Things that make you go hmm and the European little lies
Another must read “Hmmm” report, courtesy Grant Williams.
One way or another, we are no more than weeks away from the first de- fault in the history of the Euro.
Yes, I know the Greeks have promised to give the Troika what they want in the way of cuts and expanded austerity. Yes I know we have been promised that we will have a ‘solution’ by last week February 15 Monday, but let’s get real for a second here, shall we?
The situation breaks down like this:
The Greeks have been told that, in order to receive the €130 billion €145 billion bailout they so desperately need, they must agree to sweeping new cuts and promise to implement them.
Not implement them. Promise to implement them.
The requirements include a €1 billion cut in pharmaceutical spending and a €300 million reduction from the defense budget (it’s worth noting at this juncture that, when they originally cooked the books in order to gain entry into the Euro, Greece hid a lot of the dubious accounting IN their defence budget on the basis that, as it was a matter of ‘National Security’, they wouldn’t have to disclose it). Reducing central government and election-related spending will also reduce spending by €270 mil- lion, and subsidies of €300 million to pension funds will also be slashed.
The Greek government must also slash its public investment budget by €400 million “through cuts in subsidies to private investments and nationally financed investment projects.”
Oh, and then there’s the little matter of the additional savings worth €325 million that were slammed unceremoniously onto the table at the last minute by Troika inspectors this week just as the Greeks were scrambling to get the fountain pen and ink the deal.
It is in this additional €325 million that the key to what happens next lies.
Full Hmmm Feb 19 report.