The Head of the European Commission, Jose Manuel Barrosso is not optimistic about the future of Spain, Portugal and Greece. In view of these countries’ enormous debt problems, Barrosso warned that unless stern measures are taken to address the problem, the repercussions may be apocalyptic. The countries might slide back to dictatorship rule and democracy will be no more. That was what Barrosso, a former Prime Minister of Portugal, revealed at an extraordinary briefing with the Trade Union Chiefs (TUC).
In the meantime, European Union (EU) chiefs have begun talks aimed at arranging for the bailout of Spain which is anticipated to run into hundreds of billions of pounds. Greece has already accepted a bailout package amounting to £650 billion. John Monks, the head of the European TUC, expressed his personal shock at Barrosso’s prediction. According to Monks, Barrosso sees no other alternative except for these countries to embrace austerity measures, however painful they might be.
If Spain, Portugal and Greece fail to adopt austerity measures, then there is a very real possibility of a takeover by the militaries which might then usher in a dictatorship. Bearing in mind the recent riots and popular uprisings in Athens and Malaga and elsewhere, a military coup is not too far-fetched a notion in these three countries. They do have a history of military uprisings and themselves only became democracies in the 1970’s.
Greece has already had its share of street protests as interest rates and taxes soared and public spending was drastically cut. Similarly, Portugal and Spain have announced austerity measures to avoid defaulting on their national debts. Likewise, other European countries that have had similar incidents of riots and protests include Hungary, Italy and Romania where public sector employees’ salaries are to be cut by 25%.
Mr Barroso’s warning exposes the concern of the EU that that the economic crisis could also lead to the collapse of the beleaguered euro and the unraveling of the EU itself.
On the other hand, Mr. Monks feels that the austerity measures themselves could push the EU back to the 1930s during the time of the Great Depression. He revealed that union chiefs throughout the EU are preparing for a coordinated ‘Day of Action’ to protest the cuts on September 29.
Meanwhile, EU leaders are meeting to discuss a rescue package for Spain. It is expected to come up to at least £100 billion to start with, although this figure could very well balloon as the economic crisis deepens.
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Filed under Chapter 7 (Tampa) by on Sep 1st, 2010. Comment. 
Two recent opinion polls showed that most Greeks agree that the country’s government has to adopt the austerity measures imposed by the European Union (EU) and International Monetary Fund (IMF) in exchange for bailout funds to avoid national bankruptcy.
The Greek government coffers have no money to meet its obligations largely due to endemic corruption, cumbersome bureaucracy and government largesse. The country is only one week away from defaulting on bonds worth €8.5 billion maturing May 19 for which it does not have the money to pay. Despite widespread violent protests last Wednesday, a majority of the people have begun to realize that they have to bite the bullet if their country is to survive.
In a poll conducted by the Proto Thema newspaper, 54.2% of respondents say they are willing to go along with the austerity measures imposed by the EU-IMF plan rather than see their country go bankrupt. On the other hand, 33.2% of those who responded to the poll feel the government should not accede to getting outside help but should rather go it alone. The poll also shows that 51.4% of the public are reasonable enough to accept that more personal sacrifices have to be made to overcome the economic crisis while only 28% believe that having strikes will solve the problem.
Another poll was conducted by the Sunday edition of the To Vima newspaper. This poll showed similar results in more than half of Greeks (55.2%) feeling that the EU-IMF austerity measures are necessary and they will ‘accept’ or ‘probably accept’ them. 44.6% of respondents in this poll do not accept the EU-IMF conditions. However in contrast to the other poll by Proto Thema, this poll discovered 53.2% of Greeks feel that strikes and protests should continue. However, 63.5% of these respondents do not think that the protests would stop the government from adopting the austerity measures.
In the Proto Thema poll, 1,000 people were asked if they thought the Greek workers unions keep their protests at a ‘rational’ level. A whopping 74% said yes while only 21% replied in the negative. This poll was conducted on behalf of the newspaper by Alco polling agency on May 5 to 7 through telephone calls after violence in Athens by protestors resulted in the deaths of 4 bank employees whose building was set on fire.
On what they thought of their political leaders, the poll showed that 49.4% of the people felt that Prime Minister George Papandreaou has been ‘responsible’ in his job while 39.9% said he was not. In a related result from the other poll by the To Vima newspaper, 71.3% of Greeks think the country’s major political parties should cooperate more to tackle the crisis.
The To Vima survey was conducted by the Kapa Research polling agency interviewing 1,030 respondents on May 6.
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Filed under Chapter 7 (Tampa) by on Jul 29th, 2010. Comment.
Two recent opinion polls showed that most Greeks agree that the country’s government has to adopt the austerity measures imposed by the European Union (EU) and International Monetary Fund (IMF) in exchange for bailout funds to avoid national bankruptcy.
The Greek government coffers have no money to meet its obligations largely due to endemic corruption, cumbersome bureaucracy and government largesse. The country is only one week away from defaulting on bonds worth €8.5 billion maturing May 19 for which it does not have the money to pay. Despite widespread violent protests last Wednesday, a majority of the people have begun to realize that they have to bite the bullet if their country is to survive.
In a poll conducted by the Proto Thema newspaper, 54.2% of respondents say they are willing to go along with the austerity measures imposed by the EU-IMF plan rather than see their country go bankrupt. On the other hand, 33.2% of those who responded to the poll feel the government should not accede to getting outside help but should rather go it alone. The poll also shows that 51.4% of the public are reasonable enough to accept that more personal sacrifices have to be made to overcome the economic crisis while only 28% believe that having strikes will solve the problem.
Another poll was conducted by the Sunday edition of the To Vima newspaper. This poll showed similar results in more than half of Greeks (55.2%) feeling that the EU-IMF austerity measures are necessary and they will ‘accept’ or ‘probably accept’ them. 44.6% of respondents in this poll do not accept the EU-IMF conditions. However in contrast to the other poll by Proto Thema, this poll discovered 53.2% of Greeks feel that strikes and protests should continue. However, 63.5% of these respondents do not think that the protests would stop the government from adopting the austerity measures.
In the Proto Thema poll, 1,000 people were asked if they thought the Greek workers unions keep their protests at a ‘rational’ level. A whopping 74% said yes while only 21% replied in the negative. This poll was conducted on behalf of the newspaper by Alco polling agency on May 5 to 7 through telephone calls after violence in Athens by protestors resulted in the deaths of 4 bank employees whose building was set on fire.
On what they thought of their political leaders, the poll showed that 49.4% of the people felt that Prime Minister George Papandreaou has been ‘responsible’ in his job while 39.9% said he was not. In a related result from the other poll by the To Vima newspaper, 71.3% of Greeks think the country’s major political parties should cooperate more to tackle the crisis.
The To Vima survey was conducted by the Kapa Research polling agency interviewing 1,030 respondents on May 6.
Filed under Chapter 7 (Tampa) by on May 22nd, 2010. Comment.
In the midst of the biggest economic crisis since the Great Depression, municipalities across the country are severely affected. Already, Harrisburg (the capital of Pennsylvania) and Vallejo (California) have either seriously considered or already filed for Chapter 9 municipal bankruptcy. In the case of California’s Vallejo, a city in the San Francisco Bay area, the city municipality plans to cut back on salaries, benefits and services in an effort to reduce its debt. It has also declared that no interest would be payable on bonds for four years and general fund principle and interest payments will be suspended for three years. This would amount to a savings for the city and a loss to investors of $13.4 million.
Analysts believe that if the Vallejo’s petition for bankruptcy is approved, it would adversely affect its ratings by Fitch Ratings and set a precedent that affects bondholders. When faced with a worsening economy, it is more usual for municipalities to reduce interest rates and extend terms of repayment to bondholders rather than take the path taken by Vallejo. But it appears the long-held belief that municipalities would always honor their bond payments has to change in light of more Chapter 9 filings.
Chapter 9 filings by municipalities do not happen often. In fact, only 4 were filed in 2008 and the latest were 6 in the first 3 quarters of 2009. Since 1980, there were 227 instances with 1991 having the highest number of Chapter 9 applications with 18. Most of these did not involve cities but only special districts or utilities. States cannot file for Chapter 9 bankruptcy and 26 states even legislate that their municipalities cannot file. In these states, if a municipality wants to file for Chapter 9, it has to have a special statute in its law allowing it to do so.
In an unrelated incident, Republican US Senate candidate Carly Fiorina agreed that it would be worth it for the state of California to consider bankruptcy, apparently ignorant of states being unable to do so under federal law. At a business roundtable meeting in Colton, California, Fiorina was asked if California should consider declaring bankruptcy. She answered, “I think it should always be considered. Whether that is the right approach now, I don’t know. I think bankruptcy, as a possibility, at the very least focuses the mind on what has to be done to salvage a situation.”
In response to her gaffe, her spokesperson stated that Fiorina’s opinion was that the concept of the state not being able to pay its bills should focus everyone’s minds on how bad the financial condition of the state really was.
Filed under Chapter 7 (Tampa) by on Feb 15th, 2010. Comment.
