Thursday, May 6, 2010

Economic Crisis in Greece

This reminds me so much of the 2001 Crisis. The bank protests, the rioting, financial institutions being attacked, etc.
Maybe Greece has an even greater debt, but they didn’t have our social problems. Thousands of people that took the streets here were people that really couldn’t put food on the table because of unemployment and inflation, their families growing hungry.
Another difference is that in our cases, people weren't the ones living in debt, getting loans, it was the government and the politicians, who also got pretty rich thanks to that debt, so I guess that makes the public outrage even greater. I mean, you didn't have a credit bought car or house to even feel guilty about. It was all money loaned to the Argentine government that we never got to see, only got the tab to pay.
None the less, the resemblance is noticeable, and I suppose economic crisis end up having many similarities once they go down and the middle class starts protesting.


Greek bailout: Athens burns – and crisis strikes at heart of the EU


At 2.03pm today, on the third floor of a neoclassical building in the heart of Athens, three people died – and Greece changed. As the bank employees tried to beat back the flames, ignited by a firebomb tossed into the building by protesters, the economic crisis enveloping the debt-stricken country not only claimed its first lives: it shifted from bewilderment and disappointment into violence carried on an unpredictable current of rage.
The young bank employees, a man and two women, one of them four months pregnant, died in the fire which came within an hour of irate protesters laying siege to the Greek parliament.

"All of us are angry, very, very angry," bellowed Stella Stamou, a civil servant standing on a street corner, screaming herself hoarse, a block away from where the bank had been set alight.
"You write that – angry, angry, angry, angry," she said, after participating in one of the biggest ever rallies to rock the capital since the return of democracy in 1974. "Angry with our own politicians, angry with the IMF, angry with the EU, angry that we have lost income, angry that we have never been told the truth."
Across Athens today the signs of that anger were everywhere: in the central boulevards and squares that resembled a war zone, the burning cars, the burning hotels, the burning government buildings and rubbish bins and shattered windows and pavements.

Surveying the debris, Karwan Ahmet a 28 year-old Iraqi Kurd caught up in the chaos, described the scene as "being straight out of Iraq. It reminds me of all the shit we saw in Kirkuk."
What had started as a general strike called by unions to protest against deeply unpopular austerity measures turned into a tidal wave of fury as an estimated 100,000 private and public sector workers took to the streets screaming "let the plutocracy pay".
By midday that rage had assumed a new and determined dynamism as demonstrators – including once-stalwart supporters of the governing socialist Pasok party – began to shout "thieves, thieves".
Their venom soon turned towards the large sandstone building that is the Greek parliament. After scuffling with police, chasing the ceremonial guards away from the Tomb of the Unknown Soldier and taking axes to the monument, hundreds tried to storm the building, screaming "let the bordello burn".
As MPs inside debated the draconian economic reforms that eurozone nations and the IMF have demanded in return for the biggest bailout in history, riot police outside fired off rounds of acrid teargas to keep the crowd at bay. "All of them are dirty and have eaten from the trough," said one man brandishing a large wooden club. "Our politicians are squarely to blame and the worst of the culprits know it because they have fled the country."

With Greece facing a 19 May deadline to refinance its staggering €300bn euro debt, the EU and IMF agreed last week to inject up to €120bn euro into its cash-starved coffers on condition that Athens makes unprecedented budget cuts.
The tough regime, which also includes a freeze on public sector wages and pensions in addition to tax hikes, has not been seen since the country emerged from the privations of civil war in 1949.
"Why should we, the little man, pay for this crisis?" said Giorgos Didimopoulos, a 55-year-old jeweller who belongs to a communist-backed union which on Tuesday stormed the ancient Acropolis to make precisely that point.
"What people forget is that we Greeks don't like authority. We have always resisted when we think something is unfair. We fought against the Persians at Marathon, the Germans during the second world war and we will fight the IMF because in reality we no longer have a government. It is foreign forces who are in charge of us now."

Polls show that he is not alone. The perception is growing that it is low-income Greeks, already hit by three previous packages of austerity measures, who are being made to suffer disproportionately from the three-year fiscal and structural programme. In repeated surveys the vast majority have said they will take to the streets to oppose the "barbaric" measures. For many, today's violence is a taste of what is to come.
With unions backing the general strike – a walkout that crippled the country and isolated Greece from the rest of the world – the protests were seen as a key test of prime minister George Papandreou's determination to carry out the reforms. Germany, which will be picking up the lion's share of the emergency aid, has been quick to warn that if Athens strays the money will dry up.

But he clearly has a battle on his hands. "No longer can they say that these are isolated incidents of violence carried out by stone-throwing anarchists," said Makis Papadopoulos, who owns a popular tourist store in the capital's historic Plaka district where shopkeepers were fearfully boarding up premises.
"People are being pushed to the hunger line. With the intervention of the IMF things have changed. We now have an explosion situation and no one knows what the limits of Greeks are, how far people will go to vent their spleen." Resolution, say some, will only come with a root-and-branch clean up of Greece's corrupt political system.

Papadopoulos said: "This crisis has taught us that we can't go on acting the way we did, living off loans, treating the state as an endless treasury to be raided, never thinking about our future."


Maldek said...

Greece is in trouble. No doubt.

But it is NOT the IMF and NOT the EU who are to blame. They are basicly giving greece free money after all.

The problem is the fact the people of greece did lie. They did lie to the EU when joining the Eur.
The politicians did lie to their people, giving away more and more entitlements and making promises for pensions and benefits the greek economy NEVER did support.

Now the people are angry. They are angry because they have been living in a dream world. A dream world build on debt.

Now they are about to wake up in the real world and that will mean many years of poverty and high unemployment plus declining standard of living.

It is the EXACT same situation argentina did face in 2001. Argentina too did have many years of very high standard of living that the people of argentina never earned in the first place and that was powered on debt.

Do you, per chance know any other countries who have a very high standard of living and costly social systems while at the same time building gigantic mountains of debt?

It is not possible to borrow into prosperity. Not once in history has this ever worked in the long run. Why would YOUR country be different?

Anonymous said...

The IMF and EU are not GIVING money to Greece they are LENDING them money, at an lower rate as the "normal" rate the Greece would get credit (if at all).
This is one thing that upsets Greek people (at least those who can still think straight): Why lend money to a country which already can't repay it's debt, so that it will be even more in debt and for longer? Why lend money to a country which is up to it's ears in corruption? - This is the main concern of Greek people: they are afraid that most of the money will "dissapear" and they will be left with repaying the whole mess.
Their pensions and entitelments cannot explain such huge deficit (although they contribute to it), but corruption in high places can.

Bones said...

The people of Greece have something to be truly angry about. It appears that the vast majority are well aware of the BS put out by the politicians over the years and and deeply resent the fact that the ones being made to pay to clean up the mess are those that did NOT benefit from government largess over the years.

It will be very interesting to see what happens to politics over there.

Anonymous said...

Maldek's comment is spot on

Another element that should be mentionned : those raging and murdering civil "servants" are exaclty like your piqueteros

They are the cause of the problem, definitely not its solution. They parasite the nation, enjoying a standard of living that is funded by preying on those who really produce something of economic value.

Socialism is a plague of democracies, and the plague of euro "democracies" is that we only have to choose between two different socialist candidates at each election.

Canis Lupus said...

Maybe the situation is not that bad. Read this : Survival Blog : A British Ex-Pat's View of the Ongoing Greek Tragedy.

Loquisimo said...

Canis, that blog entry you posted would seem to reinforce the need to be away from major governmental and financial centers during a SHTF event. That doesn't mean be away from a city entirely, but be outside protest-attractors such as capitals, banking centers, stock markets, and etc.

In Argentina Buenos Aires far and away dominates the country, and if you're not there it's likely that you're hungry, thus the sprawling villas where people migrate to BsAs to find food and work. BsAs politicians have the muscle to forcibly steal harvests to feed the capital.

The US is so much bigger, and has multiple population centers. It's unlikely that New York City could forcibly steal crops from California to feed New Yorkers. Los Angeles would be vulnerable to citizen's militias seizing control of the aqueducts that it relies on. Do people really think that the welfare leeches of Inglewood would take up arms and march hundreds of miles to the north to secure water supplies? They'd slaughter each other first.

America's major financial and governmental centers are vulnerable to a sudden seizure of food and water sources by angry citizens. That's why we have all the "obey your betters" propaganda here-the cities just don't have the firepower to dispense with the BS and simply grab what they need like in Argentina.

The army is largely made up of people from the "provinces", like the legions of Rome were, and would be unlikely to fight for the urbanites if push really came to shove. American elites know this, I think, which is why they use the sweet-talk and such.