The contrast between Rome and Athens is quite stark.

After the whirlwind political upheaval of the last week, you get the sense the Italians don’t quite know what hit them and don’t know what to expect. So they’ve just reverted to their carefree normal life enjoying the all that is great about Italy.

The Greeks on the other hand seem to be about 6 months ahead of the Italians. Reality has well and truly set in and the mood quite sombre and tense.

Adding to the tension this week is the Athens Polytechnic anniversary of when students at the university rebelled against the military junta in 1973 and 40 were killed.

In the last 12 months the Greek economy has contracted 5.2% and the austerity measures are quite brutal… if they get delivered.

The Greek politicians are once again debating the measures and another confidence vote in the new Prime Minister was held again overnight. It’s all down to the politicians… and they’re certainly not helping.

The Greeks know they’re going to be hit with a big stick and they hate the Germans, the European Union and the International Monetary Fund for causing it.

THIS IS GREECE

. Economic contraction 5.2%

. Government debt is 145% of GDP (Italy is 115%, Ireland 95%)

. unemployment 18.75%... closer to 25% because E115/wk benefits stop after a year

. budget deficit of 15.4% of GDP… Euro zone limit is 3%

. Public service employs 20% of the population

WHAT DRAGGED IT DOWN

. Tax evasion… amounts to E22b a year or 10% of GDP

. Corruption… E20b a year or 8% of GDP

. Black economy… 25% of GDP

. Protected industries… no new trucking license since 1970

. big interest bill on Government debt

HOW ARE THEY FIXING IT

. social security cut by E5b over four years

. 20% cut in public service wages

. pensions above E1000/mth cut by 20%

. retirement age raised to 65… currently 50 for public servants

. deregulate industry to promote competition

AMAZING FACTS

. swimming pool tax… rich suburb of Athens declared 324 pools. Finance ministry sent a helicopter over that suburb and photographed 16,974.

. 9000 Greeks sent E4.9b overseas last year… 5000 of those people declared a taxable income of under E20,000 a year.

. Greek railway loses E1b a year and has debts of E10.7b

. 150,000 people and businesses have until November 24 pay their back taxes or they’ll be named.

. 900,000 Greek people or businesses owe E41.1b in back taxes

. of those 900,000, 14,700 owe E3.7b or an average E150,000 each

IF GREECE LEFT THE EU

. Greek banks would collapse

. international investment would flee

. Greek companies with Euro borrowings would go bankrupt

WHY SHOULD AUSTRALIANS CARE IF EURO ZONE COLLAPSES

1. Collapse in commodity prices as global economy slows… demand for our commodities stops
2. Global banking system stalls… credit squeese and credit costs rise which pushes up interest rates.
3. Consumer and business confidence hit
4. Sharemarkets fall which affect superannuation fund returns