Implosion Alert: Europe On The Verge of A Social, Political, Systemic Breakdown And The Last Remaining Hope To Save Europe Is Slipping Away.

Greece’s austerity policies could create a crisis of insolvency within the country, undermining the very reason they were implemented – to repay the country’s debt – says the country’s biggest labour confederation.

“I am afraid that we may see a phenomenon that could cause a social explosion,” says Savvas Robolis, scientific director for the Labour Institute of the General Confederation of Workers in Greece (GSEE), the private sector’s confederation of unions. “Right now many people can’t pay their taxes. That’s why state revenue fell 300 million euros ($395m) short of January targets. If that continues, I don’t know if the state will be able to meet its obligations by June or July. It may not have the cash to pay salaries and pensions.”

The state heavily subsidises approximately 1.3 million pensions, according to finance ministry data. It also pays the salaries of almost 800,000 state employees, roughly a quarter of all people still working in the country. Failure to pay those pensions and salaries in full would greatly impact on the state’s own tax revenues, and therefore its ability to maintain payments to international creditors.

Greece’s New Homeless: “We Have Not Even Water To Drink”

It’s a little known fact about the Spanish crisis is that when the Spanish Government merges troubled banks, it typically swaps out depositors’ savings for shares in the new bank.

So… when the newly formed bank goes bust, “poof” your savings are GONE. Not gone as in some Spanish version of the FDIC will eventually get you your money, but gone as in gone forever (see the above article for proof).

This is why Bankia’s collapse is so significant: in one move, former depositors at seven banks just lost virtually everything.