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Greece in meltdown as Eurozone begins to fail
06.16.2011
08:18 am
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Greece is in economic meltdown, and the Greek government is on the brink of collapse after a series of pitched battles between police and demonstrators took place on the streets of Athens yesterday. The demonstrators were protesting against the government’s austerity measures, which were imposed to guarantee further bailout from the EU.

As a member of the Eurozone - that collection of countries who all share the euro currency - it is essential for zone’s success that the Greek government does not default on the repayment of its loans. However, one of causes to Greece’s near bankruptcy is its membership of the Eurozone. Without the euro, Greece was moderately successful. With the euro, it is bankrupt. The Eurozone is run for the benefit of its banks, not the people - as the citizens of Greece, Portugal, Ireland and Spain will tell you.

Membership of the Eurozone has very high fiscal standards - realistically you must be as successful a country as Germany to have any chance of maintaining a position with the Eurozone, which is unfeasible.

In an attempt to maintain some semblance of power, Greek Socialist Prime Minister, George Papandreou announced on national television yesterday, he would form a new government today, and ask for a vote of confidence, after negotiations to form a coalition with the Conservatives failed.

It was these events which saw world stocks tumble and EU leaders bicker over whether Greece should receive a further bailout. If the Greek banks implode, then this could “spread like contagion” bringing down major banks in Germany and France - an event which would be worse than the collapse of Lehman Brothers Bank in 2008.

The problem is Greece cannot afford to pay for any further bailouts, and the Greeks do not want it.

If Greece defaults on the loan (which it undoubtedly will), then this means that the banks who financed the bailout will be in serious shit.

And one of the big the knock-on effects if Greece falls is that America will have to foot the bill, as the U.S. is the major insurer of Greek loans.
 

 
More on Greece’s meltdown plus video, after the jump…
 

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Posted by Paul Gallagher
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06.16.2011
08:18 am
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Rebellion in Spain
05.21.2011
02:36 pm
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Forget the Rapture, Spain is where the action is, as tens of thousands of protesters have taken to the street for a sixth day. In Madrid, some 25,000 protesters occupied the Puerta del Sol Square, while others gathered in Barcelona, Valencia and Seville.

The protests, which started last Sunday, are against the the austerity measures implemented by the current government, the Spanish Socialist Worker’s Party (PSOE), in May 2010. The government’s policies have been blamed for the steep rise in the country’s unemployment to 21.3%, and for the calamitous state of the economy.

The demonstrations come ahead of the May 22 Municipal and Regional Elections, when it is expected the ruling Socialist Party will take a “drubbing”. Political rallies are banned under Spanish law on the day before elections, in order to allow a “day of reflection”. Though a police crackdown was feared by some protesters, Interior Minister Alfredo Perez Rubalcaba said the police were “not going to resolve one problem by creating another”.

The main issue with the protesters is a desire for change:

One of the protesters, Carlos Gomez told the BBC:

This is an historic moment. Thousands of people have been camping in Sol since last Sunday with no flags or affiliation to any party.

Young people, old people, families, it does not matter. Everything is organised. There are tents to place your suggestions to the movement.
There are tents with food, where people are giving to the campers, tents with political debates, even one for childcare. We are not just asking for jobs. We are asking for a change in the political system.

We have no option but to vote for the two biggest parties in Spain, who are more or less the same. They are unable to solve any problem, it is just a nest of corruption.We are tired. In short, we want a working democracy. We want a change..

Paco, Valencia:

The protests are not really anti-government, but rather anti-big political parties, both the one in power and the main ones in opposition.

It’s an anti-capitalism, anti-market ruled society, anti-banks, anti-political corruption, anti-failed democracy, anti-degraded democracy and pro-real democracy protest.

It’s a protest that wants a better, real future, not the future that the government or parties in opposition seem to be able to provide.

The manifestos and proposals are quite left-leaning ideologically, but not linked to any political party, because right now, most of us don’t feel represented by them.

Paula, Vigo, Spain:

The protests began against Spanish electoral law, as we want that to change.

Then other movements started joining in and many political parties tried to make the protests their own.

But this movement is affiliated to no political party whatsoever.

There are young people, old people, unemployed, civil servants, pensioners, immigrants, campaigners for local languages, freelancers, right-wingers and left-wingers all taking part.

It is a beautiful movement.

The protests have brought comparisons with the recent pro-democracy demonstrations in Egypt and Tunisia. However, there is a major difference - Spain’s economy is tied into the Eurozone, which means if the country is bailed out, they will be “owned” by the EU. Where previously Spain could have devalued their currency, this is no longer possible as the Eurozone, which is made up of 17 member states including Spain, has one shared currency - the Euro. Deputy Prime Minister, Alfredo Pérez Rubalcalba has said Spain won’t be another domino (like Greece, Ireland and Portugal) but a “dam protecting the eurozone.”  It may all be just wishful thinking on the government’s behalf, but whatever happens next, tomorrow’s Municipal and Regional Elections will be the first small step towards change; and while demonstrations may be nothing new in Spain, it will be interesting to see where this one goes over the coming days.

More pictures from the protest in Madrid here.

Live stream from Puerta del Sol Square in Madrid, here
 

 
Vlog from inside Madrid’s Puerta del Sol Square, after the jump…
 

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Posted by Paul Gallagher
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05.21.2011
02:36 pm
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