“We are once again saying no to anyone who would come again to steal our country, whether it be the Germans or anyone else. We say no, and that is final!” Those were the words of a middle-aged woman, the regular sort demonstrating against the austerity measures that chain Greeks even after the latest European resolution.
It was eerily symbolic: the celebration of Oxi Day just a few days after the European Union agreed to slash Greece’s debt burden in half. The Greek word, “Oxi,” of course means no, and the day symbolizes Greece’s response to Mussolini's demand for the Hellenic Republic to surrender. Greece’s government agreed to this latest deal, the best option it has been offered yet, but perhaps the Greek people should have been surveyed. They so disrupted the Oxi Day parade in Greece’s second largest city of Thessaloniki, that it was cancelled.
The problem is that while Greece’s government burden has been reduced, no such luxury has been afforded to the Greek people. Austerity programs remain in place, as Greece continues to be indebted in one way or another to its European brothers. Greece’s debt burden was cut in half, and the pain of that event will be born mostly by private investors. European banks with exposure are being infused with 106 billion euro. Finally, to head off any future needed action, a trillion euro fund will be set up to act as a firewall against like crises in Portugal, Italy, or elsewhere.
With all the glory of the grand barter, stocks across the globe and in Greece as well, enjoyed a relief rally Thursday. Greek issues including the National Bank of Greece (NYSE: NBG), Hellenic Telecommunications SA (OTC: HLTOY.PK) and Coca-Cola Hellenic Bottling (NYSE: CCH) all benefited from the mitigation of catastrophe. However, the rally ominously stalled on Friday, with the Euro STOXX 50 Index dropping 0.6%, as investors remembered that while imminent catastrophe was mitigated, misery remained. Greece cannot now go back on its progressive measures like its clean up of political and other corruption and its collection of income taxes, nor can it renege on its emergency plans including luxury taxes, pressure on pensioners, or the privatization of publicly owned installations.
Under such austerity, economic growth is impeded, but supporters of order will ask you, “What else can we do?” I say, plenty. Greece at least now has time to put together a better think tank, to give sincere effort to the design of creative ideas that could ease the burden from the people and allow economic growth to sprout. Current conditions will not encourage employment growth, though perhaps, with a tiring populous and the onset of winter, riots may ease and tourism may return in the spring.
It is a pity that the great barter agreed to by the nation finds the same answer from the people who have been protesting so vehemently for so long. That answer is the same issued to Mussolini, and it is still Oxi. Yet, I believe that fewer fresh measures will be pushed upon the people moving forward, which will cut off the kindling from the fire. With the nearing of an important national holiday for the Orthodox Christian nation, I expect Greece will tend to its wounds this winter, and prepare for rebirth in spring.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.