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As Greece Launches Latest 2 Day General Strike, Unions Warn Of Austerity "Death Spiral" - A Primer On Greek Politics
A few days ago we pointed out that Greece has now effectively shut down following a relentless barrage of strikes and occupations which not only have halted the economy, but now prevent the economy from even collecting tax revenues (one wonders if the country has finally borrowed the ink it needs to print tax forms, from Ben Bernanke). It appears the irony of the vicious loop whereby more austerity means more strikes, means less tax revenues, means bigger budget deficits, means more austerity, means even more strikes, has not been lost on the population, and now, according to Reuters, local unions warn that the country "risks sliding into a "death spiral" if the government continues to slash salaries and lay off workers instead of cracking down on tax evasion and raising money from the rich, the head of the biggest public sector union said Tuesday. "This will exacerbate recession, unemployment and state revenues will continue to fall, creating a death spiral. It must not continue," Tsikrikas told Reuters in an interview and urged lawmakers to reject the package when it is voted in parliament Wednesday and Thursday." He is right, and unfortunately for him, as the attached Nomura primer on near-term Greek politics indicates, both parties have no upside in severing monetary ties with Europe and realize all too well that unlike what G-Pap is saying, specifically that the country is being held hostage by strikes and protests, it is Greek strikes and protests that are holding Europe and its taxpayers hostage. However, since productive Europeans have no problem with that, it will continue indefinitely, even as the Greek economy grinds to a halt and nobody does or produces anything, and the entire country becomes a permanent ward of the European state, receiving its bi-monthly IMF bail out funding which in turn is flipped right back and used to pay off European bank interests. Rinse. Repeat.
From Reuters on the population's very much irrelevant anger:
Tsikrikas said the latest measures, which include tax hikes and pay and pensions cuts, would wipe out any hope of growth for the stricken Greek economy, crushed by debt and now in its third year of recession.
"All we're doing every time is waiting for the troika to release the next tranche," he said, referring to inspectors from the European Union, the European Central Bank and the International Monetary Fund which visit Athens every three months to assess whether Greece deserves new bailout loans.
"The government has to call on the rich to contribute. Workers look more like squeezed lemons now, they can't take it anymore," he said.
"The state must take the money from those who have the income to pay the taxes. The rich, the big companies that use the workforce of this country," Tsikrikas said. "Don't they owe the country and its people something?"
He also urged more action on endemic tax evasion, particularly rife among professions such as doctors and lawyers, where under-the-table cash payments -- known in Greece as fakelaki or "little envelopes" -- are standard practice to avoid declaring income.
"People are right to want justice, the burden equally shared, a just tax system and a crackdown on tax evasion," he said.
Tsikrikas rejected any suggestion that Greece should leave the euro zone and return to the drachma, which would allow its currency to devaluate and become more competitive. He said Greece's European partners needed to continue supporting it in the interests of the bloc.
"It is the EU's duty to help, because this is how it also helps Europe as a whole and the common currency," he said.
Everybody strikes as total chaos grips Greece:
The general strike, called by ADEDY and the main private sector union GSEE, is expected to shut down much of the country and follows days of individual strikes by groups ranging from garbage collectors to doctors and judges.
Tsikrikas, a school teacher who took the reins of ADEDY two months after an earlier wave of anti-austerity protests in June, said the government had not done everything in its power and must change course, even now.
He said that despite repeated promises, the government had failed to take advantage of Greece's strengths in areas like agriculture and green energy and had been slow to make full use of existing European subsidies.
"It has to promote Greek products, our services, tourism and shipping, the country's natural beauty," Tsikrikas said. "It must also make use of all energy sources, solar and wind power."
Tsikrikas' comments reflect growing union disillusionment with the ruling PASOK party, which built up Greece's bloated and inefficient public sector under the leadership of Papandreou's charismatic father Andreas Papandreou in the 1980s.
Greek public sector workers, paid on average 1,300 euros a month, will see their salaries cut by more than 40 percent once a unified wage scale is imposed under the new measures.
On top of slashing pensions and state wages by about 20 percent in 2010, the government broke a 100-year-old taboo last month by allowing public sector layoffs in a country where the constitution guarantees state workers jobs for life.
And for those who harbour any illusions that anything will change should G-Pap and PASOK be vote out, here is Nomura with the prompt glass of cold water to the face.
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where keynes and hyak meet in a death match.
Greeks are going to give it to us all in the, end.
Drakopoulos coming to suck your blood!
Beware of Geeks bearing Grift.
perilous times are coming to a greek theatre near you.
pay even more money to see their failed style of living?
Hah! + 1
Sure, it's YOUR (European) money, why not?! You worked for it, so why not?
I read where have of Greece "workers" will be on strike as half of them are union workers with a lot being govt workers. 50% of the country is unionized.
No. It's more than that.
Greece is a very socialist and democratic country. They have been hated by Germany and the rest of the Capitalistic countries. This was an all out attack on Greece. Greeks work more hours than the Germans and the British, but they are being portrayed as lazy Greeks. It's all a lie. I am not Greek, but I know their culture pretty well. And yes, the vast majority is unionized. All these years, they have protected their system and they have made it work, until they were lied to with the Euro system.
I think the best thing for them right now is to just bail out of the Euro and claim bankruptcy, then they will have to arm up because Germany has had it out for them for years. I should know, I was in the US Navy over 10 years ago and I remember the history those two countries have had. The Germans have ALWAYS been jealous of Greeks and they have coveted that land for so long.
Bottom line, their politicians have been bought by the IMF and the other Euro system crooks. Now they have been put in a bind by their own politicians. The people did NOT want the bail outs and even when they protested, they were forced into them. Their politicians did not listen to the people and they haven't stopped rioting for months now.
The people will make their country go bankrupt with the constant 48 hour boycott protests to teach the corrupt politicians who their bosses really are.
The people will also not permit the country to be sold off and they won't stand for anyone occupying their country, especially Germany.
isn't that Hayek?
No. It´s von Hayek.
Dr. von Hayek no less!
"Why Mises (and not Hayek)?"
http://mises.org/daily/5747
"My thesis is that Hayek's greater prominence has little if anything to do with his economics. There is little difference in Mises's and Hayek's economics. Indeed, most economic ideas associated with Hayek were originated by Mises, and this fact alone would make Mises rank far above Hayek as an economist...Rather, what explains Hayek's greater prominence is ... Hayek is actually a moderate social democrat, and since we live in the age of social democracy, this makes him a "respectable" and "responsible" scholar." - Hans-Hermann Hoppe
umm ... of course ... sorry
unstoppable vs immovable. nice. always wondered which would prevail
I'd post a comment, but I'm on strike.
it is Greek strikes and protests that are holding Europe and its taxpayers hostage. However, since productive Europeans have no problem with that, it will continue indefinitely, even as the Greek economy grinds to a halt and nobody does or produces anything, and the entire country becomes a permanent ward of the European state, receiving its bi-monthly IMF bail out funding which in turn is flipped right back and used to pay off European bank interests. Rinse. Repeat.
Well I guess it's not just knowing when to buy or sell ships. The Greeks are just plain good traders period.
The Greek people never wanted the bail outs, the politicians were the ones that wanted the money. Even after the people were protesting against any bail outs, they politicians met their own people with the police in riot gear.
The Greek people were sold out by their own politicians and they want to sell off the country.
The Greep people have already stated that their country is not for sale and they won't stand for any occupation. They will continue to hold their 48 hour protests making the govt NOT get any taxes or revenue because they intend on making the govt go bankrupt.
They will then take up arms because they were threatened by the European Union owners of being taken over. They will die to protect their country.
This is like watching a dead leaf fall from a tree, slowly circling and somehow everyone is trying to defy gravity and reattach it to the tree.
Greece will never be "fixed" to the point where it is a contributor to the EU.
If they really wanted to push the EU, they would treat the Greeks as a "charity" as the money is never gonna be repaid.
or like 'Weekend at Bernie's" where Greece is dead and the EU is trying to prop it up for appearances sake until the banks can agree to lose 21, 50, 60 or 100% on their dumb ass loans. Which means the Eurozone tax payer is on hook for 21-100% in this go round. 200% if they get leverage.
Greece can be "fixed" like ah...Detroit or Camden, NJ or Gary, IN or East St, Louis.
Here, take a look at what Athens currently looks like. Soon coming to a town near you...
http://diepresse.com/home/wirtschaft/international/700436/Folgen-der-Kri...
PS Nice touch with the huge trash heap in front of a bank, wisely named EUROBANK.
I notice petrol (gas) is 1.62 Euros per litre in picture 6. Thats 7.29 Euros a gallon, or USD 10 a gallon.
Yeah! Isn't Europe great ?
I love that sound.
It is the sound of an American, so used to bitterly denouncing his/her unfair tax burdens, meeting the realities of the world outside.
I see. So because European governments in tiny heavily built up urbanized countries that barely make a decent sized state in the US soak their own people horribly we should do the same. After all, it has worked very well for them an prevented bankruptcy by their governments and financial sectors so the $3.15-20 ish per gallon I am seeing now in my area should get cranked to 10.
Brilliant thinking Einstein. Im sure cost of living wouldnt rise at all. Hope you grow your own food, I for one will love getting $5/pound for beans and 10+ for melons.
I guess it's okay to own slaves as long as your neighbor beats theirs more?
That is a cost for not having wars in oil rich countries.
Gas price on the Shell sign: 1.628 Euro per LITER. Damn.
So that is what the kindling for burning down a republic looks like.
Ben is coming to the rescue,
@MarketWatch Ben Bernanke: Fed might have to hike interest rates if it sees a potential threat to financial stabilityso grease up.....
The Greeks should form a new political party and end this nonsense.
no Tea Party to be had in Europe. the Pirate Party in Germany is closest thing and they aren't winning.
The PP is a gang of homosexual pedophiles.
Luvly! An assertion with no facts to back it up!
Biggest % gainers on my screen are retail stocks and banks.
I guess investors could care less about Greece right now.
You mean couldn't care less? Because if they COULD care less, it would mean they actually care somewhat. Which they apparently don't, and instead are playing their part as market levitation zombies. And I wouldn't call Chinese-written HFT algos "investors."
Wow Robo opened his Yahoo!Finance home page and figured he'd write a post about it...how interesting!
I guess they don't care, if they win they win big, if they lose we will support so called "investors" with timely bailout.
I love it when one of these smartest-guys-in-the-room start blabbing about the "rich", and how they need to do more. Tell me, what do the 40 year-old communist, anarchist philosophy students [living with their parents] do? Besides being parasites on society.
There isn't anything Greece "produces" that is worth a bucket of warm spit. For over a decade they borrowed off the name and credit of Germany, racking up a debt bill that can't be sustained on any level. It's like loaning money to a band of Gypsy's.
The sooner they tell the political elite to go to hell and default, the quicker greek society can get back to being the backwater it has been since the end of WWII.
Its a bit dispririting to see my German cousins taking this like a bunch of fucking sheep. They should all be in the streets protesting these damn bailouts.
Germns go on streets only if they have permission.
Germans are slow to anger. After the 1914-32 fuckover, Adolf still only got c. 40% of the vote. Talk about good natured!
Like anyone in America will do anything. Too many good things on the HD brainwashing idiot box. The Tea Party march on DC was huge but the media decided to ignore it. Soros paid OWS kids do not count. At least the Italians rushed Goldman Sachs in Milan.
And it's rather sad myopia to allow it devolve into class warfare at this point. They don't seem to understand, it's too late. They could hunt down every "rich" person who was stupid enough to still have assets in Greece, tax them 100%, and it wouldn't make a difference. They are already done. They are the FBI agent being fed his own sauteed brains at the end of Silence of the Lambs.
Very true. Add to that the governments could confiscate 100% of EVERYONE'S earnings and it stil wouldn't be enough. The black hole of debt - coming to a sovereign near you.
LOL, delete Greece, and add USA. Everything is so screwed up.
Go read more of your mass media master's lies but this time don't back and regurgitate them here. Ignorant asswipe.
1300 Euros a month (for average public worker). Christ, I wouldn't even get out of bed for that. No wonder.
http://yfrog.com/h8719p Bullish for Euro bonds
Honestly, none of these make any sense to the stock market which is shooting to the moon.
Well 'Shooting to the moon' with the DOW up +60, putting it at 1999 levels is a bit of a stretch.
They are about to learn what the real meaning of the word "austerity" is. Thus far what they've called "austerity" really is nothing more than "mildly inconvenient".
When do we get to hang these mother fuckers?!?!
christ, end it already, let's move on to the next victim.
The Greek public unions are angry that doctors and lawyers do too much fakelaki....?? in the USA, half the entire population does it. Whiners. They need to get back to not working at their constitutionally protected lifetime jobs.
Go long Greek STREET VENDORS -- a Gyro cart or a Baklava mobile would clean-up right about now.
Greek"death spiral"....ours will be bigger and bloodier
The Greeks better look out or the Troika will put them on "Double Secret Probation". The Troika really means it this time!
Chairman Gensler is FINALLY IN THE ROOM! CFTC meeting on position limits in commodities (SILVER!) is now in process. LIVE COMMENTARY AND VIDEO of the CFTC Meeting
make your bets! I say JPM get's exemption.
This is great! The next bankrupt country has both alternatives as an example to pick:
Iceland or Greece.
The women are much nicer in Iceland. I think I may check into Iceland to escape ObamaVille.
Perhaps it's time for Greece to adopt similar measures to those adopted by Iceland. Kick out the bankers and current slate of politicians, claim "Odious debt http://en.wikipedia.org/wiki/Odious_debt. And return to their own sovereign currency.
Democracy is a failure. The sooner they realize it, the better.
http://en.wikipedia.org/wiki/Democracy:_The_God_That_Failed
http://mises.org/hoppeintro.asp
"Since the late 1960s or early 1970s, real wage incomes in the United States and in Western Europe have stagnated or even fallen... Further, the collapse of the Soviet Empire represented not so much a triumph of democracy as the bankruptcy of the idea of socialism, and it also contained an indictment against the American (Western) system of democratic - rather than dictatorial - socialism. ...In the U.S., less than a century of full-blown democracy has resulted in steadily increasing moral degeneration, family and social disintegration, and cultural decay in the form of continually rising rates of divorce, illegitimacy, abortion, and crime." - Hans-Hermann Hoppe
why yes, Doktor, a demockery indeed. voting is the opiate of the masses. as Wavy Gravy once opined, "Don't vote. It only encourages them."
So you think that democratic government isn't a failure?
Of course it is, it's just less of a failure than all the other kinds. Kind of like how I got your girlfriend only a little bit pregnant.
There is a another way, informed by centuries (see here http://praxeology.net/anarcres.htm) of thought.
Specifically, from http://en.wikipedia.org/wiki/Rothbard
"Building on the Austrian School's concept of spontaneous order, support for a free market in money production and condemnation of central planning,[5] Rothbard advocated abolition of coercive government control of society and the economy. He considered the monopoly force of government the greatest danger to liberty and the long-term well-being of the populace, labeling the State as nothing but a "gang of thieves writ large"—the locus of the most immoral, grasping and unscrupulous individuals in any society.[6][7][8][9]...Rothbard concluded that all services provided by monopoly governments could be provided more efficiently by the private sector. He viewed many regulations and laws ostensibly promulgated for the "public interest" as self-interested power grabs by scheming government bureaucrats engaging in dangerously unfettered self-aggrandizement, as they were not subject to market disciplines. Rothbard held that there were inefficiencies involved with government services and asserted that market disciplines would eliminate them, if the services could be provided by competition in the private sector."
So everything 100% privatized with 0 regulation is that correct?
Pearls before swine, Doctor!
They want laws ... more laws ... lots of laws ... there aren't enough fucking laws! The lawmakers, bankers and traders ignored all the current [3,000-page] laws, so we need MORE LAWS, dammit!!
+1 for the Hoppe reference. The sooner we get rid of the illusion of "equality" enforced by the state, the sooner we will be able to redefine "public service" as a private moral imperative, as opposed of the current façade for exploitation, expropriation and state-sponsored terror.
Democracy is demonic demagogues demonstrating demonetization of the demographic; demonstrably un-democratic.
Don't vote else you give your consent to be ruled.
Institute spending controls (max limits for taxation) for democracy, failure solved.
"If you cut government spending, the GDP will fall by that much and then you make your debt/GDP problem worse!!! It's a death spiral!!!"
Double counting? What's that?
The war on class has been won. There is no class to be found anywhere.
and as soon as Moody's downgrades France, Greece will soon be only ancient history.
The only austerity that will work is to cut Greece off the Eurozone. Greeks are addicted to unaffordable lifestyles like a lazy son addicted to parents' fat allowance. Cutting him off is the only solution.
why the hell are the risk assets rallying and vol being crushed?
Hopium addiction. Hear bad news, run to the terminal and hit buy like Pavlov's dog.
Buy banks. What an absurd comment.
Ouzo and Ex-lax all around! I'm buyin'!
That combo is just spelled Oozo
German-French 10 yr Spread SPIKES!!!!!!!!!!!!
http://confoundedinterest.wordpress.com
“Once more unto the breach, dear friends, once more;
Or close the wall up with our English German dead.”
current yield on a 1 year Greek bond is 180%
to infinity and beyond..!!
http://www.bloomberg.com/apps/quote?ticker=GGGB1YR:IND
Reading this piece is akin to reading the Michael Jackson autopsy report.
WOO HOO!
The patient is dead, I repeat, the patient is dead
It's like reading one's own obituary.
local unions warn that the country "risks sliding into a "death spiral" if the government continues to slash salaries and lay off workers instead of cracking down on tax evasion and raising money from the rich, the head of the biggest public sector union said Tuesday
gee, and thought the only u.s. had class warfare...........
"I think we have to distinguish between different commodities. We have agricultural commodities, and I think the long term outlook for agriculture in the world is probably rather favorable. I would rather play it by owning farms than by speculating in wheat futures and corn futures because the average investor will find it very difficult to trade these markets.
And then we have industrial commodities, and this is an important signal for the market. They collapsed. They did not collapse because of Greece. They are down 30 percent because it is very likely that the Chinese economy is now decelerating very rapidly.
And that on the world would have a far greater impact than say Greece. And so I think investors who all focus on the banking crisis in Europe, they overlook the next shoe to drop, which could be China. - in Bloomberg Surveillance"
faber must wait to hear what jimmy rogers has to say first. faber is a talking head.
Greece released the "official" unemployment statistics today. UE-rate 16,5%. UE-rate for people between 15-24 years old is "officially" 42,4%.
Read the rest from here:
http://www.statistics.gr/portal/page/portal/ESYE/BUCKET/A0101/PressRelea...
that doesnt really matter, bc our pensions are safe (thx to printing money)
How do you discern employed and unemployed greek?
Employed greek sleeps during work time, unemployed greek sleeps whole day.
Kyle Bass
http://www.youtube.com/watch?v=99aRrF33p0s
"Moonwalkin' Georgie P" says "I need my milk, Dr. Trichet, gimme my milk".
so G-Pap says we've hit the 50% unemployment threshold and JC Cheater together with Timmy Hightner deliver the bag of goodies? mmm...nice global cornucopia...like that bitchez
vol getting crushed on that nice global co-integration
seems fairly obvious that banker plan has always been to destroy the world economy, force a crisis, and consolidate control...
Austerity is a bitch, bitchez.
Why can't the People cut back eating, drinking, living so the Bankers can take home more Big Fat Bonuses?
Odd.
"Lots of taxpayer money with few strings attached" says Koo
Read more: http://www.businessinsider.com/richard-koo-its-time-to-go-nuclear-heres-how-to-save-europe-2011-10#ixzz1b9zM8vYZ Europeans better buy more KY .....Clarke and Dawes (six million dollar question) nail it on the head.
+1 I filled up at Shell yesterday and the pump turned off when it hit 100 dollars. AT $1.32 CDN per litre the tank on my car wasn't full yet so I had to swip the CC again and fill it up. Shell said it was policy not to allow more than 100 dollars at a time.
They ..the bankers had the chance to take the hit 9 months ago...it would have hurt...but not kill them...now they are dead...Greece is dead...the next six months there are going to be very violent...no one will invest there..no one will go there as a tourist...and they will not go to work....its over...they just missed next quarters numbers by 30% again...it is drama to watch the death of a country....but it is happening live on TV and the blogs...and watch and learn...because it is coming here too..
The strong Euro.....WTF?????
Another Greek tragedy, writ large. But really just a canary in the mine. Get ready. When it hits, it will hit fast.
FFS PAPADEMOS WORKED FOR GOLDMAN SACHS !! CANT YOU SEE WHERE THIS IS GOING???
Greek workers put in longer hours than any other Europeans or Americans, according to a new report by McKinsey.
The consulting firm’s 60-page brief, “Greece 10 Years Ahead,” examines what makes the Greek economy so uncompetitive relative to its neighbours and offers advice on what to do about it.
Within the McKinsey report, however, there are two additional data points that explain why more hours worked by Greeks haven’t led to a growing economy.
First, Greece has the lowest labor participation rate in all of Europe — just 66 percent of the employable population have jobs, compared with 73 percent in the European Union and 70 percent in Southern Europe.
Second, not only are fewer Greeks working, those who do are far less productive: A Greek worker’s productivity comes in at $35 an hour, compared with $49 an hour in the EU, $55 an hour in Central Europe, and $58 and hour in the U.S.
Therein lies the problem—the Greek economy is uncompetitive, and until that changes it will be unable to grow at a sufficient rate to generate enough tax revenues to pay its bills.
Put it all together and it led McKinsey to one inescapable conclusion: "A relatively smaller percentage of Greeks work longer and harder hours than their European peers to support a generally unproductive system.”
Having combed through the databases of the International Monetary Fund, Eurostat, Global Insights, and the Conference Board, McKinsey paints a vivid picture of why the Greek economy is so uncompetitive — primarily, its extensive bureaucracy and rigid labor rules. Both are strangling Greece’s ability to compete in a global economy, whether in the shipping industry, tourism, or even exporting its high-quality olive oil and famous yogurt.
http://msnbcmedia.msn.com/i/CNBC/Sections/News_And_Analysis/_News/PDFs/G...
Ultimately, it is not Greeks who are "holding Europe and its taxpayers hostage" - it is the bankers. When bankers speculate, they - not taxpayers - should be the ones to suffer.
It looks like Greece is to be the first of the EU states to 'de-industrialize'. I expect the fed-up Greeks to head for the family village and return to growing food, wine and olive oil ...
Hmmm .... good food, wine, olive oil, Greek girls, music, beach, sunshine, family ... versus ... the rat race?
Sounds like we have ourselves a winner!
Towards the end of this piece, the head union guy calls for the Government to chase more EU subsidies for Greece's wind and solar assets as a revenue measure.
These people are on crack.