One would think that a country tortured with constant strikes would have to pay heavily for its debt. After all, strikes are disruptive to the economy, which lowers efficiency, which crimps the ability to pay taxes, which….
But as the FT reports,
Greek bond yields plunged to their lowest since March 2011 after the European Central Bank accepted their eligibility as collateral, adding fuel to the rally caused by Standard & Poor’s upgrading Greece’s credit rating by six notches on Tuesday.
The price of the benchmark 10-year bond, created in Greece’s €200bn restructuring earlier this year, rose to a record 50.5 cents on the euro on Wednesday, translating into an annual yield of 11.3 per cent.
The ECB is now accepting Greek bonds as collateral because of the “wide range of measures already implemented by the Greek government in the areas of fiscal consolidation, structural reforms, privatisation and financial sector stabilisation”.
Meanwhile on the ground, “Every morning when you wake up, you check the weather, you switch on the news and you see what strikes are happening that day,” said Yannis Ifantis, a 42-year-old travel agent in Athens. “It’s one of the absurdities of life in Greece.”
When there’s a need, an entrepreneur comes up with a service. In this case, as the Wall Street Journal reports, Antonis Gouzias, a 32-year-old computer programmer, his sister, Athina, and a few friends started apergia.gr a website that publishes detailed daily strike schedules to help people plan.
The site is getting 30,000 hits a day and has had as many as 230,000 hits in a single day.
The WSJ story gives examples of taxes not being collected because of government employee strikes as well as lawmakers caving in to striking workers in less than 10 minutes “moving to exempt them from pay and pension cuts imposed on other government workers.”
Niether would seem to enhance a government’s ability to pay. But hey, there’s another bailout around every corner from ECB head man Mario Draghi, the Financial Times Person of the Year.