The Greek Parliament voted through the austerity Bill yesterday with a larger majority (155 to 138) than expected while the riots continued out side. More riots are expected as culturally the Greek society goes into shock.
Of course there is no way that Greece will either pay back its debts or actually achieve the austerity measures past. Yet continue to live in this nether world of make believe as the Euro leaders congratulate themselves on the stay of execution for the Euro.
Greece may or may not vote for the Austerity of a nation for a generation or more, but it seems clear now that the Euro cannot survive in it’s present state.
Right now hundreds of thousands of people are demonstrating on the streets of Athens with a few thousand people committed to a day of violence around the Parliament buildings, rioting and setting fire to cars and vans.
The classic signs of a fractured society being asked to pay a massively high price for a problem they did not create.
Greece has become the fall guy of the Euro zone being asked to have several decades of austerity; falling living standards; a burden of debt it cannot hope to repay and the selling off of it’s national assets in order to prevent the collapse of the Euro and to prevent a massive shock to the European banking system.
Realisation is now hitting many within the Euro zone, that for some countries, including Greece, the only way to bring prosperity back, is to obtain economic growth. To do this they cannot be subjected to a generation of austerity, where a downward spiral of division and poverty is the only future they have to look forward to.
Around 70% of the debt of Greece is held by German and French banks, and austerity measures is the price Greece is being asked to pay in order to prevent a shock to the banking sector that could yet again freeze up the wholesale banking system and grind the world economy into another recessionary dip.
The sticking plasters of the last 4 years have not worked and the Ostrich like behaviour of the European leaders to deal with the structural problems of the Euro has led us to a slow motion Domino Effect.
The Euro was never a united currency with a fiscal and monetary convergence within Europe. The Political ideology of the French and German political leaders of the past led to a blind eye being shown to certain economies within Europe.
GREECE is a sacrificial lamb in such a disgraceful way, leading to the sell off of national assets quicker than Margaret Thatcher could ever have dreamed of. Selling national assets in a quick fire sell off to satisfy such undemocratic organisations like the IMF at rock bottom prices just at the time when investors are least likely to pay a fair price for them is madness.
The IMF has become the standard barer yet again to impose an ideology imposed by the US and other western governments.
How the IMF has been able to rise up the ranks of importance in world financial affairs is staggering. When we consider that 6 months prior to the financial crisis they were arm twisting governments all around the world to deregulate the financial sector to follow the UK and US banking systems, just before they collapsed. Yet we are now swallowing medicine from the same doctor that should have been condemned 4 years ago.
The real loser however is democracy. Democracy is fragile and evolves over time. The flag barer of democracy is legitimacy. Legitimacy of governments, laws and policies is paramount for democracy to work. However, now we are in a cycle of democracy that is disconnected from reality and legitimacy.
The power is no longer with the citizen, but with the banks, IMF, European Commision, and politicians who no longer speak for their own electorate. Unaccountable institutions now have a disproportional amount of power in society.
The Domino Effect will continue – in slow motion – until the inevitable defaults occur, and the Euro is restructured. This is just one economic shock that is inevitable, and unless we wake up to the necessary reforms of the financial sector more economic shocks are on the horizon.