World View: Massive Anti-Austerity Riots Hit Athens
This morning's key headlines from GenerationalDynamics.com:
- Police fire teargas at massive anti-austerity riots in Athens Greece
- Eurozone agreement forged in June appears near collapse
- Greece accuses Turkey of ramming in the Aegean Sea
- Japan vows no compromise on Senkaku Islands
- Egyptian Sunni and Shia activists come to blows in tv debate
Police fire teargas at massive anti-austerity riots in Athens Greece
More than 50,000 people marched to Syntagma Square in Athens Greece to
protest the new round of austerity measures that European leaders are
demanding in return for the next bailout. The rally was peaceful at
first, but as it ended, dozens of black-clad youth threw stones,
molotov cocktails and petrol bottles at riot police, who responded
with several rounds of teargas. Greece has promised to implement an
additional 12 billion euros of new austerity cuts. These include
cutting wages, pensions and welfare benefits. With Greece in its
fifth year of recession, analysts say patience is wearing thin leading
to a strong public backlash, with possible violence.
Eurozone agreement forged in June appears near collapse
A much-ballyhooed deal that the eurozone leaders reached at the end of
June ( "30-Jun-12 World View -- Germany and Angela Merkel cave in to Italy and Spain") has now
collapsed, throwing the bailout dreams of Spain and Italy into chaos.
I summarized the terms of that deal, and it's worth taking
a moment to review those terms so that you can see the game-playing
- Bailout money will be provided from the European Stability
Mechanism (ESM), a bailout fund with much of the money coming from
- In previous bailouts, the money was loaned to the country, along
with demands for austerity measures, such as raising the retirement
age, privatizing public sector businesses, or cutting the number of
public sector workers.
- The big change in the new agreement was that ESM would lend the
bailout money to the countries' banks, rather than to the countries.
That way there are no nettlesome austerity requirements, and no
increase in the countries' debts.
- The banks could then use the money to buy the country's bonds,
thus pushing down bond yields (interest rates).
- With interest rates lower, the countries will be able to borrow
even more money by selling more bonds.
- Thus, Germany will be indirectly purchasing other countries'
bonds, which Merkel had said would not happen in her
This whole agreement was never more than a farce. It was being called
a "growth pact," but it would not create one iota of growth. It was
strongly favored by Spain and Italy because it would permit unlimited
profligate behavior to continue, with expenses largely paid by
And so on Wednesday, four nations announced a re-interpretation of the
June deal. Germany, Finland, the Netherlands and Austria. They've
added the following sentence to the deal: "The ESM can take direct responsibility of problems
that occur under the new supervision, but legacy assets should be
under the responsibility of national authorities."
In other words, the really huge legacy debts will still remain on the
books of Spain and Italy. This means that the possibility of default
remains for Spain and Italy, which means that bond yields (interest
rates) will not fall, which means that they will be unable to sell
them as cheaply as they had hoped. Reuters
Greece accuses Turkey of ramming in the Aegean Sea
A Greek coast guard vessel and a Turkish patrol boat collided on
Wednesday in the eastern Aegean Sea. Greece's Foreign Ministry is
accusing the Turkey of having brought about the collision on purpose
in order to challenge Greece's territorial waters, and therefore the
European Union's territorial waters. Although no one was armed, both
sides are said to have armed their weapons during the standoff.
Kathimerini and Greece Foreign Ministry
Japan vows no compromise on Senkaku Islands
After China said on Tuesday that "Fascist" Japan must "abandon
illusions" about retaining sovereignty over the Senkaku/Diaoyu
islands, on Wednesday, Japan's Prime Minister Yoshihiko Noda, speaking
at the United Nations, made a statement that was equally firm, though
not as offensive:
"As for the Senkakus, they are an inherent part of our
territory in light of history and also under international law.
There are no territorial issues as such. Therefore, there cannot
be any compromise that represents a retreat from this
I must say clearly to China that there is no excuse for violence
and strongly urge China to protect Japan's citizens and
The reason that China and Japan are fighting over two insignificant,
uninhabitable rocks in the middle of the East China Sea is because the
owner of the islands gets with them control over a 200 mile Exclusive
Economic Zone (EEZ) around the islands, and it's believed that the
region around the islands contains trillions of dollars in oil and gas
deposits, as well as rich fishing waters. Reuters
Egyptian Sunni and Shia activists come to blows in tv debate
In an Egyptian TV show airing on September 9, the Egyptian Sunni Walid
Ismail and Egyptian Shia activist Mahmoud Ahmad Mahmoud come to blows.
Here are some excerpts:
Moderator: "Let's just talk about one more thing,
since we have only a few minutes left. Let's talk about the
citizen and citizenship. Are Egyptian Shi'ites more loyal to Egypt
or to Iran? In Lebanon, Hassan Nasrallah said: 'I'm more loyal to
Iran than to Lebanon.' Is it the same case with the Shi'ites in
Shi'ite activist Mahmoud Ahmad Mahmoud: "Things are much simpler
than that. There is this bunch of really stupid people, who are
like a woodworm gnawing away at the Egyptian people. I'm talking
about the Wahhabis. They are the ones who are responsible for
everything – they are the ones who have driven a wedge between
Muslims and Copts, and between Muslims and Muslims. They
themselves are divided into different sects.
"Secondly, I was a Salafi and then I became a Shi'ite. I wasn't
born a Shi'ite. My father has a Masters degree in Sunni
Sunni activist Walid Ismail: "He renounced you..."
Mahmoud Ahmad Mahmoud: "You are a liar."
Walid Ismail: "He did, and so did your brothers."
Mahmoud Ahmad Mahmoud: "You are a liar..."
Walid Ismail: "By God, they all renounced you..."
Mahmoud Ahmad Mahmoud: "Your wife is contacting Shi'ites, offering
to engage them in 'pleasure marriage.'"
Walid Ismail: "That's inappropriate..."
Mahmoud Ahmad Mahmoud: "Do you want me to provide recordings?"
Walid Ismail throws something at Mahmoud Ahmad Mahmoud, who jumps
out of his chair
Walid Ismail: "Shame on you! That was below the belt! You're being
Moderator: "That's enough, Walid. [To Mahmoud Ahmad Mahmoud:] How
dare you mention his wife?! Shame on you!"
Mahmoud Ahmad Mahmoud: "I didn't say anything like that."
Moderator: "Show some respect! Shame on you!"
Mahmoud Ahmad Mahmoud: "I didn't say anything like that."
Moderator: "That's it, Walid. I apologize... Dear viewers, let's
take a short break. We'll return shortly."
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