DYLAN GRICE: Greek Austerity Is Reopening Deep Social Wounds And Could Lead To Civil War

Dylan Grice

Photo: Business Insider Video

Last week, we highlighted Paul Mason’s eye-opening BBC report explaining what’s happening in the streets of Greece right now at the hands of ascendant, extremist political party Golden Dawn:Golden Dawn “attack squads” roam the streets intimidating immigrants on a regular basis…and the police are reportedly in on it, which means victims have virtually nowhere to turn.

Panagiotaros told Mason that he estimates 50-60 per cent of the Greek police force supports Golden Dawn, and “every day it is growing,” – which means they don’t get involved when Golden Dawn is doing damage. Some Greeks claim terrible mistreatment at the hands of police who openly boast their allegiance to Golden Dawn as well.

Societe Generale strategist Dylan Grice caught Mason’s report too, and he leads his latest note with some scary questions:

In a marked softening of the IMF’s former tone, its chief economist Olivier Blanchard, speaking in Tokyo, earnestly pronounced that the prudent policy maker should now be “ready to adjust the [budget] targets” if achieving those targets becomes too painful. Is the bitter medicine of the IMF’s hitherto unshakable orthodoxy, once deemed cathartic to emerging market victims of economic calamity past, too bitter a pill for more sensitive Western palates?

A harrowing BBC report suggests Greece is Balkanising once more. We are reminded that its civil war only ended in 1949 and that harsh austerity is reopening deep social wounds. Yet Spain’s civil war ended only a few years earlier, and a generation ago it was a fascist military dictatorship. Couldn’t it go the same way if subject to the same stress?

Thus Nobel Prize winning clever clogs Paul Krugman says austerity is “fundamentally mad” and all reasonable people agree with his diagnosis, it seems. Spain looks set to finally benefit from the ECBs printing press with only token conditionality. And poor Greece, close to being cut loose earlier in the year, is once more nestling in the warm bosom of the Teutonic embrace … well … its being given more time, at least, to pretend it is able to repay the unrepayable ….

Today, talks among coalition parties in the Greek government regarding a new package of spending cuts necessary to secure more troika aid fell through.

Democratic Left leader and Greek MP Fotis Kouvelis blasted the troika plan, saying that it “levelled” labour relations and that it had “nothing to do with fiscal reform; essentially they want wages stuck at low levels,” reported Athens News Agency.

The situation is in flux.

ALSO: The REAL eurozone crisis is much more dangerous than sovereign debt >

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.