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- Dec 31, 2011
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ATHENS, Greece Greece's coalition government faces a crucial test in Parliament as unions on Monday launched three days of escalating strikes against austerity proposals that must win lawmakers' support if the debt-crippled country is to get more aid and stave off bankruptcy.
The conservative-led coalition that has governed Greece since June will later Monday present the country's fourth austerity package in more than two years to Parliament. The drastic spending cuts and tax hikes demanded by the country's bailout creditors aim to save some (EURO)13.5 billion ($17.3 billion) in 2013-14. If lawmakers reject them in a vote Wednesday, Greece faces the prospect of losing vital rescue loans that have kept it afloat since May 2010.
The next loan installment of (EURO)31.5 billion out of a total of (EURO)240 billion is already overdue and without it, Prime Minister Antonis Samaras has said Greece will run out of euros on Nov. 16. If the country cannot raise any more funds from elsewhere, it would quickly find it impossible to pay its debts. The government would then be forced into issuing its old currency, the drachma, to pay bills and wages. As well as pushing the country out of the eurozone, this could trigger a nightmare of bank runs, hyperinflation and currency depreciation that would vaporize savings and put even the most basic goods out of the reach of many Greeks.
If the country was forced into a default and began printing its own currency, the entire eurozone's finances would become increasingly shaky as markets would assume other countries in the eurozone might be the next to go. Investors would begin to pull their money out of the region or demand higher returns to keep it there.
Greek unions start 3 days of anti-austerity action | Comcast
The conservative-led coalition that has governed Greece since June will later Monday present the country's fourth austerity package in more than two years to Parliament. The drastic spending cuts and tax hikes demanded by the country's bailout creditors aim to save some (EURO)13.5 billion ($17.3 billion) in 2013-14. If lawmakers reject them in a vote Wednesday, Greece faces the prospect of losing vital rescue loans that have kept it afloat since May 2010.
The next loan installment of (EURO)31.5 billion out of a total of (EURO)240 billion is already overdue and without it, Prime Minister Antonis Samaras has said Greece will run out of euros on Nov. 16. If the country cannot raise any more funds from elsewhere, it would quickly find it impossible to pay its debts. The government would then be forced into issuing its old currency, the drachma, to pay bills and wages. As well as pushing the country out of the eurozone, this could trigger a nightmare of bank runs, hyperinflation and currency depreciation that would vaporize savings and put even the most basic goods out of the reach of many Greeks.
If the country was forced into a default and began printing its own currency, the entire eurozone's finances would become increasingly shaky as markets would assume other countries in the eurozone might be the next to go. Investors would begin to pull their money out of the region or demand higher returns to keep it there.
Greek unions start 3 days of anti-austerity action | Comcast