Civil society breaking down in Greece

Even with a deal with two of his three coalition partners about a modest austerity program that would cut pensions and other benefits, Greece seems poised to come apart at the seams. Massive strikes and messages of sympathy with the protestors from police and even the finance ministry reveal a nation on the brink.

Reuters:

Police fired teargas as black-masked protesters threw petrol bombs, stones and bottles in central Athens. The biggest police trade union said it would issue arrest warrants for Greece's international lenders for subverting democracy, and refused to "fight against our brothers."

As public rage seethed, the leader of the far-right LOAS party, the smallest of three parties backing Prime Minister Lucas Papademos, said he could not support the harsh austerity program.

"I explained to the other political leaders that I cannot vote for this loan agreement," LAOS leader George Karatzaferis told a news conference.

His party has 15 deputies in the 300-seat parliament, dominated by the socialist PASOK and conservative New Democracy parties, which both support the Papademos government.

Finance ministry staff, who must implement a new wave of job, pay and pension cuts, waved black flags as emotions in a nation suffering a fifth year of recession neared boiling point.

Venizelos made clear Greece has little choice but to accept the harsh conditions attached to a 130 billion euro bailout, and a plan to reduce its huge debt burden, to avoid a chaotic default when big debt repayments come due next month.

With a parliamentary vote on the deeply unpopular austerity package due on Sunday or Monday, he said Greece had to decide by next week whether it wanted to take the pain and stay in the euro zone, or face much greater hardship on its own.

"It's time for us to make up our minds," he said in Brussels after euro zone finance ministers refused to give immediate approval to the bailout plan. "Unfortunately, we have to choose between sacrifices and even bigger sacrifices."

Even if the austerity package is passed by parliament, there is still the issue of Greece's old bonds. Private investors who hold those worthless bonds are being forced to take a 50% - or greater - loss in return for getting new bonds backed by the EU bailout monies totaling $170 billion. If that cash is not forthcoming by March 20 when Greece owes current bondholders billions that they currently don't have, the country will be in default and there will be no cash to pay government workers, their pensions and health benefits, or much of anything else.

Today is a foretaste of what is to come on a much larger scale if Greece defaults.


Even with a deal with two of his three coalition partners about a modest austerity program that would cut pensions and other benefits, Greece seems poised to come apart at the seams. Massive strikes and messages of sympathy with the protestors from police and even the finance ministry reveal a nation on the brink.

Reuters:

Police fired teargas as black-masked protesters threw petrol bombs, stones and bottles in central Athens. The biggest police trade union said it would issue arrest warrants for Greece's international lenders for subverting democracy, and refused to "fight against our brothers."

As public rage seethed, the leader of the far-right LOAS party, the smallest of three parties backing Prime Minister Lucas Papademos, said he could not support the harsh austerity program.

"I explained to the other political leaders that I cannot vote for this loan agreement," LAOS leader George Karatzaferis told a news conference.

His party has 15 deputies in the 300-seat parliament, dominated by the socialist PASOK and conservative New Democracy parties, which both support the Papademos government.

Finance ministry staff, who must implement a new wave of job, pay and pension cuts, waved black flags as emotions in a nation suffering a fifth year of recession neared boiling point.

Venizelos made clear Greece has little choice but to accept the harsh conditions attached to a 130 billion euro bailout, and a plan to reduce its huge debt burden, to avoid a chaotic default when big debt repayments come due next month.

With a parliamentary vote on the deeply unpopular austerity package due on Sunday or Monday, he said Greece had to decide by next week whether it wanted to take the pain and stay in the euro zone, or face much greater hardship on its own.

"It's time for us to make up our minds," he said in Brussels after euro zone finance ministers refused to give immediate approval to the bailout plan. "Unfortunately, we have to choose between sacrifices and even bigger sacrifices."

Even if the austerity package is passed by parliament, there is still the issue of Greece's old bonds. Private investors who hold those worthless bonds are being forced to take a 50% - or greater - loss in return for getting new bonds backed by the EU bailout monies totaling $170 billion. If that cash is not forthcoming by March 20 when Greece owes current bondholders billions that they currently don't have, the country will be in default and there will be no cash to pay government workers, their pensions and health benefits, or much of anything else.

Today is a foretaste of what is to come on a much larger scale if Greece defaults.


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