Greece Slides Back Into Recession Amid Riots, Rewewed “Grexit” Calls
Submitted by Tyler Durden on 02/12/2016 07:11 -0500
It was just over a year ago that Greece elected Alexis Tsipras and Syriza amid a flurry of anti-austerity sentiment.
Things didn’t exactly go as planned.
The new PM and his “radical” finance minister Yanis Varoufakis thought they could shake things up in Brussels and wrench Greece from the clutches of Berlin-style fiscal rectitude. As it turns out, Wolfgang Schaeuble is not a man who is easily bested at the bargaining table and after more than six months of negotiations, the imposition of capital controls, a referendum on the euro that Tsipras promptly sold down the river, Greeks ended up facing an outright depression.
In the end, Varoufakis unceremoniously resigned and Tsipras agreed to a third bailout before calling for snap elections that would ultimately see the PM re-elected albeit at the helm of a party that was completely gutted by the arduous bailout talks.
As we and quite a few others warned, the new bailout and the attached terms would do exactly nothing to turn the Greek economy around. We’re all for being responsible with the budget but you can’t very well implement fiscal retrenchment during a depression unless you intend to remain in said depression in perpetuity, but alas, that’s exactly what Brussels forced Greece to do and on Friday we learn that the country has slipped back into recession.
GDP contracted 0.6% in Q4 after shrinking 1.4% in Q3. “With opposition mounting to the government’s pension reform plan, the European Union pressuring it to stem the tide of refugees entering the country and the global market rout hastening the sell-off in Greek assets, dark clouds are gathering again,” Bloomberg writes. Ironically, capital controls appear to have helped the economy perform better than expected: “The economy fared less badly than those initial expectations in part due to a 90 percent annualized increase in cashless payments since the introduction of capital controls in June, shifting activity out of the shadow economy.” Another justification for banning cash we suppose.
Earlier this month we noted that Greek bank stocks were cut in half in just a matter of 72 hours while Greek equities as a whole had fallen to their lowest levels since 1989. Yields on the Greek 10Y had spiked back above 10%.
Greece, sources told MNI, “seems unable to deliver” on a number of measures Brussels says Athens needs to implement an effective fiscal consolidation plan. “We agreed to disagree,” one official said. “Judging from (last week’s) talks, the negotiations could drag for months. Anyway, I don’t see any real funding needs for Greece until June,” the official went on to note.
Maybe not, but things are getting dicey again. Tsipras faced the largest public revolt he’s seen since his re-election earlier this month when a massive general strike that cancelled flights, ferries and public transport, shut down schools, courts and pharmacies, and left public hospitals with emergency staff. Even the undertakers were striking.
Tens of thousands took to the streets to protest pension reforms and in relatively short order, it was 2015 all over again.
And it didn’t stop there. “Greek riot police fired tear gas at farmers protesting against pension reform plans on Friday who hurled stones at the agriculture ministry in central Athens ahead of a major demonstration outside parliament scheduled for later in the day,” Reuters reported on Friday. “Under the planned reform of the pension system demanded by Greece’s international lenders, farmers face a tripling of their social security contributions and higher income tax.” Here are some images from the scene:
So no, Greece is not “fixed.” And even as the farmers swear “they won’t make us bend,” something will have to give because as Poul Thomsen, head of the International Monetary Fund’s European Department wrote in a blog post on Thursday, “Grexit fears to resurface once again [if all sides adopt] a plan built on over-optimistic assumptions.”
In other words: the reforms are a must if Greece wants to remain in the euro and those reforms entail tough times ahead for the farmers and for everyone else living in the socialist paradise.
Throw in a couple of hundred thousand refugees that are lliterally arriving in boats and you’ve got a particularly precarious situation that will likely devolve into the type of chaos shown above on an increasingly frequent basis.
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diogenes
February 12, 2016 8:42 am
Glad to see they have the right target, a bank
starfcker
February 12, 2016 8:50 am
Greece is exhibit A in the global ponzi. Take a small country, give everyone a non-productive government job, sell them a ton of imported crap they don’t need, run up the trade deficit, run up the National debt, force them to accept more debt, because if the government checks stop, the whole economy stops. Nothing left to do but strip the assets, eh? What’s a banker to do. Remember, they get to keep all the profits by laundering the counterfeit money through any one transaction. Print money, lend it to country, country pays employees, who buy imported shit, money leaves economy. Result? Global niggertown.
hardscrabble farmer
February 12, 2016 8:52 am
What did that one cop say to them? He seems like the primary target.
hardscrabble farmer
February 12, 2016 8:55 am
“Greek riot police fired tear gas at farmers protesting against pension reform plans…”
WTF?
Why do farmers give a damn about pension reform? Are farmers government workers in Greece? Have they no families, no land, no livestock or orchards? Why were they depending upon government handouts when they were farmers?
I don’t know if this is an accurate summation of the protest. It doesn’t sound right at all.
Greek farmers wielding shepherd’s staffs and throwing rocks clashed Friday with riot police in central Athens during a two-day protest against the government’s plans to impose new tax hikes and overhaul the pension system. Riot police used tear gas to repel them.
Separate clashes broke out on the highways leading into the capital. To the east, farmers used tractors to circumvent a police roadblock and block the main highway to Athens’ international airport. On the capital’s western highway, riot police fired tear gas to disperse farmers who were demanding to be allowed into the city with tractors and agricultural vehicles despite a government ban.
About 800 farmers from the island of Crete who arrived by overnight ferry rallied Friday outside the agriculture ministry in Athens, throwing tomatoes. Tensions escalated when police prevented them from staging a symbolic occupation of the building. Clashes soon broke out, with riot police using tear gas to stop the protesters, who were throwing rocks and setting dumpsters on fire.
At one point, an outnumbered riot police unit was forced to flee up a street, with farmers wielding staffs and pieces of wood in pursuit.
Many of the agriculture ministry’s windows were broken and rubble from rocks and broken paving stones lay strewn outside the building. Police said the farmers also threatened to spray them with a pesticide used for olive trees if the police used tear gas. At least four farmers were detained.
“These scenes were aimed at blackening the struggle of the farmers,” said Agriculture Minister Vangelis Apostolou. “For us, there is one path — that of dialogue to solve the problems of farmers. And this (path) has been opened by the prime minister.”
Farming associations have been blockading highways with tractors for more than two weeks, forcing traffic into lengthy diversions to protest a planned overhaul of the country’s troubled pension system. So far, farmers have refused talks with the government, insisting the pension reform plan must be repealed.
Bailout lenders are demanding that Greece scrap tax breaks for farmers and impose pension reforms that will lead to higher monthly contributions from the self-employed and salaried employees.
The protests against the pension changes have united a disparate group of professions, including lawyers, artists, accountants, engineers, doctors, dentists, seamen and casino workers.
Other farmers in buses, pickup trucks and cars from north and south were heading to the capital for the main rally, set for Friday afternoon in Athens’ main Syntagma Square outside Parliament.
Although the government initially banned the participation of tractors in the Athens protest, Nikos Toskas, the deputy interior minister for public order, said a few would be allowed through for a short period.
“It was clear that we could not permit tractors to enter the city but we have permitted a symbolic number to take part in the protest,” Toskas said.
Anonymous
February 12, 2016 9:15 am
hardscrabble,
Greece is a socialist nation, going the way all socialist nations go.
All pensions there are government provided and all economic things government regulated (except for the wealthy ruling class I would think since they, as rulers, are always exempt from the rules the people live by under every form of government).
hardscrabble farmer
February 12, 2016 9:15 am
Thought so. It isn’t “pension reform” they are protesting, it’s increased taxes. They keep adding the “pension reform” tag at the end of each mention of new taxes.
I heard that olive wood is bad ass, like osage or ash. I would want someone to hit me with one of those even if I was wearing a crash helmet.
Mike in CT
February 13, 2016 6:37 am
hardscrabble farmer: I make custom knives…I have some of that Fancy Olivewood..Trust me..Good old fashioned American hickory or Ash…just about any north American hardwood is a better staff…Mike
Plato
February 13, 2016 7:25 am
“We are Greek. We do not pay no fucking taxes.”
hardscrabble farmer
February 13, 2016 8:09 am
Mike, next time you get a chance to take a day drive, come up here and pick up some rock maple and ash slabs. I’ll trade you for a knife.
Greece Slides Back Into Recession Amid Riots, Rewewed “Grexit” Calls
Submitted by Tyler Durden on 02/12/2016 07:11 -0500
It was just over a year ago that Greece elected Alexis Tsipras and Syriza amid a flurry of anti-austerity sentiment.
Things didn’t exactly go as planned.
The new PM and his “radical” finance minister Yanis Varoufakis thought they could shake things up in Brussels and wrench Greece from the clutches of Berlin-style fiscal rectitude. As it turns out, Wolfgang Schaeuble is not a man who is easily bested at the bargaining table and after more than six months of negotiations, the imposition of capital controls, a referendum on the euro that Tsipras promptly sold down the river, Greeks ended up facing an outright depression.
In the end, Varoufakis unceremoniously resigned and Tsipras agreed to a third bailout before calling for snap elections that would ultimately see the PM re-elected albeit at the helm of a party that was completely gutted by the arduous bailout talks.
As we and quite a few others warned, the new bailout and the attached terms would do exactly nothing to turn the Greek economy around. We’re all for being responsible with the budget but you can’t very well implement fiscal retrenchment during a depression unless you intend to remain in said depression in perpetuity, but alas, that’s exactly what Brussels forced Greece to do and on Friday we learn that the country has slipped back into recession.
GDP contracted 0.6% in Q4 after shrinking 1.4% in Q3. “With opposition mounting to the government’s pension reform plan, the European Union pressuring it to stem the tide of refugees entering the country and the global market rout hastening the sell-off in Greek assets, dark clouds are gathering again,” Bloomberg writes. Ironically, capital controls appear to have helped the economy perform better than expected: “The economy fared less badly than those initial expectations in part due to a 90 percent annualized increase in cashless payments since the introduction of capital controls in June, shifting activity out of the shadow economy.” Another justification for banning cash we suppose.
Earlier this month we noted that Greek bank stocks were cut in half in just a matter of 72 hours while Greek equities as a whole had fallen to their lowest levels since 1989. Yields on the Greek 10Y had spiked back above 10%.
Greece, sources told MNI, “seems unable to deliver” on a number of measures Brussels says Athens needs to implement an effective fiscal consolidation plan. “We agreed to disagree,” one official said. “Judging from (last week’s) talks, the negotiations could drag for months. Anyway, I don’t see any real funding needs for Greece until June,” the official went on to note.
Maybe not, but things are getting dicey again. Tsipras faced the largest public revolt he’s seen since his re-election earlier this month when a massive general strike that cancelled flights, ferries and public transport, shut down schools, courts and pharmacies, and left public hospitals with emergency staff. Even the undertakers were striking.
Tens of thousands took to the streets to protest pension reforms and in relatively short order, it was 2015 all over again.
And it didn’t stop there. “Greek riot police fired tear gas at farmers protesting against pension reform plans on Friday who hurled stones at the agriculture ministry in central Athens ahead of a major demonstration outside parliament scheduled for later in the day,” Reuters reported on Friday. “Under the planned reform of the pension system demanded by Greece’s international lenders, farmers face a tripling of their social security contributions and higher income tax.” Here are some images from the scene:
So no, Greece is not “fixed.” And even as the farmers swear “they won’t make us bend,” something will have to give because as Poul Thomsen, head of the International Monetary Fund’s European Department wrote in a blog post on Thursday, “Grexit fears to resurface once again [if all sides adopt] a plan built on over-optimistic assumptions.”
In other words: the reforms are a must if Greece wants to remain in the euro and those reforms entail tough times ahead for the farmers and for everyone else living in the socialist paradise.
Throw in a couple of hundred thousand refugees that are lliterally arriving in boats and you’ve got a particularly precarious situation that will likely devolve into the type of chaos shown above on an increasingly frequent basis.
[img
[/img]
[img
[/img]
Glad to see they have the right target, a bank
Greece is exhibit A in the global ponzi. Take a small country, give everyone a non-productive government job, sell them a ton of imported crap they don’t need, run up the trade deficit, run up the National debt, force them to accept more debt, because if the government checks stop, the whole economy stops. Nothing left to do but strip the assets, eh? What’s a banker to do. Remember, they get to keep all the profits by laundering the counterfeit money through any one transaction. Print money, lend it to country, country pays employees, who buy imported shit, money leaves economy. Result? Global niggertown.
What did that one cop say to them? He seems like the primary target.
“Greek riot police fired tear gas at farmers protesting against pension reform plans…”
WTF?
Why do farmers give a damn about pension reform? Are farmers government workers in Greece? Have they no families, no land, no livestock or orchards? Why were they depending upon government handouts when they were farmers?
I don’t know if this is an accurate summation of the protest. It doesn’t sound right at all.
Greek farmers wielding shepherd’s staffs and throwing rocks clashed Friday with riot police in central Athens during a two-day protest against the government’s plans to impose new tax hikes and overhaul the pension system. Riot police used tear gas to repel them.
Separate clashes broke out on the highways leading into the capital. To the east, farmers used tractors to circumvent a police roadblock and block the main highway to Athens’ international airport. On the capital’s western highway, riot police fired tear gas to disperse farmers who were demanding to be allowed into the city with tractors and agricultural vehicles despite a government ban.
About 800 farmers from the island of Crete who arrived by overnight ferry rallied Friday outside the agriculture ministry in Athens, throwing tomatoes. Tensions escalated when police prevented them from staging a symbolic occupation of the building. Clashes soon broke out, with riot police using tear gas to stop the protesters, who were throwing rocks and setting dumpsters on fire.
At one point, an outnumbered riot police unit was forced to flee up a street, with farmers wielding staffs and pieces of wood in pursuit.
Many of the agriculture ministry’s windows were broken and rubble from rocks and broken paving stones lay strewn outside the building. Police said the farmers also threatened to spray them with a pesticide used for olive trees if the police used tear gas. At least four farmers were detained.
“These scenes were aimed at blackening the struggle of the farmers,” said Agriculture Minister Vangelis Apostolou. “For us, there is one path — that of dialogue to solve the problems of farmers. And this (path) has been opened by the prime minister.”
Farming associations have been blockading highways with tractors for more than two weeks, forcing traffic into lengthy diversions to protest a planned overhaul of the country’s troubled pension system. So far, farmers have refused talks with the government, insisting the pension reform plan must be repealed.
Bailout lenders are demanding that Greece scrap tax breaks for farmers and impose pension reforms that will lead to higher monthly contributions from the self-employed and salaried employees.
The protests against the pension changes have united a disparate group of professions, including lawyers, artists, accountants, engineers, doctors, dentists, seamen and casino workers.
Other farmers in buses, pickup trucks and cars from north and south were heading to the capital for the main rally, set for Friday afternoon in Athens’ main Syntagma Square outside Parliament.
Although the government initially banned the participation of tractors in the Athens protest, Nikos Toskas, the deputy interior minister for public order, said a few would be allowed through for a short period.
“It was clear that we could not permit tractors to enter the city but we have permitted a symbolic number to take part in the protest,” Toskas said.
hardscrabble,
Greece is a socialist nation, going the way all socialist nations go.
All pensions there are government provided and all economic things government regulated (except for the wealthy ruling class I would think since they, as rulers, are always exempt from the rules the people live by under every form of government).
Thought so. It isn’t “pension reform” they are protesting, it’s increased taxes. They keep adding the “pension reform” tag at the end of each mention of new taxes.
I heard that olive wood is bad ass, like osage or ash. I would want someone to hit me with one of those even if I was wearing a crash helmet.
hardscrabble farmer: I make custom knives…I have some of that Fancy Olivewood..Trust me..Good old fashioned American hickory or Ash…just about any north American hardwood is a better staff…Mike
“We are Greek. We do not pay no fucking taxes.”
Mike, next time you get a chance to take a day drive, come up here and pick up some rock maple and ash slabs. I’ll trade you for a knife.