[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Sign-in] [Mail] [Setup] [Help]
Status: Not Logged In; Sign In
|
Business/Finance See other Business/Finance Articles Title: Deepening Greek Depression Deepening Greek Depression by Stephen Lendman Greece is Exhibit A on how financial predators wreck economies for profit. Force-fed austerity is toxic, polar opposite what’s needed. Weak economies need stimulus to stabilize, recover and grow - expansive monetary and fiscal policy. Euro straightjacket rules prevent member countries from controlling their own financial policies. It’s like having weapons with no ammunition when trouble strikes. Greece’s manufacturing index is a testimony to wrongheaded euro policies. It July, it sank at a record pace - from a negative 46.9 in June to a dismal 30.2 in July. Readings below 50 signify contraction. Greece’s new orders gauge showed no relief in sight - plunging from 43.2 in June to a record 17.9 in July. Markit Economics blamed capital controls and a “generally uncertain operating environment. Although manufacturing represents only a small proportion of Greece’s total productive output, the sheer magnitude of the downturn sends a worrying signal for the health of the economy as a whole. Bank closures and capital restrictions badly hampered normal business activity.” Since crisis erupted five years ago, Greece’s economy slumped over 25%. After reopening for the first time since June 26, Greece’s stock market crashed - down 23% in early trading, closing around 20% lower than when trading began with perhaps more declines coming before stabilizing. A halt in short selling was declared. The benchmark National Bank of Greece plunged 30% - the daily limit. Other bank valuations followed. The Financial Times cited an unnamed Greek market analyst saying “banks are especially vulnerable because of capital controls. The question now is whether they’ll drag down the rest of the market with them.” Monday trading showed bad news affected equities across the board. In the past 12 months, the Athens Composite is down about 45% - heading lower. Greece’s bond market indicates further trouble. Higher short-term rates over longer-dated bonds indicates investors fear default. Greek two-year notes yield 21% - 10-year bonds around 12%. Investment strategist Frances Hudson commented, saying “things are going to be very tough for Greece” - especially with tougher austerity measures imposed, more coming, and still more demanded. Greece’s economy teeters near collapse. Investment “ground to a halt,” the Financial Times reported. Prospects ahead look dismal. Troika and Greek financial officials are discussing recapitalizing the nation’s major banks - hard hit by capital flight and non-performing loans. Up to 25 billion euros are needed. Austerity issues being discussed include pension reform, ending early retirement, accelerated privatizations, ending violations of Greece’s last bailout agreement and further social service cuts than already demanded. Releasing bailout funds in amounts to be determined depend on SYRIZA’s implementing all terms imposed. So far, Prime Minister Alexis Tsipras conceded on virtually everything - breaching his promise of ending austerity. The Foundation for Economic and Industrial Research’s monthly Greek economic sentiment indicator fell for the fifth straight time in July - reaching its lowest level since October 2012. A IOBE statement said: “The negative development is the result of the sharp deterioration in business expectations in all areas, but also a recent and significant decline in consumer confidence.” Greece has a three billion euro debt service obligation due the ECB on August 20. It needs to complete ongoing talks to receive bailout funds in agreed on tranches to be mostly handed right back to banks and other large creditors - a predatory scheme raping the country and harming ordinary people most, already in extreme duress. Former SYRIZA welfare minister Dimitris Stratoulis said “(t)he government has to choose between a humiliating agreement to sign a third bailout, or abandon the agreements reached in Brussels and seek alternatives for a positive course out of this crisis.” The capitulation course chosen assures harder than ever hard times ahead, potential economic collapse, as well as eventual odious debt default and Grexit instead of right now as the only way back from the abyss no matter how painful the process. Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net. His new book as editor and contributor is titled "Flashpoint in Ukraine: US Drive for Hegemony Risks WW III." http://www.claritypress.com/LendmanIII.html Visit his blog site at sjlendman.blogspot.com. Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network. It airs three times weekly: live on Sundays at 1PM Central time plus two prerecorded archived programs. Post Comment Private Reply Ignore Thread
|
||
|
[Home]
[Headlines]
[Latest Articles]
[Latest Comments]
[Post]
[Sign-in]
[Mail]
[Setup]
[Help]
|
||