By God, the Greeks will suffer for profligacy. If the IMG and Eurozone nations give them a dime, they will take it out in blood. The rescue package which was once 40 billion euros or 50 billion will have to move as high as 120 billion over three years. The Greeks have dug themselves that deep a hole. Angela Dorothea Merkel, the German Chancellor, may eventually lose her job over the bailout, because it is so terribly unpopular in her country. The Greek aid could also cost taxpayers in other European nations something to fund it.
Greece will almost certainly have to agree to 24 billion euros in budget cuts as part of the deal for its lifeline. That might allow the southern European nation to get its deficit to GDP percentage from about 13% to closer to 4% over three years. To get there, the nations will have to start a VAT, freeze public wages, and accept a commission of EU wardens to make sure that the nation toes the line with the new rules.
The ruling government in Greece will accept the agreement. Some opposition leaders will try to use the austerity plan to bring down Prime Minister George Papandreou. The new programs are so oppressive that Papandreou may well be kicked out by more radical politicians who will use the agreement with the Eurozone nations and IMF as a rallying cry around which those unhappy with old regime can gather.
The bailout of Greece is more a political problem than a financial one. It will probably bring a new group of politicians to power and their goal will be to break with their new masters even if the cost is a default on the nation’s sovereign debt. The Eurozone nations, especially Germany, are not willing to put up with any resistance from Greece, and that is just what they are faced with.
The peace between Greece and its neighbors was bought with money and will likely be repaid with rebellion.
Douglas A. McIntyre
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
