It's not so Great being Greek

The latest going's on in Greece.

Is Greece the canary in the coal mine?

Greece’s public finances could collapse as early as next month, leaving salaries and pensions unpaid unless a stable government emerges from the June 17 election, according to Lucas Papademos, the technocrat prime minister who left office after this month’s inconclusive vote.

Mr Papademos warned that conditions were deteriorating faster than expected with cash flow likely to turn negative in early June amid a sharp fall in tax revenues and a loosening of spending controls during two back-to-back election campaigns.

Mounting anxiety that Greece is headed for further political instability and a possible exit from the euro has prompted many Greeks to postpone making tax payments, and has also accelerated outflows of deposits from local banks.

Athens bankers estimate that more than €3bn of cash withdrawn since the May 6 election has been stashed in safe-deposit boxes and under mattresses in case the country is forced to readopt the drachma.

The finance ministry has halted repayment of value-added tax to Greek exporters, and slashed public investment spending by more than 20 per cent in the first four months.

Transfers to the health ministry to pay debts owed to hospital suppliers and pharmacies have been temporarily suspended, obliging patients to pay the full cost of prescription drugs for the first time.

The struggling state electricity utility PPC has received a €250m special payment from the budget to help cover a widening deficit. The utility has been hit by a sharp rise in non-payments of household electricity bills after the finance ministry imposed an extra “solidarity tax” last year that was added to the bills

Greek citizens have been on a tax strike since 2011 and earlier, rendering the greek government bankrupt. From a Greek local, Manos, from last September:

"Today, after two years of screwing and pressing us, most households and businesses have stopped paying. Stopped paying taxes, utility bills, toll fees, or anything else related to the government."

Without a government for the last eleven days, and amid mainstream discussion of a Euro Zone exit, the Greek people are realizing that the economic and political system as they know it is rapidly descending into chaos.

And you thought you were having a bad week......wow.

ickenittle