Tag Archives: Greece

News

As Greece’s private sector dies, so does government-provided health care

Leave a comment

From Reuters. (H/T ECM)

Excerpt:

Greece’s rundown state hospitals are cutting off vital drugs, limiting non-urgent operations and rationing even basic medical materials for exhausted doctors as a combination of economic crisis and political stalemate strangle health funding.

With Greece now in its fifth year of deep recession, trapped under Europe’s biggest public debt burden and dependent on international help to keep paying its bills, the effects are starting to bite deeply into vital services.

[…]Greece, a member of the euro zone that groups some of the richest nations on earth, has descended so far that drugmakers are even working on emergency plans to keep medicines flowing into the country should it crash out of the currency bloc.

The emergency has grown out of a tangle of unpaid bills, with pharmacists and doctors complaining of being unable to pay suppliers until competing health insurers clear a growing backlog of unfilled state payments.

[…]Greeks have long had to give medical staff cash “gifts” to ensure good treatment. Nevertheless the health system was considered “relatively efficient” before the crisis despite a variety of problems including a fragmented organization and excess bureaucracy, according to a 2009 report for the Organisation for Economic Cooperation and Development.

But it has been unable to respond to the growing crisis. The European Union and International Monetary Fund, which provided a 130 billion euro lifeline to Greece in March, have demanded big cuts to the system as part of a wider package of austerity measures.

But powerful medical lobbies and unions have resisted fiercely. Caretaker Prime Minister Panagiotis Pikrammenos, in office until a new government is formed after the elections, has pleaded for a solution but been powerless to force a change.

What’s the lesson here? The lesson is that government programs have no money of their own – they don’t make anything or do anything that people want of their own free will. Only private companies do that because they have to compete with other sellers to please the customer. Government is a parasite on the private sector – everything they do is funded from taxes taken from workers and employers. When the economy goes bad, it’s not just private sector jobs that are lost, it’s public sector health care programs. That’s why no one should want government to go beyond the minimal functions set out in the Constitution.

UPDATE: On Sunday, Greece voted to reject Obamanomics and to live within their means.

News

Europe is going socialist – what’s the worst that could happen?

Leave a comment
European Debt to GDP and Credit Rating
European Debt to GDP and Credit Rating

From MSN Money.

Excerpt:

European finance officials have discussed as a worst-case scenario limiting the size of withdrawals from ATM machines, imposing border checks and introducing capital controls in at least Greece should Athens decide to leave the euro.

EU officials have told Reuters the ideas are part of a range of contingency plans. They emphasized that the discussions were merely about being prepared for any eventuality rather than planning for something they expect to happen – no one Reuters has spoken to expects Greece to leave the single currency area.

[…]The discussions have taken place in conference calls over the past six weeks, as concerns have grown that a radical-left coalition, SYRIZA, may win the second election, increasing the risk that Greece could renege on its EU/IMF bailout and therefore move closer to abandoning the currency.

No decisions have been taken on the calls, but members of the Eurogroup Working Group, which consists of euro zone deputy finance ministers and heads of treasury departments, have discussed the options in some detail, the sources said.

As well as limiting cash withdrawals and imposing capital controls, they have discussed the possibility of suspending the Schengen agreement, which allows for visa-free travel among 26 countries, including most of the European Union.

[…]Another source confirmed the discussions, including that the suspension of Schengen was among the options raised.

“These are not political discussions, these are discussions among finance experts who need to be prepared for any eventuality,” the second source said. “It is sensible planning, that is all, planning for the worst-case scenario.”

I noticed an article that came out in CNN Money that explained how American households had lost almost 40% of their net worth since 2007 – the exact year that Nancy Pelosi took control of the House and Harry Reid took control of the Senate. The Democrats have been running the European playbook since they took over in 2007. We are just a few steps behind the Europeans thanks to the borrow and spend policies of the Democrats.

News

Greeks withdraw $894 million from Greek banks in one day

Leave a comment

I found this article from MSNBC on The Other McCain.

Excerpt:

Political leaders in Athens were due to discuss an emergency government Wednesday to deal with a possible run on banks as it emerged Greeks withdrew almost $900 million in a single day, fearing their country could crash out of the euro currency by the end of the week.

An interim government would take the country through to new elections on June 17, triggered by the collapse on Tuesday of talks to form a coalition between winners of the inconclusive May 6 election.

Greeks are withdrawing euros from banks, apparently afraid of the prospect of rapid devaluation if the country leaves the European single currency and returns to the drachma.

President Karolos Papoulias warned of “great fear that could develop into a panic,” the minutes of Papoulias’ negotiations with political leaders showed, according to Reuters.

[…]Several banking sources told Reuters similar amounts had also been withdrawn on Tuesday. Nevertheless, there was no sign of panic or queues at bank branches in Athens on Wednesday. Bankers dismissed suggestions that a bank run was looming. A senior executive at a large Greek bank told Reuters: “There is no bank run, no queues or panic. The situation is better than I expected. The amount of deposit withdrawals the president mentioned referred to three days, not one.”

[…]Greeks have already been withdrawing their savings from banks at a sharp clip – nearly a third of bank deposits were withdrawn between January 2010 and March 2012, reducing total Greek household and business deposits to 165 billion euros.

What I find really striking about stories like this is that Greece just had an election. 75% of them want to stay in the European Union and keep the Euro as a currency. But that can only happen if they accept that they are spending too much and they are not producing anything. They have to cut spending, lower taxes and deregulate so that there is economic growth. So what did they do? They voted against austerity. They think that by refusing to meet the conditions of the people who can bail them out, that they will get a bailout. It’s just insane. Like whipping a thirsty camel with the expectation that whipping can somehow satiate its thirst and cause it to get up and keep moving.