Friday, September 30, 2011
The Death of The Greek Economy
The gullible elements of the media may well be reporting the hype from the Eurozone, that yesterday's vote by the German Parliament to approve a larger EFSF resolves the Euro crisis.
Well it doesn't!
1 The EFSF that the Germans have agreed to is not large enough
2 The implementation of the EFSF is not timely enough
3 Wise eyes are now focusing on Greece, which is not in a position to meet its obligations.
Greek Deputy Prime Minister Theodore Pangalos told AP:
"I believe that the tax limits of Greek society have been exhausted. I would say they have been exhausted for some time."
In the extremely unlikely event Greece tries to implement its much vaunted austerity measures, the knock on effect on GDP coupled with the rise in debt servicing costs and the inability to raise further taxes effectively means that the economy is dead and that they will have to default.
In October 2010 I wrote about the EU budget:
"The fact that budget rises of this kind are being pushed through, during a time when national governments are being forced to reduce their own budget deficits, shows just how out of touch with reality the EU has become.
The EU, by acts of folly such as this, will eventually engineer its own self destruction. Unfortunately, in the meantime the citizens of its member states will pay the price for the greed and intransigence of the MEPs."
Those "leading" the EU have lost touch with reality and the needs of its own citizens.
In Orwell's "1984" Winston Smith was told what the future would look like:
"Imagine a boot stamping on a human face forever".
Sadly we no longer need to read "1984" to visualise the future, we just have to watch what is happening to the Greek people courtesy of the Eurozone.