Mob violence is rarely justified. But unlike rioting Vancouver hockey fans, the people of Greece actually have something serious to be angry about. Unemployment (this Business Insider chart says it all) is above 16% and rising thanks to austerity measures that will force further layoffs while slashing national GDP growth.
Protests turned deadly last year, as this YouTube clip shows, when three bank clerks were killed. And the violence continues. On June 15, citizens tossed gas bombs at the local finance minister as the Greek parliament was gathering to debate more layoffs, state asset sales, tax increases and other austerity measures required to gain financial aid from the EU, European Central Bank and International Monetary Fund. Police fought back with tear gas and batons, as you can see in this CNN report.
Simply put, the European Union’s most fiscally challenged nation is tired of paying for bad decisions made by local politicians and foreign bankers (this Der Spiegel chart sums up the debt issue in a glance.) The people are being heard. After the June 15 riot, two Socialist Party members withdrew their support for further austerity measures. The defections, which now total at least four, threaten Greek Prime Minister George Papandreou’s plan to reshuffle cabinet and gain support for policy measures required to save the nation from a debt default.
The situation has not cooled down. Syntagma Square has become ground zero for a Greek version of the Arab Spring movement. (You can watch developments live as they happen here.) And this isn’t just an issue for Greeks to worry about. Bankers around the world contributed to this problem by making billions of dollars worth of bad loans that now threaten to create another global financial crisis. That’s why stocks are trading at three-month lows, while the euro is declining in value and government bonds with top credit ratings are growing in demand. Even central banks are loading up on gold as these Zerohedge charts show. This Business Insider presentation shows the bank balances at stake.
In this Daily Ticker clip, U.S. advisor to the rich John Mauldin explains how we could all soon be reliving the 2008 meltdown thanks to Greece and its creditors.
Finally, keep in mind that out-of-control government spending isn’t just an EU issue. Plenty of other nations are on the watch list. Here is Business Insider’s ranking of the top 21 concerns. And let’s not forget that the U.S. debt clock is still ticking its way to serious trouble time.