Greece and the economic crisis 2016

NEWS ARCHIVE - May 13 - May 24

May 24, 2016

"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."

“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.

“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."

"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’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

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

"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

"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

"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."

"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 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."

"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

"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."

"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."

"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 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."

"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."

"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

"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."

"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

"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."

"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. "

"A document from the country’s Ministry of Economy, seen by Euractiv.com, 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."

"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

"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."

NEWS ARCHIVE - May 2016

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