Athens: What a Schauble(s)!

Wolfgang Schäuble

Wolfgang Schäuble

Wolfgang Schäuble is on the wanted list today and it’s probably true to say that any Greek would be willing to bump off the German Finance Minister and probably do it without collecting the ransom that they will be putting on his head. As the press conference gets underway in Athens, Schäuble stated that Germany and the rest of the EU expects Greece to stick to what has been agreed in terms of tightening austerity.  He went on to add that “Another haircut beyond the 53 percent for the private sector is not doable” in reference to the deal in which it was agreed to write off 53% of the value of Greek bonds (agreed in February 2012). But obviously the Greek people disagree and the current state of affairs in Greece means that the pot may actually simmer over as it is already at boiling point yet again in the Hellenic capital.  The German Finance Minister believes that any talk of a further write-off would be unproductive. Does he actually understand the austerity that is being imposed on the Greeks? It seems very much as if the Greek people have only one option: invoke the Gods, because it doesn’t look as if anybody else will be ready to help them.

Opponents to Schäuble’s visit have been banned by the government from visiting the center of Athens today in the hope that they will not rock the German boat too much. That has angered opposition members of the parliament in Greece. The city center has been cordoned off (starting at 9am local time and going right through until 8pm tonight). A spokesman for the left-wing opposition issued a statement to Associated Press and said: “This action is fascist and undemocratic. It is inconceivable to have a demonstration and to exclude Syntagma Square. It is inconceivable for any European city”.

Last night thousands had decided to camp outside the Greek parliament in opposition to a new austerity law. But the vote still went through and the law was passed meaning that thousands will be laid off in the public sector in Greece. Demonstrators were out in force yesterday. Rubbish is lining the streets as the refuse collectors are now on strike. But water cannons are now in place to protect the German Finance Minister and 4, 000 police are in the streets, ready to deal with the protestors. Various public-transport lines have also been closed down temporarily today in anticipation of rioting. We could probably bank on the fact that the police are there and the water cannons deployed to protect the money (which doesn’t exist). The people don’t matter, do they?

Greece: Austerity

Greece: Austerity

The Troika (European Union, the European Central Bank and the International Monetary Fund) demanded that austerity measures be imposed further to cut public spending in an already almost-non-existent budget. As a consequence 15, 000 civil servants will be given the boot in the country before the end of 2014. Teachers and public workers will be told to join the ‘mobility scheme’ and see their sector of activity change to where they are most needed. Sounds like some Cuban-fanfare of economic control, doesn’t it?  Send the people to the sectors where they are most needed and force them to work. Only thing is, the country looks as if it will suffer from the transfer and redeployment of teachers into other sectors of activity. Take teachers away from schools will not be the long-term answer. It is only the Greek people that will suffer the consequences of that decision, once again. 12, 500 people will be part of the mobility effort. Greece has to cut the number of civil servants by 150, 000 by 2015. But, there is no job creation that will take place to satisfy those workers that will be out of work. 2, 000 public workers will go before December this year already. Greece has a lower percentage in terms of how many people work for the public sector surprisingly. 22.6% of Greeks work in the public sector, while the EU average stands at 25%. But, I fail to see how taking employment away from people without actually generating jobs in other sectors could solve the issue. Without creating employment, those Greeks will be a burden to society, saddled with debts and unable to live. They will therefore ask the state to provide for them, increasing the burden on the state in turn, and as a knock-on effect on the rest of the EU. You’ve made your bed Europe, now lie in it.

Austerity: Greek Protests!

Austerity: Greek Protests!

The Finance Minister, Yannis Stournaras stated “I fully understand the hardship the Greek people are going through during the great crisis. But I am fully convinced that the path we have chosen is correct”. Isn’t that just wonderful? I’m sure that helps the people, the masses a whole lot. Always good to be told ‘I’m doing it for your own good, even if you can’t see that right now’. Trouble is: it doesn’t look like the Greeks will ever see the benefit of those decisions. Neither in this nor the next generation’s lifetime.

Antonis Samaris: Greek PM

Antonis Samaris: Greek PM

The Prime Minister, Antonis Samaris, announced on television last night that he had a hold of the economy and improvement was already showing signs of better days. We have looked hard, but failed dismally in spotting a recovery, Mr. Samaris.

One good piece of news perhaps was that it was announced that an investment partnership has been discussed with a German development bank in order to provide much-needed loans to Greek people. Although, one wonders whether lending any more money is actually the answer. That will just have the added effect of increasing the debt of the Greeks, rather than creating growth. Growth doesn’t exist in the country and as such lending all the money you like will not have the effect of doing anything but heightening the debt-laden back that will probably snap in two very soon for the Greeks.

One journalist during the conference snidely asked Schäuble if he believed that Germany could teach a thing or two to the Greek state about running an economy. Schäuble declined to answer and just said that it was a “dangerous question”. He added that he would “sound arrogant” if he answered it. Therefore, the implication was that yes he had a few things to teach them but wouldn’t tell them what. Arrogant? But, hasn’t the troika been arrogant already in its dealings with Greece? Yannis Stournaras, the Finance Minister of Greece, stated that there was more that united Germany and Greece than divided them. Perfect diplomatic rhetoric.

In the meantime, while the German-Hellenic delegation poses for photographs and slaps themselves on the back, congratulating themselves over the unity between the two countries, the gravy train for the average Greek person is well and truly coming to a halt. Whatever happens, it looks like the German Finance Minister’s visit to Athens has been nothing but a shambles, Schäuble!

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tothetick

Professional team of writers/analysts analyzing the financial markets.

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