US economy grows, Greek Government agrees to deeper austerity, citizens riot

Bloomberg report that

The U.S. economy expanded at a 3.2 percent annual rate in the first quarter as households spent more freely, setting the stage for gains in employment that may help the recovery broaden and accelerate.

and the Wall Street Journal note that

Greece has agreed with the International Monetary Fund and the European Union to take additional austerity measures expected to yield “around €23 billion” ($30 billion) as a precondition for financial assistance, a Greek official familiar with the talks on aid said

while The Guardian has some video footage from last night’s rioting.

Bild wonders why German taxpayers are bailing out a Greek Billionaire?, while Business Insider report that a Greek Mayor Starts Hunger Strike To Protest Austerity Measures.

At iTulip Eric Janzen offers some insight into the Greek political system

The government there has not been as much improved as one might hope, and the ruling elite that took over did maintain certain advantages as before, such as not paying taxes. Tax revenues thus not being sufficient to maintain infrastructure and other social amenities at the level expected by the Greeks as European citizens, the difference needed to finance the lifestyle to which voters had become accustomed was borrowed abroad. Thing is, every German and Frenchman and other European has been perfectly aware of this forever. The French and Germans are famous for levying hefty taxes on any large moving financial object. The ruling elites are heavily taxed to the point where it is practically illegal to be as rich as, say, Warren Buffett or Bill Gates. Thus, when the European debt crisis eventually arrived, triggered by the US mortgage credit crisis, ironically, the Germans and French were in no mood to send money to Greece’s ruling elite to save their bacon, and still aren’t. Faced with a threat to its credit rating, rather than change the tax laws to tax themselves and end the fiscal crisis that is at the bottom of the PIIGS debt crisis, the Greek leadership instead decided to cut expenses and impose “austerity,” that is, extract even more from the Greek middle class, such as it is. That didn’t go over so well with voters, and soon the Greeks were out on the streets as my friend was so many years ago. It’s a tradition there that does not exist here.

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  • wild turkey

    Mack
    re the proposed bailout, the corruption and arising inefficiencies of the greecian fiscal policy, the likelihood of serious political/social upheaval in Greece and ripple effects across the euro periphery(ireland included? whaddya think?)

    beware of gifts baring the greeks

  • Greenflag

    baring ?? We’ve been there before . IIRC it was in the dying days of the last Conservative administration to have misruled the UK .

    I quote

    ‘The collapse of Britain’s Barings Bank in February 1995 is perhaps the quintessential tale of financial risk management gone wrong. The failure was completely unexpected. Over a course of days, the bank went from apparent strength to bankruptcy. Barings was Britain’s oldest merchant bank. It had financed the Napoleonic wars, the Louisiana purchase, and the Erie Canal. Barings was the Queen’s bank. What really grabbed the world’s attention was the fact that the failure was caused by the actions of a single trader based at a small office in Singapore.

    The trader was Nick Leeson. He had grown up in the Watford suburb of London. After attending university, he worked briefly for Morgan Stanley before joining Barings.

    PS -The Greeks were not involved except indirectly with Phillip the Greek i.e Queenie’s hubbie and Barings being the Queens bank 😉

    deja vu

  • wild turkey

    greenflag

    in the first instance i i meant baring in the sense of “revealing, laying bare”. i did not think anyone would get the double entendre.

    wrong again!

  • Mack

    I can’t see how the Greeks are going to implement these cuts, this is an incredibly painful process. I’d guess they are a near certainty to default, then we’ll probably see your ripple effects.

    Will Germans stomach throwing €600 bn – €1trn of taxpayers money at the PIIGS – once one defaults, it’s likely there’ll be no further support for the rest..

  • PaddyReilly

    And Nick Leeson went on to become CEO for Galway United.

  • wild turkey

    mack

    from todays nyt

    http://www.nytimes.com/2010/05/02/world/europe/02evasion.html?hp

    my computer is occassionally screwing up with links.

    let me know you received this?
    thanx

  • Greenflag

    wild turkey ,

    Yes I know . Nick Leeson certainly laid the cupboard bare as will the Tories if they manage to cobble together a government after May 6th ;(

    paddy reilly ,

    Was that the same Nick Leeson or are you winding ;)?

    As it’s the last weekend before E day and as Greece has been in the news I’ll share this little gem from the German version of Jon Stewart’s “Daily Show’ which btw was a hoot on the UK election 😉

    The German show is called Heute lit (Today ) for anyone who want to search .

    Statement :

    A Greek , a Spaniard and a Portuguese decide to go to a brothel together to have a good time and a bit of escape from their country’s economic woes .

    Question :

    Who pays ?

    Answer : The Germans .

    Northern Ireland version

    Statement :

    ‘The DUP and the SF and the SDLP and the AP want more money to deliver to their constituents those things which have been promised ‘

    Question :

    ‘Who pays ?

    Answer :

    Well it used to be the English taxpayer and we hope they will continue to keep us in NI in the manner to which we have become accustomed . And no we’re not Greeks well not yet anyway ;)?

  • JustTheFacts,Ma’am

    Do you journo folks ever question what you read and then cite? That 3.2 growth in GDP simply creates jobs for those entering the work force but will do nada, nothing, zilch, zippo, to reduce existing unemployment. You might try checking the GDP growth in the US following the late 70s, early 80 recession to find out what level of GDP growth will operate to reduce unemployment (at least double that 3.2%). In the meantime, if some don’t extend unemployment benefits, which dollar benefits will go right into the economy, well, 400,000 or so next month, plus 400,000 or so the next month, and so on, won’t have any money to spend and won’t that do wonders for GDP growth. And did you ask yourself where Bloomberg was in calling the bubble and then its break? Lastly, you all there in the UK can vote for whoever you like. Labor didn’t ruin your UK, the end of the British Empire did. Hard to gorge yourselves at the trough when you’re not able to siphon off the surplus of the labor of others quite like you used to.