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Euro Crisis Looms as Six Greek Cabinet Ministers Resign in Austerity Plan Protest

Euro Crisis Looms as Six Greek Cabinet Ministers Resign in Austerity Plan Protest

As Greece prepares to agree on yet another round of austerity measures on Sunday, socialist and labor union street protests have erupted, six Cabinet members have issued their resignations, and 35 socialist deputies are calling for the spending-cutting plan to be softened.

In exchange for a 130 billion euro ($172 billion) bailout, the newest austerity plan would cut the Greek minimum wage by 22 percent, slash 150,000 public workers, and reduce the cost of government worker pensions.  The proposed plan has prompted Greece’s two biggest unions to launch a 48-hour street protest.

“Do not bow your heads!  No to layoffs!  No to salary cuts!  No to pension cuts!” protestors chanted.

Finance Minister Evangelos Venizelos stated the stakes facing Greece and the Eurozone squarely:  “It’s time for us to make up our minds.  Unfortunately, we have to choose between sacrifices and even bigger sacrifices.”

If approved, the 130 billion euro billion bailout would top the first 110 billion euro bailout Greece received 21 months ago.


“The painful measures that create misery for the youth, the unemployed and pensioners do not leave us much room,” said the ADEDY labor union’s secretary general.  “We won’t accept them.  There will be a social uprising.”

Greece, which has been mired in a five year recession, presently has a jobless rate of a record 20.9 percent and a youth unemployment of 48 percent, a figure almost identical to America’s black youth unemployment rate of 46.5 percent.

The International Monetary Fund (IMF) says that Greece must cut its 160 percent debt-to-GDP ratio to 120 percent by 2020.  In January 2012, the United States’s debt-to-GDP ratio crossed the 100 percent mark.

Experts question whether the proposed plan will remedy Greece’s underlying structural economic problems.

“Greece’s economy is falling off a cliff,” said Peter Tchir of TF Market Advisors.  “This does nothing to fix that.”

At issue, say analysts, is whether throwing more money at debt-ridden nation can change its fundamental lack of economic growth.

As Fox Business reports: “Greece by most accounts has no money to pay its debts and its economic growth prospects are such that it won’t have any money for the foreseeable future.  Consequently giving it bailout money to pay its debts is nothing more than a temporary Band-Aid.”

Observations like that have many in the Eurozone and beyond worried that the latest Greek bailout may simply delay the inevitable and portend a future cascading effect that could trigger an economic domino effect.

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