Greece is heading down the road of austerity, now selling off it's land and assets to pay their creditors. Literally the beautiful beaches of Greece are for sale.
Where have we seen this before? A crisis to advance a privatization agenda.
This is in a midst of a new loan approved and a new bail out in the mix.
The euro area approved its share of a 12 billion-euro ($17.4 billion) aid payment for Greece and pledged to complete work in the coming weeks on a second rescue package for the cash-strapped nation to prevent a default.
Finance ministers agreed to disburse 8.7 billion euros of loans under last year’s 110 billion-euro bailout by July 15, rewarding Greek Premier George Papandreou for pushing an extra austerity plan through parliament. The International Monetary Fund is due to provide the rest of the July aid installment, the fifth under the 2010 package.
All of this sell out is the midst of violent protests, where many are being injured and the government is tear gassing citizens. Why are the people of Greece erupting like Mount Vesuvius? The citizens and taxpayers are being forced to pay for the bail outs of the banks.
The latest austerity package passed by the Greece parliament is beyond belief. The package is $113 billion in privatization and cuts.
The new austerity measures include a sale of $72 billion in public assets and $41 billion in additional tax increases and spending cuts. These new taxes will affect people earning as little as $12,000 and will include a new tax on people earning over $17,000 annually. Also included are new increases in consumer taxes, increased taxes on businesses and further cuts in public employment.
The new measures are on top of the austerity program enacted last year that included a 20 percent to 30 percent reduction in public sector wages, cuts in unemployment benefits and a suspension of a 2009 poverty support program. In addition, last year's measures suspended collective bargaining; lowered and froze public pension payments; raised the retirement age for public pensions; increased the value-added tax from 19 percent to 23 percent; imposed consumption taxes on fuel, tobacco and alcohol; and raised income taxes on middle-income earners.
The cuts to date have caused 800,000 Greeks to lose their jobs. So, will this all work and enable Greece to get out of debt? Most are saying no, it only delays the inevitable.
All of this is to avoid hitting a default, which triggers credit default swaps. In Everyone is a Helot Now, Numerian calls these latest plans The Debt Enslavement Act of 2011.
Think this is far away and doesn't affect you? Think again, the IMF and banks are just itching to take away your social security and medicare, using almost identical excuses.
Comments
The Economic Consequences of the Peace
It seems to me we Europeans are determined to repeat the folly of the aftermath of World War I. This time the battle was waged by our financial overlords with their zombie-banks. They won and now their supra-national enforcers (IMF, ECB, EU) extort reparations on their behalf. There will be economic consequences of the peace:
»It is an extraordinary fact that the fundamental economic problems of a Europe starving and disintegrating before their eyes, was the one question in which it was impossible to arouse the interest of the IMF, the ECB and the EU. Reparation was their main excursion into the economic field, and they settled it as a problem of theology, of polities, of electoral chicane, from every point of view except that of the economic future of the States whose destiny they were handling.«
SMS to John Maynard Keynes: Urgent! We need you here. ASAP!
Reparations
About the history of Europe, I seem to recall that reparations (opposed by U.S. President Wilson) proved to be a big plus for the political ambitions of a politician named Adolf Hitler.
I gather that is your point here, Stephan!
BTW: Keynes was okay as a pragmatist, but to really understand what is needed for democracy, check out the work of Henry C. Simons (although Simons worked entirely within a specifically American context and, IMO, would today favor an across-the-board tariff or VAT for the U.S.A.).
Let's watch the privatization
Here are some questions to consider as this unfolds.
Are the assets sold at a big discount?
Who buys what and who is behind those buying?
Will a connection unfold between the purchasers of Greek public assets and those who contributed to the crisis?
This is what happhappened in Egypt in the decade prior to the peoples rebellion - privatization, massive unemployment, suppression of the people by police.
The Money Party has it's game plan down. They won't given an inch and they're out to crush everyone (as irrational as that seems). They are the new nihilists.
Michael Collins
Let's watch the privatization
Here are some questions to consider as this unfolds.
Are the assets sold at a big discount?
Who buys what and who is behind those buying?
Will a connection unfold between the purchasers of Greek public assets and those who contributed to the crisis?
This is what happened in Egypt in the decade prior to the peoples rebellion - privatization, massive unemployment, suppression of the people by police.
The Money Party has it's game plan down. They won't given an inch and they're out to crush everyone (as irrational as that seems). They are the new nihilists.
Michael Collins
fire sale
It sure sounds like they will be fire sales. Watch the video where it goes round and round about Greek Bureaucracy being the "big woe" in terms of "private investors"...
but then, look at that beach. World famous, astounding beaches in Greece, and if they end up being private beaches, that says everything.
Wouldn't surprise me, but we'll see.
As it stands the report shows they get jack for the price and it will cost Greek citizens much more in the long run, just like the Indiana toll road in the U.S.
Naked Capitalism, more links to what is for sale
Naked Capitalism picked up on this post and found even more fire sale items, link to NC's post.
Folks, remember we have this going on in the U.S. The most infamous is the Indiana toll road, getting less, costing more, all per the demands of corporations, this selling off of public works taxpayers already paid for.
Kind of like you build it, they profit from it and you pay for it every time.
New York Central example
How many times?
First the New York Central was given all kinds of goodies to assure investors of phenomenal returns.
Then they were allowed to set rates according to "what the market can bear."
Also, they were always something of a monopoly, especially at first.
Then the chief operators schemed and scammed and printed up stock certificates ... until the railroad went broke.
Then it was bailed out.
Then it went broke again.
Then it was bailed out again.
We lose count of the bail-outs.
How much will we have to pay private investors to take over the operation of Amtrak?
And how many more times will we have to pay some private interest to continue to operate it?
All subsidies are evil, but subsidies paid to private interests are okay?
Sale or Sellout?
In WWII, Germans, Italians, and Bulgarians raped Greece. Germans destroyed the Corinth Canal and port facilities (rebuilt with Marshall Plan funds). Now the Germans are dictating terms to the Greeks -- when the Greeks should be demanding reparations for the outrages of WWII -- the Germans can damn well afford them. But the power elites in Greece -- good Eurocrats with fat salaries and allowances -- are betraying the Greek people. Maybe they will find a way to sell the sunshine to the Germans and charge the Greeks user fees for swimming in the Aegean. Then their elites can retire to St. Moritz.
Frank T.
S&P Says Greece Debt Roll Over is Default
Someone muzzle S&P. They just said the current Greece bail out debt roll over plan is a default, which will trigger all of those CDS payouts.
Or more to the point, here is what happens when derivatives are not reformed and there is no better stink bomb than CDSes.