Greece Is Still The Word
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What started as an anti-government protest in the Greek capital developed into deadly riots.
Three people were killed after protesters threw petrol bombs into a local bank. Two men and one woman were said to have died when the building was set on fire.
Tens of thousands of Greeks took to the streets and clashed with riot police in front of the national parliament.
They were demonstrating against government plans to push through tough budget cuts demanded by the European Union and the International Monetary Fund.
In return the debt-stricken country will receive a 110 billion euro aid package to lower its budget deficit.
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Greece is an excellent example of what happens to countries that overspend and, then over borrow without any solid repayment plan and without cutting it’s costs that helped create the problem.
Unlike America, Greece does not have the “luxury” of simply printing more money to cover it’s shortfalls. I’d gamble to guess that America’s ability to keep doing that won’t be lasting for much longer either.
This bailout is also very unpopular in Germany, which is paying for the lion’s share of it. This weekend Chancellor Merkel’s party is facing an election in Nordrhein-Westfalen, the country’s most populous state, which it will almost certainly lose due to anger over the bailout of Greece, and thus also lose control of the upper house of Parliament. People in Germany are fed up of bailing out an incompetent government in Greece.
Based on how bad this rioting is getting, it’s unlikely that Greece will be able to stick to the austerity measures it agreed to as the price for the bailout, either.
This situation is going to get a lot worse before it gets better.
When this Greeks in debt story first broke, 6-8 weeks ago, there was a mention that Goldman Sachs had cooked the Greek books to make it look like they could cope with being in the Euro Zone, don’t know how true that was.
You are right about the rioting in Athens not helping the situation. Spain and Portugal are looking on very nervously. They could well be next.
Understandably they are upset, but they are only worsening the problem. Greece is in the bb+ or junk rating right now.
So imagine that you had a debt of several billion but you had put it on your credit card that was at 16 percent interest.
Ouch!
Send over the good people from Goldman Sachs. Sure they’ll fix things up in a jiffy.
Good old Goldman Sachs are part of the problem.
Goldman did “cook” the books by hiding debt amounts. And made a tidy profit. But major Banks do this quite frequently for outside sources and themselves. I believe the term is accounting skulduggery.