So Much For Austerity: Greece Has Already Overspent In Just The First Two Months Of The Year
For one reason why Greece thought that the EU and the IMF were just keeeding about all that austerity mumbo jumbo, here is one explanation, from Kathimerini (via Eurointelligence), according to which three of the Greek "ministries have already disbursed more funds than they should in the first two months of the year." Shockingly, the department of health insurance for the self-employed has already disbursed almost 50% of the allotted funds in just the first two months of 2010! One can see why Greece may suddenly be worried that Europe, and especially the IMF, were actually quite serious about all those spending cut threats. And if Greece already had violent demonstrations, general strikes and bombings without in fact having instituted any austerity, then one can see why John Taylor sees civil war as one of the most unpleasant, yet realistic implications of a Greek bailout (as well as lack thereof, hence the Catch 22).
Greece might need further spending cuts
Kathimerini reports that the Treasury’s latest expenditure projections for Greece suggest that most likely there will be a need for further spending cuts. Three ministries have already disboursed more funds than they should in the first two months of the year: The Ministry of Economy, Competitiveness and the Marine spent 18.2% of its total appropriation for this year, the Interior Ministry 17.4% and the Ministry of Labour 17%. Even worse are insurances. OAEE health insurance for self employed has disbursed 41.7% of its assets. The social insurance ΙΚΑ 25.3% and 20.4% NAT.