On the one year anniversary of its first bailout, things in Europe's basket case are getting much worse once again. Even as senior EU and IMF inspectors arrived in Athens on Wednesday to press Greece to shore up its finances, workers walked off the job to protest against austerity-induced recession, culminating in a 24 hour strike which sees both airports and journalists taking a break from hard work. Oddly ironic this: the "bankers" arrive to make austerity even more aggressive (so there is more value left over to senior bondholders when the bankruptcy commences), just as the country experiences a deja vu moment of strikers on one side and teargas lobbing policemen on the other. Those who wish to follow the protests live, which so far the mainstream media has refused to show, can do so here.
Reuters explains the beyond obvious reason of the IMF's latest visit to Greece:
The review will determine whether Greece will get a fifth aid tranche from the 110 billion euro bailout that saved it from bankruptcy last year and whether Athens should be given improved loan terms or more aid to avoid debt restructuring.
If Greece did not receive the next 12 billion euro tranche, key to pay 13.7 billion euros of immediate funding needs, it would be tantamount to default.
One year into the EU/IMF deal, investors are convinced the debt-choked country's bailout is not enough and Greece will be forced to restructure its debt, imposing losses on private bondholders, unless lenders step in with more funds.
Euro zone officials including German Chancellor Angela Merkel say they will wait for the result of the inspection visit before taking any decisions.
The EU and IMF mission chiefs started their visit on Wednesday with a meeting with Finance Minister George Papaconstantinou as hundreds of workers on a 24-hour strike prepared gathering to protest against austerity which unions say is strangling the economy.
Athens was nearly deserted with many shops and public services closed and the officials are likely to have seen posters covering the Greek capital reading: "We can't take it anymore. The rich and the tax evaders should pay."
Vassilis Hatzigiannis, a 31-year-old striking lawyer said: "We've reached a dead-end and the worst still lies ahead of us and our country. This policy is not getting us out of the crisis, without growth we can't move on."
As we have reported before, the market is now expecting a 45%-50% haircut to Greek bonds currently:
Ten-year Greek bonds currently change hands at around 55 percent of their face value, carrying a secondary market yield of 15.696 percent -- little changed on the day, but up more than 3 percent since the start of the year.
On why recessions, austerity and banker bailouts make for an explosive political mix:
The Socialist government has cut salaries and pensions and increased taxes, despite repeated strikes, to meet bailout targets but the measures have plunged the country into a deep recession and crimped tax revenues, hampering efforts to tackle a debt of nearly 150 percent of GDP.
Ministers are now conceding that Greece cannot regain investor trust to go back to the markets for finance in 2012.
"More austerity is probably not good for the economy, because it will deepen the recession and we don't know whether it is going to produce results in terms of fiscal consolidation," said Diego Iscaro from IHS Global Insight. "On the other hand, people will start losing faith in the government strategy."
Yet despite all the "best intentions" of the EU and the IMF, the two biggest Greek unions have decided to pull all their people. Google translated from Zougla.
"Padlock" There is now in the public and private sector, because the 24-hour nationwide strike by two unions GSEE and ADEDY, in response to economic measures affecting government employees and pensioners of the country.
Employees today affirm their opposition to the Memorandum and cuts while flare scenario that the country is heading in new, more rigorous surveillance.
In the strike will be two meetings. That of GSEE-ADEDY Pedion Mars at 11:00 am and go to 10:00 am at Omonia.
The strike involved workers in the public and private sector, employees of SOEs, theemployees of banks, the press and the staff of local authorities.
With security personnel will operate hospitals, health centers, services of IKA, Welfare and the ambulance after the decision of workers to participate in the nationwide strike, claiming to solve economic and institutional demands.
From 6:00 am Wednesday and 24 hours would not broadcast news because of the involvement of journalists in the strike.
Will remain immobilized Wednesday OSE trains and suburban railway trains, and workers involved in the CIU 24 strike.
No trains and suburban trains will remain the country Wednesday.
Work stoppage from 12:00 noon to 16:00 pm have announced that air traffic controllers. This period will not run any flights to and from Greek airports.
Those looking for a live feed from Athens, where festivities escalate in waves, can find one below: