Alex Latunski 5:21 pm on March 25, 2016

Remember the Greek debt crisis that started in…

Remember the Greek debt crisis that started in 2009? In a recent report from the IMF, apparently Greece may be bankrupt again by May. Since the people already protest the pension cuts they had to take with the second bailout, due to the inability of Greece to tax it’s affluent.What new austerity measures can Greece take? Link

tatef 3:25 pm on March 27, 2016

I think austerity is kind of counterproductive in that its hard to ask the majority to give things up when the top arent paying in.
Michael Ruben 2:49 pm on March 31, 2016

From what I’ve researched about Greece’s problems the situation goes back to when they first applied for membership into the EU back in 1981. Now apparently those accounting numbers were recently discovered to have been falsified, and if the EU had had the real numbers then Greece would probably never have been admitted:

1.) In 2002 they switched over their drachma to the Euro, but this meant they could no longer inflate their currency to pay off loans. Then in 2004, Athens hosted the Olympics, but that only increased the budget deficit… international prestige and glory cost Greece $11 billion… which added to a public debt of $184 billion. 2005-08 Greece made reforms at the insistence of the EU, but public protest followed.

2.) In 2009, amid fears of its ballooning debt defaulting, Greece’s credit rating was downgraded. Despite efforts on Greece’s part, the deteriorating public finances, inaccurate numbers, and consistent under-performance of reforms just painted a bad picture. The financial crisis of 2009 didn’t help, and Greece surpassed its GDP budget deficit criteria from 3% to over 15%, pushing it on the verge of bankruptcy.

3.) The International Monetary Fund (IMF), the European Central Bank and the European Commission issued two bailouts, $264 billion but with strict austerity terms and conditions including deep budget cuts and steep tax increases. Not surprisingly more protests followed including strikes from the trade unions. The second bailout, issued in 2012, required Greece to hike up taxes even higher, further reduction in the size of the bureaucracy, and to step up its efforts against tax evasion; health care spending was 9.8% of its budget, which is double what it spends on education.

4.) The second bailout was really more of an exchange, a “debt swap” with creditors. Although half of Greece’s debt was wiped away it came with still further austerity measures, signaling more protests and riots. Of course, had the creditors not agreed to the swap then Greece would more than likely have defaulted on its next due payment of $16 billion.

5.) Queues formed at ATMs, which limited only $66 a day to individuals. Elderly Greeks, who don’t have debit cards were turned away from the banks. There’s a story of a 77-year old man who broke down and cried outside of a bank, because this was the fourth bank that had turned him away. Black markets activities increased like with cigarettes (Greece is one of the world’s top smoking nations), selling at $1.70 a pack, and even tobacco farmers were selling bulk leaves untaxed.

6.) However, just recently at the end of 2015, Greece reportedly a surplus of 0.2%, but given their history of numbers, grocery shelves empty, and that its maritime fleet was found to be getting preferential tax treatment it seems unlikely that Greece is resurfacing.

http://www.bloomberg.com/news/articles/ 2011-05-26/greece-cheated-to-join-euro-sanctions-since-were-too-soft-issing-says

http://www.bbc.com/news/business-17283783

http://www.huffingtonpost.com /2015/07/07/greece -capital-controls_n_7743624.html

http://www.greekcrisis.net/2016/02/greek-anti-austerity-hopes-boosted-by.html

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Remember the Greek debt crisis that started in…