Friday, May 27, 2016
Saturday Politics : Greece's Miseries May Never End
Saturday Politics updates Greece's miseries this week. Greece has agreed to a new bailout loan of €10.3 billion ($11.5 billion) from its creditors. More important, Eurozone finance ministers have agreed for the first time to offer Greece debt relief, extending the repayment period and capping interest rates. Greece needs the bailout to meet debt repayments due in July. But, the Greek government owes its creditors more than €300 billion -- 180% of its GDP -- and the International Monetary Fund (IMF) has argued with the Eurogroup for months over the issue of Greek debt relief. The IMF says debt relief is essential, but Germany in particular has opposed it. The IMF -- like most economists -- was so convinced of the importance of debt relief that it deferred participating in further bailouts, but now that debt relief has been agreed, the IMF will consider contributing to the bailout. ~~~~~ The 19 Eurozone ministers said the deal was made possible by Greek economic reforms, calling it a "breakthrough." The deal doesn't reduce the amount Greece will have to repay. Instead, debt relief will be phased in from 2018, after Germany's general election in late 2017. So, many see the deal as a compromise intended to buy time. Eurogroup President Jeroen Dijsselbloem told reporters : "We achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance program." He said the package of debt measures would be "phased in progressively." ~~~~~ The bailout deal came two days after the Greek parliament approved another round of spending cuts and tax increases demanded by its creditors. Protesters demonstrated outside parliament as it approved the austerity budget and created a state privatization fund demanded by Eurozone finance ministers. Greek public debt is unsustainable at the current 180% of GDP. The IMF European Director said: "We welcome that it is recognised that Greece needs debt relief to make that debt sustainable and it can't do it on its own." ~~~~~ Germany and its Eurozone partners have forced on Greece human misery of monumental proportions. As the bailout has unfolded, Greece has had to take on more debt than it will EVER be able to repay. The debt has in essence been passed on to Eurozone taxpayers and governments that have their own serious economic problems. In addition to debt that puts Greece in eternal serfdom, Greek citizens have been reduced to abject poverty. As of July 2015, 25% of Greeks were out of work, with half under 25 having no job. In some areas of western Greece, youth joblessness is above 60%. Chronic unemployment means pension funds receive fewer worker contributions. So, as more Greeks are jobless, more pensioners have to support families on a reduced income. According to mid-2015 Greek government figures, 45% of pensioners receive monthly payments below the poverty line of €665. From 2008 to 2013, Greeks became on average 40% poorer, according to Greek government statistical data. In addition to job losses and wage cuts, the deep poverty can also be explained by steep cuts in social benefits demanded by the Eurozone. In 2014, disposable household income in Greece sunk to below 2003 levels. Add to this the Eurozone demand that Greece sell off public assets, reducing further Greek government income available for economic development and social relief. ~~~~~ Dear readers, can things get worse for Greece? Yes. The UN News Center reports the EU has largely ‘abandoned’ Greece to deal with the migrant crisis alone. UN Special Reporter on Migrant Human Rights, François Crépeau, says the suffering of migrants in Greece is the result of a complete absence of long-term vision and a clear lack of EU political will. Crepeau says : “This is not only a humanitarian crisis. This is more importantly a political crisis in which the EU and the overwhelming majority of EU member States have abandoned Greece -- a country that is fighting to implement austerity measures – leaving it to deal with an issue that requires efforts from all." Pray for Greece; the EU certainly isn't.