€urosclerosis: The Greeks are revolting


Greece Nears Wage Cut Agreement as Strike Looms


ATHENS—The three party leaders backing the interim government of Greek Prime Minister Lucas Papademos were close to an agreement to cut the private-sector minimum wage by an average of around 20%, two senior government officials said Monday, as signs of popular protest loomed.

Pressure on Greece has been piling up from its euro-zone partners to accept a new round of painful austerity if the country is to get a €130 billion ($171 billion) bailout loan that will keep the country from defaulting next month when €14.4 billion in bonds have to be redeemed.

Germany and France urged Greek leaders on Monday to “live up to their responsibilities” by agreeing to the new cutbacks.

“We think that the elements of the agreement have never been so close, both for public and private creditors,” French President Nicolas Sarkozy said at a press conference after meeting German Chancellor Angela Merkel. “Time is pressing, now we must conclude.”

Much more at the link. The Greek people are planning strikes and protests, because after living better than their productivity could support for decades, they may be forced to actually live within their means now, and pay back part — not all — of what they borrowed to live beyond their means for all of those years.

Greece is a democracy, and the unrest caused by being forced to live within their means might result in the government being overthrown and the austerity plans canceled, in which case Greece would wind up defaulting on its debts, and the Greek people would still have to live within their means, because nobody with any sense would lend them more money to enable them to live beyond their means again. It is entirely the choice of the Greeks: do they want to live under austere conditions in a hated but orderly manner, or do they want to live under austere conditions under chaos? The option the public want, to continue to live beyond their productive capacity, does not exist.

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