The Summer Vacation Is Over - As Papandreou Briefs Greece On Its Sorry State, The Riot Police Returns

Tyler Durden's picture

Just as Greece's G-Pap, who has proven he has more political lives than a cat, is about to speak at the Thessaloniki trade fair with an update on the economy (which is now contracting at more than 5% compared to the -3.8% forecast in May), the country reminds us that summer vacation is over, and that millions of Greeks have returned from their month long vacations only to find that they still are not getting the socialist benefits they thought may, just may, sneak their way back into their paychecks and early retirement plans. To wit, as AP reports, "Riot police fired tear gas Saturday to disperse anti-austerity protesters armed with flare guns, stones and sticks as clashes broke out in Greece's second-largest city. From taxi drivers to sports fans, thousands of angry citizens were protesting in the northern port of Thessaloniki before the prime minister's annual speech on the economy. The protests came in waves Saturday. Several thousand taxi drivers angry over new licensing reforms chanted anti-government slogans as they marched, many throwing plastic water bottles at riot police guarding the trade fair where Papandreou was to speak later. An estimated 1,500 students and anarchists followed on their heels, while other crowds gathered for separate protests by the barely-solvent country's two biggest labor unions. Even fans of Thessaloniki's soccer club Iraklis turned out to protest." Of course, now that even Italy, after one aborted attempt to paint over the issue, is forced to impose some austerity, Europe has a long, long autumn and winter of protesting to look forward to, which coupled with the logical impact on GDP courtesy of everyone's complete lack of interest in working any more (think of the horror at retiring at 65), means that all European economies will soon grind to a halt... Just as has been predited on these pages over a year ago.

From AP:

On Friday, Finance Minister Evangelos Venizelos was forced to deny rumors of impending bankruptcy over the weekend.

 

The default rumors, combined with the sudden resignation of senior European Central Bank official Juergen Stark, created fresh market fears that sent yields on Greek 10-year bonds surging to 21 percent. Greece has the worst credit rating in the world, just shy of default.

 

Venizelos insisted Saturday that the country could still pull through.

 

"Whoever believes that Greece has been broken or has no hope is clearly out of touch with reality," he said. "The two coming months are crucial for the very existence of our country, these are two months whose every day counts as a year in terms of effort."

Funny: a Greek telling others about being "out of touch with reality."

In the meantime, Greece is also telling Europe, which is ready to scuttle bailout #2, to prepare their checkbooks for round #3:

"The clearest message Greece is sending at this point ... is that we are absolutely determined, without taking any momentary political cost into account, to fully meet our obligations to our partners," Venizelos insisted.

 

But he warned that the economy, in its third year of recession, is shrinking at a faster-than-expected pace, further hampering ambitious efforts to cut the budget deficit to 7.5 percent of gross domestic product this year.

 

"The forecast in May was a 3.8 percent contraction, and we are currently above 5 percent," he said.

Sorry Veni: this is where Germany says enough.

Greek-speaking readers can watch G-Pap's address at the link below.