Greece has been in an uphill battle for the past few years now, because of it’s deeply indebted government, and for fear of defaulting on its debt and leaving the Euro zone. Well the conservative government that has been in power since June has experienced its first union sponsored protest that once again turned violent in Athens, outside Greece’s parliament.
The Government just announced it would cut spending by 11.5 bn euro’s or $15bn, the additional spending cuts are another prearranged deal to ensure the country receives its second round of bailout funds to keep the government operating. Without the next 31 bn euro installment of bailout funds the government could be bankrupt within weeks.
Greece’s economy has shrunk by 6.2% in the second quarter, with GDP expected to Contract as far as 7.1% by the end of 2012, and by 2.4% in 2013, making five straight years of economic depression, where one in four Greek’s are unemployed with the unemployment rate already up to 23.1% and 55% for people ages 15-24. Another 40,000 public servants are expected to be dismissed in the next round of savings, only adding fuel to the already out of control blaze.
The United States owned $8.2 bn worth of Greek debt, now in a show of good faith, and common sense the United States Government should forgive all $8.2 bn in debt owed by Greece, because this would not only aid the troubled economy of Greece that already can’t pay it back for years to come, but help the Euro zone stabilize a bit by helping the Greek economy grow rather than demand more cuts, that are only killing the country.
Another question is why doesn’t Greece just return to its own national currency fire up its national bank and start issuing drachma’s granted it’s trading value would be very low, at first it would give the Greek Government a chance to begin to reinvest in the economy, and to finally be able to reform its tax system to allow for more accurate revenue collection, and better fiscal responsibility.
While the Jobless rate across the 17 member Euro zone has reached an all new high of 18 million, things are only looking worse as Spain, continues to have troubles, with its banks needing some 59bn euro’s in bailout funds, France Balancing its budget and not increasing revenue for the next fiscal year, bringing about new reforms, it will be interesting to see if the Euro zone last’s another year, while things keep getting better for America, maybe she can bull the EU out of its slump.