Papandreou's Top Priority "Save the Country from Bankruptcy"; It's Impossible, Greece is Already Bankrupt; Papandreou's Speech Greeted with Protests

Greece is bankrupt and the entire world knows it. Even ECB president Jean-Claude Trichet cannot be so dense as to not understand Greece is bankrupt, although he is too big a liar to openly admit it.

Nonetheless the Greek Prime Minister refuses to throw in the towel. Please consider Papandreou Pledges to Avoid Default.

Prime Minister George Papandreou said he’ll fight to avoid a default and keep Greece in the euro, as resistance builds to extending more aid to the European Union’s most-indebted nation.

The government’s top priority is “to save the country from bankruptcy,” Papandreou said in a speech in the northern Greek city of Thessaloniki last night. “We have taken the decision to fight to avoid a catastrophe for our country and its citizens: bankruptcy. We will remain in the euro. And this meant and means difficult decisions.”

The speech was greeted with protests and police battled demonstrators with tear gas in Thessaloniki as Greeks marched against the austerity measures that have cut incomes and driven unemployment to a record. Police in Athens also used tear gas to disperse protesters near the Parliament building.

A total of 4,500 police officers were deployed in Thessaloniki as 15,000 people protested, including students marching against education reforms and taxi drivers opposed to new licensing rules. Police detained 94 and arrested two. Guests ran the gauntlet of protesters to reach the venue and were pelted with eggs.

The government now expects the economy to shrink 5 percent this year, worse than the June estimate of 3.8 percent from the EU and International Monetary Fund, and a deeper contraction than in the past two years. The forecast damps hopes that Greece will meet its pledge to lower its budget deficit to 7.5 percent of gross domestic product in 2011, with the government blaming the slump for a budget gap that widened 25 percent in the first seven months of the year.

Finance Minister Evangelos Venizelos, who on Sept. 6 promised to speed austerity measures pledged in return for the emergency loans, said yesterday the situation was “critical” and that the next two months would be “decisive for our existence.”

Nine in 10 Greeks are dissatisfied with the way the government has handled the country’s economic crisis, according to a poll by researcher VPRC for Epikaira magazine on Sept. 8. Greek opposition New Democracy party’s lead over the governing Pasok party is widening, while a majority of voters don’t want early elections, according to opinion polls published last week.

Simple Logic

Logic dictates, one cannot prevent what has already happened. Greece is bankrupt and it is asinine to deny it. Clearly Greek citizens have had enough.

Here is an interesting statement from the article "Germany is preparing a plan to shore up the nation’s banks in the event that Greece fails to meet the terms of its aid package and misses a payment on its debt, three members of Chancellor Angela Merkel’s coalition said Sept. 9."

In and of itself that statement is not newsworthy. However, as noted in Can Government Lies Calm the Markets?, German Finance Minister Wolfgang Schaeuble denied the claim.

Ironically, the fear should not be that Schaeuble is a liar, but rather that he is telling the truth. If Germany is not making preparations for a Greek default, Germany is well beyond foolish.

My conclusion: Schaeuble is a blatant liar.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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