Papandreou tells the squabbling politicians of PASOK and New Democracy that “If we do not put the country in order, if we do not create a sense of justice, if there is no respect for the law, they will chase all of us away with stones, and rightly so,” he told Parliament. Article at the New York based Greek News

Tension between the Turk and Greek military continues: Turkish military jets have flown dangerously low over a Greek frigate in international waters in the eastern Aegean Sea

June 7, 2010

Greece moves toward major changes

"The great loneliness" of the predicament in Greece

Kathimerini takes another swipe at union behavior

Small euro 'recovery'

June 6, 2010

Where's the Greek debt hiding?

Greek privatization "Fire Sale" shopping list

The "new breed" of unionist

Kathimerini continues to hammer at the leadership of Greek unions who seem blind to current economic realities:

"...many of these “professional” unionists have blatantly flouted the right of workers to choose whether or not they will participate in strikes over issues that may or may not have any direct impact on them. They have also insisted on taking an extreme position on outlandish demands that can only ensure more problems for businesses and, by extension, further cutbacks in staff."

Can the Drachma save Greece?

Related: The drachma

June 5, 2010

Greek military spending to halt

June 4, 2010

Greek sailor union to press forward with blocking Piraeus tour ships

Young Greeks edging toward emigration

EU bailout plan under investigation

Strikes continue: Hungary looking like the "next Greece"

Roubini: Greece must restructure

June 3, 2010

Olympics in Athens the surge point toward Greek insolvency?

June 2, 2010

More bad news

Manufacturing contracts even faster in May
Greece issuing new bonds
Forbes: Government employee unions bar the path out of the Greek mess
Austerity measures not producing results yet; vow to not leave eurozone

June 1, 2010

Learning the lessons about sovereign debt

ARCHIVE PAGE - MAY 19 TO MAY 31 2010

ARCHIVE PAGE - MAY 1 TO MAY 18 2010

ARCHIVE PAGE - APRIL 2010

ARCHIVE PAGE - DEC 2009 - MARCH 2010

May 27, 2010

Flaws in euro being exposed by crisis

March 22, 2010

The Political Costs of the Debt Crisis in Greece

Financial Edge - Writer Jonas Elmerraji on the genesis of the Greek crisis and how many other countries - - particularly the United States and the EU on the whole - - are facing the same roadblocks dead ahead:

" it's important to understand how the EU's sovereign debt crisis started, and which countries could be next in line with a crisis of their own. The main contributor to Greece's financial straits shouldn't be all that unfamiliar to scores of Americans who hit tough times in 2008. After all, it's the same problem - spending. Like consumers who became overleveraged and spent more than they took home, Greece undertook a policy of deficit spending to support its vast social programs. These programs, like ours here at home, ballooned out of control as the economy soured.

To finance its overspending, the Greek government borrowed, issuing debt at an increasing rate. But borrowing only lasts for so long. As lawmakers in Athens increased the country's debt load, anxious investors effectively increased the cost of borrowing for Greece by widening bond yield spreads and increasing the risk premium for credit default swaps on Greek debt.

Put more simply, as Greece continued to borrow at high levels, the cost of borrowing money increased too, making each dollar Greece borrowed cost more in interest than the last."

Elmerraji goes on to describe the unpleasant moniker fixed to the countries in the EU which are staring down the barrel of the debt cannon:

"The situation in the EU would be largely contained if Greece were the only country affected right now by staggering debts and deficits, but it's not. Portugal, Italy, Ireland and Spain are also at risk of serious economic consequences right now, and investors are rightfully concerned. The five countries are sometimes referred to as the PIIGS."

Will the other EU nations hand over the money to keep the Greek debt crisis under control? Supporting a bail-out is an unpopular position, so in order to do this the various leaders of Germany and France would have to try and camouflage such funding. Particularly vulnerable to this is German Chancellor Merkel:

"European leaders sent out conflicting signals at the weekend over aid to Greece, with Germany's Angela Merkel urging Athens to solve its debt problems alone and Italy's Silvio Berlusconi strongly backing EU support.

The 16-nation euro zone is divided over whether and how best to provide financial help to Greece, whose struggles to cope with soaring debt and deficits have plunged the currency bloc into the deepest crisis of its 11-year existence.

Chancellor Merkel, who faces a key state election in May, is keenly aware that the German electorate overwhelmingly opposes a bailout for Greece and has hardened her line against the EU making a concrete pledge of financial support. "

Above excerpt from Reuters article from yahoo.com. Another question is whether the Greek government is able to resist the pressure in Athens to go even further into the hole with more debt obligation in order to raise money to stave off the pressure coming from unions. Austerity measures are generally accepted if you see the polling for the population as a whole, but individual groups are screaming when it is their particular funding getting the axe. What will be the solution the Papandreou government will link its political future to?

"The Greek government needs to reach a decision on whether it will attempt to borrow without the support of international markets, even if that means being burdened with a very high rate of interest, or whether it will lodge a formal request for support either from the European Union or the International Monetary Fund or both."

Above from the editorial at ekathimerini. Elsewhere at ekathemerini is Nikos Konstandaras on what the crisis reveals about the EU in general:

"A few weeks ago, there were serious concerns that the good relationship between Greece and Germany would be the greatest victim of both the Greek economic crisis and the extreme reaction on the part of German citizens and news media to any talk of their country contributing to the support of the Greeks. As the crisis drags on, however, and questions linger about how the Europeans will show their support for Greece in practice, an even greater danger to Europe (than that of Greek profligacy) is becoming evident: Germany appears to be at a loss about how to handle its role as one of Europe’s leading powers. The Greek crisis – which, we repeat, is solely of Greece’s own doing – has posed a difficult challenge to Europe regarding its future but it has also put a spotlight on the cracks in the European construct.

It quickly became evident, though, that the economic and political union is not only cracked – its very foundations are rotten. This has not been caused solely by the obvious problem that an economic union was created ahead of a political one but by an even more basic fault: Neither the structures of economic cooperation nor the mechanisms for resolving crises had been determined in advance. And so, when Greece came along like a mild earthquake, it shook the euro castle to its core, revealing that the single currency had been built solely on good intentions and high hopes..."

March 12, 2010

Dozens arrested in violent clashes in Central Athens - Xinhuanet Chinese news

"At least two people were injured and dozens were arrested by riot police officers during the clashes that moved from Syntagma Square in front of the parliament to Omonoia Square.

Dozens of hooded young men holding crowbars and bats broke more than a dozen shop windows and set cars and dustbins on fire. Similar scenes also occurred in other parts of Athens.

Police responded with tear gas and stun grenades.

Greece's two umbrella unions, private-sector GSEE and public-sector ADEDY, called the third general strike in a month to protest spending cuts and increased taxes. The two unions represent more than five million workers across the country.

"It's so bad, when a small minority of troublemakers get all the attention, while people should focus on the large participation of Greek citizens in the strike," 55-year-old Kleopatra Anagnostopoulou told Xinhua."

Greek jobless rate eases but recession entrenched - Reuters.com (also see Reuters 'timeline' of events in Greek exonomic news since PASOK went back into office in November 2009)

Police clash with protesters as Greeks fight cuts - Yahoo news / Reuters

"Everybody is watching Greece to see the depth, intensity and sustainability of protests," said Theodore Couloumbis, deputy head of the ELIAMEP think-tank and a professor of international relations at the University of Athens.

"These protests are more than likely similar to the farmers' blockades earlier this year, which ran out of steam after a while," he said.

Participation in the Athens marches was slightly higher than in the previous nationwide strike on February 24 but not huge by Greek standards and much smaller than a 100,000-strong march against similar measures in the Irish capital last year.

"People understand we are going through difficult times," a senior government official said. By late afternoon, the streets had largely returned to normal.

Making money from the Greek disaster - New York Times:

"Over the past decade, Greece took full advantage of a strong euro and rock-bottom interest rates to fuel a debt binge by the country's consumers and its government. When the global economy crumpled, the stage was set for a financial crisis.

Its trigger was Greece's admission in late 2009 that its government deficit would be 12.7 percent of its gross domestic product, not the 3.7 percent the previous government had forecast earlier. Investors were stunned. In early 2010, the fears grew into a full-fledged financial panic, as investors questioned whether Greece's Socialist government could push through the tough measures it has promised to reduce its budget deficit. As the fear spread to Portugal and Spain, leaders of Europe's more affluent countries like Germany and France, worried about lasting damage to the euro, stepped in with a pledge to defend the currency but stopped short of an outright bailout for Greece.

While talks continued among European officials and the International Monetary Fund on additional steps to reduce the country's $400 billion debt, a series of 24-hour strikes made clear the depth of opposition to the austerity measures Greece is trying to impose.

As part of Greece's austerity plan, the government in early March 2010 approved a round of tax increases and pay cuts for public employees. The steps were met with a series of angry but peaceful protests by civil servants and others, but they allowed Athens to take the crucial step of selling a new round of bonds worth 5 billion euros. The sale went more smoothly than expected, although Greece is still paying twice the interest rate that Germany does, apparently because investors are convinced that Greece's richer euro partners will come to its aid."

The Greek "Reality": Back to earth with a bang - ekathimerini English section

"Wednesday, March 3, 2010, will go down in history as the day that a modern Greek government made a conscious effort to bring the country and its economy in line with reality. It is most appropriate that the unprecedented step was taken by a PASOK government, headed by George Papandreou, as it was under PASOK, in its first term in power under Papandreou’s father, Andreas, that Greece slipped the bonds of economic reality and began to live way beyond its means. But the New Democracy party, with which PASOK has alternated in power since the restoration of democracy in 1974, is no less guilty of bloating the public sector and buying “social harmony” by giving workers whatever they wanted, leading to a relentless rise in wages and pensions irrespective of what the country produced.

As deficits and the country’s debt burden grew, governments just kept on borrowing – borrowing to meet their obligations in terms of wages and pensions, borrowing to import more than Greece exported, borrowing to pay off previous debts. There was no effort to break the borrowing habit. In addition, membership of the eurozone brought monetary stability and historically low interest rates, prompting a massive boom in mortgages and consumer loans, which hid the economy’s underlying weaknesses.

The late Andreas Papandreou’s strategy in the 1980s was to give the disenfranchised, who formed the bulk of PASOK’s voters, a shot at living like the middle class. If this meant throwing European assistance and subsidies around like political favors and giving pensions to people who had never contributed to social security (such as farmers), then so be it. At last, all those who had been shut out by the right-wing establishment which triumphed in the Civil War in 1946-49 – and which was thoroughly discredited by the dictatorship of 1967-74 – would get to share in the wealth of the nation.

The fact that this new middle class was founded on wealth that the country was not producing meant that the economy broke free from all logic and went into its own orbit. PASOK established the National Health System and poured money into education but it also undermined the gains by destroying any semblance of hierarchy, accountability and recognition of merit in the public sector. "

March 2, 2010

Is Greece now a protectorate of the EU?

EU Power

The EU argument is that the insolvency of one member threatens to crash the whole system for all, and with other countries approaching the same instability as Greece (Portugal and Spain specifically) getting Athens back on its feet (or at least its knees) is a pressing matter. Disciplining all three at once is going to be more than their system can support. So the May 15 deadline on Greek implementation isn't arbitrary.

Meanwhile, market speculators are making money off of the Greek debacle (something noted by Greek news writers and by Papandreou himself). This is setting the stage for a whole new round of regulatory controls within the EU:

"If the Greeks hold on to the strict parameters and the markets continue to speculate against Greece, we will not let them just march through," Jean-Claude Juncker, Luxembourg's prime minister, told Germany's Handelsblatt newspaper. "We have the torture equipment in the cellar, and we will show them if needed."

From the Financial Times online

Can the EU financial system absorb strangulation of some of its most basic investment methods? Financial collapse could force the EU toward command-and-control procedures that have been the nightmare of the more libertarian minded of EU observers.

The Future of the West?

I have heard and read repeated use of Greece as an example of the entire "European Future," and the especially the future of the United States, heavily indebted to China. But the socialist Greek system isn't the same as the one in Washington DC. But there is one feature shared by all of the countries either in crisis or scheduled to fall into financial crisis: heavy debt spending. Falsifying the numbers seems to have been the final straw in the struggles between Greece and the EU. But who is going to "pull rank" on the United States? Or even the larger EU states?

More News Updates:

Swapping Blame In Athens Once again, national governments would rather vilify financiers than face up to their own mismanagement. - Wall Street Journal: (Contains this humor: "At this point, "news" about Greece's manipulation of its budget and deficit figures is about as shocking as the fact that there was gambling in Rick's cafe.")

New Austerity Measures - Wall Street Journal: "The Greek government is expected to outline a new austerity package of about €4 billion ($5.42 billion) on Wednesday in an effort to cut its huge budget deficit by four percentage points this year, government officials said Tuesday."

Wall Street Journal has a whole page section devoted to the Greek debt crisis.

Feb 25, 2010 News Updates

Greece Paralyzed in nationwide strikes - Wall Street Journal

Currency Swaps allowed Greek government to hide billions in debt - Financial Times Online

EU threatens to remove Greek sovereignty over tax and spend policies - UK Telegraph

Fuel shortages follow countrywide strikes against austerity measures - Yahoo news / AP

POLL: 75% of Greeks against strikes until crisis over - Reuters

Greek welfare state in ruins - Washington Post opinion piece by Robert J. Samuelson:

"What's happening in Greece speaks to two larger issues affecting hundreds of millions of people everywhere: the future of the welfare state and the fate of Europe's single currency -- the euro. The meaning of Greece transcends high finance.

Every advanced society, including the United States, has a welfare state. Though details differ, their purposes are similar: to support the unemployed, poor, disabled and aged. All welfare states face similar problems: burgeoning costs as populations age; an over-reliance on debt financing; and pressures to reduce borrowing that create pressures to cut welfare spending. High debt and the welfare state are at odds."

Feb 13, 2010

Why contain Greek crisis?

From the Wall Street Journal: Why did Europe blink? By Simon Nixon:

"The decision by European leaders to offer Greece support, albeit unspecified, likely owed more to fears for the weakened European banking system and its ability to supply credit to a fragile recovery than fraternal concern for a struggling neighbor.

Shares in euro-zone banks slumped as the sovereign-debt crisis unfolded, with Greek banks tumbling more than 50%. Aside from the political imperative for leaders to make a statement, the fear of contagion to the wider euro-zone economy was real."

Part of the appeal of the EU system was that it would lift the smaller economies and streamline growth for every member by eliminating barriers. The current situation shows how that can work in reverse. What was only a theoretical downside a few years ago is becoming unpredictable but real.

Jan 30, 2010

Pressure on Greece to 'solve its own problems": May 15 deadline for Greece to impose reforms

UK Times Online mentions that the pressure between the EU and Greek officials is getting higher. With an imposed deadline of May 15, and the leaking of documents to demonstrate that EU officials are pushing for bigger cuts than the Prime Minister Papandreou was hoping to have to make:

" European officials will this week set the Greek government a four-month deadline to impose a stringent regime of budget cuts and financial reforms.

Leaked documents have revealed Brussels will publish a plan for Greece this week, under the headline “Urgent measures to be taken by May 15, 2010”.

The package includes demands to “cut average nominal wages, including in central government, local governments, state agencies and other public institutions”. It also suggests new taxes on luxury goods and proposals to speed up tax payments by the self-employed.

Greece has been under pressure from international investors over fears it will default on its debts, precipitating an unprecedented strain on the euro. Fears of a Greek debt default have spread concerns that other EU countries could face problems — including Ireland, Spain, Portugal or Italy.
Related Links

Richer eurozone countries such as Germany and France would be expected to bail out Greece in the worst-case scenario, to prevent a disastrous crash in the value of the single currency.

Officials in both countries have been attempting to play down such speculation, heaping further pressure on Greece to resolve its problems itself."

The last week bond plunge had Papandreou declaring it a covert attack by unnamed parties on Greece and the EU in general:

"The Greek Prime Minister accused speculators of targeting the country as a “weak link” in the euro yesterday, as the value of Greek bonds plunged on financial markets. The risk premium on the yield of Greek government debt rose to a new record of 4.05 per cent above the yield on the benchmark German bund.

Speaking at the World Economic Forum in Davos, George Papandreou said: “This is an attack on the eurozone by certain other interests, political or financial, and often countries are being used as the weak link, if you like, of the eurozone.”

Kathimerini is saying Papandreou is coming down to having one last chance:

"Papandreou has one last chance for decisive action. In this, he will have the backing of the conservative opposition and a significant section of the voting public, which is prepared to make the necessary sacrifices for the sake of the country."

Recession "uncovering Greek economic cracks"

Jane Foley at Reuters Uk "Great Debate" flips over a few rocks looking at the dilemma facing Greece as the economic and budget crisis gets closer to reaching a climax. "Bailout" has been proffered in many places as Greece's 'get out of jail (almost) free' card, in fact Foley says that "German and French pride" virtually requires that.

Is the alternative that Greece will leave the euro behind and then devalue a reborn drachma?

"What makes Greece different is that it is highly questionable as to whether the electorate have the stamina to suffer reform. The farmers have this month been blockading roads; the risk of rising social discontent is high.

Worsening the hand of the Greek government is the fact that tax avoidance is high. If yields continue to rise, Greece may begin to see appeal in the re-establishment of a very weak drachma. It is exactly this risk that will force the authorities within Germany and France to work out a bail-out for Greece.

If it was just down to economics than the lack of budgetary rigour would probably have kept Greece out of EMU in the first place. The fact is that EMU was always more about politics than economics and it is this reason which will force the grandfathers of EMU to protect their system and bail out Greece.

They will of course make Greece squirm first; lessons have to be learnt and pledges have to be made. Greece may be given certain goals which will have to be achieved before rewards are made. But the fact is that if Greece exits EMU, the whole system could topple. German and French pride is not about to allow this to happen. "

Official Greece web sites

Hellenic Republic Official Website [Greek]

Greece Civil Protection Agency [Greek and English]

National Organization for Medicines in Greece [Greek]

Hellenic National Public Health Organization [English]

City of Athens [English] City of Athens [Greek]

Greece Certificate of Movement download forms coronavirus shut-down [Greek]

Greek Employee Support Link Greek Government [Greek]

Greece's Golden Visa program

Advertisement: I am an Amazon affiliate

Greece Travel 2024

NEWS ARCHIVE - JULY 2010

July 31, 2010

July 30, 2010

July 27, 2010

July 26, 2010

July 20, 2010

July 19, 2010

July 16, 2010

July 15, 2010

July 14, 2010

July 12, 2010

July 10, 2010

July 8, 2010

Pension reform passes Greek parliament

Strikes shut down country early Thursday

Protesters losing support

Default needed for Greece (and European Banks): Globe & Mail

July 7, 2010

Kathimerini continues hammering Greek unions

Unemployment in Greece to go to 14.3% in 2011: OECD

"Not too late for Greece"

EU Report: Greece "on track"

"Greece Unbound"

July 2, 2010

Greeks pay average of €1,671 per bribe for public services: costs nation €800 million a year

More strikes set for July 8

More about sovereign debt default

Charts of Doom

"Protect tourism"

July 1, 2010

June 29, 2010

June 28, 2010

Greek default contracts hit high of 1,125 on June 25

Greece to issue T-Bills mid-July

Market test: could be a "good idea" or could "end in disaster"

"Kleftes"

June 27, 2010

Papandreou: Vote for the pension reform or I will call for a general election

IMF: Greek Austerity plan will succeed

June 25, 2010

Government: rumor of islands for sale not true

European bank bailout needs €2 Trillion Euros?

Capital to asset reporting 'deeply unreliable'

Talks of Greek default refuse to go away

Bomb kills one at minister of public order in Athens

June 23, 2010

Pension plans and holiday pay back under the knife

Athens trying to stabilize tourism drop to single digits

How to rescue Greece: return to 1897

June 22, 2010

400 million euro write-down from Emporiki

New police effort to quell rising crime wave in Athens' historic central area

June 21, 2010

Unions to shut down Pireas on Wed June 23

Migrants leaving Greece, work 'dried up'

Provopoulos: Markets need convincing"

June 20, 2010

June 19, 2010

June 15, 2010

June 14, 2010

Karamalis government warned about economy says IMF

June 13, 2010

June 10, 2010

Numbers continue to crumble on Greek economy: China may bring in $1 billion in investments

June 9, 2010

Various updates: