Greece On Fire With Austerity

Here we go again. The Greece parliament has approved more austerity, code speak to cut pensions, wages and dump Greek debt on the backs of the people. Literally Athens is burning.



The austerity parliamentary vote was 199-74, with 27 abstains. These measures are all to obtain a €130 billion in additional bail out funds. The EU demands Greece cut to the bone in order to stave off sovereign default. Additionally, austerity is about saving the banks, in part:

The measures equal about 7 percent of gross domestic product over three years and include a debt swap that would shave 100 billion euros off more than 200 billion euros of privately held debt.

To get another bail out, Greece had to sell it's people down the river...again.

Here are some of the new austerity terms, which in part cut €3.3 billion from Greece's 2012 budget:

  • 22% cut in Greece minimum wage
  • 15,000 state workers to immediately lose their jobs
  • 150,000 government jobs lost by 2015
  • €300 billion in pension cuts

There is an additional, separate deal passed by the Greek parliament to write off €100 billion of privately held Greek debt, currently held by banks.

Greece doesn't have a prayer's chance out of this mess. Austerity is causing their economy to contract, right at the moment they need to grow out of their crisis. Greece has been in recession for 5 years now with a 21% unemployment rate.

Greece already received a €110 billion bail out in 2010. Supposedly Greece was going to get their GDP to debt ratio to be 120% by 2020. Now Greece's GDP to debt ratio is 160%.  Why?  Their economy has shrunk.

Economists are projecting further contraction for Greece, just this year as a result of these new austerity measures. Just what Greece needs, another -4% to -5% change in 2012 GDP.