaced.  No amount of shell game antics will save it.  No amount of budget cuts, or austerity drives will save this system. None.

As long as everyone points the blame at social spending, is another day it will take before we can solve the real problems going on.  Another day we vent instead of think.  Another day the fed can print money that will never get to you, because you're too busy fomenting over some poor guy in greece getting help any human should be afforded from a basic dignity standpoint.  Somehow that is above what we deserve, and to save the world we must treat each other like cattle.

Somehow they got you to believe that social spending was bad.  Yet they always paled in comparisons to what was stolen from us...and of course the cost of the social spending has to go through the private markets laden with debt.

You could cut probably half of the cost of healthcare, and thus moot any point the future 'medicare' and other 'unfunded liabilities' study that shows 50-100 trillion in such liabilities, if you only took away the cost of the goods/services procured through highly leveraged and indebted institutions. 

Of course the HMO gouging doesn't help either.  So don't let them have that monopoly.  Whoops, Obama's deathcare doesn't even do that.

The problem isn't meeting the needs for the people, it's the system has broken and is incapable of meeting the needs.  The system is placing everybody's head in the chopping block and saying that 'tough choices' are what's needed to save it.  First is these people, then it's them, then it's us, then it's somebody else.  How about instead of everybody being bankrupt, we change the system? Because with this system, everyone becomes bankrupt.  Sure some will be better off than others, but how 100 gold bars in Europe helps you here in America when you're rich but can't get running water is not my idea of being better off.  Then again, those that have, will be targeted.  If 290 million people are starving, the 10 million people that were prepared will be whittled down considerably before the 290 million starving are dead. So we can all go down this fingerpointing road, or change the system.  We can all bitch about social spending on needful things while TPTB steal many times more for unneedful things and get you to think it's the welfare mom down the street that's the cause of your problems.

 

Or maybe some people just want to take the easy road out? Except when we're already on the easy road, you can't take another route called easy.  The hard road isn't social spending cuts, it's taking on the problem which is the overall system and how it's structured. Social spending cuts are the easy road to nowhere, for idiotic politicians and people.  They will cause pain, they won't solve the problem.  Thus why we're at a point where we can no longer take the easy road.  All of the lies, the voodoo economics, the selfishness, all of that 'market' thinking of the last 40 years is proven false by reality, time and time again as the easy road has hit a dead end.

I just believe people should realize that before the world cuts social spending to maintain budget deficits from spiraling out of control, they are going to be on the recevining end of those cuts, for absolutely no macro benefit for their country at large.  So why cut what's needed if it ain't going to help? The deficits are going to spiral out of hand either way.  Who are all the blamers going to blame when everyone is bankrupt? The people receiving food stamps or those that set up, rigged, and broke the system? This time, I want it to be placed at where it's deserved, and it's not the welfare mom.  We're not going to point fingers at other poor people besides ourselves like the french revolution.  We're going to point the fingers at the monetary policies which created it, like the American revolution.  But make no mistake, the first to change it into a French Revolution would be those pointing fingers at welfare moms, many you could call republicans, or tea baggers. 

 

Isn't that funny, the side that hates the french are going to be the first ones to act like the French did at their worst.  (they had reason to be pissed obviously like we did...and like tea baggers feel jilted...they should....but one went the tea bagger approach, and became the French Revolution, while another focused the attention where it should, the monetary instruments crushing them, and that was our American Revolution). 

So be angry, but point it in the right direction.  Because the American Revolution and French Revolution started from very similar circumstances, but they evolved into two very different outcomes. (for the french it was the rise of Napolean), whereas we know OUR history.

As always, good luck :)

Wed, 02/24/2010 - 18:56 | 244076 MsCreant
MsCreant's picture

This was awesome. Thankyou for writing what was on your mind and in your heart.

I'd give you one of those + thingies, but when something is just simply how it is, that would be trite.

I want to join your revolution.

For those about to rock...

Thu, 02/25/2010 - 04:37 | 244638 Anonymous
Anonymous's picture

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