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Euro Crisis: A Big, Maybe Bad, Week For Greece

Euro Crisis: A Big, Maybe Bad, Week For Greece

Things are getting even more challenging for Greece and not only because wildfires have been burning for three days on the eastern Aegean island of Chios, razing almost 13,000 hectares of arable land and forests.

Greek Prime Minister Antonis Samaras is preparing to travel to Berlin to meet German Chancellor Angela Merkel on Thursday. Greece’s coalition government is presenting a plan to cut 13.5 billion euros over the next two years, 2 billion more than those demanded by the troika of the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission, for Greece to receive a very much needed next installment of bailout funds.

According to the daily Ekatherimini, the additional 2 billion in cuts is the result of calculations by the Finance Ministry, which says that “once the pension and salary cuts are implemented along with the reductions to spending, tax revenues and social security contributions will fall by about 2 billion euros, leading to a new shortfall.”

Part of the plan, as laid out by Greek Finance Minister Yannis Stournaras, calls for 30,000 to 40,000 public sector employees to be removed from their posts; they will be given up to 75 percent of their salaries for one to three years. People will also have to work for more years before qualifying to receive the minimum pensions of 485 euros.

No gain without pain, as they say.

Stournaras has said that “We have to stay alive and remain under the umbrella of the euro, because that is the only choice that can protect us from a poverty that we have not experienced” — a dire comment suggesting the pressures under which he has been working to produce an extra 2 billion euros of cuts.

European politicians have been addressing the topic of a “Grexit,” of Greece leaving the euro zone.

Over the weekend, Luxembourg prime minister Jean-Claude Juncker (who is also the chair of the eurogroup of European finance ministers) said that there is no change of Greece having to leave the euro zone “unless Greece were to violate all requirements and not to stick to any agreement.”

In Germany, Volker Kauder, the parliamentary leader of Merkel’s conservative bloc, underscored that no changes to the bailout (like the two-year extension Greece is seeking) can be made: “There is no more latitude, either on the timeframe or the matter itself, because that would again be a breach of agreements. It is just that which led to this crisis.” Germany’s deputy finance minister, Steffen Kampeter, echoed these sentiments: “If, as we all assume, there are any deviations then the Greece side will compensate for them.”

More tough words from Finland too. Said Alexander Stubb, Finland’s minister for European affairs and foreign trade: “There will be no third package [for Greece] if it does not make structural reforms.”

Loud and clear, that.

The clock is ticking: Greece is hoping to receive approval from the troika for its spending cuts program by September 14, less than a month away.


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Photo of wildfires in Chios taken on August 19, 2012, by va_sfak

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5:42PM PST on Jan 17, 2013

thanks, noted

12:23AM PDT on Aug 24, 2012

When Greece first entered into the Euro economic zone, the Greek population was not given a chance to vote on it. The corrupt government of George A. Papandreou and Evaggelos Venizelou decided unilaterally for our nation - in reality for his own pocket. Throughout the years there has been much blatant corruption by his government and now that he is not the Prime Minister anymore we are still reeling from the effects of his destruction of our once proud and prosperous nation. Many of us want to go back to our own ancient Drachma so we can print our own money and not have to rely on outside sources to constantly bail us out at such a high price that we cannot possibly ever pay it back and are condemned to live in extreme poverty and misery near slavery. There needs to be a criminal and civil lawsuit against Papandreou and his administration to force them to pay back everything they stole from the citizens of Greece through their corruption as well as make them responsible for paying back the Euro debt they purposely put us in.

8:28AM PDT on Aug 23, 2012


3:04AM PDT on Aug 22, 2012

Thanks for sharing.

9:28PM PDT on Aug 21, 2012

Marilyn: The labor and socialist parties take control of the Euro governments evoke law after law that supposedly protects the workers with lay-off restrictions, pensions, healthcare and short work weeks. Now their corporations can no longer compete on the world market, the economy collapses under the weight of bloated governments. With no economy, the countries environmental protection collapses, innovation, modernization, education, healthcare, even the treatment of animals, all stagnate. How does this benefit the corporations and big banks?
I here form poster after poster that says THE MAN has his thumb over the folks, who is the MAN that benefits from this Chaos? Bush?

7:20PM PDT on Aug 21, 2012

I think the answer is a new currency based on assets of the government that is not debt. Audit, assign value and make money according to equity in all assets.

In the US it would be a US Treasury Dollar.

6:12PM PDT on Aug 21, 2012


2:53PM PDT on Aug 21, 2012


1:08PM PDT on Aug 21, 2012

The Euro has caused a lot of problems. thank goodness the U.K. had the sense to keep away from it.

11:57AM PDT on Aug 21, 2012


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