The Greek Who Stole Christmas!

Rebecca Broomstein

Greece’s current economic state calls for some major changes in the lives on those suffering from it.  According to Prime Minister Lucas Papademos, their only way to retain their spot as a part of European currency (the euro), people’s overall income must be cut.

300 dpi Chris Ware illustration of Greek Prime Minister Lucas Papademos. MCT 2011

Officials from the European Union, The European Central Bank, and the International

Chart showing unemployment rates for selected EU nations, November 2011, and for the EU-27 and the eurozone. November 2011 data released Jan. 6. MCT 2012

Monetary Fund (also known as the Troika) have organized a reasonable economic plan for the next four years.  Greece is in danger of an immediate economic collapse if this financial agreement falters.

In order to keep the economy from crashing, Papademos is cheating debt by making deals with bondholders.  Through these bondholders, Greece will receive 130 billion euros in public funding (that is $166 billion).On March 20, 2012, Greece will receive 14.4 billion euros of bonds. The second time Greece had avoided debt, investors took 50 percent off of their 206 billion euros in privately owned debt.  The next bailout consisted of 5 billion euros due in December, being delayed until March.

The International Monetary Fund estimates that Greece’s 2011 deficit would be  nine percent of gross domestic product , as opposed to the 10.6 percent from 2010. They had expected the economy to decrease six percent last year.

Greece is relying on austerity to continue to put off paying their debt.  All the while, they are borrowing as much as they can negotiate with sovereign debt holders.

Bio of new Greek Prime Minister Lucas Papademos. MCT 2011

George Papandreou, former Prime Minister of Greece, informed his Pasok party, on Wed. Jan. 4, 2012, that he was resigning, giving all power to Papademos.  The past five austerity packages took a toll on his governments and his majority in parliament was damaged.

The sacrifices being made are putting a lot of pressure on Papademos to turn the debt swap around and call for elections soon, to resolve the problems.

The elections are heard to be held sometime this spring.

The New Democracy, lead by Antonis Samaras, has won 21 percent voter support already. Papandreou’s Pasok has only won 13 percent.  These percentages are based on a 1,004-person survey (by Kapa Research, on Dec. 28-29).  From the survey, about eight out of 10 people agree that it is up to Greece’s political leaders to do whatever means necessary to retain their position in the euro.

The propositions presented by the troika to Papadermos are adjustments to minimum wage, wage increases, and the termination of vacation pays and bonus’.

The troika organization is certain about the national labor accords.  This meaning that they are not willing to cut minimum wages or any annual wages.

Unfortunately, the debt is expected to only expand this year, with no chance of reaching any debt reduction in the immediate future.  This could possibly take even generations to recover entirely.