This is not Austerity, Greece has suffered with little "Austerity"

Austerity Kills! Bank Of Greece Admits "Greeks' Health Deteriorating, Life Expectancy Shrinks"

This is simply the fact that the Greeks don't want to work, and the Germans no longer want to freely fund the Greek first world lifestyle. Austerity is the German attempt to get Greece to fund its own first world lifestyle.

More EU madness below the fold.

The EU is one of the strangest economic models ever devised. It was essentially a model where the wealthy North thought it would be a good idea to create a trade union/monetary union in order to manufacture larger quantities of advanced consumer goods, sell them to the much less advanced consumer goods dense South. To do this the North shared some of their massive new manufacturing wealth with the South in the form of loans. The South after it joined the EU was already burdened with high cost loans, so it converted these to new low cost loans now that they received the same rates as the North. And the South added even more loans mostly from North investors, and pension funds looking to invest in safe secure government issued bonds.

Since the loans were to be repaid, the North thought it would get all of the money back. It simply never took the time to think through the reasons why the South was advanced consumer goods sparse. It was because they simply did not have the desire to work hard enough to create the money to buy these goods. The North lending the South money would not change this basic fact.

All that happened after the 2008 crisis was the North and the South both became aware of what the South was doing. Now the North is terrified the South will not repay these loans and that the money was really just an elaborate gift. The austerity/bail out schemes are an attempt to keep the entire south from defaulting, and walking away from the debt. If that happens the North will be stuck without any chance for repayment of the loans. Worse, the only retaliation open to the North is to stop lending to the South, which will cause the South to immediately stop buying advanced consumer goods from the North. 

Then recession, and a much reduced standard of living for both the South, and the North. 

This has no positive outcome, but still both try to find some way to recapture the vital economy of the pre 2008 days. This cannot be. The economy was canard, not real. 

The politicians in the North don't want to admit they were hoodwinked. The politicians in the South don't want to admit the Southern countries will never return to a first world lifestyle. 

Stalemate! So, today they while away the days attempting to find a way to turn a sows ear into a silk purse.

The real spending in Greece has never dropped at all, it continues to climb. What is happening is the North is no longer lending huge gobs of money to Greece which Greece can use to inflate the standard of living. Or more actually, the Greeks are being required to live on what they actually earn. This is not imposed austerity, this is earned reality.

This is the story of the Ant and the Grasshopper, Greece is the Grasshopper.

 In a field one summer's day a Grasshopper was hopping about, chirping and singing to its heart's content. An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest.

"Why not come and chat with me," said the Grasshopper, "instead of toiling and moiling in that way?"
"I am helping to lay up food for the winter," said the Ant, "and recommend you to do the same."
"Why bother about winter?" said the Grasshopper; we have got plenty of food at present." But the Ant went on its way and continued its toil.
When the winter came the Grasshopper found itself dying of hunger, while it saw the ants distributing, every day, corn and grain from the stores they had collected in the summer.

Then the Grasshopper knew...
It is best to prepare for the days of necessity.