The European nation of Greece appears to be sliding ever so progressively into the abyss of total collapse, as illustrated by a recent government measure aimed at feeding the growing hordes of hungry, unemployed Greeks across the nation. A report translated into English from Voz Populi explains that, under the new law, Greek merchants will now be permitted to sell expired foods at a reduced rate to the nation’s poorest citizens, who are becoming increasingly unable to afford basic necessities.
Since price control efforts have largely failed thus far, as have austerity measures aimed at reviving the nation’s economy, the Greek government is grasping at straws to maintain some illusion of normalcy in a country where the unemployment rate has now breached 25 percent overall, and more than 54 percent among the youth population aged 15 to 24.
“We are sinking in a swamp of recession and it’s getting worse,” Dimitris Asimakopoulos, Head of the Greek small business and industry association GSEVEE, is quoted as saying by phillyBurbs.com. “180,000 businesses are on the brink and 70,000 of them are expected to close in the next few months.”
Greece’s downward spiral has come to the top of the euro zone agenda again, with economists and analysts warning that it is closer than ever to running out of cash, and that the survival of a coalition government brought in just five months ago is under threat.
“Greece is running out of cash.The current strategy is really not working and there is substantial political risk,” Thanos Vamvakidis, head of European G10 currency strategy at Bank of America Merrill Lynch, told CNBC Thursday.
Greece’s economy has disappointed on every key metric – growth, unemployment and debt reduction – since the initial bailout terms were agreed. Its debt-to-GDP ratio, already the highest in the euro zone, will reach 189 percent, rather than 179 percent, Finance Minister Yannis Stournaras announced Wednesday.
This means that the targets agreed as part of the bailout are based on over-optimistic forecasts. The country’s privatization program is also not proceeding as quickly as hoped.
While Europe continues to plan and scheme, content in the knowledge that Greece can do nothing to derail plans of status quo preservation, especially ahead of next week’s critical parliamentary vote that will see the country imposing even more austerity on its people (see the great profile in the AP today in “Hit by crisis, Greek society in free-fall“), Greece has just decided to pull a “Karlrushe Kardinals who say Nein” move, and as Reuters reported moments ago, the entire process may be scuttled by none other than yet another court, this time in Greece:
- GREEK COURT SAYS PLANNED PENSION CUTS, RETIREMENT AGE INCREASE SOUGHT BY EU/IMF LENDERS MAY BE UNCONSTITUTIONAL
What this means is that suddenly Greece once again has all the leverage (recall that last year the mere threat of a Greek moratorium cost G-Pap his job), a development which in June sent Europe plunging on fears that Greece may vote itself out of the Eurozone, leading to a Grexit, the return of the Drachma, redenomination, collapse in risk levels, the apocalypse and other bad things.
Judging by the reaction in the EURUSD, risk is now once again off.
More from ANA via Bloomberg:
- Greece’s Supreme Court of Audit ruled that Greek austerity measures including cuts to pensions and an increase in the retirement age may be unconstitutional, state- run Athens News Agency reports, without citing anyone.
- Court of Audit almost unanimous in ruling the measures are unconstitutional, ANA says
- Court ruled on pension cuts, retirement age and cuts to pensioners’ holiday bonuses, ANA says
- Court says 5th cut to pensions in short period of time contravenes number of constitutional articles, ANA says
“October data showed another steep decrease in the level of manufacturing output in Greece, which reflected not only lower demand in the domestic economy but also a further marked drop in export orders,” wrote Markit, the publisher of the report.
Here are their key points:
- October sees sharp declines in output and inflows of new work
- New export orders fall at steepest rate since early-2009
- Employment down at fastest pace in six months