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European Banks Erase $67 Billion as Greece Edges Toward ExitGreece leaving the euro region would be a “blip” for British banks, said Scott Vincent, managing partner of consulting firm Parker Fitzgerald.
Greece fiercely divided as referendum campaign gets under wayCaught between a history of resistance and defiance and fears of being cast out of the eurozone, Greeks are facing a dilemma of immense proportionsGreece, not long healed from the horrors of civil war, is now deeply divided. Overnight, fault lines between left and right have opened up with a ferocity that has shocked many, and which harks back to the bloody 1946-49 internecine feud.Supporters of the no camp, backed by the government, are denounced as anti-European and proponents of the drachma lobby; supporters of the yes camp as quislings of Wolfgang Schäuble and the German finance minister’s austerity brigade in Berlin.How the adventure – for that is what the referendum is now being called – will end, nobody knows. How long it will take, and at what cost, nobody knows either.Tsipras has vehemently denied that the referendum is about deciding whether Greece will remain in the euro or re-embrace the drachma. For the leftist government it is simply about austerity.That is not, however, how it is seen in Europe. In the days ahead he will be up against the full force of European solidarity backing the yes camp.
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Yes, the Greek government was spending beyond its means in the late 2000s. But since then it has repeatedly slashed spending and raised taxes. Government employment has fallen more than 25 percent, and pensions (which were indeed much too generous) have been cut sharply. If you add up all the austerity measures, they have been more than enough to eliminate the original deficit and turn it into a large surplus.So why didn’t this happen? Because the Greek economy collapsed, largely as a result of those very austerity measures, dragging revenues down with it.And this collapse, in turn, had a lot to do with the euro, which trapped Greece in an economic straitjacket. So it’s time to put an end to this unthinkability. Otherwise Greece will face endless austerity, and a depression with no hint of an end.
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Topic: 30/06/15 (Read 1453 times)
