Events are are violent in Athens, as the Greek Parliament prepares to vote on a new wave of austerity measures.
NEW YORK (CNNMoney)--there were riots in Athens, once again, as the Greeks - already burdened by more severe austerity measures in Europe - protest against the next wave of belt-tightening in the ongoing debt crisis.
The Greece faces a terrible truth: to reduce costs for assistance to resolve the debt crisis, the nation desperately needs more austerity measures were stifling its sluggish economy. Parliament vote Wednesday Greece in adopting new austerity measures.
"The Greeks are having a program external austerity ramming down the throat, and Greek finally it the collapse of the economy," said Mark Blyth, Professor of international political economy at the Watson Institute at Brown University in Providence, R.I. "In Greece, they are basically piracy themselves to pieces."
Desmond Lachman, resident fellow at the American Enterprise Institute for Public Policy Research and policy advisor former Monetary Fund International, said that it is the part of the Greek Government effort "to reduce their deficit of 15% of GDP to 3% of GDP in three or four years."
"It's a huge fiscal adjustment," said Lachman. "Once they go into a deep recession, they found that they cannot collect taxes they thought they were going to collect." It is really an impossible exercise. »
The new austerity measures include the reduction of the remuneration of public workers, increasing attrition of public jobs and perform tax compliance. Approval is required if the Greece to win the last of 17 billion dollars of a 156 billion debt crisis relief package awarded year last by its European neighbors.
The new austerity measures are worth about $ 112 billion to the Greek economy, analyst of the Deutsche Bank Jim Reid. But the austerity that the Greeks already adopted last year - including pension cuts; a hand of sales tax; taxes on fuel, cigarettes, alcohol and luxury goods; Excise more severe eligibility for disability benefits; and a hike in the retirement age to 65 years in as low as 61 - dragged more economy, analysts say.
The more distressing symptom, especially the youth of the country, has been the increase in unemployment. The unemployment rate reached 16.2% to 11.6% in March 2010, according to Marko Mrsnik, analyst downgrade of the recent Standard & Poor of the Greece lead.
The Ireland and the Portugal also donned the yoke of austerity in exchange for rescue of European neighbours to bring down their huge deficits.
Ireland, which, according to Eurostat has a deficit of 2010 equals a whopping 32% of GDP, was granted in a bailout of $ 122 billion last year. It was after the Republic agreed to a plan of painful austerity of four years with deep cuts in expenditures and public sector, a lower minimum wage and increased taxes.
The Parliament of the Portugal, which has a deficit of 2010 equal to 9% of GDP, is also considering an austerity program of four years for a program of European rescue 112 billion.
The financial future of these countries is uncertain. But for the Greece, analysts can see a possibility: a stagnant economy or decline placing loads more on his people to take on debt more.
And, with hindsight, it is easy to see how they were obtained, according to Blyth.
"You look at the Greeks, they lied about their deficit budget years;" they have not been paid their taxes for years, "he says. "We found that everyone was swimming naked when the tide is out."
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