Please see how a state can create 836,000 unemployed people without any other benefit except a step to bankruptcy which is obviously the aim
Euripides Billis, Ex-Assistant Professor NTUA
Honorable Members of the European Parliament, Honorable President, Honorable Vice Presidents and Honorable other Members of the Committee,
Everyone is aware that reducing wages and pensions, robs money from the market and the state, causes unemployment, reduces state revenues, creates a need for unemployment benefits, etc., leading to further reductions in wages and pensions, and creates a vicious cycle that leads to recession and destruction. And yet continues suggesting that sought that THIS DESTRUCTION IS THE TARGET OF THOSE imposing these measures.
By what we suffer the last almost three years all Greeks, we became amateur economists. As so far I have not seen any analysis of how the reduction of wages and pensions (the notorious Merkel,s internal devaluation) leads to the above and to bankruptcy of the Greek state and of the Greeks (to be confiscated their wealth by Resler), I request with apologies to economists for their more scientific study of the below analysis.
1. Suppose that a reduce of wages and pensions by 4 billion Euro on annual basis is imposed following commands by Merkel, Holland, with Schroeder acceptance too who promised as Holland to help us if we accept everything and commit our “suicide”.
2. Suppose too that from the 4 billion that lose the employees and retirees (who were paying by this amount of 4 billion Euro taxes – social security contributions of their own – of their children and of their grandchildren), one billion would deprive the state as a result of their inability to meet the mentioned, taxes, social security contributions etc after this reduction of their wages (the third or fourth reduce of salaries and pensions, called always “last time” ) and 3 billion would be deducted from businesses.
3. The businesses (that are already at a breaking point of survival) to face this deduct of three billion euros they have to fire people corresponding to this amount of 3 billion euros. Assuming an average annual salary of $ 10,000 we will then have 300,000 (three hundred thousand) extra unemployed (3,000,000,000: 10,000 = 300,000)
4. Suppose too that from loss of these 3 billion euros (of the 300.000 new unemployed) that will be deducted from state and from the businesses, 1 billion will be lost of state (taxes, insurance funds, unemployment benefits, etc.) and 2 billion will be deducted from businesses.
5. As a result we will have layoffs by companies corresponding to 2 billion euros or with an average annual salary of € 10,000 we will have other 200,000 layoffs.
6. Total so far, 300,000 + 200,000 = 500,000 layoffs.
7. Suppose again that from the above loss of 2 billion euros of the 200,000 new unemployed people, the state would deprive 0.67 billion (a third of the 2 billion) and the businesses the rest around 1.4 billion euros.
8. With an average annual salary of 10,000, we will then have 140,000 new unemployed Greeks (1,400,000,000: 10.000 = 140, 000) and a total dismissals of 500,000 + 140,000 = 640,000 unemployed people.
9. Assume again that the 1.4 billion income loss of the 140,000 new unemployed people the state lose about 0.46 billion and the rest of 0.93 billion it is a loss of the businesses .
10. Then we will have additional layoffs equivalent of 0.93 billion that is equal (with an average annual salary of 10,000 euros) to 93,000 new layoffs and a total of 640,000 + 93.00 = 733,000 Greeks will lose their jobs.
11. Suppose that from the loss of o,93 billion euros of the income of the new 93,000 unemployed Greeks, the state will lose 0.31 billion and the businesses 0.62 billion euros, which corresponds to 62,000 new layoffs totaling 733,000 + 62,000 = 795,000.
12. Suppose too that from the loss of the income of 0.62 billion euros of the new 62,000 unemployed Greeks one third equal to 206,000,000 euros is deducted from the State and that two thirds, that is to say 414,000,000 euros are deducted from the businesses. Then with an average annual salary of € 10,000 we will have 41,000 more layoffs, totaling 795,000 + 41,000 = 836,000 unemployed Greeks
13. Assuming now the closure of this Mekel,s vicious circle (in reality it continues) , then the reduce of salaries and pensions by 4 billion euros has as aresult.:
a) Loss by Greek state revenues equal to: 1 billion + 1 billion + 0.67 + 0.46 + 0.31 + 0.206 = 3.646 billion
b) Creation of 836,000 thousand new unemployed Greeks.
If the above is correct, as shown to be, Greek protectorate to win 354,000,000 (4,000,000,000 – 3,646,000,000 = 354,000,000) million euros from the reduction of salaries and pensions by 4 billion euros generates about 836,000 unemployed Greeks, destroying this people and the Greek economy.
If we continued our analyses we would find that earns “0” euros creating 836,000 unemployed Greeks.
Stupidity or objective???
Ex-Assistant Professor National Technical University of Athens (NTUA)
Michalacopoulou Ave 155, 11527 Athens Greece