Europe Is Now In A Completely Unmanageable Situation: The Spain & Greece Faced Mass Anti-Austerity Protests, While Greece Was Reported To Be Billions of Euro Off-Track In Meeting The Terms of Its Bailout And S&P Sees New Recession Hitting Euro Zone

InvestmentWatch

Photos Of The Giant Protests Rocking Greece And Spain

Discontent in Spain and Greece is rising.

Greece’s two largest labor unions went on strike today, disrupting flight and train services and forcing hospitals to depend on emergency staff.

This is the first general strike in Greece since the coalition government came to power.

Protestors gathering around the Greek Parliament in Athens, throwing Molotov cocktails at the riot police but have been pushed out of the main square now, according to BBC.

Click here to jump to the photos >

Meanwhile, Spain which saw massive anti-austerity protests yesterday, also saw a smaller number of demonstrators take to the streets today. But the demonstrations are expected to gather steam and some reports say 1,300 police officers have been deployed to keep clashes in check.

Spain is also grappling with the threat of a Catalan secession, a crucial economic region of the country. And pressure is building on Mariano Rajoy to request a sovereign bailout, though he has said he will only do so if the country’s borrowing costs stay high over a long period of time.

Markets are selling off across Europe. Spain is down 3 percent, and yields on the Spanish 10-year surged this morning.

We will be updating this feature through the day.

** Debt Crisis: Spanish GDP Falling At ‘Significant Pace’

** Greece Is About To Default AGAIN!

Greece Caught Underreporting Its Budget Deficit By Nearly 50%

here was a time about a year ago, before the second Greek bailout was formalized and the haircut on its domestic-law private sector bonds (first 50%, ultimately 80%, soon to be 100%) was yet to be documented, when it was in Greece’s interest to misrepresent its economy as being worse than it was in reality. Things got so bad that the former head of the Greek Statistics Bureau Elstat, also a former IMF employee, faced life in prison if convicted of doing precisely this.

A year later, the tables have turned, now that Germany is virtually convinced that Europe can pull a Lehman and let Greece leave the Eurozone, and is merely looking for a pretext to sever all ties with the country, whose only benefit for Europe is to be a seller of islands at Blue Aegean water Special prices to assorted Goldman bankers (at least until it renationalizes them back in a few short years). So a year later we are back to a more normal data fudging dynamic, one in which Greece, whose July unemployment soared by one whole percentage point, will do everything in its power to underrepresent its soaring budget deficit.

Case in point, on Friday the Finance Ministry proudly announced its budget deficit for the first eight months was “just” €12.5 billion, versus a target of €15.2 billion, leading some to wonder how it was possible that a country that has suffered terminal economic collapse, and in which the tax collectors have now joined everyone in striking and thus not collecting any tax revenue, could have a better than expected budget deficit. Turns out the answer was quite simple. According to Spiegel, Greece was lying about everything all along, and instead of a €12.5 billion deficit, the real revenue shortfall is nearly double this, or €20 billion, a number which will hardly incentivize anyone in Germany to give Greece the benefit of another delay, let along a third bailout as is now speculated.

To quote Greg House: “Everybody lies”

From Spiegel:

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