More economic red lights in Greece

The economic crisis in Greece shows little sign of easing, despite no less than three separate ‘rescue packages’, each of which was announced to be the one that would fix the problems for good.  So much for politicians and their wishful thinking . . .

The first warning light is flashing over the Labor and Social Insurance Ministry in the Greek government.  It’s announced that in order to meet the shortfall in social security funds, it’s considering seizing – confiscating, or in other words, just plain stealing – the assets of companies it claims are in arrears with their contributions.  There’s no legal process involved, no court case – just a straightforward bureaucratic stroke of the pen, whereupon the Ministry will commandeer the bank accounts and other assets of the companies concerned.  Whether or not they’re able to continue operating at all after so draconian a raid is clearly of no concern to the Ministry.

As Zero Hedge points out:

Aside from the obvious, namely that this “plan” will be merely the latest disaster to hit the long-suffering Greek economy, now caught in the worst depression in history, and where greedy and corrupt politicians will promptly “confiscate” whatever benefits there are to [be] made from this confiscation plan … the greater problem is that any entrepreneurial confidence that Greece just may be a sound place to do business, has just gone out of the window as nobody will know if they are safe from arbitrary persecution, and subject to a wholesale asset confiscation at any moment in time.

Would you invest your assets in a country that might confiscate them without so much as a court hearing?  If you were a multinational corporation with offices already in Greece, how much of your money and your assets would you leave in that country, facing that sort of threat?  Talk about ‘killing the goose that laid the golden eggs’ . . . sheesh!

(Expect similar threats to be made by US government departments in due course.  We’ve already seen that the IRS has become nothing more than a partisan political tool in the hands of the present Administration.  Its so-called ‘impartiality’ is nothing more than a chimera.  I can see it mounting a ‘smash-and-grab’ raid on corporate assets to fund government operations, without so much as turning a hair.  Look what the agency has just done to a small business in Michigan, without a court order or giving the owner any prior opportunity to respond.  Think they won’t do the same to other businesses for any reason they can think of?)

In another report from Greece, it’s claimed that “the stock of nonperforming loans … exceeds 65 billion euros at present”.  That’s more than US $88 billion, in a nation with a 2012 estimated GDP of no more than $250 billion.  In other words, ‘nonperforming loans’ amount to more than a quarter of the size of Greece’s entire economy!  What sort of expectation for future economic well-being, growth and prosperity does that ratio give you?  Uh-huh.  Me too.  I wonder what that ratio is for the US economy?  I haven’t been able to find numbers that I consider reliable and authoritative.  Can any reader oblige, citing their source(s)?

The Greek economic mess . . . coming soon to an America near you, perhaps?  It wouldn’t surprise me.


1 comment

  1. To my mind, Greece's troubles began when they joined the Euro on false premises. They hired financial companies to show how successful they were at taxing and so forth.
    If instead of that flim-flam they asked some simple questions – how much, in Drachma, is a kilo of bread and how much is a BMW they would have had a more realistic conversion ratio against German currency and the Euro.
    By cheating they cheated themselves.

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