Greece and the economic crisis

May 31, 2016

Varoufakis: Greece, Still Paying for Europe’s Spite - NYT

"Against this background, Greek voters elected my then party, Syriza, in January 2015 to negotiate an end to self-defeating austerity in exchange for serious reforms. With the state now living within its means, I strove, as the country’s new finance minister, to convince our European and institutional lenders that their interest and ours would best be served by reducing tax rates and avoiding further cuts to already much reduced pensions. As a compromise, I even promised a “deficit brake” — automatic tax hikes that would kick in if government revenues did not pick up within an agreed period.

My pleas fell on deaf ears, and I resigned. Greece’s creditors insisted instead on even higher sales taxes, as well as new cuts in pensions and wages. The Greek government’s capitulation to the creditors even involved a preposterous obligation that all Greek companies should pay, immediately and in full, their estimated tax for the next year. The cruel screw of austerity turned again.

Once the new measures were implemented, incomes in Greece, which had picked up slightly while we put austerity on hold, began to fall again. The bank closures that were forced by Greece’s creditors to make our government yield, and the new austerity that followed, revived the recession. This increased the number of nonperforming loans on banks’ balance sheets — an astounding 45 percent of all loans — with the effect of denying credit to potentially profitable export-oriented firms. In 2014, close to half of Greek families had no adult in employment, while the cuts in public spending mean that for the past two years less than 10 percent of the jobless receive any unemployment benefit."

Greece and Creditors Spar Over Legislation Changes - WSJ

"Greece is arguing with its international creditors about a few small but politically sensitive measures creditors want implemented before they release some €7.5 billion ($8.4 billion) of badly needed bailout funds.

A teleconference between Greek officials and representatives of the country’s lenders failed on Sunday to reach agreement on whether and how Greece should amend recent legislation to comply with the conditions of its bailout program.

Creditors, represented by the European Commission, other eurozone institutions, and the International Monetary Fund, say Greece must make specific changes to recent laws on areas including banking regulation, retiree benefits, and privatization. But Greek Finance Minister Euclid Tsakalotos has written a letter to the commission, the IMF and the European Central Bank saying his government can’t carry out all of the lenders’ demands, according to Greek officials, citing political obstacles."

May 29, 2016

Time for relief? - Neo Kosmos

"...According to officials, mutual trust has returned to the talks, nearly a year after Tsipras's rejection of austerity measures pushed Athens close to be pushed out of the euro. This kind of optimism was further confirmed when one of the finance ministers started playing the music of Zorba the Greek during the Eurogroup meeting.

"I think there is some ground for optimism that this can be the beginning of turning Greece's vicious circle of recession-measures-recession into one where investors have a clear runway to invest in Greece," said Greek Finance Minister Euclid Tsakalotos, returning from Brussels to Athens."

IMF turns its back on Europeans in Greece bailout - Times of India

"...The IMF said it won't give another penny until it sees a concrete plan from the Europeans to substantially cut the country's debt burden. Wednesday's agreement by the Eurogroup finance ministers failed to deliver that.

The IMF is now focused on protecting its own reputation after the failure of the first two joint Greek rescue operations -- even if it sours relations.

... German finance minister Wolfgang Schaeuble derided the IMF's suggestion to free Greece from servicing its debt until 2040, saying creditors might as well "do a grace period of a thousand years."

May 28, 2016

What can Putin bring to Greece ? - Reuters

"Russian President Vladimir Putin arrives in Greece to sign oil and gas contracts - in a visit seen as signalling that both he and his hosts have options other than to rely on the West. Ivor Bennett reports."

Greece Is Kicking Another Can Down the Road - Fortune

"This ritual has become an established fixture in the European Union calendar, and usually involves some tough talk morphing into ambiguity and compromise, as behind-the-scenes negotiations thrash out the details of the inevitable last-minute agreement, which postpones big decisions for another year.

...As ever, politics stands in the way of a clear-headed assessment of how to revive the Greek economy. But this time, the fractious politics of Greece is the least of the EU’s worries. A more important reason for the obstinate refusal to contemplate a rational approach to the euro crisis is the volatile politics of the European Union’s Northern flank. The refugee crisis sparked by the conflict in Syria has heightened tensions over immigration in Europe’s creditor states, with nationalist and populist politicians fanning the flames of resentment amongst hard-pressed voters."

May 27, 2016

Greece planning cautious return to bond markets in 2017 - Fox News

"George Houliarakis, a deputy finance minister, said the decision would hinge on a return to economic growth in 2017 — as forecast by the European Union — and a continued drop in sovereign borrowing rates.

Greece has been locked out of debt markets since 2010, with a brief return two years ago. Interest rates on Greek government bonds have eased after Athens and eurozone rescue lenders ended months of delays in reviewing the Greek bailout program. "

Putin visits Greece ahead of Russia sanctions vote - RT Com

"Before the visit, Putin published an article in Greece’s Kathimerini newspaper, where he spoke about the negative effect of mutual sanctions.

“These days, Greece is Russia's important partner in Europe. Unfortunately, the decline in relations between Russia and the European Union stands in the way of further strengthening our cooperation, with an adverse effect on the dynamics of bilateral trade that fell by a third to $2.75 billion as compared to last year. Particularly affected were Greek agricultural producers,” Putin said.

In 2015 trade between the two countries fell by 33.7 percent to about $2.8 billion. Ninety percent of that loss was exports from Russia to Greece. Russian imports from Greece decreased by 54 percent and amounted to $229.4 million."

Additional coverage:

Putin heads to Greece for business, Orthodox Christian site - JS Online

How the European Central Bank is playing a very stupid political game with Greece - Thisweek

"Wednesday's agreement is to provide Greece with a new bailout of $11.5 billion, to be doled out in stages starting in June, in exchange for yet another round of spending cuts and tax hikes from Greece. Some form of debt relief will be phased in starting in 2018. According to The Wall Street Journal, the Eurogroup president said, "Among the steps that will be considered in 2018 are caps and deferrals on interest rates as well as the return to Athens of profits from Greek government bonds held by eurozone central banks."

So it will be another round of the infuse-Greece-with-money-and-promptly-drain-it-again doom loop of the last few years. Then some more debt-relief-mumble in 2018. This is obviously nowhere near equal to the scale of the challenge as the IMF described it."

May 26, 2016

What next for Greece? Loan averts crisis but debt still huge - Washington Post

"After an 11-hour meeting lasting into the early hours Wednesday, European officials agreed to unfreeze more rescue loans and to consider ways to lighten Greece’s debt load. That means Greece stands to get 10.3 billion euros ($11.5 billion) from its bailout loan package from European governments and the International Monetary Fund.

"Guntram Wolff, director of the Bruegel think tank in Brussels, says it’s positive that the eurozone governments agree Greece’s financing needs — both borrowing to cover maturing debt and new borrowing — should stay below 15 percent of annual economic output.

...The money means Greece can make debt payments coming due in July.

...“Basically, the next two years we continue to see a story where Greece will have to continue to do a significant fiscal effort to achieve their target, and it’s going to be bad for growth and bad for an economy that’s already in recession and in deep trouble.”

Tsipras, the big winner of the Eurogroup

"The big winner of the Eurogroup agreement Tuesday is the Greek Prime Minister Alexis Tsipras, who managed again to shield the electoral base of the cuts, which have long been the IMF insists that they are necessary to put the finances of Greece sustainable basis, said the Simon Nixon at the Wall Street Journal

....The agreement is also a partial victory for the German Finance Minister Wolfgang Schaeuble. It is true that now Schäuble will have to pass a red line, asking the Bundestag to release additional rescue loans of 10 billion. Euros to Greece without the full participation of the IMF program. But at least managed to achieve postponing detailed decisions on debt relief until after the German elections in 2018..."

EU officials hail deal to release billions in bailout loans for Greece -UK Guardian

"...debt campaigners criticised the lack of progress on debt relief and called for a significant cancellation of Greece’s liabilities. Ratings agencies Moody’s and Fitch, while welcoming the news, warned of the problems Greece faced in implementing the proposed reforms. Markets reacted well to the deal, which could pave the way for the European Central Bank to start buying Greek debt once more as part of its quantitative easing programme."

Greece's New Bailout Cash: A Bandage on a Deep Economic Wound-US News WR

"Greece's creditors, namely the German government and the IMF, have been hung up for months on how to handle the precarious situation. The indebted country will need to fork over billions of dollars in bailout repayments in June and July, but the Greek government's coffers aren't believed to be nearly full enough to meet all of those deadlines without a little extra help.

.....The IMF, in a report earlier this month, also estimated the Greek unemployment rate was hovering at "around 25 percent," or about five times the rate seen in the U.S. And even if Greece meets the IMF's admittedly lofty growth projections – under which its economy would expand at an average rate of more than 2.8 percent between 2017 and 2020 and more than 1.7 percent between 2017 and 2030 – the country's unemployment rate is still expected to hover around 12 percent by 2040. It won't be until 2060 that the rate should come down to about 6 percent, barring any kind of significant economic downturn between now and then."

The return of the Parthenon Marbles is a matter of cultural morality -Athens News Agency

"Acropolis Museum, Professor Dimitris Pantermalis gave an interview to ANA-MPA ..."What is important is the constant struggle, the constant vigilance and keeping the issue constantly alive. And the issue is kept alive, to be realistic. I am optimistic. But it is also a matter of time," he underlined. Asked if he believed that the British Museum could return the sculptures, he replied: "Yes, but it is not so simple. They are not going to tell us 'take them back.' We should negotiate; we should give them something in exchange. For example, the idea of periodic exhibitions of Greek works to the British Museum is not bad. Good ideas exist, but it takes time to implement them."

May 25, 2016

The very 2012-like Eurogroup deal and the Draghi factor - Capital GR

"...under immense pressure put on both the IMF and the Eurozone by the G7, both sides took a step back and made commitments for a resolution of the debt issue, under the condition of Greece fully achieving the primary surplus target.

The obvious backtracking on behalf of the IMF came in the shape of accepting a package of measures by the Eurozone that, contrary to the Fund΄s requirements, does not bring front-loaded debt relief, but rather tackles it in three distinct stages (short, medium and long term).

The Fund commited to participating in the program, so that the Eurozone countries would be able to pass the disbursement of the 10,3 billion euro tranche, in their respective parliaments."

Why the Deal Is Good Enough for Now - WSJ

"Greece is back in the European fold—for now, at least.

The late-night agreement struck with eurozone finance ministers and the International Monetary Fund in Brussels under which €10.3 billion ($11.5 billion) will be disbursed should remove the risk of a rerun of 2015’s summer crisis.

A further step for the ECB would be to include Greek bonds in its asset-purchase scheme, for which eligibility as collateral is a prerequisite. But this would be more symbolic than anything else: under the rules for quantitative easing the central bank cannot undertake purchases that would mean it held more than 33% of an issuer’s bonds."

Greece just made a 'major breakthrough' in solving its debt crisis - BusinessInsider

"Late on Tuesday night and into Wednesday morning, over nearly 12 hours of talks, representatives from Greece, the International Monetary Fund, and the Eurogroup agreed upon a series of loose measures to help restructure Greek debt when the country's bailout deal concludes in 2018. As it stands, that bailout is worth €86 billion (£65.4 billion, $95.8 billion).

...Dijsselbloem was not the only senior figure in the discussions to strike an upbeat tone about the restructuring, with the IMF's Europe chief, Poul Thomsen, saying the fund had made an "important concession" and everyone involved in the talks had "shown flexibility."

May 24, 2016

Athens stocks jump to 650 points -Capital GR

"The General Index rose by 1,50% and settled at 649,1 points, while hovering to over 650 intraday. Turnover was at 170,29 million euros with transactions of 301,8 million shares. Blue chips jumped by 1,92% to 185,67 and the mid-cap enjoyed gains of +0,52%. More importantly, bank stocks rose by 5,04%, to 61,88 units."

Greek bailout without IMF 'not an option,' says Dijsselbloem - eKathimerini

“It’s not an option to go on without the IMF,” [Eurogroup head Jeroen Dijsselbloem] said as he arrived for talks with eurozone finance ministers to end a row between Europe and the International Monetary Fund over how to proceed with Greece's 86-billion-euro ($96 billion) bailout.

“There is a reason to look at debt relief because the debt is very high and there will be some problems in the future, I think the debt analysis shows that,” Dijsselbloem, who is also Dutch Finance Minister, added."

MPS approves new cuts to unblock bailout funds - Hiru News

The Greek parliament has passed new budget cutsand tax rises two days before a euro-zone meeting expected to unblock much-neededbailout funds.

Lonely Planet names Peloponnese top European destination in 2016 - eKathimerini

“Now more than ever the Peloponnese is the perfect destination for absorbing traditional Greek life, compelling history and inspiring landscapes,” Lonely Planet says on its website."

Greece moves thousands of migrants from Idomeni camp - BBC

"Only journalists from Greek national television are being allowed to film the clearance operation. Others are being kept back at a roadblock along with some aid workers and a group of children's entertainers who used to organise activities at the camp. When the buses pass us, clowns jump up and down and dance at little refugee children who wave back.

Last week when we visited Idomeni camp, many expected this clearance operation. But they were reluctant to leave their location by the border gate with Macedonia, even though it has remained firmly closed since March."

Greece starts clearing out thousands from makeshift migrant border camp - Reuters

"Thousands of migrants and refugees are being cleared out of the Idomeni camp on the Greece-Macedonia border where they've been stranded for months waiting for passage to the rest of Europe."

Egypt prosecutor seeks data from France, Greece on crashed plane - Himalayan Times

"Egypt’s public prosecutor formally requested data on the crashed EgyptAir plane from France and Greece on Monday, as the victims’ remains began arriving at a Cairo morgue ready for DNA testing."

May 23, 2016

IMF tells EU it must give Greece unconditional debt relief - Guardian UK

The International Monetary Fund has called for “upfront” and “unconditional” debt relief for Greece as it warned that without immediate action the financial plight of the recession-ravaged country would deteriorate dramatically over the coming decades.

...In its debt sustainability analysis (DSA), the Fund insisted it would provide support for the third Greek bailout since 2010 on two conditions. It said it was “critical for the credibility of the DSA that it be based on ambitious but realistic policy commitments from the authorities”. However, it added that “front-loaded debt relief, to be fully delivered during the programme” was “equally important”.

May 22, 2016

Polling stations for Cyprus' parliamentary elections open in Greece - Famagusta

"Cypriot nationals began voting on Sunday in Greece to elect the 56 members of the House of Representatives of the Republic of Cyprus, at six polling stations set up in Athens, Thessaloniki and Patra. No problems were reported."

May 20, 2016

IMF urges fixed rates for Greece, longer grace period, maturities - Yahoo Finance

"The document, entitled "Greece: Debt Sustainability Summary Note" is the IMF's input into a discussion on how to restructure Greek debt to make its servicing manageable for Athens and not too big a burden on the economy.

"The first key objective is to maintain gross financing needs well within the 15-20 percent of GDP thresholds... throughout the projection period," the document, seen by Reuters said. The projections go as far as 2060."

May 19, 2016

Greece Struggles to Return Migrants Under EU-Turkey Deal - WSJ

"Europe’s plan for deterring refugees and migrants from crossing the Aegean Sea has hit a snag: Greece is struggling to return recent arrivals to Turkey as the policy requires, early data show.

...Meanwhile, Greek authorities have so far rejected only about 30% of the asylum claims they have considered, bucking expectations that nearly all claims would be dismissed on the grounds that Turkey is a safe place for the migrants."

How Europe put Greece on permanent life support - This Week

"In July of 2015, the IMF surprised observers with a report essentially arguing that Greece's long-term fiscal position was unworkable unless the bailouts were massively increased, or Greece's debt was reduced and restructured. It was ignored. And, wouldn't you know, a year later Greece's situation is still unworkable.

...At the end of the day, an actual recovery for Greece looks like this: Its economy would create enough food, clothes, housing, medicine, and other goods and services to give everyone in the country a decent and at least somewhat equitable standard of living. And in the course of producing all that stuff, it would also give the vast majority of jobseekers some sort of employment. How money fits in here is equally simple: It is what is traded back and forth in exchange for all that productive work.

What austerity does is drain the Greek economy of so much money it can't maintain that circulation."

The experiment - eKathimerini

"The IMF proposal to extend the grace period through 2040 and to set the interest rate at 1.5 percent for 30 or 40 years, sound like a fairy-tale scenario to Prime Minister Alexis Tsipras and the coalition government. Berlin, of course, reacted just as was expected.

...As an experiment, Greece has played its role by transforming an extreme government into a systemic partner within Europe. The experiment for surmounting the differences between the IMF and Berlin over the Greek debt is something quite different and all we can hope is that it doesn’t all blow up in our faces."

Threat of Grexit still looms, Greece΄s return to markets still far away - Capital GR

"The possibility of Grexit remains – it never went away actually. Greece went so much in the background after last August’s agreement, and it is worth reminding people that a lot of issues remain and a lot still needs to be passed through parliament, plus there is a very weak government majority.

...The integrity of the euro, from a political perspective, is very much at stake and we are not done with the existential problem of the euro and how Greece plays a role in it...

We could be plunging back into more turmoil and uncertainty from both a Greece’s perspective and from a European perspective, because if you look at the overall European situation, it is quite tense: we have the migration crisis, Brexit, Spain elections, Turkey. So, it’s not only about Greece making noise."

May 18, 2016

IMF Proposal on Greece Sets Up Battle With Germany - WSJ

"The IMF is also pressing for Greece’s interest rate on its eurozone loans to be fixed for 30 to 40 years at its current average level of 1.5%, with all interest payments postponed until loans start falling due.

German leaders are confident that the IMF will soften its stand, people familiar with the negotiations say. The Washington-based fund is ultimately controlled by its majority shareholders, European Union governments and the U.S., who want a deal in the coming weeks that keeps the IMF on board and Greece afloat. But Berlin officials also know they will have to offer the IMF major concessions, engaging in a long-delayed debate about Greece’s debt burden that Germany previously claimed wasn’t needed.

... A compromise between Germany and the IMF is needed by June, when Greece is in danger of running out of money to pay its bills, and definitely by July, when major debts fall due."

Schaeuble said to reject IMF proposal on Greece -eKathimerini

"According to a report in Germany's Suddeutsche Zeitung on Wednesday, Schaeuble has ruled out freezing interest payments as long as he is finance minister.

The German parliament should not be asked to approve changes to an agreement that was reached after much deliberation last summer, Schaeuble said according to the newspaper."

May 17, 2016

IMF Proposes Eurozone Debt Relief for Greece Until 2040 -WSJ

"The International Monetary Fund is pressing the eurozone to let Greece skip paying interest or principal on bailout loans until 2040, say officials familiar with the talks.

...The IMF’s proposal, presented to eurozone governments late last week—and described by one European official as “hardcore, really”—would keep Greece’s annual debt-service needs below 15% of its gross domestic product, under the IMF’s relatively pessimistic forecast for Greece’s long-term economic trajectory.

Eurozone governments, led by Germany, are reluctant to make such major concessions on their loans to Greece, which currently total just over €200 billion ($226 billion) with around another €60 billion to come under the latest Greek bailout plan."

Greece: A bad deal with the country on the brink - Capital GR

"Four international experts who have been following the eurozone financial crisis, comment on the latest deal between Greece and its creditors, pointing out the extremely steep primary surplus targets as well as debt relief, both issues contested among creditors, mostly between Germany and the IMF. It is pointed out that a successful completion of the bailout review could have a positive side effect since it will be the final criterion upon which the ECB can decide on whether to include greek bonds in the quantitative easing program. Even so, more pain for Greece is expected as we move forward, in an issue that is as much political as it is one of public finances.

Federico Fubini: Everybody knows that the unsustainable surplus target are being pushed for Germany΄s internal politics..."

Greece wants Eurogroup to focus on short-, medium-term debt relief on May 24 -Reuters

"Greece expects euro zone finance ministers to focus on short- and medium-term debt relief for Athens when they meet on May 24, government spokeswoman Olga Gerovasili said on Tuesday.

Finance ministers from the shared currency bloc are expected to assess next week whether Greece qualifies for new bailout loans and to discuss debt restructuring. Athens is hoping that reprofiling its mountain of debt will help it regain market access and convince its public that the six years of austerity they have endured are beginning to pay off."

Will Greece Get 25 Years of Interest-Free Debt? - Barrons

"As Greece stares down a July debt-payment deadline, the International Monetary Fund is pressing for debt relief beyond what leaders in Germany and elsewhere are willing to allow."

Work begins on Greek leg of Trans-Adriatic gas pipeline - eKathimerini

"TAP is 870 kilometres long, running from Komotini in northeastern Greece to Puglia, Italy. It will cover 215 kilometres across Albania, 105 kilometres under the Adriatic and a final eight kilometres in Italy. Tsipras said the pipeline would usher Greece and Europe into a "new era." "TAP is one of the greatest direct foreign investment projects carried out in Greece," Tsipras said at the ceremony held in Thessaloniki."

May 16, 2016

Greek parliament to vote on bailout reforms on Sunday - Channel Asia

"The bill would increase value added tax by 1 percentage point to 24 percent, raise tax on fuel, tobacco and alcohol, liberalise the sale of banks' non-performing loans and detail the set-up a new privatisation fund, government officials said.

..It will also include details on a contingency mechanism to impose tighter austerity measures, which will be activated only if Greece misses its fiscal targets, the officials said on Monday."

Why so many of Greece's tech firms may abandon its shores - ZD Net

"The biggest problem is taxation, linked with the attitude of the state towards entrepreneurs. The Greek state considers entrepreneurs as de facto tax evaders. We even got taxed on a loss, because according to the state we must have somehow found that money."

..."For tech companies, tax instability is the first reason to relocate, followed by high taxation," she [Anna Zilakou] says. Next in line is a lack of access to funding, followed by bureaucracy. All these issues outweigh the country's assets, which include high-quality and reasonably priced skills, she says."

May 14, 2016

EuroWorking Group to meet today to finalise measures - Capital GR

"The Euroworking Group will meet today in Brussels (in person, not through teleconference) in an attempt to finalise the measures included in the prior actions, namely additional fiscal parametric measures (of €1.8bn, mainly indirect taxes), NPLs, the new privatisation fund and the contingency mechanism."

Greece wants to tap bond markets next year, says debt relief will help - Economic Times

"Cut off from global credit markets since 2014, Greece signed up to a third multi-billion euro bailout last July.

..."I estimate that a total of 9 billion-12 billion euros could come into the real economy within 2016, which along with other factors will help economic recovery," [Deputy Prime Minister Yannis] Dragasakis said.

...Tsipras's leftist government hopes to conclude a review of its progress on reforms at a meeting of euro zone finance ministers on May 24, a step that would unlock funds in time for upcoming repayments to the European Union and the International Monetary Fund (IMF) as well as state suppliers. "

Revealed: Greece Could Scupper TTIP In Argument Over Feta - Brietbart

"A document from the country’s Ministry of Economy, seen by, says Athens is not optimistic about the deal’s future due to America’s stance on so-called “geographical indicators”.

These restrict the use of a word to a product from a specific place. Currently, EU law says only cheese made from sheep’s milk, or a mixture of sheep’s and goat’s milk, in Greece can be described as “feta”.

However, numerous cheeses made elsewhere in a similar method can also be marketed as “feta” in the United States. The Greek government wants to stop this, as it believes it harms its own feta industry."

A hashtag does not change make - eKathimerini

"The only kind of “normality” that has been maintained and continues to be nurtured during these six years of crisis is the constant confrontation between whichever government is in power and the main opposition party...

...In the past few days, however, we saw this interminable confrontation transferred in codified version to the Internet, where it was expressed under the hashtags #fygete (get out), representing conservative New Democracy, and #synelthete (get a grip) on the SYRIZA side.

...What can we conclude from this brief episode? That when technology is put to the service of an old political system, it simply intensifies the feeling that the system is tired and obsolete."

May 13, 2016

Refugee arrivals in Greece drop 90% as Syrians remain stuck in Turkey - dfgh

"Fewer than 2,700 people entered the Greek islands in April, with Syrians accounting for the majority of asylum-seekers trying to get into Europe.

Frontex chief Fabrice Leggeri said that "the drop in the number of arrivals on the Greek islands was dramatic."

Under the deal with Turkey, all refugees who cross to Greece illegally across the sea, including Syrians, are sent back."

Amazon 2016 Lonely Planet Guide Greece


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