A Greek Tragedy

Like a snake biting it’s own tail the EU, particularly the island of Greece is stuck in a vicious cycle.

In the articles Battle for Britain and Anarchy in the UK I covered the British riots that took place back in August.  Much like the British Isles Greece has seen it’s fair share of austerity riots.  In fact the riots have been going on for years.  The level of violence in Greece has been steady as well.  People throwing petrol bombs at the police has become a common sight.

Greece is the canary in the coal mine for the EU, UK, and the US.  Every austerity measure proposed by the Greek government is swiftly met with demonstrations and in many cases riots.

The latest round of proposed budget cuts has provoked violence on a massive scale.  In the video below protesters and police clash in Thessaloniki the second largest city in Greece.

In order to secure more bail out-funds, Greek Finance Minister Evangelos Venizelos wants to cut Greece’s 2012 budget.  This would involve rescinding pay raises for public employees and lay-offs for public employees that were hired in 2010 and 2011.  Such budget cuts could have an adverse effect on more than 20,000 people.

The IMF and the EU are trying to get blood from a stone.  After years of rioting it is obvious that the Greek people will not tolerate any further austerity measures.

Unfortunately dramatically cutting jobs and wages will make a bad situation worse.  Greece is already insolvent.  Try to imagine how bad the economy will be with less money in the hands of the consumer.  If the people don’t get paid then the taxes won’t get paid either.

I fear that if these budget cuts are approved the Greek recession will become a full blown depression.  On the other-hand if Greece does not approve an austere budget soon they will not receive any more bailouts.  This would lead to a national default.  If that happens we could see the end of the EU and ultimately the end of the American dream.

All of my American readers should be deeply concerned about this.  What happens in Europe will have a dramatic effect on the rest of us.  The US and the EU are inexplicably intertwined.  If one economy fails then they both do.

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