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Weekly Report (I) (17.08.12)

By Per Svensson

miércoles 22 de octubre de 2014, 11:21h

Spain is burning

With temperatures soaring to over 40 degrees this summer, the forest and woodland areas are like tinder boxes.  There have been a number of fires, although most have been extinguished by the heroic efforts of the fire brigades and local inhabitants.  However, on the Canary islands of Tenerife and La Gomera they have had serious difficulty to contain several extensive fires.  Five thousand have been evacuated from their homes on La Gomera (one fourth of total population) and 2,200 on Tenerife.

Fire in Torre de las Masanes, and in other municipalities in the hinterland of the province of Alicante, seem to have been stabilised after having burnt more than 6,000 hectares (1,500 acres) 

Poor people raid supermarkets

In the province of Seville unemployed workers attacked two supermarkets, and in a peaceful way appropriated food items which were later distributed to needy families. The action was led by the well-known leader of the Andalusia Workers Syndicate and Mayor of Marinaleda, Juan Manuel Sanchez Gordillo, who is now under threat of arrest and imprisonment.  Sanchez Gordillo said it would be better to arrest Emilio Botin, President of Banco Santander, which has 'thousands of millions' stashed away in fiscal paradises, or to arrest the corrupt politicians in PP and PSOE.

Consumer confidence drops

The confidence of Spanish consumers dropped in July to 37.6 points, down 13 points on the previous month and 36 points lower than July last year; the lowest level in recorded history.

Sixty percent of those polled, said the economic situation of their family had worsened over the past 6 months, and 48% feared the situation will get even worse in the coming months.

Shop turnover continues to shrink

In June, shop turnover fell 4.3% on the same month last year; the 24th consecutive month with a negative trend.  Gasoline stations saw a 3.9% reduction in sales. The largest falls were in Castilla–La Mancha with -7.8%, and Castilla y Leon -7.3.

Sales sector employment is also falling (- 1.2% on June last year).

Less saving

Families and non-profit institutions savings are down 3.3% during the first quarter of the year, equal to  -0.6% of net income, signifying that households spent more than their income.

Over the same period, Public Administration has registered a need for the re-financing of 14,646 million euros, or 5.6% of GDP.

Some spend more

According to Eurostat, the statistical office of the European Union, in 2010 Spaniards spent double the European average of 8.5%,  on hotels, restaurants and bars, representing 17% of their total spending. 

Also big spenders in restaurants and bars were ‘rescued’ Cyprus 14.5%, Ireland 13.5%, and Portugal 11%.

Countries spending less of their income in restaurants and bars were Denmark 4.8%, Holland 5, Germany 5.8 and France 7%, the countries supposed to save the 'spenders'.

Foreign Ministry close embassies

To save costs, the Foreign Ministry has closed their embassies in Yemen and Zimbabwe. The work of these embassies in the two countries will be taken over by the European Union offices.  Spain now has 116 embassies.  They have also closed some consulates, one in Larache, Morocco and two in Portugal, but not those in Lisbon and Porto.

Industrial production falling

Industrial production fell 6.9% in June compared with the same month last year,  the 10th consecutive month. The biggest falls were in the metal elements sector, down 38.3%,  and car production down 24.6%.

In the six first months of this year, industrial output contracted 6.3%.

The weekly crisis:

As I write this (the morning of Wednesday the 15th) Spain has not yet taken any decision on whether it will ask to be brought under the 'rescue umbrella' of Europe' or not.  Yesterday, Prime Minister Rajoy who returned from his holiday in Galicia, was in conversation with the King in the Marivent Palace, Mallorca.  He then embarked on an extra break in La Doñana.  Monday will see him back in his office in Madrid, facing the crude situation of the Spanish economy and counting the  petals on the daisies : .....shall I ...shan’t I ...shall I ...shan’t I  ...ask for a rescue ...

Knowing the careful Rajoy, full to his ears with Spanish pride, he will try once more to find an escape, or at least an excuse, but with the interest on growing Spanish debt still close to the 7% (last week it hit a record 7.45%) and the country risk oscillating between 500 and 594 points,   almost all financial experts recommend the Government not to wait any longer.

'September will be the crunch time'

The politicians agree that September will be the 'make-or-break' month.  The reasons are clear:

The Spanish Treasury is empty, and in the 4 remaining months of the year Spain needs 60 to 100 billion euros in fresh money to pay its debts (in addition to the 100 billion agreed to save the Spanish banks)

The German constitutional court will decide whether the increase in the European rescue funds (Germany pays approx. 30% of the bill) can be made without a qualified majority in their parliament, or maybe even a referendum

Parliamentary elections in Holland may create a majority against further bail-outs

Decisions must be taken on Greece (new financial injections or the country leaving the Euro) and Cyprus (which has applied for a bail-out) 

President of bankers: Break up of Euro probable

In a resent seminar,  the President of the Spanish banks, Miguel Martin,  made it clear that,  'what is happening is that the risk of a Euro breakup, previously believed possible, is now probable.'

'The crude reality is that what happened in Greece, that finally landed with non-payment and the holders of Greek debts having to accept losses of 75%, is something that has become contagious..'

Property values fall 11.2% in July

Property values in Spain fell 11.2% in July, after a reduction of 11.5% in the second quarter. The biggest fall in July was on the Canary and Balearic islands, with 14%, while properties on the Mediterranean coast plummeted 11%.

The share values of the big promoters and constructors are also falling;  down 39% so far this year, and the shares of the biggest company, Sacyr Vallehermoso, down 67.53%.

Patriotic bonds.....

The Regions have been selling bonds to avoid having to ask the National Government for additional funds (and being monitored by Spanish 'black men') appealing to the hollow patriotic feelings of their citizens.  Now thousands of small investors are trapped with un-saleable 'patriotic bonds'; which are falling in value.

Catalan bonds sold in 2011 with an amortisation of two years, were sold last week at 87.1% of their value. Valencia 1 year bonds from December 2011 have fallen 7% in value, while Andalusia and Murcia bonds have not registered any transactions at all.

An angry President of the Canary Region, Paulino Rivero (from the Canarian regionalist party CC) has protested against a new demand from the national government to slash another 120 million euros from its budget.  Rivero has appealed to  Canarz citizens to 'rebel against this serious discrimination ..... .condemning them to having to close schools and hospitals...'

Hopeful stock exchange

The Ibex, the Spanish stock exchange, has had a mild rally over the summer, crawling over the 7,000 point mark, based on the hope that the 100,000 million euro injection for the Spanish banks will re-float the financial institutions and provide loans for businesses. Another hope is that President Draghi of the European Central Bank will use his so called 'big bazooka' for the unlimited purchase of Spanish bond.

But the politicians of Europe may not want to commit their funds to any 'big bazooka' at a time when their countries are slipping into recession.  EU countries recorded a fall of 0.2% in their economies in the second quarter, compared with last year.  The Euro Zone fell 0.4%.

Another Almerian Road-Show

By Lennox Napier

 Almería's promoters are worried about the high number of homes on their
books and have decided, crisis or no crisis, that it is time to get the
gosh-darned Government involved in selling those homes to foreigners.

 Thus, together with the national Asociación de Promotores y Constructores de
España, they want the gummint to organise a 'macro road show' in foreign
parts. There are, we are told by La Voz de Almería (12/08 - Los promotores y
el ICEX preparan un macroplán de ventas en el extranjero), some 25,000
viviendas for sale in this province alone.

 Now, news flash for the promoters, bankers and politicians: foreigners don't
buy homes or apartments in the big cities. There are no Brits living in
Almería DF, Dalías or El Ejido - they would like to live in the smaller
towns, villages and pedaneos in the hinterlands or on the coast. Of course,
having seen the TV programs  and read the newspaper articles in the British,
German and Norwegian media about how the Junta de Andalusia likes to wait
until a foreigner has bought his house before declaring the structure illegal
and worthless as an investment (there are over 250,000 such properties in
Andalucía, mainly owned by European foreigners who stupidly thought that
Spain lived by the 'rule of law'), sales are decidedly sloppy. Yes, Andalusia
is an excellent place to retire to, and the move is a definite win/win for all
concerned, with the new residents pumping in foreign funds twelve months a
year, creating jobs, repopulating dying villages and improving their
surroundings; but there is a firm and powerful rejection from the
environmentalist lobby - that group of city-folk who presume to know about the
countryside and are as impervious to criticism as was the Spanish inquisition
in its day.

 The reasons offered by La Voz for the drop in sales of these 'second homes' -
and presumably echoed by the building community - include 'la crisis', tax
relief and encouragements which have now been removed by the Partido Popular,
the rise in IVA (well done those politicians!) and the staggering 35%
unemployment in Almería - all of which are small beer compared with the
summary illegalisation of most foreign-owned property across the region.

 In brief, Andalusia has its post-dated 'illegal homes', Murcia its valueless
bank guarantees on unfinished off-plan sites and Valencia, when the times are
good, its Land Grab. Don't buy in Spain.

 There are many foreigners, Europeans who should have certain rights as agreed
at Maastricht, yet treated as extranjeros by the Spanish authorities (I must
show you my residence card one day), who would like to live in Spain. It
should be the European equivalent to Florida - wealthy and comfortable. Some
foreigners, attracted by Spain's vibrant and fascinating culture, would
disappear into Madrid, Granada and Seville; but we are concerned here with the
majority - who want sun, peace and to drink a cool glass of wine as they sit
in their garden and watch the sunset.

 'We must regain our judicial reputation abroad', says José Manuel Galindo,
the director of the Almerian promoters and builders association with a
blindness little short of breathtaking. He's got 25,000 empty homes in
Almería alone - and a hell of a lot of unpaid and anxious brick-layers,
carpenters, marble-workers, electricians, plumbers, painters and gardeners to
look out for. Plus any number of realtors, agents, lawyers, bankers and
municipal tax collectors hoping that he can pull a rabbit out of his sombrero.
But he can't, because the foreign media doesn't want its readers and viewers
hightailing off to Spain, and as far as the media is loyal to its consumers
(rather than its customers), it doesn't like to see people being stung.

 If he could get the Junta de Andalusia's department of viviendas y obras
públicas to pay compensation to Helen and Len Prior for having their house in
Vera summarily demolished in January 2008 (they have lived amongst the ruins
ever since), then maybe that might send a signal to the Northern Europeans.

 Until then... there's always Cyprus.

How long can Spain take the financial heat?

By Barry Hatton on August 10, 2012

Imagine struggling to keep a control of your debts, with the costs and interest rates going up and up until you can barely meet the monthly instalments. How long do you hold on, scrimping and saving, before you throw in the towel?

That is the problem facing Spain, whose Prime Minister Mariano Rajoy is fighting to prevent his country becoming the latest — and biggest — victim of the economic crisis crippling the 17 countries that use the euro and ask for a full-blown government bailout.

The clock is ticking for the country, which is finding fewer and fewer buyers for its debt, sold on the market as bonds. Investors are charging the country increasingly higher rates so that it can borrow the money it needs to keep the economy and public services working.

Investors have taken flight as the uncertainty over the whether the country can afford to contain the problems in its banking sector and indebted regional governments continues unabated.

As demand falls for a country's bond, its price falls and the interest rate the country would have to pay to sell it rises.

On the secondary market, where bonds are traded, the interest rate Spain would have to pay on 10-year debt has hovered around 7 percent for weeks. Most market-watchers think borrowing at an interest rate of 7 percent is unaffordable for a country in the long-term. And it's also the pain threshold that eventually compelled Greece, Ireland, and Portugal to request billion-euro bailouts.

The 7 percent interest rate is "a totem, because it shows a total lack of confidence in the country," says Matteo Cominetta, a European economist at UBS.

"The problem is that rates at that level kill the economy and basically make any growth impossible," he said. "The road is getting narrower and narrower and in the end (Spain) will have to ask for an intervention."

Investors are fretting over whether Spain will be able to repay its loans, and the country could end up being shut out of vital international debt markets. High borrowing costs mean fewer funds for investment, and government austerity policies meant to save money to pay the increased interest rates could choke off growth.

In a bond auction last week, Spain sold €1.04 billion in 10-year bonds at an average interest rate of 6.65 percent and €1.02 billion in four-year bonds at a rate of 5.97 percent, up from 5.54 percent.

Analysts reckon Spain has enough funds to manage its debts until next year. It has already managed to sell off 72 percent of its targeted €86 billion in medium- and long-term debt for this year.

The Spanish Treasury benefited from two events earlier this year and managed to build up a war chest that would save it from having to go to the bond markets too often and pay over the odds. The first was the ECB's €1 trillion in low-rate loans offered to banks at the end of last year. Spanish banks used the funds from these loans to buy up debt in their country. At the same time, the Treasury front-loaded the start of the year with debt auctions, collecting more than Spain needs to cover its 2012 redemptions, notes Raj Badiani of IHS Global Insight.

"Spain, right now, has some leeway," says Ishaq Siddiqi, an analyst at ETX Capital in London.

However, Spain's future looks grim amid a catalogue of disheartening statistics:

—It is weathering an unprecedented double-dip recession, which is forecast to continue at least through next year. Almost a quarter of the working population is unemployed — the eurozone's highest.

—The International Monetary Fund says Spain's public sector debt is climbing rapidly. The IMF sees it rising to almost 90 percent of its €1.07 trillion gross domestic product this year, from 68.5 percent last year. A country in recession would find this burden increasingly difficult to control.

—Spain's budget deficit, which is supposed to stay within 3 percent of GDP like other Eurozone members, came close to 9 percent in 2011. The government is trying to get it down to 6.3 percent this year. Other members of the Eurozone are also struggling to comply with the 3 percent target.

—Spain's Treasury puts the total outstanding central government debt at €611 billion at the end of June. The IMF estimates that this debt will mature in an average of six and a half years and has an average interest rate of 4.1 percent.

 

Gabriele Steinhauser wrote in The Wall Street Journal:

Remember all the confusion about whether the Spanish government would still have to take final liability for losses on the recapitalization of its banks – even once the euro zone has empowered its new bailout fund to prop up failing lenders “directly”?

The European Union’s economic-affairs commissioner, the head of the current and future bailout funds, and the chairman of the group of finance ministry officials who work out the technical details to euro rescues said no. The German finance minister said presumably yes, and Germany’s chancellor said the issue hadn’t yet been decided.

Looking at the current technical set-up of the Spanish bailout – this is now, when the European Financial Stability Facility rescue money is still going first to the Spanish government before being funnelled into the banks – all of them may be right. Because crucially, the €100 billion in euro-zone rescue money for Spain will be split into two parts. As much as €25 billion will go to a so-called “bad bank,” a separate company that the Spaniards will set up to take over the impaired real-estate and other assets that have been the biggest drag on Spanish lenders. And up to €75 billion will go toward filling the gaps left in Spanish banks’ capital buffers after realizing the losses on the impaired assets.

That of course raises an interesting question. Once the new bailout fund, the European Stability Mechanism, is in operation and has been given the power to directly recapitalize banks, will it invest in the cleaned up Spanish lenders or the bad bank? The answer to that question may come in the coming weeks, when it will become clear what institutions — the cleaned-up banks or the bad bank — will carry the biggest risk of future losses.

As we explained in today’s Brussels Beat column, there’s one factor that will be the biggest determinant for who holds future risk: the price at which the bad bank buys the impaired assets from the Spanish banks. A team of private auditors are currently in the process of determining that price, by figuring out the “real” value of some €200 billion in potentially problematic loans given out by Spain’s 14 largest banks. That’s not an easy task, mostly because the value of these assets — dubbed the “real long-term economic value” in the Spanish bailout deal — will likely lie somewhere between their boom-time book value and the fire-sale price they would go for in the middle of an economic crisis. And that’s assuming the Spanish economy doesn’t do much worse than the worst-case scenario set out by the auditors (a 4.1% recession this year, followed by a 2.1% contraction in 2013 and a 0.3% shrinkage in 2014).

If the Spanish government overpays the banks for the assets, the lenders will need less recapitalization money, but the government risks taking large losses on the bad bank in the coming years. If it underpays, it has to pump more money into its damaged banks now, but has a chance to run a profit on the bad bank in a few years.

Assuming that the euro zone wants to limit its risks, it would make more sense for the ESM to invest in the cleaned-up lenders, especially if it gets to take over the Spanish government’s stakes in a year or so at market price, rather than in the bad bank. Two people familiar with the discussions among euro-zone finance-ministry officials said that decision hasn’t been taken yet, with one adding that there’s also the option that the ESM might buy bonds in the bad bank. As things stand now, however, those bonds will be guaranteed by the Spanish government – which obviously clashes with the EU’s insistence that no such guarantee will be necessary.

Sony Kapoor, managing director of financial think tank Re-Define, points out that there’s another risk to the bad-bank process, namely that the auditors fail to identify all the impaired assets, leaving them to cause future problems on the books of the ”good banks”. That, again, depends quite a bit on how well or badly the Spanish economy fares in the coming years.

Our comments: This article proves clearly that it was rampant property speculation that caused the crisis in Spain. Feverish promoters planned and built without regard to what the market could or would absorb; greedy bankers bankrolled the follies and incompetent politicians provided the rubber stamps. Those responsible for the crisis are still living grandly on the profits during the first boom years, leaving the average Spaniard to suffer draconian cuts in their living standard inflicted by Prime Minister Rajoy and his PP party.

Rajoy, did he ever warn of a property crisis?  Did PP restrict the planning and construction of the millions of new dwellings during the boom year?  No, PP was the party of the promoters and the bankers, attacking those who dared mention that the speculation could lead to a crisis.

Now they are pretending to save Spain from the result of the crisis!  Stalwart hypocrites!

 

Miles Johnson wrote in Financial Times:

Mariano Rajoy has for the first time opened the door to a Spanish sovereign bailout, but insisted that the European Central Bank would have to clarify the terms of any rescue before any decision could be made.

“I want to know first what these measures are, what they could mean, and if they are adequate … and then in view of the circumstances we can make one decision or another, but I have not taken any decision,” Mr Rajoy said, in his first appearance at Spain’s weekly government press conference since taking power seven months ago.

He said he had not had any form of private conversation with Mario Draghi, president of the ECB, over the measures. “I will do what I consider to be in the general interest of Spaniards,” Mr Rajoy said.

His comments followed Thursday’s announcement by Mr Draghi that the central bank would not begin buying government bonds, a measure used to reduce a country’s borrowing costs, unless a formal application for aid was made, which would come with unspecified conditions attached.

The acknowledgement by Mr Rajoy that a request to the European Financial Stability Fund to buy Spanish debt is an option – a measure that the ECB made clear would come attached with economic conditions – was a reversal for the Spanish prime minister, who has until now fiercely denied that Spain would require any aid resembling a sovereign bailout.

When asked about the possibility of Spain requesting the aid on Thursday during a joint press conference with Mario Monti, Italian prime minister, Mr Rajoy had declined to directly answer.

Spain has already requested a €100bn European bailout of its banking system, which came with several conditions attached, such as the loss of regulatory oversight by the Bank of Spain, but the Rajoy government stressed that this was not a “full rescue”.

Mr Rajoy is fighting to convince international investors that his programme of spending cuts, tax increases and structural reforms will be enough to reduce the country’s budget deficit, and return it to growth at the same time.

After the acceptance of the €100bn for the banks Mr Rajoy unveiled a new €65bn austerity package, which included public sector pay cuts and an increase in sales tax - triggering waves of protests across Spain.

Spanish 10-year bond yields, a benchmark for its borrowing costs in the capital markets, surged back over 7 per cent on Thursday after Mr Draghi disappointed investors by failing to provide a definitive plan to buy the government debt of Italy and Spain.

The Spanish prime minister said on Friday that he had sent a letter to European leaders urging them to speed up cross-continental measures for a single regulator and mechanism to recapitalise banks.

He also said that Spain would stand behind the debts of its 17 regional governments, of which several are struggling to refinance. One, Valencia, has already requested a central government bailout.

“I am the prime minister of Spain, and this means I am responsible before Europe and the rest of the world for our public finances,” he said.

 

The Greek Reporter wrote:

Greeks who owe money to the government which has cut their pay, raised their taxes and slashed their pensions could find themselves in prison like this one in England in the 1830′s

ATHENS -  Not content with taxing the poor to protect the rich, Greece is putting the arm on the penniless, starting with the arrest of an unemployed Cretan father of seven, whose wife was also jobless. He owed the government 5,000 euros, or $6,130 in back taxes – because former Finance Minister Evangelos Venizelos, who now has apparently joined the Mission Impossible team and is trying to disavow himself of his actions – doubled income and property taxes and taxed the poor.

The shameless arrest came the same day that Prime Minister Antonis “Mr. Bean Counter” Samaras bullied his coalition partners – PASOK Socialist leader Venizelos and Democratic Left flunky Fotis Kouvelis – to back down on their demands that the government not impose more pay cuts, tax hikes and slashed pensions to satisfy international lenders who want to make sure foreign banks get paid back before starving Greeks get fed. You could forgive forked tongue Samaras for going back on his word – repeatedly – because he’s been chasing his snake’s tail since he first opposed austerity, then supported it, then opposed it, then supported it and is apparently dizzy.

But Venizelos and Kouvelis, who folded up like a Chinese-built tent, are alleged Leftists and what they’ve done in supporting the Capitalist leader is akin to President Obama handing Newt Gingrich a sword to slice off the heads of the poor because they’re taking up breathing space in the land of the free and the home of the rich. Republicans, after all, don’t mind putting the poor on ice floes and letting them drift out to sea, where they make swell target practice and now Venizelos and Kouvelis – as former Prime Minister and previous PASOK leader George Papandreou before them – have betrayed their own principles, if that’s the right word to use about a politician.

Greece is just picking up on an old tradition because debt bondage was common in ancient Mediterranean societies, including Greek City States, so maybe not much has changed. You can be sure that Eurobank, one of Greece’s big four private banks which makes people who’ve paid off their loans if they didn’t get a letter of discharge pay them again, would have had a branch in ancient Athens.

By around 600 B.C., economic crises resulted in so many Athenians being sold into slavery that the lawmaker Solon enacted seisachtheia, banning debt bondage and letting debtors return to their lands as free men. But Greeks today have Samaras, who’s buddy-buddy with the banks and stood by while the jobless man on Crete was arrested while tax evaders owing the country $70 billion are walking around free and laughing at the government. And seisachtheia has apparently run out because the poor soul was told he could have a “job” with the municipality where he lives, but with no salary, and had to be an indentured servant – slave – to pay off the debt he never really accumulated but was imposed on him.

Maybe it’s not such a bad idea though because PASOK and New Democracy cajoled Greek banks into “lending” them $304.8 million – while at the same time Greece’s political parties were giving themselves $670 million in taxpayer funding over the previous decade, which explains why party leaders live in pink mansions. The bank loans are not being paid back, of course, and never will be because the banks know that unless they “loan” the politicians money that the government might suddenly decide they need to be nationalized or face onerous laws.

ATEbank, founded as an agricultural bank in 1929, and now being acquired by the private Bank of Piraeus because it was losing money faster than politicians could spend it, didn’t mind “lending” the political parties $31.6 million last year, knowing it wouldn’t be paid back. Its new owners, alone with Eurobank, Marfin, and Attica Bank, are also being investigated for letting themselves be used as a kind of slush fund for political parties, but no one’s shown up at Venizelos’ door or the Prime Minister’s mansion and arresting them for not paying back hundreds of millions of dollars because the police are too busy arresting the poor.

BOOK ‘EM, SOLON-O

Greece is $460 billion in debt because PASOK and New Democracy took turns hiring hundreds of thousands of unneeded non-workers for generations in return for votes, which makes the ruling political parties the biggest debtors in Greece, but don’t count on any arrests. Wouldn’t it be sweet to see Samaras and Venizelos in a debtor’s prison instead, and, as was the custom in Olde England, forced to pay for their stay in their cells, although they have so much money they could just buy the prison and turn it into the kind of country club they prefer.

The United States, where the rich 1% own the country, used to have debtors’ prisons until the practice was outlawed in 1833 because people could be thrown in jail for owing as much as 60 cents to somebody. Owing the government is almost as bad as owing the late Tony Soprano and his ilk, but at least their loan sharking business was unlawful while government-imposed poverty is not. Greeks have been protesting, striking and rioting for two years to no avail over the pay cuts, tax hikes and slashed pensions that the likes of Samaras and Venizelos – and now Kouvelis, his crocodile tears notwithstanding – have imposed on people while letting tax evaders, the rich and politicians escape. Poor Greeks wouldn’t owe the government as much as they do if the tax burdens were fair, but rich Greeks don’t pay taxes.

Many Greeks ran up their credit cards during the easy money days after Greece got into the Eurozone of the countries using the euro a decade ago but can try to renegotiate with the banks. Until 2008, Greeks could still be imprisoned for debt, whether they owed the tax office or banks, before the law was declared unconstitutional after 173 years in practice, and just in time because there’s really not enough cells to jail nine million people who are up to their eyes in debt and being forced to pay back 100 percent of what they owe although their pay has been cut 30 percent or more.

But debtors in Greece could still yet find themselves handcuffed because the courts still have the power to put them away in some circumstances under the vague notion of prosōpokrάtēsē for debts to the government if it’s a criminal act, although tax evasion apparently isn’t. The real crime is that the people who caused people to be in debt to the state aren’t being arrested and being forced to work free for the people they allegedly represent until the debt is paid off. But that’s justice, another ancient Greek notion that doesn’t really exist in the country that created it.

 

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