Greece Is Burning

Greek Prime Minister George Papaconstantinou is calling for

over a period of five years, and without it, the country will default. It's that simple. In other words, Greece is going to burn to the ground right before our very eyes. The European Union and the International Monetary Fund are trying to stave off a Greek default, because Athens defaulting would have dire consequences across the world in the banking system. The EU and the IMF have threatened to cut the prior bailout package that was given to Greece if it can not get its fiscal house in order, and the new austerity measures are designed to do just that. "We have a choice between a difficult path and a path of destruction," George Papaconstantinou said as he presented the new plans. "This government will never choose the path of destruction, it will always chose the difficult path. ... We must fix what's wrong or this country has no future." Papaconstantinou said that the new austerity plans must be passed in Parliament for the country to receive the next installment of the bailout, some €12 billion. The vote will take place at the end of June to see if the legislation passes, or if Greece crashes and burns. Even if the austerity measures do pass, Greece may not get all the funds next month. The IMF has said that it will not give its portion unless the country's funding gap for next year is resolved. "For the disbursement of the next tranche ... it will be difficult for the markets to open in 2012, so other forms of funding must be found," Papaconstantinou said. "I cannot be the one -- since no decision has been made -- who will speculate how high the level (of funding) will be. And I will not do it. But the funding needs of our country are well known -- they are well known for 2012, they are well know for 2013 and they are well known for 2014," Papaconstantinou said. In addition to the austerity measures, Greece is undergoing a €50 privatization of certain assets through 2015. It is painful to watch the austerity measures and seeing the devastation happening in Greece, as citizens have taken over the capital's central Syntagma Square, setting up a tent city in a sit-in. Tens of thousands of people thronged the square, which lies in front of Parliament, last Sunday. "When you take corrective measures, some people will lose money. There's no doubt about this. But we are trying to do this in the fairest possible way," Papaconstantinou said. "When you wade across the river, you get wet, many people get wet. But you can't stop in the middle, or the current will carry you away." As part of the cuts, approximately 150,000 workers would be let go from civil service jobs, and for every 10 retirements that occur, only 1 worker would replace them. "The main thrust of this effort is structural in nature, changing the way the public sector works and is structured," Papaconstantinou said. If Greece does not get the new austerity measures passed, Greece will default, and the financial and economic consequences implications of this are dire. German banks such as Deutsche Bank

hold a lot of exposure to Greek debt that will have to be written down, and crushing capital raises will have to come. This is slowly turning into a Greek tragedy where all the players are dying a slow death, and in some cases, burning alive right before our very eyes.