The Greek economy is in total shambles. Unemployment is 26.9% and youth unemployment is 57.5%. Round after round of bond haircuts have not done a thing for the economy.
Der Spiegel now reports Greece on the Brink: Athens May Need 10 Billion More
According to a report by German daily Süddeutsche Zeitung, the beleaguered country needs another massive influx of money if it is to avoid insolvency. The paper cites an unnamed official at the European Commission as saying that the “financial gap” could be as large as €10 billion.
The news comes at a difficult time for Greece and its relations with Germany. German Finance Minister Wolfgang Schäuble is set to visit Athens this Thursday for consultations with his Greek counterpart Yannis Stournaras and with Prime Minister Antonis Samaras. Schäuble is highly unpopular in Greece for his consistent insistence on austerity. And with German elections looming in September, it seems unlikely that additional aid money for Athens will be forthcoming anytime soon.
Concerns that Greece could be in need of additional assistance are not new. France, for example, recently called for direct EU assistance for wobbly Greek banks. In addition, Greek Economy Minister Kostis Hatzidakis told German daily Die Welt earlier this month that he expects Europe to agree to another debt haircut for the country, a conjecture with which he is not alone. Indeed, senior economists in Schäuble’s own ministry told the daily Frankfurter Allgemeine Zeitung on Tuesday that a further reduction in the country’s debt load is necessary.
“There will be a significant cut,” Jörg Rocholl, president of the European School of Management and Technology and a member of an advisory council for the Finance Ministry, told the paper. “Greece’s ability to shoulder its debts has not been guaranteed.”
When EU leaders approved the latest tranche of aid money for Greece earlier this month, they elected to spread it out over several months so as to increase the reform pressure on Greece.
The results of that pressure are coming to a head on Wednesday, with parliament set to address the slashing of thousands of public sector jobs by the end of this year. To protest the measure, labor unions on Tuesday staged their fourth general strike of the year, paralyzing the capital with peaceful marches.
€10 Billion is an enormous sum of money for Greece, and Schäuble is hardly going to deliver any good news. During the visit, Greece elected to put up a facade.
Greece Bans Protests During Schäuble Visit
The AP reports Greece Bans Protests During Schäuble Visit
The Greek police has banned public protests in central Athens for 11 hours on Thursday, when German Finance Minister Wolfgang Schaeuble will visit, a decision the left-wing opposition party described as “fascist and undemocratic.”
A police statement Wednesday said a cordon would be set up around the city center in which “public gatherings and rallies” would be banned between 9:00 a.m. and 8:00 p.m. (0600-1700GMT).
The cordon includes parliament and the city’s main Syntagma Square, focal points of scores of anti-austerity demonstrations.
Panos Skourletis, a spokesman for the left-wing main opposition party, Syriza, strongly criticized the decision. He said it was “inconceivable in a European city.”
Various Protests in Spite of Ban
How successful was the ban?
The Guardian provides pictures and a list of various Greek protests of the day
On Monday night, teachers and education workers protested against layoffs and school closures, ahead of today’s general strike.
Several protests are planned for Athens today, with the first starting shortly, and an all-night sit-in planned outside the Greek parliament
• 10:30 local time (8.30am BST): Communist workers group PAME will gather in Omonia Square in Athens, then coverge with union protest in Syntagma. A seperate march will take place in the city of Thessaloniki.
•11:00 local time (9am BST): Employees from the ADEDY, GSEE and POE-OTA (municipal employees) unions will start a protest in Klafthmonos Square and move to Syntagma, outside Parliament
• 20:00 local time (6pm BST): Municipal workers will begin a sit-in and overnight protest in Syntagma Square, as MPs debate the latest austerity bill required to secure bailout funds.
How long before major violence erupts again?
Mike “Mish” Shedlock