Shock news – Greece on fringe of bankruptcy, IMF to inject a further EUR100 billion in bailout money

[Paul Letterhaur, European Union Politics Contributor]

EUObserver:  As Greece has indicated that it is unable to make the current bailout repayments, the IMF, as a last ditch measure, is going to inject another EUR100 billion into the country’s coffers to enable it to do so and also to stave off its bankruptcy.

Analysts are saying that Greece’s situation is a striking example that EU bailouts are not working and that EU/IMF austerity programs aimed at forcing baileout countries to drastically reduce public spending when more prosperous countries are increasing theirs, also are not working.

Greece’s position is grave. Last week the country experienced a major general strike against EU-IMF austerity programs which have brought the country to desolation. Police and demonstrators in the streets of 14 cities all over Greece, last Wednesday, were in battle mode with demonstrators throwing stones in retaliation against police tear gas and stun grenades.

Workers of all classes including teachers, stevedores, government administrators and medical professionals were on the streets and schools, public transport, hospital and airports were all affected, with some services stopping to function entirely.

The protests coincided with the government’s announcements of a EUR 26 billion cuts measure and massive tax increases coupled with government sell-offs to the tune of some EUR50 billion at a time of 15% unemployment in the country.  Greece is in chaos, that is sure, as government ministers, MPs are showing increasing disaffection with the EU/IMF program bailout/ austerity program which is proving to be Greece’s poisoned chalice par extraordinaire.

As if all that was not enough, the Greek Daily newspaper, Kathimerini has reported that the IMF, upon request of the government, is going to put in another round of bailout money – this time to the tune of some EUR 100 billion into Greece to save its debt to the Eurozone and its reported inability to meet its current bailout repayments.

Economists are saying that Greece’s position is untenable as it has reached a stage when only bankruptcy would be a feasible option. However, the EU is not keen for this to happen as Greece’s debts are spread over most European Union states and its bankruptcy would result in some of the countries which are its creditors collapsing as well.   In addition, Greece’s demise would surely end the Euro because of the collossal amount of debt which would would need to be absorbed by the European Central Bank.

My guess on futures? Greece will default on the bailout, go bankrupt, or leave the Eurozone within 12 months from now.


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