Greece pays huge price

Townsville Bulletin - - OPINION - RON WAD­FORTH, An­nan­dale.

ONCE it be­comes clear you can’t pay your debts a fi­nan­cial col­lapse can hap­pen very sud­denly and you start los­ing your sovereignty to those you must turn to for fi­nan­cial help.

Greece is pay­ing the price but is it the ca­nary in the coal mine?

Ire­land has al­ready re­ceived bailouts and they are prob­a­bly go­ing to need another one at some point. Por­tu­gal is a fi­nan­cial bas­ket case and they are prob­a­bly next in line for a bailout.

In Spain the last of­fi­cial un­em­ploy­ment rate was 23.78 per cent, and if the domi­noes start to fall, Spain could be in a mas­sive amount of trou­ble very quickly.

Italy recorded a gov­ern­ment debt to GDP of 132.10 per cent – clearly a prob­lem. Bel­gium and France also have very sub­stan­tial debt prob­lems; they prob­a­bly would not be the first domi­noes to fall but if the con­ta­gion starts to spread it would be a likely sce­nario, ac­cord­ing to some ex­perts.

In ad­di­tion to all that, the In­ter­na­tional Mon­e­tary Fund has some bad news for us; the slower rate of eco­nomic growth could be here to stay ( businessinsider. com. au/ i mf- world- eco­nomi­cout­look- slow- growth- 2015- 4).

With a slow­ing global econ­omy, the truth is, Europe’s en­tire fi­nan­cial sys­tem is ex­tremely vul­ner­a­ble right now and big banks all over Europe and es­pe­cially in Ger­many are lever­aged to the hilt. Ger­many is hold­ing a mas­sive amount of Greek debt, that is why there is so much fear.

When the domi­noes fall the cri­sis in Greece could spread across the rest of Europe. Maybe the US could come to the res­cue like they did in 2008.

That’s un­likely, the US to­tal Fed­eral gov­ern­ment debt at the end of fi­nan­cial year 2015 is es­ti­mated to be $ 18.628 tril­lion.

The EU can put a gun to the head of the Greek gov­ern­ment but the truth is as Yanis Varoufakis said – Greece is bank­rupt.

Greece may still re­main in the euro but has the cri­sis been re­solved? This deal of­fers no way out and is not a so­lu­tion.

The de­struc­tion of Greece, like the de­struc­tion of other coun­tries by the big mega banks and fi­nan­cial firms is not, as claimed, about aus­ter­ity or im­pos­ing ra­tio­nal ex­pen­di­tures or bal­anced bud­gets.

It is not about re­spon­si­ble or good gov­ern­ment. It is most an­tidemo­cratic. Cor­po­rate profit is god. It does not mat­ter who suf­fers.

In Greece, 40 per cent of chil­dren live in poverty, there is a 25 per cent un­em­ploy­ment rate and the un­em­ploy­ment fig­ure for those be­tween the ages of 15 and 24 is nearly 50 per cent. Sadly the Greek cri­sis has seen a rise in sui­cides and de­pres­sion and it will only get worse.

BLUNT MES­SAGE: Yanis Varoufakis, who re­signed this month as the Greek Fi­nance Min­is­ter, says the coun­try is bank­rupt.

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