Greece: Austerity as Athens Burns

There was another round of Greek protests as the government met to pass an austerity bill:

Greece definitely needs to make progress in reducing their debt and getting their budget in order. The economy is suffering and people are going nuts over it. There's been an immense brain drain because of this. The whole country is unhappy:

Although the demonstration was organized by leading labor unions, everyone from trash collectors, teachers, retired army officers, lawyers and even judges walked off the job to protest the government-imposed wage cuts and tax increases that they say are squeezing the debt-ridden country into penury.

“There’s no precedent for this,” said Anastasia Dotsi, 70, a retired bank worker who said anger had driven her out to protest. After two years of austerity measures, “we have been crushed as a people,” she said.

The bill is harsh in that it will include wage cuts and job cuts, but it might be a necessary measure:

The controversial bill includes cuts in wages and pensions as well as thousands of layoffs in the public sector — once a political third rail in Greece’s welfare state. It also changes collective bargaining rules to make it easier to hire and fire workers, a highly unpopular action that economists say is crucial to liberalizing Greece’s economy but that has little popular support.

Some of this is a necessary for Greece's EU position:

“The vote will boost our negotiating position; it will give us strength for the E.U. summit,” Mr. Papandreou said this week. The main goal for Greece, he added, is “to stay in the euro zone.”

The situation is bad. There's no other way to describe it. Any decision that the government makes seems like a poison pill. I have no idea how Greece is going to get through this in the short term, but in the long term, moving towards a strengthen private sector makes sense. The government is stuck between a rock and a hard place though.