Greece, the European nation hardest hit by the Great Recession, continues to struggle, weighed down by massive loan debt, accumulated during the pre-crash boom and amplified by bailouts in the years since.
Much of the Greek debt is held by vulture funds, specializing in swooping in toe feed off the cheaply priced debt of stricken economies, then demand payment in full as the national economy struggles to recover.
Much of the Greek debt is held any Germans backs which financed Greek military purchases from German munitions companies — many of them induced by bribes from the German corporateers.
The Troika — the coalition of the European Central Bank, the European Commission, and the International Monetary Fund have insisted on full repayment, with the price of rebellion being the education of Greece from the common currency, a move that would force Greece to drop the Euro and go back to the drachma.
And while Germany booms, Greeks are subjected to pay and pension cuts healthcare reductions, and sell off of national power and transportation grids, as well as the sale of ports and islands.
The resulting deprivation has distorted the Greek economy, evident in these two charts from the Hellenic Statistical Authority.
First, a chart of the ten top-selling industrial products manufactured in Greece [click on the images to enlarge]:
We begin with this from China Daily:
Greece will likely need a fourth bailout program, according to Cypriot economist and 2010 Nobel laureate Christoforos Pissarides.
“I am afraid there will be a fourth memorandum,” 69-year-old Pissarides said in an interview with local SKAI television’s program “Weekend with Action”.
“The crisis and austerity will end when Greece will be able to return to international financial markets,” Pissarides said, adding that in his view it was rather unlikely to happen before the end of the current bailout in August 2018.
The expert called for more reforms with no delays to attract investment in order to exit the seven-year debt crisis.
And Germany won’t stand for debt relief
There’s no relief in sight for the Greeks, as Germany, the dominant economic power in the European Union and chief player in the central bank, insists that all loans be paid in full.
Greece must not be granted a “bail-in” that would involve creditors taking a loss on their loans, Germany’s deputy finance minister said in an interview broadcast on Sunday, reiterating the German government’s opposition to debt relief for Athens.
“There must not be a bail-in,” Jens Spahn told German broadcaster Deutschlandfunk, according to a written transcript of the interview.
“We think it is very, very likely that we will come to an agreement with the International Monetary Fund that does not require a haircut,” he said, referring to losses that Greece’s creditors would have to take if debt was written off.
The IMF has called for Greece to be granted substantial debt relief, but this is opposed by Germany, which makes the largest contribution to the budget of the European Stability Mechanism (ESM), the eurozone’s bailout fund.
Greece and its creditors agreed on February 20 to further reforms by Athens to ease a logjam in talks with creditors that has held up additional funding for the troubled eurozone country.
While the poor keep getting hammered
Just as the Greek government and many Greek corporations were buried in debt, so, too were many individual Greeks/
The Greek government ostensibly passed a law so that the poorest Greek could have special bank accounts, where they could keep enough money to live on without fear of it being taken as payment for their debts.
We suspect that bank lobbyists were involved in the drafting, because the law isn’t working and the poor keep losing their meager funds.
The ostensible shield of so-called protected bank accounts, which is supposed to prevent the confiscation of certain deposits for debt purposes, is full of holes and does not protect families in need, as it should. Kathimerini has learned that complaints have been made to the Ombudsman regarding a series of state agencies which have raided a number of these supposedly protected accounts.
In one case, a freelance workers’ fund (OAEE) pensioner was ordered to return a benefit he had received in the past. The law allows for payments to be made in installments of up to 25 percent of his pension – meaning that if his pension is too low for the remaining 75 percent to cover his needs, the installment can be below 25 percent. However, OAEE has ordered banks to withhold the full 25 percent in all such cases, regardless of any problems this would create for pensioners.
The Ombudsman has also received complaints about the confiscation of benefits for children with disabilities, as although the money is paid into protected accounts, there have been instances where it was taken away due to debts owed by the children’s parents.
The Ombudsman is now proposing that such benefits be protected if they are granted to people in financial distress whose survival depends on them.
Now we know the price of austerity.
It just isn’t worth it.