In DC on Monday:
The head of the International Monetary Fund believes Greece will resolve its debt crisis without an IMF bailout, and today dismissed fears that other European nations will be engulfed by the crisis. "The eurozone wants to deal with the problem itself, and I can understand that," Dominique Strauss-Kahn said. "I think they can do it … and we're just here to help."
http://www.guardian.co.uk/business/2010/mar/08/greece-will-come-through-crisis-imf
In Paris on Sunday:
At a joint press conference in Paris, Sarkozy expressed his unequivocal solidarity with Greece, saying that his finance minister, Christine Lagarde, had already drawn up legislation to help the European Union's most indebted member extricate itself from its worst fiscal crisis in decades.
"Should Greece need financial help, the eurozone will stand by it," the French president said. "That's what partners are for."
http://www.guardian.co.uk/business/2010/mar/07/nicolas-sarkozy-support-greek-economy
In Berlin on Friday:
Angela Merkel, the German chancellor, on Friday pledged to do “everything in order to stabilise the euro, our common currency”, after meeting George Papandreou, the Greek prime minister.
http://www.ft.com/cms/s/0/f635351e-287c-11df-a0b1-00144feabdc0,dwp_uuid=2b8f1fea-e570-11de-81b4-00144feab49a.html
Thank you!
The New Athenian started in August 2009 as an experiment in whether an online venue could build up visitors without money or mass advertising. It has been promoted solely through a periodic round-robin email to 1,200 recipients, a few sites that have chosen to link to it and word of mouth.
Your visits to The New Athenian have helped drive the site to its highest numbers yet for the month ending March 7:
935 unique visitors
1,576 visits
2,145 page views
44 countries
1:08 minutes average times on site
46 percent new visits
89 members
Monday, 8 March 2010
Friday, 5 March 2010
Greek protests turn violent
What started as a peaceful protest march turned suddenly into a pitched battle between riot police and a small group of protesters in central Athens. Police say the group emerged from a section of the march sponsored by the Left Coalition, a breakaway communist party that has been accused of giving safe haven to anarchists. The group set upon about a dozen riot police guarding the Council of State, one of Greece’s highest courts. Witnesses say they managed to isolate and badly beat up one officer. They also tore up marble steps for ammunition, and smashed plate glass windows on central avenues. A strike today shut down schools and hospitals, state media, public transport and at least one ministry. Flights were grounded for four hours. Labour unions and left wing parties, responsible for the protests, are scheduling more strikes against what they see as one-sided deficit-reduction measures victimising workers.
View the Irish Times article.
View the Irish Times article.
Thursday, 4 March 2010
New austerity measures bite the Greeks
THE GREEK government says it will effectively axe one in 14 annual salaries from the public payroll and raise VAT as part of an ongoing effort to cut its budget deficit by four points in 2010.
Public servants have gone on strike twice this year, complaining that a 10 per cent cut in their benefits already amounted to the loss of one salary. Yesterday those benefits, which can sometimes double nominal salary, were cut by a further two percentage points. Pensions are being frozen.
Greece has pledged to bring its deficit to 8.7 per cent of GDP in 2010 and was under pressure from the European Union in recent days to make good a €4.8 billion shortfall in its initial plan.
Half of the pain is in public-sector cuts, but the other half is in new revenue. This comes in part from higher value added tax, the top bracket of which now rises from 19 to 21 per cent. Inflicting further pain on household budgets will be a 10 cents a litre hike on unleaded fuel, a 65 per cent consumer tax on cigarettes and a further tax hike on alcohol. Even electrical power will suffer a fee of €5 per megawatt hour.
Preparing public opinion for the latest tranche of measures on Tuesday, prime minister Yiorgos Papandreou said: “We are today in a state of war against the worst-case scenario for our country.”
That scenario, by his description, was a cost of borrowing so prohibitively high that the state would be unable to pay salaries and pensions, which represent 52 per cent of its outlay. “Today, when we borrow €5 billion, we pay €750 million more than Germany does in interest,” Mr Papandreou said. “How can we ever compete with the German economy?”
He is facing increasingly stiff opposition at home, however. These measures would deepen the recession, said conservative leader Antonis Samaras, who rejected the salary cut and VAT and fuel tax rises. He accused Mr Papandreou, who came to power in October, of waiting five months to cut the cost of government.
If he had acted sooner, he said, the cuts would have been softer and less painful. The government’s indecisiveness was expensive.
The governing council of the European Central Bank (ECB) and European Commission chief José Manuel Barroso backed the new measures, each of them underlining the importance of public-sector pay cuts.
In a statement last night, the ECB’s policy-making body said it welcomed the “convincing additional and permanent” measures and said it appreciated that Mr Papandreou’s administration planned to implement them very swiftly.
“Importantly, cutting public expenditure and adjusting public sector wages is a key signal both for the long-term fiscal sustainability and for substantially enhancing the price and cost competitiveness of the Greek economy,” the council said.
Read the full version of this story in The Irish Times.
The full tranche of yesterday's measures is as follows:
1. New revenue
- VAT (or sales tax) rises from 4.5 percent to 5 percent, from 9 percent to 10 percent and from 19 percent to 21 percent, to bring in 1.3 billion euros.
- A series of consumer taxes aim to bring in a further 1.1 billion euros, including:
- 8 cents on the litre for regular unleaded fuel, and 3 cents for diesel (heating oil remains as is)
- Tax on cigarettes rises from 63 percent to 65 percent
- Tax on alcohol rises to 20 percent
- The Public Power Corporation loses its exemption from tax on oil, and a new consumer tax is levied on electric power
- Cars with a retail value above 35,000 euros, pleasure craft, private helicopters, precious stones and metals and furs and leather will sustain a new luxury consumer tax
Total new revenue: 2.4 billion euros
2. New cost cuts:
- Public sector Easter, summer and Christmas bonuses are cut by 30 percent. These three bonuses amount to two monthly salaries, so public servants lose 60 percent of their 14th salary.
- Benefits above salary to public workers are cut by 2 percent, further to the 10 percent cut announced last month
- The salaries and benefits of all employees working in state-owned or state-controlled companies is cut by 7 percent across the board
- Pensions are frozen
- The state will reduce its outlay to the pension funds of the Public Power Corporation (DEI) and the Hellenic Telecommunications Organisation (OTE) by 10 percent
So far, the measures save 1.7 billion euros.
- The public investments programme is cut by 500 million euros
- The public investment programme in education is cut by 200 million euros
Total savings: 2.4 billion euros
Key 10-year bond sale goes well
Greece's sale of a 5 billion euro bond issue was going well on Thursday, a day after the austerity measures were announced, with the FT reporting an oversubscription of 2 billion euros.
Ireland overhauls pensions radically
Ireland has just announced an overhaul of its pension system that includes many of the ideas currently being discussed in Greece. The retirement age will rise to 66 in four years' time, and eventually to 68. Pensions will be calculated on average career earnings, not just the last few years of work. And young entrants into the labour market will be obliged to participate in a second pillar scheme in the private sector, where they will contribute four percent of salary, their employer two percent and the government two percent.While the state pension plan will remain a defined-benefits plan, with the state guaranteeing 35 percent of average industrial earnings, the private scheme will be a defined-contribution one where benefits may fluctuate according to fund earnings.
Read the full story in The Irish Times.
Public servants have gone on strike twice this year, complaining that a 10 per cent cut in their benefits already amounted to the loss of one salary. Yesterday those benefits, which can sometimes double nominal salary, were cut by a further two percentage points. Pensions are being frozen.
Greece has pledged to bring its deficit to 8.7 per cent of GDP in 2010 and was under pressure from the European Union in recent days to make good a €4.8 billion shortfall in its initial plan.
Half of the pain is in public-sector cuts, but the other half is in new revenue. This comes in part from higher value added tax, the top bracket of which now rises from 19 to 21 per cent. Inflicting further pain on household budgets will be a 10 cents a litre hike on unleaded fuel, a 65 per cent consumer tax on cigarettes and a further tax hike on alcohol. Even electrical power will suffer a fee of €5 per megawatt hour.
Preparing public opinion for the latest tranche of measures on Tuesday, prime minister Yiorgos Papandreou said: “We are today in a state of war against the worst-case scenario for our country.”
That scenario, by his description, was a cost of borrowing so prohibitively high that the state would be unable to pay salaries and pensions, which represent 52 per cent of its outlay. “Today, when we borrow €5 billion, we pay €750 million more than Germany does in interest,” Mr Papandreou said. “How can we ever compete with the German economy?”
He is facing increasingly stiff opposition at home, however. These measures would deepen the recession, said conservative leader Antonis Samaras, who rejected the salary cut and VAT and fuel tax rises. He accused Mr Papandreou, who came to power in October, of waiting five months to cut the cost of government.
If he had acted sooner, he said, the cuts would have been softer and less painful. The government’s indecisiveness was expensive.
The governing council of the European Central Bank (ECB) and European Commission chief José Manuel Barroso backed the new measures, each of them underlining the importance of public-sector pay cuts.
In a statement last night, the ECB’s policy-making body said it welcomed the “convincing additional and permanent” measures and said it appreciated that Mr Papandreou’s administration planned to implement them very swiftly.
“Importantly, cutting public expenditure and adjusting public sector wages is a key signal both for the long-term fiscal sustainability and for substantially enhancing the price and cost competitiveness of the Greek economy,” the council said.
Read the full version of this story in The Irish Times.
The full tranche of yesterday's measures is as follows:
1. New revenue
- VAT (or sales tax) rises from 4.5 percent to 5 percent, from 9 percent to 10 percent and from 19 percent to 21 percent, to bring in 1.3 billion euros.
- A series of consumer taxes aim to bring in a further 1.1 billion euros, including:
- 8 cents on the litre for regular unleaded fuel, and 3 cents for diesel (heating oil remains as is)
- Tax on cigarettes rises from 63 percent to 65 percent
- Tax on alcohol rises to 20 percent
- The Public Power Corporation loses its exemption from tax on oil, and a new consumer tax is levied on electric power
- Cars with a retail value above 35,000 euros, pleasure craft, private helicopters, precious stones and metals and furs and leather will sustain a new luxury consumer tax
Total new revenue: 2.4 billion euros
2. New cost cuts:
- Public sector Easter, summer and Christmas bonuses are cut by 30 percent. These three bonuses amount to two monthly salaries, so public servants lose 60 percent of their 14th salary.
- Benefits above salary to public workers are cut by 2 percent, further to the 10 percent cut announced last month
- The salaries and benefits of all employees working in state-owned or state-controlled companies is cut by 7 percent across the board
- Pensions are frozen
- The state will reduce its outlay to the pension funds of the Public Power Corporation (DEI) and the Hellenic Telecommunications Organisation (OTE) by 10 percent
So far, the measures save 1.7 billion euros.
- The public investments programme is cut by 500 million euros
- The public investment programme in education is cut by 200 million euros
Total savings: 2.4 billion euros
Key 10-year bond sale goes well
Greece's sale of a 5 billion euro bond issue was going well on Thursday, a day after the austerity measures were announced, with the FT reporting an oversubscription of 2 billion euros.
Ireland overhauls pensions radically
Ireland has just announced an overhaul of its pension system that includes many of the ideas currently being discussed in Greece. The retirement age will rise to 66 in four years' time, and eventually to 68. Pensions will be calculated on average career earnings, not just the last few years of work. And young entrants into the labour market will be obliged to participate in a second pillar scheme in the private sector, where they will contribute four percent of salary, their employer two percent and the government two percent.While the state pension plan will remain a defined-benefits plan, with the state guaranteeing 35 percent of average industrial earnings, the private scheme will be a defined-contribution one where benefits may fluctuate according to fund earnings.
Read the full story in The Irish Times.
Tuesday, 2 March 2010
Further austerity announcements expected tomorrow
Following yesterday's announcements by European Monetary Affairs Commissioner Olli Rehn, the Greek press awaited tomorrow's new austerity announcements. To Vima carried a story predicting a 20 percent cut to above-salary benefits, which will be equivalent to a whole salary, for government employees. It also predicts a fuel, alcohol and tobacco hike. Employment Minister Andreas Loverdos has already frozen pensions for three of the largest funds.
http://www.in.gr/news/article.asp?lngEntityID=1111847&lngDtrID=244
http://www.kathimerini.gr/4dcgi/_w_articles_kathremote_1_02/03/2010_325994
Further austerity measures in sight for Greece
European Monetary Affairs Commissioner Olli Rehn yesterday called on Greece to implement further measures to ensure its deficit reduction target of four percent this year.
“The measures outlined in the Greek stability plan over January and February certainly go in the right direction, but … additional measures of fiscal consolidation are necessary so that the deficit reduction target for this year can be met,” Rehn told journalists in Athens. He described meeting this target “the one single most important thing for the moment”.
Greece has pledged to reduce its yawning 2009 deficit of 12.7 percent of GDP to 8.7 percent this year. It has so far reduced public salaries by 4-6 percent and raised petrol tax. But EU, European Central Bank and International Monetary Fund auditors who visited the Greek finance ministry last week reportedly found a 4.5 billion euro shortfall in the execution of the stability plan.
Even after implementing the first tranche of measures, Greece came away empty-handed from an informal European Union summit in early February to discuss a possible aid package. Asked repeatedly whether the EU was considering a a financial assistance package, Rehn said cryptically, “We are ready to put in place a plan for co-ordination and the euro area has the means to ensure the stability of the euro area as a whole.” He flatly denied that Prime Minister Yiorgos Papandreou and senior cabinet members, whom he met, had asked for “direct financial support”.
France and Germany are reportedly working on extending to Athens loan guarantees or bond purchases, but only in the event that Greece cannot sell its bonds on international markets.
The further austerity measures, due to be announced later this week, could take several forms. For the general public, the government is widely expected to escalate last month’s petrol tax hike. It is also reportedly mulling over a VAT increase. For public servants, who last week went on strike in protest at the especial pain reserved for public servants, there could be another cut in benefits above salary. Those benefits can add between 30 and 90 percent of salary over again. On Greek talk shows there is panicked discussion of the possible elimination of the Christmas bonus from government salaries.
In the longer term, the government is under pressure from the European Union to reform its pension entitlements. Greece is an ageing society, with 2.7 million retirees supported by 4 million workers, one quarter of whom work for the government and whose salaries are thus tax-supported.
Many Greek commentators have decried the lack of more concrete support to Greece as a lack of solidarity. “The euro is based on solidarity that goes both ways,” said Rehn. “It is based on respect for the common rules. No member of the euro can live permanently beyond its means. Either you control your debt or your debt starts controlling you.”
You can read this story in the Irish Times.
http://www.in.gr/news/article.asp?lngEntityID=1111847&lngDtrID=244
http://www.kathimerini.gr/4dcgi/_w_articles_kathremote_1_02/03/2010_325994
Further austerity measures in sight for Greece
European Monetary Affairs Commissioner Olli Rehn yesterday called on Greece to implement further measures to ensure its deficit reduction target of four percent this year.
“The measures outlined in the Greek stability plan over January and February certainly go in the right direction, but … additional measures of fiscal consolidation are necessary so that the deficit reduction target for this year can be met,” Rehn told journalists in Athens. He described meeting this target “the one single most important thing for the moment”.
Greece has pledged to reduce its yawning 2009 deficit of 12.7 percent of GDP to 8.7 percent this year. It has so far reduced public salaries by 4-6 percent and raised petrol tax. But EU, European Central Bank and International Monetary Fund auditors who visited the Greek finance ministry last week reportedly found a 4.5 billion euro shortfall in the execution of the stability plan.
Even after implementing the first tranche of measures, Greece came away empty-handed from an informal European Union summit in early February to discuss a possible aid package. Asked repeatedly whether the EU was considering a a financial assistance package, Rehn said cryptically, “We are ready to put in place a plan for co-ordination and the euro area has the means to ensure the stability of the euro area as a whole.” He flatly denied that Prime Minister Yiorgos Papandreou and senior cabinet members, whom he met, had asked for “direct financial support”.
France and Germany are reportedly working on extending to Athens loan guarantees or bond purchases, but only in the event that Greece cannot sell its bonds on international markets.
The further austerity measures, due to be announced later this week, could take several forms. For the general public, the government is widely expected to escalate last month’s petrol tax hike. It is also reportedly mulling over a VAT increase. For public servants, who last week went on strike in protest at the especial pain reserved for public servants, there could be another cut in benefits above salary. Those benefits can add between 30 and 90 percent of salary over again. On Greek talk shows there is panicked discussion of the possible elimination of the Christmas bonus from government salaries.
In the longer term, the government is under pressure from the European Union to reform its pension entitlements. Greece is an ageing society, with 2.7 million retirees supported by 4 million workers, one quarter of whom work for the government and whose salaries are thus tax-supported.
Many Greek commentators have decried the lack of more concrete support to Greece as a lack of solidarity. “The euro is based on solidarity that goes both ways,” said Rehn. “It is based on respect for the common rules. No member of the euro can live permanently beyond its means. Either you control your debt or your debt starts controlling you.”
You can read this story in the Irish Times.
Monday, 1 March 2010
Greece begins to undertake further austerity measures
Employment Minister Andreas Loverdos has announced a zero percent raise in pensions this year for 2.7 million retirees, according to Greek press reports. The measure would apparently save the government half a billion euros this year, but the money is unlikelty to go towards holding down the deficit because of health cost overruns.
According to news reports, European Union auditors who visited the finance ministry last week found a 4.5 billion euro shortfall in the execution of the Greek stability plan, which aims to reduce the deficit by four points this year to 8.7 percent of GDP. They are reportedly asking for the equivalent amount in further public cost cuts.
Those further cuts are likely to come in the form of another cut to benefits above salary and suspension of the Christmas bonus for public servants, another fuel tax hike, a VAT hike and a social security adjustment to keep pension costs from rising as a proportion of GDP over the next two decades. The measures as likely to be finalised today following a visit by European Monetary Affairs Commissioner Olli Rehn to Athens to see Finance Minister Yiorgos Papakonstantinou and Andreas Loverdos.
http://www.enet.gr/?i=news.el.politikh&id=136587
http://www.in.gr/news/article.asp?lngEntityID=1111178&lngDtrID=244
http://www.kathimerini.gr/4dcgi/_w_articles_kathremote_1_28/02/2010_325782
The EU assistance thriller over Greece begins to move towards resolution
The Financial Times reports that European leaders are minded to extend Athens financial assistance in the form of loan guarantees or bond purchases but only in the event that Greece cannot sell its bonds on international markets. This is a big improvement on the sentiments being expressed to journalists a week ago, which were that Greece would have to tie its own shoelaces. Greece must sell a 5 billion euro bond this week, which markets see as a critical test of its creditworthiness. And it must refinance 22 billion euros' worth of debt by the end of May.
http://www.ft.com/cms/s/0/f793a8a0-249e-11df-8be0-00144feab49a.html
http://www.ft.com/cms/s/0/a7a677d8-230d-11df-a25f-00144feab49a,s01=1.html
Hedge funds have made money betting on Greece's crisis, the FT reports.
http://www.ft.com/cms/s/0/a6b71b50-249f-11df-8be0-00144feab49a.html
Employment Minister Andreas Loverdos has announced a zero percent raise in pensions this year for 2.7 million retirees, according to Greek press reports. The measure would apparently save the government half a billion euros this year, but the money is unlikelty to go towards holding down the deficit because of health cost overruns.
According to news reports, European Union auditors who visited the finance ministry last week found a 4.5 billion euro shortfall in the execution of the Greek stability plan, which aims to reduce the deficit by four points this year to 8.7 percent of GDP. They are reportedly asking for the equivalent amount in further public cost cuts.
Those further cuts are likely to come in the form of another cut to benefits above salary and suspension of the Christmas bonus for public servants, another fuel tax hike, a VAT hike and a social security adjustment to keep pension costs from rising as a proportion of GDP over the next two decades. The measures as likely to be finalised today following a visit by European Monetary Affairs Commissioner Olli Rehn to Athens to see Finance Minister Yiorgos Papakonstantinou and Andreas Loverdos.
http://www.enet.gr/?i=news.el.politikh&id=136587
http://www.in.gr/news/article.asp?lngEntityID=1111178&lngDtrID=244
http://www.kathimerini.gr/4dcgi/_w_articles_kathremote_1_28/02/2010_325782
The EU assistance thriller over Greece begins to move towards resolution
The Financial Times reports that European leaders are minded to extend Athens financial assistance in the form of loan guarantees or bond purchases but only in the event that Greece cannot sell its bonds on international markets. This is a big improvement on the sentiments being expressed to journalists a week ago, which were that Greece would have to tie its own shoelaces. Greece must sell a 5 billion euro bond this week, which markets see as a critical test of its creditworthiness. And it must refinance 22 billion euros' worth of debt by the end of May.
http://www.ft.com/cms/s/0/f793a8a0-249e-11df-8be0-00144feab49a.html
http://www.ft.com/cms/s/0/a7a677d8-230d-11df-a25f-00144feab49a,s01=1.html
Hedge funds have made money betting on Greece's crisis, the FT reports.
http://www.ft.com/cms/s/0/a6b71b50-249f-11df-8be0-00144feab49a.html
Thursday, 25 February 2010
History written in the ink of disobedience
GREEK WORKERS took to the streets yesterday as they began to feel the bite of new taxes on fuel, alcohol and tobacco.
They are also worried that the government is about to raise the retirement age and reduce benefits to pull back social security from bankruptcy.
“What will happen to pensions?” asked Fotis, a 60-year-old worker at the Hellenic Telecommunications Organisation, one of roughly 25,000 people who took part in a protest march that brought central Athens to a halt. As an employee of Greece’s telecoms behemoth nearing retirement he should feel secure, but does not: “If the country goes bankrupt who will pay us our pensions? And what will happen to the young?” he asks.
The public sector is especially unhappy. Its one million employees – a quarter of the national workforce – have already taken a roughly five per cent pay cut, and that is expected to double next week. On top of this, the deputy prime minister has intimated that the lifelong tenure that makes public sector jobs so sought after may be up for discussion.
“We are striking because the government is going to cut our salaries,” said Vasiliki Revythi (56), who works at the National Pharmaceutical Organisation – the approval body for medicine in Greece which sets price ceilings.
She is one of the public sector employees who’ve already seen their above-salary benefits reduced, and insists she is not privileged. “I am a biochemist with a PhD; I have 35 years of work behind me. I am a manager, and I get €2,500 [a month]. Salaries are low in Greece. It’s not like Ireland.” Ms Revythi believes the government is leaning on salaried employees as it does not have the means to go after tax evaders.
“Companies should also pay. We know they evade taxes and social security payments. And we should find the people who put Greece in deficit. They must have siphoned money off to Swiss accounts. We should bring that money back.”
These sentiments are expressed more radically by Greece’s communist party, whose cheerleaders were at the head of waves of unionised strikers chanting slogans through megaphones. “No sacrifice for the plutocracy,” said one.
“History is written in the ink of disobedience,” beckoned another.
Organised labour, with left-wing parties, which claim about 12 per cent of the vote in Greece, have often succeeded in stifling social and economic reform.
Yannis Stournaras, the chief economic adviser to the socialist government that put Greece in the euro zone in 2001, doesn’t believe they will pull it off again. “This is a strike which is led by public sector unions. I think it is against the feeling of the average Greek, who sees the spectre of bankruptcy and wants to avoid it. So I don’t think these strikes will continue. I think it’s a one-off and will evaporate.”
Another threat to the government comes from its widening rift with the conservative opposition. The ruling socialists recently decided to call a parliamentary committee of inquiry into the conservatives’ six-year mismanagement of the economy from 2004-2009 as a way of winning support for austerity. But many observers believe this will backfire by killing any hope of consensus at a time of national emergency.
The socialist government is in a race against financial markets to cut the budget deficit by four points this year. If it fails, policymakers fear the markets could fail to refinance €20 billion in debt due this spring. That could have a knock-on effect on the 15 EU countries that also share the euro.
This story was published today in The Irish Times.
You can also hear today's NPR report online.
Greece suffers further credit downgrades
Financial Times: "The Greek bond markets fell sharply on Thursday after the second ratings agency in as many days warned that the country’s long-term credit ratings could be downgraded.
Greek two-year bond yields, which have an inverse relationship with prices, rose nearly half a percentage point following warnings from Standard & Poor’s on Wednesday and Moody’s Investors Service in the early hours of Thursday morning."
As the FT reports, four Greek banks have also suffered a downgrade due to their exposure to Greek bonds.
"Greek banks came under further pressure on Tuseday after Fitch Ratings downgraded the credit ratings of the country’s four largest banks on expectations that the real economy will worsen further as a result of the tough fiscal measures the government must take.
Ratings on the National Bank of Greece, Alpha Bank, EFG Eurobank Ergasias and Piraeus Bank were lowered by one notch to BBB – just two notches above junk."
Pangalos lashes out at the EU
Deputy Prime Minister Theodoros Pangalos told the BBC he did not think that today's European leaders were up to snuff compared to the leaders of the 1980's. "This is another level of leadership which we don't have today. The quality of leadership today in the union is very, very poor indeed," he said.
He also accused the Germans of destroying the Greek economy during World War Two.
"They took away the gold that was in the Bank of Greece, they took away Greek money, and they never gave it back. This is an issue that has to be faced sometime in the future," he said.
They are also worried that the government is about to raise the retirement age and reduce benefits to pull back social security from bankruptcy.
“What will happen to pensions?” asked Fotis, a 60-year-old worker at the Hellenic Telecommunications Organisation, one of roughly 25,000 people who took part in a protest march that brought central Athens to a halt. As an employee of Greece’s telecoms behemoth nearing retirement he should feel secure, but does not: “If the country goes bankrupt who will pay us our pensions? And what will happen to the young?” he asks.
The public sector is especially unhappy. Its one million employees – a quarter of the national workforce – have already taken a roughly five per cent pay cut, and that is expected to double next week. On top of this, the deputy prime minister has intimated that the lifelong tenure that makes public sector jobs so sought after may be up for discussion.
“We are striking because the government is going to cut our salaries,” said Vasiliki Revythi (56), who works at the National Pharmaceutical Organisation – the approval body for medicine in Greece which sets price ceilings.
She is one of the public sector employees who’ve already seen their above-salary benefits reduced, and insists she is not privileged. “I am a biochemist with a PhD; I have 35 years of work behind me. I am a manager, and I get €2,500 [a month]. Salaries are low in Greece. It’s not like Ireland.” Ms Revythi believes the government is leaning on salaried employees as it does not have the means to go after tax evaders.
“Companies should also pay. We know they evade taxes and social security payments. And we should find the people who put Greece in deficit. They must have siphoned money off to Swiss accounts. We should bring that money back.”
These sentiments are expressed more radically by Greece’s communist party, whose cheerleaders were at the head of waves of unionised strikers chanting slogans through megaphones. “No sacrifice for the plutocracy,” said one.
“History is written in the ink of disobedience,” beckoned another.
Organised labour, with left-wing parties, which claim about 12 per cent of the vote in Greece, have often succeeded in stifling social and economic reform.
Yannis Stournaras, the chief economic adviser to the socialist government that put Greece in the euro zone in 2001, doesn’t believe they will pull it off again. “This is a strike which is led by public sector unions. I think it is against the feeling of the average Greek, who sees the spectre of bankruptcy and wants to avoid it. So I don’t think these strikes will continue. I think it’s a one-off and will evaporate.”
Another threat to the government comes from its widening rift with the conservative opposition. The ruling socialists recently decided to call a parliamentary committee of inquiry into the conservatives’ six-year mismanagement of the economy from 2004-2009 as a way of winning support for austerity. But many observers believe this will backfire by killing any hope of consensus at a time of national emergency.
The socialist government is in a race against financial markets to cut the budget deficit by four points this year. If it fails, policymakers fear the markets could fail to refinance €20 billion in debt due this spring. That could have a knock-on effect on the 15 EU countries that also share the euro.
This story was published today in The Irish Times.
You can also hear today's NPR report online.
Greece suffers further credit downgrades
Financial Times: "The Greek bond markets fell sharply on Thursday after the second ratings agency in as many days warned that the country’s long-term credit ratings could be downgraded.
Greek two-year bond yields, which have an inverse relationship with prices, rose nearly half a percentage point following warnings from Standard & Poor’s on Wednesday and Moody’s Investors Service in the early hours of Thursday morning."
As the FT reports, four Greek banks have also suffered a downgrade due to their exposure to Greek bonds.
"Greek banks came under further pressure on Tuseday after Fitch Ratings downgraded the credit ratings of the country’s four largest banks on expectations that the real economy will worsen further as a result of the tough fiscal measures the government must take.
Ratings on the National Bank of Greece, Alpha Bank, EFG Eurobank Ergasias and Piraeus Bank were lowered by one notch to BBB – just two notches above junk."
Pangalos lashes out at the EU
Deputy Prime Minister Theodoros Pangalos told the BBC he did not think that today's European leaders were up to snuff compared to the leaders of the 1980's. "This is another level of leadership which we don't have today. The quality of leadership today in the union is very, very poor indeed," he said.
He also accused the Germans of destroying the Greek economy during World War Two.
"They took away the gold that was in the Bank of Greece, they took away Greek money, and they never gave it back. This is an issue that has to be faced sometime in the future," he said.
Tuesday, 23 February 2010
Greece's new witch hunt begins
In December 2004, before they had completed a year in power and just after they had got the Athens Olympics out of the way, the conservatives launched a parliamentary committee of inquiry into socialist defence procurements. The socialists are now doing the same. Last night, the government of Yiorgos Papandreou introduced a motion to launch an inquiry into conservative financial mismanagement over the past six years.
The inquiry is sure to end the vague consensus that has so far existed between government and opposition on the economy. Last week, in expectation of the launching of this inquiry, the conservatives began to distance themselves from government policy by issuing a list of 23 economic development policy points they believe need to be immediately implemented.
Conservative opposition leader Antonis Samaras followed up with a fiery speech on Sunday to his party's congress. He echoed much of the socialist pre-election platform, advocating a new economic revolution on the back of renewable energy, and spoke of releasing the dynamic Greek spirit much as Papandreou had done.
The government's response has been to escalate the tension further. The government spokesman said yesterday that "we realised yet again how much hypocrisy there is in the words of the leadership and members of New Democracy." Deputy Prime Minister Theodoros Pangalos called Samaras' warnings of new humiliation for Greece through the revelations of the committee "nonsense".
These latest exchanges confirm what has been apparent since Papandreou announced his intention to call the inquiry a week ago, that the gloves are off and the domestic political scene will now enshrine the traditional acrimony that has bedevilled any attempt at long-term policymaking in Greece for decades.
See the story in The Irish Times.
Goldman banker critical of Greek transparency, but defends deal
The BBC and Financial Times today generated diametrically opposite headlines from the same story. Goldman Sachs chairman Gerald Corrigan told a UK parliamentary committee of inquiry that Greece's 2001 credit swap was in keeping with standard practice at the time, but that further controls should have been implemented internationally.
The Financial Times led with the banner headline, "Goldman Banker Hits at Athens Swaps". It hangs the title on Corrigan's statement that, “with the benefit of hindsight . . . the standards of transparency could have been and probably should have been higher”.
The BBC billed the story "Goldman defends Greece debt swaps" and led with Corrigan's statement that the swap "was "consistent" with the regulations of the time."
Corrigan was commenting on a swap that took place in 2001 to help defer public deficit after Greece's entry into the eurozone. Goldman Sachs posted the following details of the transaction:
“In December 2000 and in June 2001, Greece entered into new cross-currency swaps and restructured its cross-currency swap portfolio with Goldman Sachs at a historical implied foreign exchange rate,” the statement says. “These transactions reduced Greece’s foreign-denominated debt in euro terms by €2.367bn and, in turn, decreased Greece’s debt as a percentage of [gross domestic product] by just 1.6 per cent, from 105.3 per cent to 103.7 per cent.”
In December 2004, before they had completed a year in power and just after they had got the Athens Olympics out of the way, the conservatives launched a parliamentary committee of inquiry into socialist defence procurements. The socialists are now doing the same. Last night, the government of Yiorgos Papandreou introduced a motion to launch an inquiry into conservative financial mismanagement over the past six years.
The inquiry is sure to end the vague consensus that has so far existed between government and opposition on the economy. Last week, in expectation of the launching of this inquiry, the conservatives began to distance themselves from government policy by issuing a list of 23 economic development policy points they believe need to be immediately implemented.
Conservative opposition leader Antonis Samaras followed up with a fiery speech on Sunday to his party's congress. He echoed much of the socialist pre-election platform, advocating a new economic revolution on the back of renewable energy, and spoke of releasing the dynamic Greek spirit much as Papandreou had done.
The government's response has been to escalate the tension further. The government spokesman said yesterday that "we realised yet again how much hypocrisy there is in the words of the leadership and members of New Democracy." Deputy Prime Minister Theodoros Pangalos called Samaras' warnings of new humiliation for Greece through the revelations of the committee "nonsense".
These latest exchanges confirm what has been apparent since Papandreou announced his intention to call the inquiry a week ago, that the gloves are off and the domestic political scene will now enshrine the traditional acrimony that has bedevilled any attempt at long-term policymaking in Greece for decades.
See the story in The Irish Times.
Goldman banker critical of Greek transparency, but defends deal
The BBC and Financial Times today generated diametrically opposite headlines from the same story. Goldman Sachs chairman Gerald Corrigan told a UK parliamentary committee of inquiry that Greece's 2001 credit swap was in keeping with standard practice at the time, but that further controls should have been implemented internationally.
The Financial Times led with the banner headline, "Goldman Banker Hits at Athens Swaps". It hangs the title on Corrigan's statement that, “with the benefit of hindsight . . . the standards of transparency could have been and probably should have been higher”.
The BBC billed the story "Goldman defends Greece debt swaps" and led with Corrigan's statement that the swap "was "consistent" with the regulations of the time."
Corrigan was commenting on a swap that took place in 2001 to help defer public deficit after Greece's entry into the eurozone. Goldman Sachs posted the following details of the transaction:
“In December 2000 and in June 2001, Greece entered into new cross-currency swaps and restructured its cross-currency swap portfolio with Goldman Sachs at a historical implied foreign exchange rate,” the statement says. “These transactions reduced Greece’s foreign-denominated debt in euro terms by €2.367bn and, in turn, decreased Greece’s debt as a percentage of [gross domestic product] by just 1.6 per cent, from 105.3 per cent to 103.7 per cent.”
http://www.ft.com/cms/s/0/9899dccc-1fe2-11df-8deb-00144feab49a.html%20%20
http://news.bbc.co.uk/go/pr/
http://news.bbc.co.uk/go/pr/
Greece threatens the entire EU project
FT comment by Gideon Rachman: "The risk for Europe now is that if the EU does not move forward politically in response to the Greek crisis, it will move backwards – and the long process of European integration could start to unravel."
Let the Greeks ruin themselves
The Economist carries out a political analysis of why there is such strong opposition within Germany to further assistance to Greece: "A domestic row over welfare makes charity for foreigners a still more awkward subject. This month the constitutional court ruled that the government had erred in setting benefits for the main welfare programme, called Hartz IV. It has until the end of the year to come up with a new formula, which may cost more money. Guido Westerwelle, the FDP leader, lamented the “late Roman decadence” of a society that treats welfare beneficiaries more generously than workers. His outburst, in turn, annoyed Ms Merkel. “I can’t explain to someone on Hartz IV that we can’t give him a single cent more but that a Greek gets to retire at 63”, said Michael Fuchs, a CDU leader in the Bundestag."
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