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Greek Fiscal Crisis: Parliament Passes Austerity Plan as Riots Rage

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ATHENS (Monday Feb. 13, 2013) — "After violent protests left dozens of buildings aflame in Athens, the Greek Parliament voted early on Monday to approve a package of harsh austerity measures demanded by the country’s foreign lenders in exchange for new loans to keep Greece from defaulting on its debt.

 

 

Though it came after days of intense debate and the resignation of several ministers in protest, in the end the vote on the austerity measures was not close: 199 in favor and 74 opposed, with 27 abstentions or blank ballots. The Parliament also gave the government the authority to sign a new loan agreement with the foreign lenders and approve a broader arrangement to reduce the amount Greece must repay to its bondholders.

 

The new austerity measures include, among others, a 22 percent cut in the benchmark minimum wage and 150,000 government layoffs by 2015 — a bitter prospect in a country ravaged by five years of recession and with unemployment at 21 percent and rising."

 

 

 

http://www.nytimes.com/2012/02/13/world/europe/greeks-pessimistic-in-anti-austerity-protests.html?_r=1&hp

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Americans should be very concerned with what is happening in Europe and especially in Greece. Many folks don't realize how intertwined our economies have become and analysts are predicting a serious recession for the entire Euro zone this year, which could have a serious impact on our recovery since Europe is a huge trading partner with the U.S. The Greek situation will only continue to worsen as far as I'm concerned. They rely heavily on tourism and they really don't have much industry. Even the farming that they had is starting to dry up. Unlike Germany (auto industry amongst many other things that are produced in Germany), Greece is not a heavy exporter and since they don't produce a ton like Germany, France, the UK or even Italy, nor do they have oil reserves or invest heavily in research like the Scandinavian countries do (i.e. Sweden, Norway in particular) and Germany to some extent (tons of German patents) it makes their economy that much more fragile. Even with the bailout the question is where in the world are they going to get the money from to pay off the loans??? :eek: Countries like Germany (which is doing fairly well and is the #1 economic giant in the Euro zone followed by France, Italy and Spain), who quite frankly want no part of these sorts of bailouts are demanding concessions so that their country is not looked to for more of these loans. The consensus from the Western (Northern) Europeans is that once again they have to bailout their Western (Southern) European neighbors due to fiscal irresponsibility and of course we have countries like Italy, Spain and Portugal barely holding on.

 

The youth in Greece are understandably frustrated. The prospect of finding a job is slim pickings unless you have connections for the most part and the countries like Italy, Spain and Portugal are facing the same issue, albeit on a lesser scale, but still bad. Corruption is also something that is killing the Greek economy and it needs to be weeded out if there is any hope of getting the country on the right track again fiscally.

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While I am no economist or money expert, I do agree that the Crisis in Greece could bring the rest of Europe and even much of the world including the US back into the deep recession that we are only starting to recover from. Too bad at least here in the US it got overshadowed this past weekend (2/11-12/12)of the death of Whitney Houston. Thus it worth watching.

 

 

Americans should be very concerned with what is happening in Europe and especially in Greece. Many folks don't realize how intertwined our economies have become and analysts are predicting a serious recession for the entire Euro zone this year, which could have a serious impact on our recovery since Europe is a huge trading partner with the U.S. The Greek situation will only continue to worsen as far as I'm concerned. They rely heavily on tourism and they really don't have much industry. Even the farming that they had is starting to dry up. Unlike Germany (auto industry amongst many other things that are produced in Germany), Greece is not a heavy exporter and since they don't produce a ton like Germany, France, the UK or even Italy, nor do they have oil reserves or invest heavily in research like the Scandinavian countries do (i.e. Sweden, Norway in particular) and Germany to some extent (tons of German patents) it makes their economy that much more fragile. Even with the bailout the question is where in the world are they going to get the money from to pay off the loans??? :eek: Countries like Germany (which is doing fairly well and is the #1 economic giant in the Euro zone followed by France, Italy and Spain), who quite frankly want no part of these sorts of bailouts are demanding concessions so that their country is not looked to for more of these loans. The consensus from the Western (Northern) Europeans is that once again they have to bailout their Western (Southern) European neighbors due to fiscal irresponsibility and of course we have countries like Italy, Spain and Portugal barely holding on.

 

The youth in Greece are understandably frustrated. The prospect of finding a job is slim pickings unless you have connections for the most part and the countries like Italy, Spain and Portugal are facing the same issue, albeit on a lesser scale, but still bad. Corruption is also something that is killing the Greek economy and it needs to be weeded out if there is any hope of getting the country on the right track again fiscally.

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