This is what I meant when I referred to the “Greek crisis” in my post earlier today. Prime Minister George Papandreou has made promises of austerity to the EU and to the bond market in order to float his bond offering, get bailed out, and pull his country out of the whirlpool.
But he can’t keep those promises — the Reds are in control of most of the unions, and the general strike is the most effective weapon they have. Either Papandreou restores the status quo ante — and thus drives his country into ruin — or the Reds force a descent into anarchy.
Take your pick: those are the only choices. The welfare state cannot be deliberately scaled back by the politicians allegedly in control of it. It can only collapse.
According to ANSAmed:
Greece: New Strike Paralyses Country
ATHENS — Greece is once again paralysed today by a new partial general strike and by demonstrations in all the major cities, whilst Parliament is being called to approve the government’s austerity package which will severely reduce wages, freeze pensions and impose new taxes.
The communist union PAME has called for a national 24-hour strike for today, whilst the two main confederations, ADEDY (civil servants) and GSEE (private sector), have decided on a suspension from work from midday local time (11am in Italy), but giving their members permission to strike for the full day. And this is what will happen to all urban transport, doctors, professors, and journalists from state media.
Air transport will suffer heavy delays due to the air traffic controllers’ four-hour strike, as will rail and ferry links. ADEDY and GSEE are also preparing to declare a general strike next week (likely to be March 11) after protests in recent days by taxi drivers and pensioners, whilst customs officers prepare to follow suit. Yesterday evening thousands of people, lead by activists and communist trade union representatives, demonstrated in Athens, Thessaloniki and in the country’s major cities against the “anti-popular and criminal” measures urged by Premier George Papandreou who will today meet German Chancellor Angela Merkel in Berlin.
During yesterday evening’s demonstration, there were skirmishes with the police in the centre of the capital.
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Meanwhile, this morning the governor of the Bank of Italy, Mario Draghi, has commented positively — in light of the success of the bond sale — on the measures adopted by the Greek Government to deal with the crisis, defining them as “very serious”. Draghi said that “they are measures that have convinced the markets, as can be seen by the success of the sale (of Greek bonds, Ed.) and they have also convinced the ECB and EU Commission.”
Yesterday requests for the Greek ten-year bonds resulted as three times what was offered: 15 billion euros against the 5 billion on offer. As a result the New York Times wrote that “it is a step back from disaster”, commenting on the outcome of the operation. The bonds will pay annual interest of 6.37%.
Hat tip: Insubria.