Results of Greek elections
Jun 18, 2012
Yesterday's elections in Greece did not change the situation much. The same party won with a slim margin once again. Will it be able to form a coalition government this time, after failing last month?
If the same policies are continued, will this not return Athens to the scenes of rioting once again? We will see.
Today's reports tell us that the markets initially rallied over the election results, and then suddenly faded as reality set in. People know that even if Greece should succeed in forming a pro-austerity government, it would have serious problems that could well prove to be unsustainable in the long run.
Government assets will have to be "privatized." That is, the creditors will take it as collateral, or it will be sold off to the big banks. The Greeks will be reduced to abject poverty for years to come, and they will end up as employees of their new owners in their own country.
How long will they tolerate this until a revolution overthrows the old order? Time will tell.
Meanwhile, we find that the news media is now saying, "The crisis in Greece is over for now," and they are turning the spotlight back to Spain and Italy to watch for the next crises. Their borrowing costs are still rising. Italy's rate is now up past 6%, while Spain's has passed 7%.
7% is considered to be the tipping point where a country is forced to ask for a bailout. Just a week ago Spain's borrowing cost was only at 6%.
So the latest crisis in Greece has past, and we now await the next in a long train of crises coming down the track.