It appears that the European Union, led by Germany, are about to pony 30 billion Euros to bail out troubled Greece. The cost for Greece? Austerity.
Don’t make me laugh. Given the widespread strikes seen these past two weeks, I very much doubt that the Greek government has enough power to enforce austerity measures. So does this mean there will be no bailout? I highly doubt it: what emerges from this weekend will likely be worded as conditional, but privately known to be unconditional.
In my opinion, what will ultimately happen will be broad unrest in Germany as unemployment benefits are cut at the same time as the Greeks are partying as usual. Think riots can’t happen in Germany?
Speaking of riots, students have been protesting against budget cuts out here at UC Berkeley. When people start to realize that the jobs–and the state revenues–aren’t coming back, tensions could flare in the US as well. Greece, Spain, Portugal, Illinois, New Jersey, California, Italy, Japan, UK, the entire US… your call on “sovereign defaults” being the theme of the coming decade certainly seems right on target.
I think Mish is right to highlight well-paid public sector employees as a likely target of taxpayer ire. Of course, public sector employees aren’t well-paid compared to the financial sector; the lack of anger toward the toward the financial sector continues to mystify me. I suppose public sector unions are easier to understand than CDS bailouts.
I’m headed back to Japan tomorrow, so I’ll post an update from Tokyo within the next few weeks.