And to be fair, here’s the US under Establishment Republicans. They’re not much different than Democrats. This vision of our possible future will be playing out in Greece over the next six to nine months.
We reported on Greece extensively in the past, it is a socialist country that simply ran out of other people’s money. They are part of the EuroZone and their currency is officially the Euro, but just a few years ago they needed a bail-out from Europe because they were insolvent. They negotiated a series of huge loans from a group called “the Troika,” the European Union, the International Monetary Fund and European Central Bank (ECB). Those loans are coming due in June of this year and if they aren’t able to renegotiate them, Greece will default and will likely leave the EuroZone.
Think of it as paying off your MasterCard with your Visa. Or, borrowing money from China to pay off, err, China.
In return for the bailout, the Greeks had to agree with some very severe austerity measures. Their unionized public employees took deep salary and benefit cuts and they had to make deep cuts in social programs. Needless to say, these weren’t popular measures because while we may have 47% of our citizens who don’t pay taxes, it’s much higher in Greece. The very few pay for the very many and they borrow a huge percentage of their total national budget.
It looks like that’s about to come to an end. The liberal party – and remember it’s the “liberal” party in a very socialist country – swept the elections over the weekend and it looks like the dole is back on the table. Here’s the leader of the Syriza party Alexis Tspiras.
“And the message is that our common future in Europe is not the future of austerity. It is the future of democracy, solidarity and co-operation.”
In other words, they’ve just opened the doors to the troughs for the pigs to feed. And we’re betting they’re going to be looking to catch up for all they’ve lost in the Euro imposed austerity.
He has promised to renegotiate the repayment terms of Greece’s €318bn debt and tackle soaring unemployment and mass wage cuts that followed the country’s international bailout.
But Syriza’s refusal to continue meeting the austerity demands placed on Greece by its creditors has sparked fears the country may be unable to repay its debts, which could force the country’s exit from the Eurozone.
Germany’s Bundesbank has warned Greece needs to reform to tackle its economic problems…
We’re guessing that “tackling unemployment” means that the Greek government will be going on a hiring spree. Much like the US did when President Obama discovered that there was no such thing as a “shovel ready jobs” and he spread hundreds of millions of dollars around to the states so they could hire more unionized public employees. It didn’t work in the US and it will be even worse in Greece.
As far as “tackling massive wage cuts” in the public sector, everybody’s getting a raise. Don’t ask who’s going to pay for it though. Lately, the only reason anybody in Greece has been getting paid is because the Troika advanced the Greeks a huge line of credit. If Tspiras is planning on “renegotiating” that line, don’t expect the Troika – or anybody else – to pony up hundreds of billions so Greeks can retire comfortably on their fattened version of Social Security.
We’ve got a feeling that this won’t end well for anybody. The Troika can kiss off their current receivables and the Greeks can kiss off getting any more loans. Or bread.
Sign up to get alerts from Joe!