Remember when we said cash flow is always more important than diluting the M2 (the Fed is great at the latter, powerless at the former)? Here's why: The municipality of Acharnes in northern Athens has decided to suspend all of its operations after running out of money. The municipal council met on Thursday night and voted to stop providing anything other than basic services because of its inability to pay employees’ wages and regular expenses. In NintendoDonkey Kong Game and Watch parlance: Game over.
“Acharnes Municipality will remain closed indefinitely, until the financial problem can be resolved,” the local authority said in a statement.
The municipality will operate with just skeleton staff, which trash will only be collected from outside schools.
Mayor Sotiris Douros is due to meet Interior Ministry officials on Friday to discuss the municipality's problems.
He wants the government to reduce from 11.5 percent to 5.5 percent the interest rate on a loan to the municipality. Douros argues that the monthly loan repayments of 500,000 euro is to high.
Coming to an insolvent, cash free, Keynesian experimental abortion near you.
Zero Hedge
LOL @ Nintendo Donkey Kong. I used to play that game when I was young. :P Well, it doesn’t matter where you reside, financial hardship can catch up with you or strike unexpectedly through misfortune, an accident, or personal tragedy. In fact, the state of Georgia in the U.S.had more than 76,000 bankruptcy filings during the 12-month period, which ended last March 10, 2010. It’s a good thing that the government can still help these people via Chapters 7 or 13.
ReplyDeleteIf you’re living in a municipality like this, the only thing that you need to do is to deal with the current situation. Even some of the richest countries in the world are also going through this kind of situation these days. The officials and the public must work hand-in-hand to build up strength and get better again. It's for the good of everyone.
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