Rick Steves' Greece: Athens & the Peloponnese amazon.com
Bust: Greece, the Euro and the Sovereign Debt Crisis - By Matthew Lynn amazon.com
Greece's 'Odious' Debt: The Looting of the Hellenic Republic by the Euro, the Political Elite and the Investment Community - By Jason Manolopoulos amazon.com
Understanding the Crisis in Greece: From Boom to Bust - By Theodore Pelagidis amazon.com
The Imminent Crisis: Greek Debt and the Collapse of the European Monetary Union amazon.com
Eyewitness Greece - Athens and the Mainland - 352 Pages
Financial markets and economic growth in Greece, 1986-1999 [An article from: Journal of International Financial Markets, Institutions & Money]
Athens Demographics:
The population count for Athens was 10,964,020 in 2001. According to eurostat, in 2008 Greece had a total estimated population of 11,262,000. Of this, some 695,979 are estimated to be non-Greek.
Greece and the economic crisis
February 7, 2012
The scramble for a solution
Interim Greek prime minister Lucas Papademos continues to contend with German Chancellor Merkel and French President Sarkozy as negotiations to pull Greece back from a certain plunge into bankruptcy continue in Paris. With pressure on the Greek parliament to meet the demands of the Troika of the European Commission, the International Monetary Fund and the European Central Bank, a lot of back-door dealmaking seems to be going on.
In the past several years, Greece has agreed to and voted through several variations on the austerity program put together to meet the economic crisis, but has consistently dragged its feet on implementing key provisions beyond the passage of laws making them possible. The (non) firing of state employees and the (non) sale of particularly poor-performing state-owned properties have been sources of frustration for the european powers who contend they've yet to see any real progress in those areas.
Some of the coverage:
"Time is running, says Merkel!" at the Bloomberg Business News
Final terms of new rescue package being decided Tuesday Wall Street Journal "Greece will fire 15,000 Public-Sector Workers by End of 2012"
February 1, 2012
The scramble for a solution
The Papademos government is juggling dual-talks with bond-holders and public creditors with the March tranche payment hanging in the balance. There is a €14.4 billion bond payment due in March, and without the funds available there would likely be a quick bankruptcy, default, and Greek exit from the eurozone. All parties are saying they do not want this calamity to occur, the ramifications being unpredictable and setting a precedent that might be followed by other heavily-debted EU countries. The scramble for a solution that fits all parties; the European banks, the political leadership, Greek public opinion and all the creditors big and small seems like a near impossible task. Only the fear of what follows bankruptcy seems to be keeping all heads returning to the negotiation tables.
"...creditors have said they would be willing to accept a loss of 70 percent on their new bonds, Greece and its backers have been pushing for more by demanding that these securities carry an interest rate below 3.5 percent.
Greece is effectively bankrupt, staggering under a debt load that the I.M.F. now estimates as equal to about 160 percent of its gross product." New York Times
Merkel doubles-down on demand that Greece give up budget oversight to EU
Citing failure to implement agreed upon austerity measures (such as laying off 30,000 government workers, of which less than 1,000 have been let go), Germany is demanding an EU appointed budget control office that would follow through on treaty obligations by using the power of veto, among other powers, over Greek public spending.
"Germany is continuing its push for controls over Athens' budget, despite being rebuffed by Greece and other euro-zone countries at Monday's European summit.
Behind Chancellor Angela Merkel's quest for strict supervision of Greek spending lies growing frustration in Berlin that Greece has failed to meet its deficit-cutting targets or overhaul its economy, which were the conditions of its €110 billion ($145 billion) bailout in 2010. "
Much more on this at the Wall Street Journal
Just make deficits illegal
In related news, the EU powers that be are simply going to pass a law that forbids overspending:
"All European Union countries except Britain and the Czech Republic agreed Monday to sign a new treaty designed to stop overspending in the eurozone and put an end to the bloc's crippling debt crisis, while EU leaders also pledged to stimulate growth and employment.
The new treaty, known as the fiscal compact, was agreed at a summit of European leaders in Brussels on Monday. "
Well, that was easy! Article at the AP.
"Preordained failure" of the Troika Rescue Plan
Article by Yanis Varoufakis at cnn.com which lambastes the maneuvers throughout the crisis over Greek debt as a refusal to submit to the truth of the situation, made worse from political hubris:
"Beating their chests about the German threat to Greece's national sovereignty, they are hoping that the Greeks will somehow forget that it was they, their leaders, who ceded sovereignty to the so-called troika of the European Commission, the International Monetary Fund and the European Central Bank.
This is a typical case of a shady coalition of vested interests that is disintegrating under the weight of its collective hubris. For the past 18 months, German and Greek leaders have been working together to deny the truth about three simultaneous bankruptcies: The irreversible bankruptcy of the Greek state, the effective insolvency of many Franco-German banks, and, last but not least, the unsustainability of the euro-system as we know it."
January 30, 2012
Would Greece Cede authority over budget?
If the Greek government won't implement all of the steps agreed to in the various treaty arrangements to finance debt payments, why not just take away their ability to stop it? With sovereign budget control in the hands of euro zone-appointed commissioners, the saving of the Greek economy (or final annihilation of it) could be completed quickly in order to hit reduction targets. This simple idea (from Germany) has had the effect one might expect: outrage. Article at Financial Times.
"EU and International Monetary Fund officials have already presented the Greek government with a 10-page list of “prior actions” Athens must take before being granted the new bail-out. The list, obtained by the Financial Times, includes cutting 150,000 public sector jobs within three years and cutting this year’s budget deficit by a further 1 per cent of economic output.
...The German plan, which was circulated on Friday and would also force Greece to pay its debt obligations before spending any money on normal government expenditures, caught Mr Papademos and other eurozone governments by surprise. Officials said it was unlikely to be adopted.
“The Germans have a lot of influence but that goes a little beyond the limits the outer member states could support,” said a senior official involved in the discussions. “If you went with that model you’d do away with the normal democratic decision-making in a member state.”
The lead at the Wall Street Journal
Frustrated with the slow pace of implementation of budget reforms in Greece, Germany is leading a push to force Athens to cede some control over its budget decisions to Europe as a condition of disbursing the next tranche of international aid for the beleaguered country.
The question within all of the treaty negotiations for years now has always been would Greece sell off anything of real value in order to stay in the EU (for example Aegean Islands, or renting out historical monuments, or ceding financial control). So far the answer has always been "no*," and anytime the idea is fielded in Greece the usual contradiction is expressed: Greece wants to stay in the EU but not if it means losing any element of national identity. This yes/no answer continues to influence every move of the Greek legislature, which will approve (with often a great deal of agony) treaty agreements which mean tearing down a half-century of economic and political arrangements that benefit and protect the various ruling parties and their clients (principally unions). But when it comes to following through, very little happens.
More about the leaked Berlin proposal to adminster the Greek budget at eKathimerini (English).
(*One exception is the creation of the Elstat statistical agency, an independent body to provide reliable measurements of Greek economic activity.)
January 25, 2012
Private investors demanding ECB participate in "haircut" on Greek loans
Amid the political wrangling over what to do about vacillating support for eurozone "emergency funds" and what the level of input from various countries should be (particularly Germany, which is balking at the huge sums being suggested) there is the coalescing demands of private investors who view the ECB's refusal to join in the haircut (which could be as high as 65% to 70% of holdings) as grossly unfair and a violation of prior agreements. Many investors are complaining that they took on the bonds while listening to the commitments of the ECB and other political leaders who pledged to see that default (and 70% haircuts!) never happened. Article at eKathimerini.
Life in the eurozone
Wall Street Journal article that surveys the personal experiences of 30 people in the eurozone facing austerity and other challenges. Article online at Wall Street Journal.
January 24, 2012
Dysfunction ruling political process in Greece
New York Times piece by Rachel Donadio on the hapless progress of politics in Athens:
“It’s an implosion — it’s an endless sequence of implosions from bad to worse, to worse, to worse,” said Yanis Varoufakis, an economics professor at the University of Athens and commentator on the Greek economy. “There’s nothing to stop the Greek economy losing 60 percent of its G.D.P., given the path it is at.”
...There is ample evidence of Greece’s political dysfunction. About a year ago, after missing earlier fiscal targets, Greece promised to sell off $65 billion in state assets as a condition for receiving emergency loans. So far, though, it has sold only about $2 billion worth, because of domestic opposition and a reluctance to part with assets at what the government says are fire-sale prices.
The country also pledged to lay off public-sector workers, overhaul tax collection, and make its economy more competitive. But it has fallen short in those areas as well. A law passed in the fall called for cutting 30,000 public jobs by shifting workers into a labor reserve at much lower pay, but only 1,000 workers have been so assigned.
Adding to the sense of déjà vu, last week, the Greek Parliament began debating a bill that would streamline some state entities and open the professional associations governing lawyers and truck drivers, among others — measures it passed in 2010 but never put into effect. "
The bottomline:
"...Officials from the so-called troika of foreign lenders to Greece — the European Central Bank, European Union and International Monetary Fund — have come to believe that the country has neither the ability nor the will to carry out the broad economic reforms it has promised"
Will March be the end of the line, triggering default?
The political impasse ruling Greek implementation of treaty obligations, and the sheer weight of the math will bring the bailout on Greece to an end in March when Germany and France refuse to back more money to Athens to pay for maturing bonds. Or, maybe not: there seems to be an endless patience with Athens since so much is at stake that affects all of Europe, and the world.
"...The likeliest outcome is a last-minute deal, with all but a relative handful of creditors taking part."
"...AS EUROPE GOES, so may go the U.S. and global economies. Europe’s fate, in turn, hinges on what happens in Greece, whose debt crisis triggered the broader predicament of the euro and the 17 nations that use it. Alas, the news from Athens is not bright. Not only did Greece fail to meet its deficit reduction and growth targets for 2011, with a further deep recession forecast for 2012, but negotiations to write down the $260 billion in Greek debt held by the private sector have bogged down."
Read the entire Washington Post article.
Turkey and the "new normal"
Washington Post article about the dilemma facing the United States (and the world) regarding the changing attitudes of Turkey.
Washington Post article by Jackson Diehl:
[from a Republican Presidential debate event]
"Baier delivered a mostly accurate but extremely one-sided description of the government of Recep Tayyip Erdogan, saying that since his “Islamist-oriented party took over . . . the murder rate of women has increased 1,400 percent. Press freedom has declined to the level of Russia. [Erdogan] has embraced Hamas, and Turkey has threatened military force against both Israel and Cyprus.” Then he asked: “Do you believe Turkey still belongs in NATO?”
Perry responded: “Well, obviously when you have a country that is being ruled by what many would perceive to be Islamic terrorists . . .”
Islamic terrorists? This, mind you, is about a government that has just stationed an advanced radar on its territory that could be used to track and shoot down missiles from Iran; that joined the NATO operation against Moammar Gaddafi in Libya; that has become the host of the opposition to Syrian dictator Bashar al-Assad; and that, having repeatedly won free democratic elections, amended Turkey’s constitution to expand rights for women, ethnic minorities and unions.
Okay — that, too, was a one-sided account of the Erdogan record. But that is precisely the point: Turkey has become a complex, dynamic, difficult, sometimes infuriating, sometimes very helpful and indisputably important ally of the United States. In that sense, Erdogan’s government is a paradigm of the relationships U.S. administrations will be managing — if we are fortunate — in Egypt, Iraq and elsewhere in the Arab Middle East during the coming decade.
The reality is that, like it or not, “Islamist-oriented” governments are about to become the new normal in a region dominated for decades by secular autocrats and pro-American generals."
January 11, 2012
Does austerity even work?
Washington Post article by Anthony Faiola asks the obvious question: is austerity even working? Many economists and pundits have been suggesting since May 2010 (when the bailout out treaty was negotiated) that Greece is paying too heavy a price for so little of a result (staying on the euro).
Washington Post article:
"Greece has been forced to cut spending and raise taxes in the middle of a severe downturn, slashing pensions as well as state salaries, jobs and services. As public confidence has evaporated, consumer spending — the biggest driver of the economy — has plunged, generating cascading losses at private firms. The result is a dizzying economic plummet and social crisis that is bringing the cradle of Western civilization to its knees."
€47.1 billion has been delivered to Greece thus far from the May 2010 loan treaty. There is an estimated total of €360 billion in Greek public debt. There are ongoing efforts to negotiate a 'haircut' reduction on debts with private lenders with a goal of eliminating €160 billion altogether.
March 2012: make or break
But the biggest challenge is now coming in March 2012: nearly €30 billion is due on maturing debt, and without another tranche payment at that time from the overall bail-out treaty, Greece will be forced off the euro and into national bankruptcy.
Greek deficit exceeds target: 9.6%
Greece development minister Michalis Chryssochoidis announced that deficit reduction targets (target of 9%) were missed but still better than the 2010 deficit of 10.6%. The Fitch credit agency then warned that the missed target indicates Greek potential for pulling the eurozone into further crisis, though the Fitch overall outlook is low probability of a euro breakup (January 5 "Risk Radar" report). Fitch has suggested most important arena for such a result is with the burgeoning Italian debt problem, which greatly exceeds Greece's numbers.
Washington Post article:
"Greece has been forced to cut spending and raise taxes in the middle of a severe downturn, slashing pensions as well as state salaries, jobs and services. As public confidence has evaporated, consumer spending — the biggest driver of the economy — has plunged, generating cascading losses at private firms. The result is a dizzying economic plummet and social crisis that is bringing the cradle of Western civilization to its knees."
January 9, 2012
Without massive funding, Greece should quit euro: Czech Central Bank
The Czech central bank Governor Miroslav Singer makes some obvious points about the scale of Greece's problem, both for itself and to the euro at large:
Reuters article:
"Greece should leave the euro zone and devalue its new currency unless Europe is willing to provide "massive" funding for the indebted country, Czech central bank Governor Miroslav Singer said in a newspaper interview.
"If there is not the will to give Greece a massive amount of money from European structural funds, I do not see any other solution than its departure from the euro zone and a massive devaluation of the new Greek currency," he said in the interview to be published on Monday.
"So far Greece has been given loans that served mainly for buying time and for rich Greeks to move their money out of the country. This lowers the trustworthiness of Europe and the willingness of non-European countries to lend or provide new capital to the International Monetary Fund for helping Europe."
Reforms lagging; next tranche may not be paid
The next tranche payment from the €110 billion ($152.6 billion) bailout has been pushed back, with a March deadline apparently the make or break for the government in Athens under Lucas Papademos (if Greece makes it through again, the next payment will happen in June 2012).
"The schedule for Greece to receive payments under its first EUR110 billion bailout package has been pushed back by three months so Athens will receive the next tranche in March, European Commission spokesman Olivier Bailly said, if Greece implements its policy commitments."
New York Times article:
"There are increasing signs that Greece will fail to make the structural changes to its economy that its leaders have promised. Greek’s prime minister, Lucas Papademos, warned last week that without deeper spending cuts a disorderly default was a possibility, and could result in Greece leaving the euro.
....A drumbeat of bad economic news lately has led many economists to predict the imminent return to recession for many of the countries that use the euro. At the same time, European countries and financial institutions need to raise roughly $2.4 trillion in 2012."
And the frequent "warning" is issued again:
"There are increasing signs that Greece will fail to make the structural changes to its economy that its leaders have promised. Greek’s prime minister, Lucas Papademos, warned last week that without deeper spending cuts a disorderly default was a possibility, and could result in Greece leaving the euro. "
More about the Tranche:
Summary of New Fiscal Plan - Called "The Midterm" or "Troika Plan"
December 5, 2011
Greeks "emptying bank accounts"
It has been a long-running attribute of the austerity program that Greek banks were being emptied of deposits. Some of the money was being withdrawn to get it out of the country because of not only the fear of default of Greek financial institutions, but because of the increased tax penalty scrutiny. Money was moved to Crete and into other obvious locations (Switzerland, the United States) with an eye toward reaping a profit from the balance if or when the Greek drachma reappeared. Expecting a devaluation to follow quickly on the heels of a reborn drachma, euro money would automatically bring the holder an increase when converted into the lower valued drachma (of course, this only works if the euro stays around long enough to see a reborn drachma in the first place).
But in the last year, depositor flight has been an even shorter trip: from bank account into mattresses.
Der Spiegel article:
"Georgios Provopoulos, the governor of the central bank of Greece, is a man of statistics, and they speak a clear language. "In September and October, savings and time deposits fell by a further 13 to 14 billion euros. In the first 10 days of November the decline continued on a large scale," he recently told the economic affairs committee of the Greek parliament.
With disarming honesty, the central banker explained to the lawmakers why the Greek economy isn't managing to recover from a recession that has gone on for three years now: "Our banking system lacks the scope to finance growth."
He means that the outflow of funds from Greek bank accounts has been accelerating rapidly. At the start of 2010, savings and time deposits held by private households in Greece totalled €237.7 billion -- by the end of 2011, they had fallen by €49 billion. Since then, the decline has been gaining momentum."
November 30, 2011
8 Billion Euro tranche released to Greece
Despite ongoing fighting inside the Prime Minister Lucas Papademos government, meetings in Brussels apparently satisfied requirements to have the sixth loan installment released.
eKathimerini on the scene
"However, the mood in the cabinet meeting is unlikely to be celebratory. Sources said that Papademos has expressed concern about the disagreements between ministers and what impact this might have on his government’s attempts to meet the targets set by Greece’s lenders.
Sources added that Papademos is less concerned about squabbling between cabinet members from the three parties taking part in the interim government than between ministers from PASOK.."
Credit Ratings around the world
Nice interactive world map that shows the credit ratings for sovereign nations around the planet. That's right: Greece has a burning red "substantial risk" rating at present.
With national ratings and global banks all experiencing a phenomenon of credit rating 'adjustments', I don't know for how long this chart will be accurate.
Entire chart at chartbin.com
November 14, 2011
Interim Prime Minister Lucas Papademos
What's next? With New Democracy leader Antonis Samaras not willing to support new austerity measures, Papademos has to lead this 'revised' Greek government to produce a plan that'll please the EU leadership and the boiling Greek public.
eKathimerini polls from this weekend indicate the mood:
"An opinion poll for Sunday’s Kathimerini found that a total of 55 percent of Greeks welcomed Papademos’s appointment while 18 percent had a negative view, according to the poll carried out by Public Issue.
The survey also found that more than 70 percent of those questioned applauded the decision of the two main parties -- socialist PASOK and conservative New Democracy -- to move toward the formation of a unity government.
The survey also asked respondents what they believed the country’s biggest problems were. Six in 10 (58 percent) said the economy, 34 percent cited rising unemployment, while 29 percent saw Greek politicians and the political system as the country’s biggest burden."
November 2, 2011
Rumors of Drachma return grow
The talk of Greece going back to the drachma has been heard throughout the entire debacle of loans/debt crisis that started in 2009. But the possibility has never been more real than this week when Papandreou pushed for a referendum on austerity and a confidence vote for his government which is looking like the opt-in (or opt-out) vote for remaining in the EU. With so much seemingly in the air, drachma rebirth is looking more real (CNBC):
"So now it is time to ponder the once unthinkable: that Greece might end its 10-year use of the euro and return to its former currency, the drachma.
Such a move is still officially anathema in Athens. But a growing body of economists argues that it would be the best course, whatever the near-term financial and economic implications. And now, with a referendum on the European-led bailout facing Greek voters, a vocal minority that has long called for a return to the drachma might find itself with a growing group of listeners.
A return to the drachma is unlikely to offer a quick cure for Greece’s ills. Default on the nation’s $500 billion in public debt would become a certainty, depositors would take their money out of local banks and, with a sharp devaluation of as much as 50 percent, inflation would loom. A return to the international credit markets would take years.
But drachma defenders contend that these worst fears are overdone."
Further reading: Sydney Morning Herald "The Parthenon, as much a symbol of Greece as the drachma once was. "
November 1, 2011
Papandreou calls for confidence vote
See this paragraph from the Financial Times:
"European Union officials on Tuesday were scrambling to make sense of a surprise decision by George Papandreou, the Greek prime minister, to call a referendum on the country’s most recent bail-out package."
Nearly all comment from the eurozone leadership is negative on Papandreou's decision, and Finland Minister of Foreign Affairs Alexander Stubb said the vote was essentially a vote on Greek membership in the eurozone. Papandreou cited the need to gain political backing from Greek politicians in order to proceed with the latest debt-loan deal hammered out last week. With more painful austerity cuts and a horizon of endless strikes and demonstrations ahead for Athens, Papandreou's call for a referendum vote may be the only viable way to proceed politically. The vote should extablish, at least for a bief respite in the Greek body politic, that when it comes to the 'troika' orchestrated austerity plan the Greeks are either "in" or "out."
The option being put to the Greek political body seems to have confused the rest of Europe, though. See this also from that Financial Times article:
"The ill-timed and misguided decision to hold a referendum is the political equivalent of smashing rare and expensive plates at a restaurant when one is happy,” one European diplomat said. “The meaning of this eludes everyone."
If Papandreou loses the confidence vote, will Greece quickly default?
October 31, 2011
Greek unemployment pegged at 17.6%
Eurostat has released data showing that Greek unemployment rose to 17.6% in July 2011.
October 20, 2011
Austerity vote passes on first reading
With private sector employees involved in the 48-hour strike effort, over 100,000 people were in Athens protesting the austerity vote which got through Greek Parliament on the first reading. Meanwhile nearly everything in Athens was closed down, and the International airport was brought to a halt by a 12-hour walkout.
On Thursday a second vote concerning implementation takes place which puts attention on the agreement clause-by-clause, and could be a tougher fight. With success, Papandreou's government is expected to be able to receive the €11 billion tranche loan payment from the IMF/ECB/eurozone bailout plan. Without the money Greece would be expected to go into (long expected) default, Papandreou's government claiming Greece to run out of money by mid-November.
Coverage:
Financial Times "Greece approves austerity bill on first reading"
Washington Post "Greek lawmakers grant initial approval to new austerity bill; second vote due Thursday"
BBC "Greece MPs back austerity plans amid mass protests"
New York Times"Thousands in Greece Protest Austerity Bill"
"On Wednesday evening, as garbage fires smoldered in the streets, the Greek Parliament approved the new package of austerity measures — and secured crucial rescue financing — with all 154 governing party legislators in Greece’s 300-seat Parliament voting in favor.
The controversial bill includes cuts in wages and pensions as well as thousands of layoffs in the public sector — once a political third rail in Greece’s welfare state. It also changes collective bargaining rules to make it easier to hire and fire workers, a highly unpopular action that economists say is crucial to liberalizing Greece’s economy but that has little popular support.
The bill will not pass into law until a second vote — on the separate articles of the legislation — on Thursday. The measures are expected to pass, even over the reluctance of the governing Socialist Party, which helped build up the welfare state it is now charged with dismantling.
European Union leaders are preparing to meet Sunday to decide on the release of the next, $11 billion installment of aid to Greece, part of a $150 billion bailout engineered last year. "
October 19, 2011
Athens "on fire" again
Strikes and protests more violent than usual around Syntagma Square. Coverage in the international media is of course feeding on the dynamic images of anarchists hurling rocks and (apparently) petrol-bombs at police, and the general photogenic mayhem that follows. Though strikes are occurring all around the country, the violence seems to be centered with the usual group of Athens anarchists.
Short survey of media stories
Reuters
"...International lenders, who are providing the funds Athens needs to stay afloat after it was shut out of bond markets last year, have expressed impatience at the slow pace of reform as Greece has slipped behind on its budget targets.
There has been growing talk that Athens should be placed under tighter supervision by EU authorities to ensure it meets its reform obligations." Full Story
Marketwatch
"Ninety-two percent of the 199 respondents to the Bank of America Merrill Lynch fund managers’ survey believe that Greece cannot avoid default. Seven out of 10 respondents expect a default by April 2012, according to the survey, which was released Wednesday.
“The survey shows investor consensus has priced in, or hopes for, an orderly default by Greece,” said Michael Hartnett, chief global equities strategist at BofA Merrill Lynch Research, in a statement. " Full Story
BBC
"The BBC's Chris Morris in Athens says the mood across the country is generally one of defiance rather than violence. Legislators are voting on two bills on Wednesday and Thursday.
They include measures for higher taxes, further cuts to pensions and salaries and the suspension of collective labour agreements.
They will also suspend 30,000 public servants on reduced pay and introduce a new civil service salary system.
Prime Minister George Papandreou's Pasok party has a four-seat majority but some of his backbenchers have threatened to vote against the measures.
Finance Minister Evangelos Venizelos, who has this month been locked out of his office by protesting civil servants for several days, appealed for support, saying: "We are in an agonising but necessary struggle to avoid the final and harshest point of the crisis."
Greece finds itself with rising unemployment and a stalled economy, with a government debt that is 162% of its gross domestic product. " Full Story
Greek history held hostage to the present
Interesting article at Ekathimerini about how the political battles of Greece obscures and defeats efforts to manage Athens. In particular the challange of showcasing the Greek cultural heritage that has no value within government offices unless attached to contemporary political goals:
"Private efforts to vitalize Greece’s cultural sector are mostly met with political vitriol, says Paul Firos, the 64-year- old founder of Hotel Data Systems Inc. Shortly before the 2004 Olympics, the Greek-American businessman and philanthropist sold his Connecticut-based reservation software system and used 2 million euros of the profit to open the Herakleidon Art and Mathematics Museum on a leafy street beneath the Acropolis.
The government still refuses to allow him to put up a street sign that could lead people to the museum, says Firos.
Even the critically acclaimed New Acropolis Museum, which opened in 2009, after 33 years of ideological bickering, lingers as a target. Greek Communist Party Secretary General Aleka Papariga and the Greek Archaeologists Society have issued statements that condemn the 130 million euro facility co-funded by the Ministry of Culture and Tourism and by the EU’s European Regional Development Fund as “unacceptable” and “in danger from the most extreme privatization.”
“Neither political party has the will or expertise to manage culture,” he says. “Government culture experts live in a bunker and view any outside help to manage our treasures and make them profitable as a threat to their livelihoods.”
October 17, 2011
Does Greece have a future?
"Papandreou acknowledges that Greeks face a monumental or seemingly Sisyphean task of rebuilding the economy, which is forecast to shrink by 5.5 percent this year. But he has portrayed himself as an optimist, believing that the crisis-driven change will forge lasting improvements."
Full article by Ken Maguire at the Global Post.
"Bigger Cuts Needed" despite July ageement
"German Finance Minister Wolfgang Schaeuble said the reduction of Greece’s debt by means of private sector participation must be bigger than agreed in July by euro region leaders in order to achieve a “sustainable solution” for the over-indebted country."
Brief item at Bloomberg
September 25, 2011
Reasons to persist and reasons to give up
Article (I saw this via the Living in Greece Blog) about "Why Greece should default" by Michael Shuman
"The general thinking is: Why take the risk? Keep bailing out Greece.
The counter argument, though, is that we'd all be better off if Greece just defaulted. I've made the case before that a continued bailout of Greece was a bad idea, and the more I watch what's happening in the Greek crisis, the more I think Athens needs to just throw in the towel, default, and start over.
First, a Greek default is inevitable. It is not a matter of if, but how. A default is built into the terms of the proposed second bailout package, in which private creditors are expected to swap or roll over their holdings of Greek bonds, taking a loss in the process. That would be an “orderly” default, perhaps, through which the process could be carefully controlled to minimize the impact on financial markets compared to a “disorderly” default, in which Greece just says: “We won't pay!” But it is still a default.
Second, because of that reality, investors are already assuming Greece will default, and are preparing for it."
The reasons Shuman provides in his other points: that economic contraction makes the math of the austerity program an impossible formula for success, that the turmoil being fostered in Greece is cruel and unnecessary, with the weight of the problem of the over-extended European lenders being put almost entirely on Greek backs. In the end, Shuman is saying it is inevitable and putting it off is only creating more damage.
Complete article at Curious Capitalist
"I'm not going to pay it"
New taxes are running into the phenomenon of empty pockets
New York Times article "Worried Greeks Fear Collapse of Middle Class Welfare State" and the hopelessness of the situation:
"Sitting in the modest living room of the home she shares with her parents, husband and two teenage children, Stella Firigou fretted about how the family would cope with the uncertainties of an economy crashing all around them. But she was adamant about one thing: she would not pay a new property tax that was the centerpiece of a new austerity package announced this month by the Greek government.
“I’m not going to pay it,” Ms. Firigou, 50, said matter-of-factly, as she lighted a cigarette and checked her ringing cellphone to avoid calls from her bank about late payments on a loan. “I can’t afford to pay it. They can take me to jail.”
....The so-called troika of foreign lenders — the European Central Bank, the European Commission and the International Monetary Fund — is increasingly playing hardball with the Greek government, insisting it meet its deficit-reduction goals before it decides whether to release the next installment of $11 billion that Greece needs to meet expenses starting in mid-October."
Another related NY Times article titled "Europe Looks for Ways to Prod Growth in Greece" seems to suggest the austerity measures were intended to produce economic growth, which is certainly not the case (nor result, as witnessed throughout the Greek economy):
"The European Union said on Thursday that it was exploring new ways to try to stimulate economic growth in Greece, with one senior official acknowledging that Greek citizens were on the verge of rejecting any more austerity measures."
As Greece is forced (literally, via the pressures of the troika loan deals) to create and expand every tax and fee possible to raise money and to please the terms of the deal by at least implementing its terms, regardless of the result (which has been the measured contraction of the Greek economy quarter after quarter), keeping Greece inside the eurozone is still paramount, with the fear that a Greek exit will domino Italy, Spain and many others which will devastate the european banking system.
The effects in Greece or both negative and positive. The negative is obvious, but the positive is that the reduction of the public sector and the truncating of privileged political/union groups clears the way for modernization of the handicapped industrial, educational and even the tourist segments, all hampered by legendary layers of government bureaucracy, corruption in the form of graft and bribes, and quality standards hardly in keeping with European ideals.
"Mr. Venizelos appealed for greater honesty in the debate over the economy, saying that the country’s political class must be clearer about the situation and what is required.
“The lies to the Greek people must stop,” he said, adding that now it was time for “work, work and more work” to meet fiscal targets and revive the economy.
The European commissioner for economic and monetary affairs, Olli Rehn, said Thursday that Greece would remain within the euro zone but did not explicitly rule out the possibility of a default.
“An uncontrolled default or exit of Greece from the euro zone would cause enormous economic and social damage, not only to Greece but to the European Union as a whole, and have serious spillovers to the world economy,” Mr. Rehn said during a speech to the Peterson Institute for International Economics in Washington. “We will not let this happen.”
The water level seems to be reaching the top of the flood gates, and it is a question whether European leadership will be able to contain the pressures building. In Greece, where revolution, civil war, dictatorships and coups are all 20th century experiences, the question is will Greece carry through to the other side of the austerity program where the benefits are supposed to lie waiting? A rejuvenated Greek private and public sector seems like a phantom at this point of crisis, but the entrepreneurship that is basic to Greek people's history will surely reassert itself, if all the overhead of the recent disaster can be cleared out of the way. But the last questions is, would it be easier and better for Greece to to finally orchestrate an orderly default, and to push aside the fears of the European Commission from the equations of how to ressurrect Greece?
September 21, 2011
More austerity coming: layoffs and increased taxes
In order to secure the next tranche payment from the loan/bailout program put together by the IMF/ECB/EU, the Greek government is doubling down on the cutting:
"The troika deemed additional measures announced by Greece on Sept.11, including a new special property tax and a cut in salary for all elected officials, as “inadequate” leading the government to seek further permanent measures, according to the note.
Without additional cuts, Greece’s budget deficit in 2011 would be as much as 9 percent of gross domestic product compared with the 7.5 percent target.
Finance Minister Evangelos Venizelos, who’s negotiating a second financing package with the EU and IMF, has said the contraction of Greece’s economy will be 5.5 percent this year. He has pledged that the government will accelerate further austerity measures to ensure continued support after EU officials said payment of a sixth tranche of bailout loans will be withheld unless Greece meets its deficit targets."
Complete article at ekathimerini
"Reduce the Size of the state" Troika primary demand
Economy contraction expected to be 5.5% for year
From Bloomberg article by Paul Tugwell:
"The troika deemed additional measures announced by Greece on Sept.11, including a new special property tax and a cut in salary for all elected officials, as “inadequate” leading the government to seek further permanent measures, according to the note.
Without additional cuts, Greece’s budget deficit in 2011 would be as much as 9 percent of gross domestic product compared with the 7.5 percent target.
Finance Minister Evangelos Venizelos, who’s negotiating a second financing package with the EU and IMF, has said the contraction of Greece’s economy will be 5.5 percent this year. He has pledged that the government will accelerate further austerity measures to ensure continued support after EU officials said payment of a sixth tranche of bailout loans will be withheld unless Greece meets its deficit targets."
Read entire Bloomberg article here
September 18, 2011
Greek future "depends on phone calls"
Phone conferences Monday and Tuesday are the method the European Commission, IMF and ECB are talking with the Papandreou government to decide the immediate financial future of the country. The big question is if Greece will receive the sixth tranche payment (€8 billion) from the aid package put together in July which altogether totaled €109 billion in aid through a variety of mechanisms, all connected to Greek fulfilling an unpopular austerity program that is either reforming the countries economy, or wrecking it, depending upon the point of view.
Talks on Monday ended without agreement or decisions and are set to continue on Tuesday.
Meanwhile, the rhetoric of media voices saying Greece is on the brink of default has reached the highest pitch since the calamity began in December 2009.
This Geoffrey Smith article ("Should Busted Greece Stay In Euro Zone ") at the Wall Street Journal attempts to go through all the ramifications, socially and economically, of a Greek default, and all of them are laden with doom:
"Pace Nouriel Roubini and others, an exit from the euro zone and the re-introduction of the drachma is not the way to go. In the absence of a legal framework for such a step, a Greece that had defaulted, devalued and struck out on its own would not find that, with one bound, it was free. It would run straight into a hideous and paralyzing storm of lawsuits over who had the right to be repaid in euros and who got drachmas instead.
Advocates of a euro-zone exit argue that domestic liabilities should be repaid in new currency and foreign ones in euros. That may just be legally enforceable in a single market which supposedly guarantees non-discrimination within the whole European Union (although I doubt it). However, even if applied, it would reward all those—generally better off and more sophisticated Greeks—who have already taken their money out of the country. It would complete the impoverishment of one half of Greek society to the benefit of the other. Even in a world where there are only unfair solutions left, this would be an injustice with potentially disastrous consequences."
View of Fira, capital of the island of Santorini, Greece. Source: iStock View enlargement here
TOP PAGES:
- The new government list under Papandreou (June 2011)
- Inflation in Greece Dec 2009 - July 2011
- Who is holding Greek debt?
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