A turbulent week in Greece ended with workers walking off the job in a general strike for the second time in days, and with protestors lobbing gasoline bombs outside the Greek parliament building in Athens. The uproar is simply the latest installment of the public fury at the Greek government’s imposition of austerity measures and the prospect of still more cuts to come after the country’s politicians approved another 3 billion euros of budget reductions. That’s the price that Greece must pay in order for creditors – including fellow eurozone members – to forge ahead with a fresh bailout package that will stop the country from defaulting on debt payments in the coming weeks.
The economic data show just why Greeks are taking to the streets to protest the austerity measures. In recent days, the government has released data showing that the unemployment rate in the fifth year of recession has soared to an astonishing 20.9%, while industrial production has plunged 11.3% over year earlier levels. As can be seen in the charts below, Greece’s economic plight is far worse than that of its eurozone peers, with gross government debt expressed as a percentage of the country’s GDP skyrocketing to about double the level across the eurozone. It isn’t just the magnitude of gaps of that kind that worry economists, but the fact that as austerity measures have kicked in, those gaps appear to have widened.
Greek politicians are walking a narrow line as they attempt to preserve the country from economic ruin. On the one hand, austerity measures themselves clearly take a toll on the country, with the economic costs being matched by the growing level of public fury. Coalition leaders have signaled that they may oppose some of the provisions of the latest agreement on budget cuts, including wages: they must remember the fact that they will be facing angry voters in an early election that could happen as soon as April. Meanwhile, eurozone finance ministers aren’t making the task any easier by insisting that the entire parliament must sign off on the plan before they agree to another bailout.
The Greek crisis offers some eerie parallels to the situation that prevailed in Argentina Continuar leyendo «Greece «alter ego» Argentina? | via alphanow.thomsonreuters.com»