Thursday, March 22, 2012

Greece on the breadline: the theatre exchanging tickets for food


The National Theatre of Northern Greece is asking audience members to bring food which it will give to charity

Greeks queue to buy cheap food

Greeks queue to buy cheap potatoes in Thessaloniki. Theatregoers can now donate food in exchange for tickets. Photograph: Sakis Mitrolidis/AFP/Getty Images

Solidarity among crisis-hit Greeks is showing up in unexpected places these days.

At one end of Thessaloniki's long, cafe-lined seafront, behind the 15th-century White Tower that is the city's symbol, is the resplendent main stage of the National Theatre of Northern Greece (NTNG), as imposing a temple to high culture as anyone could wish for.

Here the curtain is about to go up on a six-week season of plays, including works by Edward Albee, Harold Pinter and Jean Genet, that will be performed by members of the theatre's 100-strong troupe of actors under the banner Social Theatreshop.

What's novel is that theatregoers coming to see the Social Theatreshop productions will pay for their tickets not with money but with food, which the theatre's staff will then distribute among half a dozen charities and welfare organisations in the city.

"We are, everyone knows it, in a very, very bad situation," said the deputy artistic director, Giannis Rigas, who like everyone else involved in the project is not being paid for it.

"We thought we, actors, technicians, directors, have to do something for people who now have so little money that they are going hungry.

"But this isn't charity, it's a fair exchange: food for theatre. And it's also a nice way to bring people back to the theatre: put it back where it belongs, in the middle of the community."

In a prelude to the season, Rigas is directing a Greek repertoire classic from 1946 by Alekos Sakellarios. The NTNG is staging the piece, it says, to mark the 20th anniversary of the playwright's death.

The title suggests another motive may be lurking somewhere behind the scenes: it is called The Germans Strike Again.

"It's about a poor Greek guy who falls asleep after the war and dreams that the Germans have come back," said Rigas, straight-faced.

"It's about the way we Greeks respond when we are under pressure. We usually quarrel, of course. But this play says: be cool, find our own way – otherwise the Germans will just keep coming back."

In the present circumstances, he conceded, it was perhaps an apt message.

The goal of the subsequent Social Theatreshop, Rigas said, was "to say to absolutely everyone in our community that we too, in the theatre, have them in our minds".

Greek theatre, he said, is in dire straits: "Theatres are closing around the country. We have no money – well, we have a little, but it comes too late.

"Our audiences have no money. Here we have some of the cheapest theatre seats in the country, €10, but that's still too much for some.

Now, people can come to the theatre for a couple of cans of soup, or a packet of pasta – and they will be helping to feed people who cannot afford even to feed themselves."

Evelina Papoulia, an actor and director who is one of the NTNG's brightest stars, is staging another play in the season, Thirst.

The Social Theatreshop project, she said, "is terribly important now, because we have to show that nobody is alone. We have to do something for others, for each other, to show that we really can all come together".

Organisers are quietly confident the theatre will be playing to packed houses until the end of April, when the Theatreshop season closes.

Rigas said: "It's strange, you know, but people don't go to the theatre when they have money. They spend it on other things, on fancy things. Then when the hard times come, you need something different.

"The theatre is a place to be together. It's a physical thing – the performers, the technicians, the audience, all become one. And we need to be brought together again. In recent times, we lost that."

Greece on the breadline: the theatre exchanging tickets for food | World news | The Guardian

Greeks Adopt Alternative Currencies as Economy Implodes

Written by Alex Newman Wednesday, 21 March 2012 09:17

As Greece’s economy and the euro continue to struggle, regular Greeks are increasingly taking matters into their own hands, creating informal underground barter markets and even alternative currencies. And the government is actually encouraging it.

Over a dozen non-euro trading networks are already believed to be operating in communities throughout the embattled nation, with more on the way. But one effort in particular — called Local Alternative Units, or “TEMs” in Greek — has attracted a great deal of international attention.

In the port town of Volos — where unemployment is above 20 percent, the economy is struggling, and tax rates are rising — a group of locals decided it was time to take action. The population still had the same skills and resources as before the crisis, just not the euros needed for commerce.

So, a handful of people got together and formed the alternative currency known as the TEM. It quickly took off. And major newspapers and media outlets around the world — from the United States to the United Kingdom — have taken notice as it continues to expand. 

“Ever since the crisis there’s been a boom in such networks all over Greece,” University of Crete vice chancellor and political economy professor George Stathakis told the New York Times, adding that despite an enormous government sector, Greek “social services” were being overwhelmed. “There are so many huge gaps that have to be filled by new kinds of networks.”

The TEM system works by allowing people in the community to set up an account on an online network, connecting them with others in the area with various needs and a wide array of services to offer. Users also receive a sort of booklet allowing them to essentially write “checks” to pay for goods and services.

A real market where people can meet to trade in TEMS is also a key component of the emerging network. And efforts are currently underway to establish a daily market in an unused building for locals to engage in commerce using their system. 

Babysitters, farmers, teachers, electricians, barbers, bakers, computer technicians, opticians, veterinarians, and more are all represented. Most traders accept both euros and TEMs, or some combination of the two. 

Member accounts start with zero TEMs, although users are allowed to borrow up to 300 units if they agree to repay it over a certain time period. And to prevent “hoarding,” the system’s managers explained, no user is allowed to have over 1,200 units of the currency.

"It's an easier, more direct way of exchanging goods and services," German-born homeopathist and acupuncturist Bernhardt Koppold, an active member of the Volos network, told the UK Guardian. "It's also a way of showing practical solidarity — of building relationships."

Dozens of other users expressed similar sentiments about their budding system. Co-founders of the TEMs network also explained that if the crisis were to spiral further into the realm of cataclysm, the alternative-currency system could help take up the slack — ensuring that a functioning economy would allow people to continue trading for survival.

Even local officials are encouraging citizens to get involved. Volos Mayor Panos Skotiniotis, for example, told NPR that such initiatives are especially valuable during the economic crisis as the government struggles to pay its bills.

"This is a substitution for the welfare state, and that is why this municipality is encouraging it and wants it to grow," he said. The local government has even printed leaflets explaining the system and helped promote panel discussions about it.

At the national level, politicians seem to support the idea, too. Late last year, the Greek Parliament even passed a law urging citizens to build non-traditional forms of “entrepreneurship and local development.” The legislation also granted the informal networks official non-profit status, helping to ease the tax burden on struggling Greeks saddled with massive debts imposed by national and international officials.

And around the world, the system has attracted praise from a broad array of commentators. “With so many fictional stories about how people will turn on one another in the event of a collapse, it's great to see a real-life example of folks who band together to make things work during tough times,” wrote Lauren Davis with the online service

But in the face of increasingly vicious attacks on Greeks by international institutions — the European Union, the World Bank, the International Monetary Fund, and others — it remains unclear how long such alternative networks may survive. Consider: When Former Greek Prime Minister George Papandreou suggested allowing citizens to vote on international demands before imposing the unpopular measures on the populace, he was promptly replaced by an unelected central banker in what observers called a “coup.”

“The real question is not whether these types of systems work during times of economic crisis, but how they can persist once organizations like the World Bank step in to ‘restore order,’” noted blogger Klint Finley, calling the TEMs network “yet another example of alternative currency thriving in a collapsed economy.”

The Greek police union has threatened to arrest international officials for attempting to foist even more misery on the nation. But that has not deterred the EU or the predatory IMF and World Bank from pursuing the same trajectory — saddling citizens and their unborn children with unpayable debts in perpetuity rather than allowing a default and an exit from the disastrous single currency.

Still, despite hostility from the “establishment,” alternative currencies are flourishing all over the world. In Germany, for example, some two dozen regional non-official monetary systems have emerged since the birth of the euro.

“We want people to think about this more … participants of the alternative currencies want to change the money system,” Christian Gelleri, the managing director of a regional German currency called Chiemgauer, told The New American in a 2010 telephone interview. “We want to promote local charities and connect local businesses — that’s our objective.”

In the United States, despite the high-profile prosecution of Liberty Dollar founder Bernard Von NotHaus, more than a few alternative currencies are already in circulation as well. Examples include Detroit “Cheers,” “BerkShares” in Massachusetts, and “Ithaca Hours” in New York. So-called digital gold currencies are also attracting more and more users. And an online currency system known as "BitCoin" has gained a tremendous following in a relatively short period of time.

And at the state level, even governments are taking action. Utah, for example, officially made gold and silver into legal tender last year. And several states are considering similar legislation as the Federal Reserve and the U.S. dollar come under increasing pressure.

Even as alternatives to the global debt-based fiat monetary regime continue to expand, however, there is a concerted effort underway by top officials worldwide to foist a world currency managed by an international central bank on the planet. And with the American dollar quickly losing its appeal as the “reserve currency” and the euro under more and more scrutiny, a significant change in the monetary system is almost certainly imminent.

The real question, then, is whether the world will eventually return to honest money established by the market, or allow increasing centralization of the clearly corrupt monetary system in the hands of a small group of elites. The answer to that crucial question will determine the future of the planet in ways that are virtually impossible to overstate.     

Related articles:

Rural Greece Falls Back on Self-Reliance

Alternative Currencies

Greeks Adopt Alternative Currencies as Economy Implodes

Thursday, March 15, 2012

Greece on the breadline: 'a student postponed to queue for potatoes'

Jon Henley, Wednesday 14 March 2012 09.47 GMT

Jon Henley hears from expats about cynicism at school, scepticism at work and stoicism at the allotment


Athens residents carry sacks of potatoes distributed by farmers. Photograph: Alexandros Vlachos/EPA

As well as Greek citizens, expatriates have been in touch with their impressions of their adopted homeland in crisis. Here are a few:


Sara Young in Thessaloniki writes:

It is becoming increasingly difficult. In Thessalonik i, as across the whole country, it is the uncertainty and the daily struggle that are wearing people down.

Whatever decisions are being made in Europe seem to have less and less connection with what is happening in reality in our city.

Here are some examples of daily life among teachers and academics. An adult student of mine – a kindergarten teacher – telephoned to postpone our lesson because she wanted to join the queue for cheap potatoes that are being sold through the so-called "potato movement", the initiative originally started through the university.

At the same time, Thessaloniki city council has started an allotment scheme for those wanting to grow their own food, while the university is giving free advice on crop cultivation. But still a sense of despair pervades the city. While people are rightly concerned about the effect on the youth of Greece (50% unemployment), it is also affecting the teenagers, who are disillusioned in turn and see no future.

Trying to teach has become a struggle against justifiable apathy and cynicism. Why study, the pupils ask, when they see often highly qualified older family members without work? For teachers, it is a daily challenge to maintain morale, even while we ourselves are not paid on a regular basis.

A friend tells me he hasn't been paid at all since October. If he quits his job, he will never see the money owed to him. In the light of that, I'm celebrating the fact that I was actually paid the whole of January's salary – the final €50 owing was paid last Friday (9 March). But as for February's …


Rebecca Hall has this:

I'm a British expat who lives in Athens. I teach English for a multinational organisation, but even they are suffering, in terms of student numbers. My job is precarious and I never know if I will have work from one year to the next.

The contract they have me working on allows them to fire me at the end of the academic year, then rehire me. Thus I do not get my IKA (national insurance equivalent) contributions paid for two months, and I have to "sign on" for benefits. Even this has been reduced by 22% (€450 last year, God knows what this year).

The cost of living seems to rise and rise. I have more Greek than English friends: one of them works for ATE bank, and has seen her salary slashed. Luckily, she is one of many Greeks that still lives in a family-owned apartment (outright home ownership is big here, still).

Another friend is a self-employed dentist. She is actively seeking work in Italy now. She sees no future for herself here any more. As a teacher, despite a drop in student numbers I have seen a rise in demand for IELTS English, the exam any non-English person needs to pass to study in an English-speaking country. People are looking to leave in droves.


Chris Murphy lives in Komotini, in Thrace:

Recently a despairing, 52-year-old former employee of a wheelie bin factory here held two hostages at gunpoint at his former workplace. He had earlier shot and wounded two former colleagues, whose injuries were not life threatening.

The hostages were released after a 12-hour standoff with the police: a relatively happy ending in a region that doesn't much believe in such things any more.

Probably the last place that comes to mind when one thinks of Greece, isolated Thrace is particularly vulnerable to a withdrawal of funding and investment from the centre. The unemployment rate is now the highest of any region in Greece, and every time I walk through the town centre more shops have closed.

Conversations about the crisis have moved on, from the shocked and angry, to the cynical, to the practical. We thank God we're not in Athens, and that Granny has a plot of land in her village for potatoes and the like, should the worst happen and the supermarket shelves are empty.

And yet, in the midst of it all, Greek society has held together remarkably well – at least, in my corner of it. The streets here remain safe; there is no "broken" society. I'm not ready to give up hope just yet.

Greece on the breadline: 'a student postponed to queue for potatoes' | World news | The Guardian

Greece on the breadline: how leftovers became a meal


Jon Henley visits Boroume which puts restaurants with unsold food at the end of each day in touch with soup kitchens

Poverty in Athens

A young man eating outside a soup kitchen in Athens: it is estimated some 400,000 Greeks now visit a soup kitchen daily. Photograph: Orestis Panagiotou/EPA

It used to annoy Xenia Papastavrou, the way Greek tavernas always give you loads of bread, way more bread than you can eat. She started taking it home, just to avoid the waste. Then one night last year a waiter suggested she might as well take all that day's leftover bread away with her, and she had an idea.

"I thought, there must be lots of other restaurants in this situation, too," Papastavrou said. "And I was sure none of them knew where they could usefully give it. And at the same time, I knew there were many, many welfare organisations in this crisis that were spending good money on buying fresh bread. It just needed someone to put the two together."

Boroume – it means "we can" in Greek – was born last May in Papastavrou's living room. "I went first to the two bakeries nearest my home, and they were only too delighted to help," she said. "An average bakery could have as much as 30kg of unsold bread at the end of the day. I told a soup kitchen three minutes away, and they couldn't believe their luck."

A volunteer at Athens' Food Bank, Papastavrou promptly put her masters degree on hold and enlisted the help of friends to build a web platform on which companies with any kind of fresh surplus food could offer it, and welfare groups that needed it could accept. She started talking about the idea on Facebook and Twitter, and one of Greece's biggest newspapers, Kathimerini, wrote about it.

In under a year, the organisation has grown fast. Venetis, the country's largest chain of bakeries with more than 50 outlets, is one of 70 Boroume donors that now include the Athens Attica Hotel Association, fast-food chains, grocers and multinationals like IKEA. Private families around the country also donate, as do Greeks from the diaspora in Canada, Australia and the US.

A network of some 400 welfare organisations, from old people's homes and orphanages to drop-in centres for the homeless and church, voluntary and municipal soup kitchens, takes up the donations. Astonishingly, one in 11 residents of greater Athens – some 400,000 people – now visits a soup kitchen daily.

The group's Facebook page has 5,000 friends. A team of 15 volunteers man the website and phones, putting donors in touch with nearby recipients – to save time and resources, Boroume limits its role to that of intermediary. "We just put them in touch," said Papastavrou. "After that, they can deal directly with each other."

Round the corner from Boroume's cramped office (the organisation has been lent limited desk space by the language school Papatavrou's mother runs, but is looking for new premises) is the NVJ Athens Plaza hotel, a five-star edifice on Syntagma Square whose marble steps are regularly chipped and broken by rioters in search of ammunition.

Yesterday, the hotel's kitchens had prepared 50 meals of moussaka and chicken; staff were loading them into the boot of a car driven by a volunteer from the Galini soup kitchen around the corner, which supplies hot meals to 200 people daily. A few hundred yards away is Kyada, one of the city's largest municipal soup kitchens, feeding up to 1,400 people a day.

Earlier this winter, Boroume found six tonnes of potatoes for Kyada; they went in three days. "There is solidarity and sensitivity now," said Dimitra Nousi, who runs the facility. "It has surprised us. But it's a huge job. Years ago I was part of the team that prepared the Athens Olympics; until now, that was the biggest project the public administration had ever undertaken. But that was the glamour of wealth; now we're in the pain of crisis."

Boroume, meanwhile, is expanding beyond food. Welfare groups are asking for everything from clothing to cutlery; hotels have started donating furniture, fridges, televisions. Recently, a hairdresser went into a shelter for young girls and cut their hair, for free. This week someone offered a substantial quantity of heating oil.

People, said Papastavrou and Alexander Theodoridis, one of her co-organisers, "are beginning to fight back. It's a practical response, but also an emotional one. We feel the need to connect, to commit; that feeling got a bit lost in Greece of late. And it meets a need for the volunteers, too; several are jobless. Volunteering gives a sense of involvement."

Showing her Greek upbringing and past studies in ancient Greek and philosophy, Papastavrou said Socrates in Plato's Republic put it best: "A community starts to be formed, I suppose, when individual human beings find that they aren't self-sufficient, but that each of them has requirements which he can't fulfil on his own."

Greece on the breadline: how leftovers became a meal | World news | The Guardian

Greece on the breadline: 'still a beautiful and safe holiday destination'


Jon Henley learns about a trio who decided to take matters into their own hands and set up an initiative to promote tourism

Greek island

Corfu, Greece: tourism provides employment for one fifth of the country's workforce. Photograph: Robert Harding Picture Library L/Alamy


Waste not, want not

Alexia Katsaounis writes to tell me about an initiative started late in 2011 called Desmos. Along similar lines as Boroume, but working with manufacturing companies producing clothes, cleaning supplies, medicines and so on, Desmos aims to put producers with surplus production in touch with welfare organisations that need their products. Alexia said most of the information about the initiative is in Greek, but sent this link to a recent article in the local Athens English-language newspaper, Athens News.


Maintaining Greece's "heavy industry"

Self-help initiatives are not confined to Greeks within Greece. Yorgos Kleivokiotis, Onic Palandjian and Stathis Haikalis write to tell me about Up Greek Tourism, a private initiative aimed at promoting Greece as a holiday destination through the current crisis. "While the government is trying to find solutions, individuals, can't wait. We need to take matters into our own hands," said Palandjian. Kleivokiotis said the trio all had day jobs and had chosen tourism as the focus of their efforts because it was "the 'heavy industry' of Greece": tourism accounts for about 15% of Greece's GDP and employs roughly a fifth of the country's 4m workforce. In 20 days, using mainly Facebook and Twitter the three raised more than $20,000 from some 330 private individuals, half of them outside Greece in countries including Australia, Bulgaria, Cyprus, France, Germany, Italy, Russia, Singapore, Spain, Switzerland, the UAE, US and UK. The money will be spent on an electronic billboard display that will go up in Times Square, New York, on March 23 for 30 days, reminding the American public that regardless of its economic situation, Greece is "a beautiful and safe holiday destination", Kleivokiotis said.


Voter apathy on the increase

The regular CiF commentator Kizbot has lived in Athens for several years. She contributes this on next month's general elections, seen by many as a likely turning-point: "Greeks have always been fiercely proud of the role they personally play in upholding democracy and voter participation has usually been pretty high. But then many Greeks have lived through the hell of dictatorship and know that democracy is precious. So voting has always been seen as both a right and a duty. Until now. Ever since democracy was restored it is the two main parties who have taken turns to govern, with no real threat from other parties. Both main parties used trading favours and maintaining the status quo as a means of holding onto power and continued in this vein even throughout the crisis. When Deputy PM Pangalos claimed that all of Greece had 'eaten' the money together, most of his compatriots disagreed. And with a good third of them now living below the poverty line, while Greek politicians earn some of the highest MPs salaries in Europe, that is understandable. Faith in politicians and the political system has all but collapsed and most Greeks are unlikely to bother voting, or intend to spoil their ballots, in the upcoming elections. Other smaller parties have started to garner more support, especially left wing parties. But, unfortunately, this is unlikely to result in much change in parliament as it is doubtful whether the left wing parties could ever manage to pool their resources and work together for change. They are, like the main parties, more interested in keeping an eye on the main chance than anything else. It doesn't leave Greeks a lot to vote for."

Greece on the breadline: 'still a beautiful and safe holiday destination' | World news | The Guardian

Greece on the breadline: pooling resources to provide an education


Jon Henley meets the tutors giving free lessons to children who can't afford the tuition needed to get into university

A Greek youth performs skateboard tricks in Athens

Young Greeks in Athens: as the state school system is considered inadequate for those hoping to go to university, private tuition is the norm. Photograph: John Kolesidis/Reuters

Ever since anyone can remember, Greek schoolchildren hoping to get into university have relied on extra out-of-school tuition to pass their school leaving exams with good enough grades.

It is, any Greek parent with children of school age will tell you, generally accepted that the state school system is not enough to ensure you a place in further education.

The same goes for learning foreign languages, for music lessons, or simply, for some students, to stay abreast of routine schoolwork. So a whole parallel system has grown up; after-school tuition has become the norm for most Greek children at some stage in their school lives.

It takes place either one-to-one, or more often in classes at private tuition centres (the Greek word is frontistirio). There are hundreds of these; they teach languages, give extra lessons to weaker students, and prepare everyone for competitive national exams.

But they don't come cheap. Harris Xanthopoulos, a father of two boys aged 11 and 15, said the cost can range from €300-400 a month for lower-school language teaching up 600-900 for final-year high school students seeking to go to university.

That's a lot for most Greek families, even assuming both parents work. When salaries have been cut by a quarter (as many have), taxes have multiplied and someone has lost their job, it's impossible. Xanthoupoulos, a mechanical engineer by training, has seen his small business dwindle to all but nothing; his wife's salary has been slashed.

"We just couldn't afford it any more," he said. "My younger son, Vassilis, is dyslexic and has had extra tutoring to makes sure he can follow in class since he was young. It cost us €450 a month; the Greek state has never provided that kind of special needs teaching. Last year we had to stop. Vassilis started falling behind almost straightaway."

Tutorpool began with a single tweet last December. Silia Vitoratou, a statistician, began tutoring a couple of children in her neighbourhood for free whose parents were in difficulties. She tweeted her frustration at how unjust it was that some children were now losing out, and about how satisfying it felt to have helped out.

"Within a couple of hours, I had 40 offers of help," she said. "I made a simple Google map, pinning each volunteer's name to a location and saying which subjects they could teach, and when they could teach them. We were up and running literally a week after that first tweet."

Tutorpool now has 500 volunteer tutors around the country and as far afield as Finland (Tutorpool aims to find local matches where possible, but long-distance tutoring is common and done by Skype). The organisation's website, built by volunteers, enables parents to log on and see what subjects available where, and tutors to see who is looking help and of what kind.

So far, all tutoring has been one-to-one; the group hopes soon to be able to offer group sessions, but is hampered by legal and licensing requirements it is doing its best to work around. But the site has had over 200,000 hits to date, and nearly 300 families are registered for help.

"It's appalling, of course it's appalling, that we have to do it at all," said Agathi Papanoti, an archaeologist who tutors Latin, Ancient Greek and history. "We shouldn't be needed. But as long as we are, we can do something. Anger isn't enough any more; we have to find new ways of making things work, help each other out."

It's rewarding for tutors, too. Marianna Roumelioti, a careers counsellor and Tutorpool tutor, said that when you "get an email from a 17 year-old, stressed because his exams are coming, and he knows his parents are behind with the rent so they can't to afford the classes he needs … When he realises you can help – that's gives you a full feeling."

Along similar lines, a group of music teachers have recently started a social music school. Their representative didn't want to be named ("We are a collective; we work together"), but said that the only music taught in most Greek state schools was theory.

"There are two state music schools, conservatories, in Athens and Thessaloniki, and both are currently being shut down," she said. "If you want to learn an instrument, you pretty much have to have private lessons. Fewer and fewer people can."

The school, which operates from premises donated by assorted theatres, associations and even a company or two, gave its first classes last month.

Some 90 volunteer music teachers now teach singing, piano, guitar, violin, cello and percussion to more than 150 students, both children and adults. More than 250 are waiting to join.

Greece on the breadline: pooling resources to provide an education | World news | The Guardian

Greece on the breadline: 'we've watched our futures go up in smoke'


Jon Henley hears from unemployed professionals wondering if there is anything in the country to keep them there

Closed business athens

Closed businesses in Athens: young people have left in their droves after being unable to find work. Photograph: Yannis Behrakis/Reuters

More testimony and appeals from Greeks, at home and abroad.

Crushed ambitions

First, two young professionals describe their disheartening circumstances: Ioanna Panagioto is a volunteer at Radiobubble, a community web radio station based in a buzzing cafe where I met a number of activists the other night. She lived in London for five years until 2008, doing an MA in marketing communications and working for Debenhams. "Since coming back to Greece I've had two short temporary contracts. I've been unemployed since July 2010 and have sent 300 CVs with no luck (including for positions in a warehouse or on a shopfloor). In the meantime I've managed to earn some cash by doing random odd jobs, but it's devastating and disheartening when you're unemployed because you're forced to live with your parents, unable to make plans for the future. Having said that, I guess it must have been a shock for my generation – I am 32 – as we were raised with a career mindset, and now since everything has turned upside down we are working merely to survive. I would be lying if I said I am not considering leaving Greece again. Meanwhile, though, I look after the English section of Radiobubble News, which aims to communicate abroad what mainstream media would not cover, or give enough attention to – stories like the police making 60 preventive detentions before the big demonstration last month. We do live blogs on general strikes or demos, weekly news round-ups and breaking news. The live blogs include only verified information reported on twitter with the #rbnews hashtag. We have 25 Radiobubble contributors, and 50 other twitter users whose credibility has been tested. Our live blog on the three days of anti-austerity protests back in February got 15,000 hits, coming mostly from Spain, Italy, France and the UK."

John Matzavrakos, who was educated in Britain, says young aspiring professionals in Greece – the 24-30 year-old age group, of which he is a part, have watched their futures go up in smoke. "I am 27 years old, and the co-founder of a web services company registered in the Netherlands (it would make more sense to have opened it here in Greece, but with the bureaucracy, red tape and corruption, it couldn't be done.) This has been a part-time endeavour so far, but since my full-time employer filed for administration and liquidation a couple of months ago, we are planning to turn it into a full-time operation – and migrate in the process. Many of my friends and acquaintances, while young, are relatively successful in their jobs. Most were paid fairly well for Greek pre-crisis standards, at €1,500 a month or thereabouts, as I was before my employer collapsed. However, even those who are still employed would rather take the plunge and get out of here. They know that if their employer "suggests" they accept a €900 or less salary, there won't be any argument against it. I'm not speaking on behalf of 'lost students' or 'desperate pensioners'. I won't mince my words here: the category where people I know fit in – aspiring professionals – has absolutely nothing to keep it in Greece. And this is perhaps the greatest tragedy of our times, not whether inflated pensions will be reduced, but this. It's the crux of the matter."


A social crisis, not an economic one

Andreas Kosmatis sends an extraordinary story of workers continuing to work for no pay in a bid to secure their company's future in the face of official foot-dragging (and worse): in the north-eastern town of Komotini is a company called United Textiles. Its staff (of which Kosmatis is one) have been without pay for the past two and a half years, yet they are protecting their factories and supporting the company's management in seeking a solution. "One year ago an American investment fund tried to buy United Textiles by buying up its debt from the banks, and then paying everything owed to the workers and suppliers, restarting three factories and using the other factories for new activities. It would have been an investment of around €250m, in a country where the government couldn't find €300m and so had to cut pensions. The investor endured eight months of negotiation with banks and government, but finally gave up and left when a bank – a state bank that is – demanded more money, half an hour after the final legal documents have been circulated for final signatures. The story of these people is at the root of our problem. It is not an economic crisis, it is a social crisis: the part of Greek society responsible for development and growth just does not care. They are sitting comfortably, getting paid well every month and all they want is for things to stay as they are. Massive bailouts suit them just fine."


The diaspora steps up

And Valeria Iliadou writes from the Netherlands, where she and other Greeks have founded a group to help people in their homeland. "We organise actions everyday in order to help people in Greece who are facing issues and economic problems," Iliadou writes. "I know it is very difficult to produce via a single group. But I think when there is a strong will anything can be done. There are many things that can be done, especially through personal initiative, especially from young people who are hoping for a better future. This group wishes to be the beginning of a worldwide organisation that supports daily operations and all the Greeks, who now needed it more than ever. I would like to ask you to post our group to your page, asking everyone to join and contribute to our effort. We have perseverance and love for our country and we will do everything in our power to help any way we can." The group has a facebook page.

Greece on the breadline: 'we've watched our futures go up in smoke' | World news | The Guardian

Wednesday, March 14, 2012

Greece on the breadline: the children of Athens too hungry to do PE


Jon Henley is in Athens finding out how ordinary Greeks are pulling together to cope amid the financial meltdown

Athens potatoes self-help

Residents in Athens carry bags of cheap potatoes bought directly from Greek farmers at cost price, one of the burgeoning ways to cope in the worsening financial crisis. Photograph: KeystoneUSA-ZUMA / Rex Features

Dozens of readers have sent me suggestions about places to go and people to meet in my search for stories behind the headlines in Athens, and I'm following up as many as I can. Others have sent me their own contributions.

Tales of solidarity come from Victoria Prekate, an Athens secondary school teacher and psychologist, who relates how her colleagues in schools in the capital have been responding:

It has been a common secret among PE teachers for some time now that they don't expect pupils to do PE any more, because many of them are underfed and get dizzy.
They need to be discreet, as these underprivileged children don't wish to be exposed to their peers. In my previous school, the teachers arranged among themselves to give the school canteen some money, so that the canteen could give the child a snack, without embarrassing the child.
However, this was not enough. In many schools today, it is the parents' associations who come together, gather food and discreetly arrange to allocate it to those families of the school who are suffering. In co-operation with the teachers, they know which children in the school are hungry and in need of help. Again, they try to do it as discreetly as possible.
"Many families, suddenly left without work, are in shock and there is nowhere to turn. Social services are collapsing. They are not professional beggars. They are ordinary people like you and me, suddenly left with nothing. I know one area, where schools have specialised in what they gather: 1st primary school gather rice and legumes, 2nd vegetables, 3rd meat and chicken etc.

Zenon Panoussis also mentions a whole string of local grassroots and semi-official self-help initiatives:

There are direct producer-to-consumer markets, collective bargaining schemes at supermarkets, organised boycotts of motorway tolls, and book fairs. In Rethimno, Crete, regular free markets take place where products and services are exchanged without money – and, consequently, without VAT.
Some local councils in Athens are helping their citizens avoid paying the new special property tax that was slapped onto electricity bills. The borough of Peristeri specifically has an entire service to collect the bills and file appeals on behalf of its citizens. They are also organising direct producer to consumer markets for staple products.

Marie Le Du writes with news of a thriving, more traditional self-help network in Kifissia, in the northern suburbs of Athens:

These are traditionally viewed as the wealthy ones. However, beneath the veneer of apparent wealth, people have been suffering here, too. It is a different picture to downtown Athens in that you do not see the poverty on the streets in the same way.
People here are embarrassed to find themselves in reduced circumstances and are doing what they can to camouflage it. They will very reluctantly admit to not having enough to eat, pay bills or heat their houses.
With this in mind, our local Orthodox church (Agia Triada) did not organise a soup kitchen, but instead runs a food bank where people can donate food. Volunteers (mostly retired Greek women; my mother is one) then deliver the food to families that they have heard are in need (local news travels through the old-lady-network much more efficiently than any social media).
In an attempt to help the needy families preserve their dignity, they work in pairs and visit two or three families that are "their" families, dropping in for a coffee, chat, to catch up and give the food parcel discreetly, as part of the visit (it is traditional in Greek culture to take food/sweets to someone's house when they have you over for coffee).
The same old-lady-network (they call themselves Proneia, which literally translates as "providence") meets regularly and exchanges news as to who needs what in the area. This can be anything from clothes, food, money for medications to the fees someone may need to have surgery abroad. They raise the money by phoning to their friends, family, anyone who still has money.
A lot of self-help and charity in Greece has always taken place informally and discreetly. A lot of foreign friends are keeping cleaning ladies and nannies employed out of a sense of solidarity even though they are having to make other big cuts in their budget, because they know that these workers will get absolutely no benefits if they are left without work.
In my mother's block of flats there are tenants who have not paid rent in 10 months, yet the landlord is turning a blind eye. I think the bulk of self-help is happening on a personal level and goes undocumented rather than through any organised activist networks.
And I think that actually these informal networks have played a large part in maintaining some social cohesion in these difficult times. The question is, what will happen once the pensioners who run Proneia find themselves in dire straits?

Greece on the breadline: the children of Athens too hungry to do PE | World news | The Guardian

Greece on the breadline: 'We are kicking homeless pregnant women on to the streets'


Jon Henley meets a woman who has decided to do something – help the unemployed improve their skills and self-confidence


A homeless man sleeps outside the Bank of Greece in central Athens. Photograph: John Kolesidis/Reuters

As Greece enters its fifth straight year of recession, the cuts deepen and the dole queues lengthen, some people are beginning to fight back.

On Monday, in Plaka, Athens' old town, I met Katerina Kanelidou, 42, a leadership coach who decided she had to do something one night a couple of weeks ago when she saw a homeless man outside the station during one of the coldest Athens winters in memory.

"Then on YouTube, I saw someone had posted a video of a pregnant woman being ejected from a homeless shelter," she said. "I was just so shocked. I was thinking, how many unemployed people are going to become homeless? And what kind of society have we become, that we are kicking homeless pregnant women on to the streets?"

Realising she had neither "the power to influence the politicians, or the money to pay for more shelters", Kanelidou decided what she could do was offer her professional experience, providing specially devised, free coaching programmes for the city's unemployed aimed at boosting their self-confidence and skills.

"I just thought: I have to do something," she said. "Yes, there is real depression; huge numbers of people are taking anti-depressants. And a lot of anger at what's happened. But the time for excuses is over now. I am so fed up with the excuses: we can't do anything, we don't have the money, the time, the right paperwork. I have all I need to do something."

So Kanelidou posted on her Facebook page and emailed her contacts, offering coaching sessions to unemployed people on little or no income. She wasn't sure what the take-up would be. "People call us lazy, but we have always worked hard," she said. "There's a huge stigma to being unemployed in Greece. Plus volunteering isn't really a big part of our make-up. There's a mentality that says, if it's free it means either it's no good, or there's a catch somewhere."

But in the space of a few days she attracted 15 participants; more are joining daily. They come from diverse backgrounds: two from a family firm that went bankrupt, a couple of HR professionals, a mid-level company manager, an architect. She has taken on a volunteer assistant.

When the town hall refused to lend her a seminar room on the grounds that she did not represent any professional or corporate body, she persuaded OTE, the Greek state-owned telecoms operator, to give her space in its training centre. "They bypassed their whole bureaucratic procedure to give me the space," she said. "They saw they could do something, too."

The first sessions take place this week. In exchange for the confidence and skills she hopes to impart ("People have the experience and talent, but many need new tools for a new technological environment") she is asking her course members to devise concrete ways in which they, in turn, can do something in their community: "That way, if I am just one person helping one group, each of them will do something for another group."

The press are on to her, and interest is gathering. Longer term, with the programme up and running, she will start looking for sponsors among her corporate contacts to spread the sessions around the city and further afield. For Kanelidou, determined now that optimism and individual action is the only way Greece will haul itself out of the mire, the country's crisis, while it has become financial, is above all a crisis of values.

"What we had became more important than who we were," she said. "Always we looked for shortcuts: just give the official some money, everything will be easier. We failed to take responsibility, and no one was ever accountable. And we stopped engaging with politics; we abdicated. Everyone was drunk on this artificial prosperity … It was a party. A big bubble, and now it's burst. We have to start again, and each one of us has to make it work."

Greece on the breadline: 'We are kicking homeless pregnant women on to the streets' | Jon Henley | World news | The Guardian

Not Solving the Greek Debt Crisis Might Just Solve the Greek Debt Crisis - Matthew O'Brien


Mar 12 2012, 8:07 PM ET 1

Everybody assumed that when Greece defaulted, Europe would fall apart. This weekend, Greece defaulted. And Europe's still around. What if extend-and-pretend actually works?



Greece and the euro zone are the Sid and Nancy of currency unions. We know these crazy kids are going to break up eventually -- so why not go ahead and get it over with already? The answer is that neither side is prepared for their inevitable divorce. The Germans have roughly a trillion reasons to keep Greece around for now. And the Greeks, for their part, still want to stay in the euro zone. The prospect of bringing back the drachma simply terrifies many of them. It shouldn't. Greece's recent managed default shows that leaving the euro, though ignominious, wouldn't need to be the end of the world.

A Greek exit from the euro zone seems a fait accompli. It has little to do with Greece's genuinely profligate government spending, and everything to do with Greece's labor costs. Greece's wages are simply too high to compete with the rest of Europe, particularly Germany. There's usually a simple remedy for this: devalue the currency. But euro membership precludes Greece from doing that. Instead, Greece is being forced to go through an "internal devaluation" -- econospeak for cutting wages. The resulting sky-high unemployment is socially unsustainable. And, as Meg Greene points out, it's unlikely to improve much within the next decade.

For Greece, the euro is not worth a perma-slump. Unfortunately, though, resurrecting the drachma might not make things any better -- for now, at least. And Greece's primary deficit has everything to do with why.

Even if Greece defaulted on all of its debt and left the euro zone, it would still be running a large deficit. The country would be stuck between two equally nauseous choices: hyperinflation and hyperausterity. In other words: It could drown the problem with money or starve the problem with cuts.

Both are nightmarish. So long as it's part of the euro zone, Greece can close its deficit with a mix of austerity and money from Germany. If it leaves the euro, Greece is on its own, and it would have to rely on much deeper cuts -- or tax hikes -- to close its deficit. Such austerity on steroids is a painful option. It would create a rather massive temptation for a country as chronically ill-managed as Greece to print its way out of trouble. But if Greece simply prints drachmas to pay its bills, inflation would take off -- perhaps even to Weimar levels.

None of this means that Greece shouldn't leave the euro zone. It means that Greece shouldn't leave the euro zone too soon. Consider the case of Greece's recent default. Markets shrugged off the 74 percent writedown on Greece's privately held debt, because there had been plenty of time to prepare for it. Even the payouts on the much-hyped credit default swaps on Greek debt turned out to be a relative non-event.

In other words, the can-kicking worked! If Greece had defaulted like this two years ago, when its debt problems first roiled markets, the result likely would have been panic. Today, it elicited more headlines than actual worries.

The lesson is clear: Greece and Germany should keep kicking that can! As soon as Greece's budget reaches a primary surplus, they should announce capital controls (to forestall the unavoidable bank runs), negotiate a writedown of the remainder of their debt -- and bid adieu to the euro. The transition to the drachma will still be hellacious, but doable.
Greece and Germany are careening towards an ugly breakup. But it doesn't have to be that way. They can still be friends -- as long as they commit to making their dysfunctional relationship work for just a bit longer.

Not Solving the Greek Debt Crisis Might Just Solve the Greek Debt Crisis - Matthew O'Brien - Business - The Atlantic

Monday, March 12, 2012

Greece on the breadline: amid the fury, solidarity


Jon Henley goes to meet Greeks who have responded to austerity with innovation and resourcefulness as well as anger

homelessness in athens, greece

Homelessness and boarded up businesses in Athens: Greeks fear several more years of swingeing austerity measures will change its society beyond recognition. Photograph: Orestis Panagiotou/EPA

Last week's news that Greece had won enough support from its private-sector creditors to finally secure the latest crucial €130bn (£109bn) bailout package was greeted with relief in Europe's capitals and undisguised joy in Greek government circles, where the deal was hailed as a "triumph".

It certainly gives Athens a breather. But for ordinary Greeks the price will be at least five more years of swingeing austerity measures that will change the country beyond recognition. EU officials have admitted that after seeing their wages cut by a third since 2009, Greeks will suffer a further 15% reduction in the next three years, and probably more after that.

The economy is forecast to shrink by up to 5% this year, after a 7% contraction last year. Stuck in recession for five straight years, Greece has seen its GDP shrink by a crushing 17%. That, is the level to which unemployment is expected to fall in two years' from 21%, at present.

Far from rescuing Greece, the austerity measures dictated by the IMF, European Union and European Central Bank, many here believe, will turn the eurozone member into a marginalised, third-world economy for decades to come. Not, of course, that Greece – in particular its swollen, corrupt and often hopelessly inept and wasteful public sector – didn't need reform. But at what cost?

Behind the numbers lies the reality that an estimated one-third of the Greek population has now fallen below the poverty line. Even for conservative analysts, the heavy and repeated cuts in salaries and pensions, spiralling tax hikes and never-ending public spending cutbacks are pushing Greece to the brink of economic, if not social, collapse.

Even the minimum wage is being slashed by 22%. The queues for the soup kitchens are lengthening; each day, the Greek Orthodox church is handing out emergency food rations to a quarter of a million people. An estimated 20,000 Greeks find themselves suddenly homeless, more than half of them in Athens.

Anger, particularly against the country's political class, is mounting, perhaps to dangerous levels. Commentators predict not just an explosion but an eruption, extraordinary scenes, even the breakdown of civil society. Elections scheduled for next month could prove a momentous test of strained resolve.

That said, alongside the fury there is solidarity. Self-help groups are emerging, citizen activists joining forces and several grassroots initiatives taking shape. Academics are offering free tuition; community web radio stations provide a forum for advice and support; volunteer soup kitchens deliver food to places the town hall can't reach. In municipalities around the country, farmers have started selling potatoes and other staple foods – including Easter lamb – to consumers directly, at ultra-low cost.

Last October I travelled to Portugal, Spain, southern Italy and northern Greece in search of real people's stories behind the headlines for a series called Europe on the breadline. This week I'm returning to Greece – to Athens and then up to Thessaloniki – on a similar quest, looking not only at how people's lives are being affected by the ongoing crisis, but also at the innovative and resourceful ways in which they have started to help each other.

Greece on the breadline: amid the fury, solidarity | Jon Henley | World news |

Sunday, March 11, 2012

Biggest debt restructuring in history buys Greece only 'a bit of time'

By Michael Steininger, Correspondent / March 9, 2012

Private investors agreed to write off 85.8 percent of Greece's private debt, but analysts warn that if Greece doesn't address underlying problems, the deal will not fix things for long.

Greece's Finance Minister Evangelos Venizelos speaks during a news conference in Athens, Friday, March 9. Greece has cleared a major hurdle in its race to avoid imminent bankruptcy after persuading the vast majority of its private investors to slash the value of their Greek bond holdings, a move that should pave the way for the country's second massive international bailout. Thanassis Stavrakis/AP


Greece has succeeded in pushing through the biggest sovereign debt restructuring in history, with 85.8 percent of those holding private Greek debt agreeing to join a debt write-off deal, according to the Ministry of Finance in Athens.

The deal cuts Greek debt by around €105 billion ($138.8 billion) – about half of the country's private debt –  and clears the way for Greece's second international bailout package, this one worth €130 billion ($173 billion). European finance ministers said today that they would immediately release the first tranche of the funds, worth €35 billion ($46.2 billion).

While European leaders welcomed the deal, analysts warn that it only buys Greece a bit of time to address the underlying problems.

"We have achieved an exceptional success,” Greek Finance Minister Evangelos Venizelos told the parliament today. “I believe everyone will soon realize that this is the only way to keep the country on its feet, and give it the historic second chance that it needs.”

RELATEDGreek bailout: 5 key conditions set by the EU

EU Monetary Affairs Commissioner Olli Rehn called the terms of the agreement “very satisfying,” and German Finance Minister Wolfgang Schäuble said, Greece was “not out of the woods yet, but on a good way."

The deal private investors have agreed to means they will write off 53.5 percent of private debt – a real loss of 74 percent when the loss in future interest payments is taken into account. The deal also includes a debt swap in which lenders will exchange the rest of the bonds they hold for new ones worth less, have a longer maturity of up to 30 years and pay less interest. The Greek government now plans to legally force the few remaining lenders to sign on to the deal through a so-called Collective Action Clauses (CACs). 

The good news out of Athens was overshadowed by the release of Greece’s latest growth figures, which show that the economy shrank by 7.5 percent in the last quarter of 2011. It is this deep recession that worries analysts like Peter Bofinger, an economist at Würzburg University.

“Greece would have needed a 100 percent haircut, including the public creditors like the European Central Bank,” he says. “But most of all, Greece needs growth. It needs investment and jobs. Right now I don’t see where these should come from.”

“This is not a time for celebration,” says Constantine Michalos, president of the Athens Chamber of Commerce. “The deal is a pain relief in the great illness the Greek society has been going through in the last two years.”

Referring to the reaction of financial markets around the globe, which went down after the announcement of the deal and the subsequent use of CACs, Mr. Michalos said that investors still needed to be convinced that Greece was now on an upward trajectory.

“If we can’t convince them, we’ll be back to where we were yesterday in three months' time," he said.

RELATED – The Greek debt conundrum, explained

Biggest debt restructuring in history buys Greece only 'a bit of time' -

Greek crisis: for the Chelsea set of Athens, it's still a life of luxury brands

Rupert Neate in Athens The Observer, Sunday 11 March 2012

As the country struggles, the rich still buy Gucci, Prada and Louis Vuitton - though they may more discreet about flaunting it

Desinger outlets in Greece

Designer outlets in Kifissia: the labels are what you expect to see in London, Paris or Manhattan. Photograph: Terry Harris/Alamy

Greece may be facing years of austerity – even after securing the biggest sovereign debt restructuring in history last week — but take a 20-minute cab ride north of central Athens to the suburb of Kifissia, and it is hard to find many visible signs that the programme of spending cuts is starting to bite.

"One group of society has not really been affected by the crisis — the very rich," says Theo Bosdas, managing director of a branch of a German estate agent on one of Kifissia's main streets, who has properties for sale for more than €8m (£6.7m). "This is where they live, so it's much better than downtown. This is very, very Chelsea."

Other locals describe the suburb and neighbouring Ekali to the north of Athens, which count former prime minister George Papandreou and opposition leader Antonis Samaras among their residents, as similar to South Kensington, Knightsbridge or Notting Hill. And Kifissia does have a very similar feel to those areas, with queues outside the city's hippest nightspots in the evening and the clientele from coffee shops that charge close to €5 for a cappuccino spilling out on the pavements during the day.

The brands shouting out from shop windows are the same ones you would expect in west London, Paris's Left Bank or Manhattan. Louis Vuitton, Gucci, Prada and Bottega Veneta handbags, Manolo Blanik shoes and Mac makeup can all be found.

Retail sales fell 30% in Greece over Christmas compared with the previous year. Antonis Megoulis, who heads the national confederation of Greek commerce, says: "It couldn't be worse. Our monthly surveys are shocking reads. Sales are down, businesses are closing every day and there are no signs of optimism on the horizon." Some 65,000 shops have closed in the past three years and another 50,000 are said to be on the brink of bankruptcy.

But business is still brisk at the luxury stores in Kifissia, according to its shop assistants. "There is a crisis and you can feel it everywhere… but Kifissia is better because people here are richer," says Maria Douka, in the Gucci store. "Of course big brands like Gucci don't have such a problem, but some family businesses are in trouble – almost everyday something is closing."

She says some customers are still keen to buy but the growing inequality between rich and poor is making them more conscious about flaunting their wealth: "Some ladies say they are afraid to wear luxury bags and brands."

It is similar story at Bottega Veneta down the street. "They don't like to wear brands out," says shop assistant Schoina Vaso. "They still buy, but not at the same levels as about five months ago, when we noticed a decline."

Around the corner at the local Starbucks (there used to be two, but one recently closed) student Hanna Martetschla and her friends, all daughters of business executives, say nothing much has changed for the rich as long as they are careful in central Athens: "Downtown you should be low-profile – wear jogging pants. But here is not at all affected. There are no protests, no riots, no nothing, only [transport workers'] strikes."

Evangelos Krielas, 39, an engineer drinking a coffee and smoking a cigar outside the newly opened B-spoke bar, says Kifissia has largely escaped the crisis affecting the rest of Greece because most people from the area are too rich to notice. "Most people from Kifissia don't work, they receive money every month from rent on the shops and houses they own," he says.

Many Greeks with more modest incomes blame tax avoidance by the super-rich for helping create the crisis. "They don't pay, that's the problem. If the rich had paid we wouldn't have had a problem," says Angelisa Tserga, a student studying for a PhD in biology.

Niki Fidaki, a computer scientist, says: "The people who have the money are the ones who don't pay. If I didn't pay my taxes I would go to jail," she says. "If I became rich I would find a way not to pay. At the moment it is the poorer who are paying for the rich, that's the scandal."

Bosdas says many of the richest Greeks have already left the country. "People who have things like that [multimillion-euro homes] left Greece years ago. They have businesses in England or wherever. They may still come back here, they may not. They are acting as they wish. They don't care."

He says the rich blame strong unions for creating a bloated public sector where jobs are guaranteed for life and sometimes even passed down through the generations. "We have about one million public servants in a population of 10 million. No one can fire these people unless they kill or steal. In the port their jobs are inherited.

"Blue-collar people blame white-collar people because their sons are entering parliament [to help ensure favourable laws for their rich parents]. It is an exchange of favours. They are both wrong."

He says very few sales go through because sellers are demanding unrealistic prices for their properties. A five-bedroom luxury mansion on the hills overlooking Kifissia, which has been on the market at €8m for more than a year without attracting any offers, should be on the market for €4m. "People prefer suicide rather than selling at a loss or breaking even."

Any buyer who bought between 2007 and 2009 will be sitting on a massive loss, Bosdas says, but he reckons people who bought before the "ridiculous property boom" should be able to break even: "The problem is Greeks are too proud, they don't want anyone to get a good deal, and buyers don't want to be seen as vultures snapping stuff up."

Greek crisis: for the Chelsea set of Athens, it's still a life of luxury brands | Business | The Observer

Saturday, March 10, 2012

Greek debt crisis: timeline | Business | The Guardian

Phillip Inman, Friday 9 March 2012 16.00 GMT

Bailouts, austerity, riots and bond swaps - key events in the run-up to Friday's news that investors in Greece have agreed to write off 75% of their loans

Greek prime minister Lucas Papademos

Greece's prime minister Lucas Papademos. Photograph: Alexandros Beltes/EPA

18 October 2009 George Papandreou's new socialist government reveals a black hole in government accounts. He admits the budget deficit will be double the previous government's estimate and will hit 12% of GDP. FTSE falls 200 points to 5042

8 December 2009 Fitch ratings agency downgrades Greece's credit rating from A- to BBB+. Borrowing costs begin an upwards spiral made worse after rival ratings agencies S&P and Moody's begin moves that soon categorise Greek debt as junk.

4 March 2010 Greece announces a major austerity plan. An increase in VAT and tax on cigarettes and alcohol is coupled with a freeze on pensions and cap on civil servants' pay.

26 March 2010 German chancellor Angela Merkel agrees under pressure to a "last resort" rescue package for Greece after debt downgrades on Portugal and Ireland force her into a U-turn. FTSE climbs to 5771

23 April 2010 Papandreou calls for a eurozone-IMF rescue package following steep rise in borrowing costs. FTSE falls more than 600 points to 5123

2 May 2010 Eurozone finance ministers agree to rescue Greece with €110bn (£92bn) in loans over three years. A week later ministers announce a €500bn eurozone rescue fund.

7 July 2010 Parliament passes pension reform, a key requirement of the EU/IMF deal, and raises women's retirement age from 60 to match men at 65.

23 April 2011 European commission says Greek budget deficit is again worse than expected, at 13.6% of GDP. Second Greek crisis begins.

13 June 2011 Greece gets the lowest credit rating in the world after S&P downgrades it by three notches, to CCC from B.

29 June 2011 Greek parliament passes second austerity bill after two days of violent protests during which some 300 protesters and police are injured. The package contains severe spending cuts and tax increases. The EU had set passage of the bill as a precondition for further aid.

3 July 2011 European finance ministers postpone a decision on a second bailout. Greece on edge of collapse. Markets dive again. Borrowing costs for Italy and Spain begin to rise.

2 October 2011 Athens says Greece cannot meet the 2011 and 2012 deficit targets agreed with the international lenders, blaming a deeper recession than forecast.

31 October 2011 Papandreou stuns markets and eurozone leaders by calling for a referendum on the EU/IMF rescue plan agreed only days earlier. The plan calls for private creditors to take a 50% writedown and allows for €130bn of fresh bailout loans.

5 November 2011 The leaders of Greece's two largest political parties form a government of national unity, but it soon collapses. Papandreou confirms on television four days later that he will resign, ushering in Lucas Papademos, a former central banker, as prime minister.

8 December 2011 European Central Bank offers massive loans to banks to avert second credit crunch as fear of Greek collapse undermines confidence in European banking sector.

16 November 2011 Papademos wins confidence vote in parliament before embarking on two months of on/off talks in Brussels.

14 December 2011 The IMF says reforms are running behind schedule in most areas and the delays are stalling recovery.

28 January 2012 Greece reaches tentative deal with its private creditors to significantly reduce the country's debt, but Germans persist in limiting loans and demanding more austerity cuts.

9 February 2012 After repeated delays and all-night talks with leaders of the three Greek coalition parties and EU and IMF inspectors, political leaders clinch a deal on government cuts in return for new rescue loans. Cuts include 22% off the minimum wage, 15% off pensions and 15,000 public sector jobs. Unemployment rises to 21%, a new record, after austerity measures already in place.

21 February 2012 After more than 12 hours of talks, eurozone countries reach agreement to hand Greece €130bn, needed in time for the country to refinance €14bn of loans on 20 March. The deal is expected to bring Greece's debt down to 120% of GDP by 2020, around the maximum that the IMF and eurozone consider sustainable.

9 March 2012 Athens announces results of bond swap offer. In effect, banks agree to write off 75% of the value of their loans.

Greek debt crisis: timeline | Business | The Guardian

Wednesday, March 7, 2012

Athens, creditor group turn up heat on Greek bondholders

By Alex Chambers and Lefteris Papadimas

Credit: Reuters/John Kolesidis

LONDON/ATHENS | Tue Mar 6, 2012 5:59pm EST

People leave the Bank of Greece as cleaning works are in progress, in central Athens March 6, 2012. Greece has no plans to extend the March 8 deadline on its bond swap offer to private creditors, Greek officials said on Tuesday, dismissing market rumours that the cutoff date may be put back to increase participation in the offer.   REUTERS/John Kolesidis

People leave the Bank of Greece as cleaning works are in progress, in central Athens March 6, 2012. Greece has no plans to extend the March 8 deadline on its bond swap offer to private creditors, Greek officials said on Tuesday, dismissing market rumours that the cutoff date may be put back to increase participation in the offer.

LONDON/ATHENS (Reuters) - Athens turned up the heat on its creditors on Tuesday as it sought to secure a bond swap that will cut its mountainous debt, while the main bondholders group warned a disorderly default would cause more than a trillion euros of damage to the euro zone.

Greek private creditors have until Thursday night to say whether they will participate in the exchange that is a key part of a bailout program to help Greece manage its wrecked finances and meet a debt repayment on March 20.

A number of the biggest bondholders are signing up but despite the dire warnings, a clutch of Greek pension funds and some foreign investors rejected the offer which will see investors lose almost three-quarters of the value of their holdings and lop about 100 billion euros off Greece's debt.

Athens ratcheted up the pressure, delivering its starkest signal to date that it will force losses on those who do not volunteer.

Its Debt Management Agency (PDMA) said if it got enough support, it intended to make losses "binding on all holders of these bonds" and said the offer was the best deal they would get, echoing comments by Finance Minister Evangelos Venizelos to Reuters on Monday.

Analysts said an Institute of International Finance document, marked "IIF Staff Note: Confidential", seemed designed to alarm investors into participating in the exchange by estimating the extent of havoc a disorderly default would wreak.

"It is difficult to add all these contingent liabilities up with any degree of precision, although it is hard to see how they would not exceed 1 trillion euros," the IIF, which represented private creditors in months of tortuous debt negotiations with Athens, said in the February 18 document obtained by Reuters.

If Greece misses the March 20 payment without a deal in place and succumbs to a hard default, it could be taken as a sign that politicians have lost control of the crisis again, prompting investors to target other weak euro zone countries.

Spain and Italy might require 350 billion euros in outside support to contain the fallout, the IIF said, while the cost of helping Ireland and Portugal could total 380 billion euros over five years.

"When combined with the strong likelihood that a disorderly Greek default would lead to the hurried exit of Greece from the euro area, this financial shock to the ECB could raise significant stability issues about the monetary union," it said.

The bank lobby group also said bank recapitalization costs could easily hit 160 billion euros if no swap is agreed.

"Obviously the report is written on a worst-case basis to try and encourage participation in the exchange," said Gary Jenkins, analyst at Swordfish Research.


Greece hopes the exchange will mark a turning point as it enters a fifth year of recession but not all its creditors are willing to take the bond exchange, raising the prospect of Athens forcing them to by legal means, which could become a messy process.

Greek banks, holding 40-45 billion euros of the sovereign bonds, will all take part in the offer, banking sources said. Athens later confirmed its six biggest banks would take part in the swap, and Italy's largest bank by assets, UniCredit, said it would participate.

Nine more major Greek bondholders, all on the IIF steering committee that helped draw up the deal, said on Monday they would support the swap.

The Greek banks and other steering group members hold about 30 percent of the 206 billion euros of bonds in circulation.

Most Greek pension funds will also sign up but four funds with bonds worth about 2 billion euros have refused to do so, a Greek official said. The funds have come under pressure from labor unions worried the writedown on Greek debt holdings will undermine their viability.

Investors in a Swiss-law governed Greek government bond have teamed up to challenge the terms of Athens' proposed bond swap, highlighting the wave of litigation it could yet face, particularly over the minority of its debt not issued under Greek law.

Greece wants a take-up of 90 percent or more, and if it falls below that but exceeds 75 percent it is expected to use collective action clauses (CACs) to force losses on all. It could trigger CACs on Greek law bonds, which account for 177 billion euros of the total, with two-thirds acceptance.

Below that level, the deal could be off, potentially plunging the euro zone back into crisis.

The Greek finance ministry denied speculation that it was planning to extend the deadline on the offer, highlighting the jittery mood just two days before final decisions are due.

"The most likely outcome may well be that Greece passes its 75 percent target and then uses CACs to ensnare the remainder," Jenkins said.

Greece needs to reach that target to ensure it makes the savings agreed under its 130 billion euro bailout deal.

Using the CACs would probably trigger payouts on bond insurance contracts (CDS) and would also increase the chance of hedge funds or other bondholders pursuing legal action.

Complicating the process is the fact that most of the bonds fall under Greek law, but the remainder are under English law.

The deadline for acceptances is 2000 GMT on Thursday, although the foreign law bondholders must hold approval meetings March 27-29 so they would settle at a later date.

(Additional reporting by Harry Papachristou and Deepa Babington in Athens; Writing by Steve Slater; Editing by Mike Peacock and Anna Willard)

Athens, creditor group turn up heat on Greek bondholders | Reuters

Thursday, March 1, 2012

Greece battered by recession, debt and now unseasonal snowstorms

Rupert Neate in Athens, Tuesday 28 February 2012 19.43 GMT

Meanwhile, a coalition of Greek businessmen implores global financial and political leaders to support the country with the slogan: 'All we are saying is give Greece a chance'

Snowstorms in Athens

A couple seek shelter during a heavy snowfall on the mountain of Penteli in northern Athens. Photograph: Thanassis Stavrakis/AP

Greece is being battered by a perfect economic storm of recession and debt – and now an unseasonal snowstorm has arrived to add to the country's problems.

As Standard & Poor downgraded Greece's credit rating to "selective default" – the first time an advanced country has been in default since Germany after the second world war – heavy snow and gales closed the main rail line between Athens and Thessaloniki, ships and ferries stayed in port and schools closed.

A coalition of Greek businessmen has invoked the memory of John Lennon and Yoko Ono's famous "bed-in", with a campaign imploring global business and political leaders to support the country as its politicians voted through another round of drastic pay cuts. "All we are saying", says the campaign, "is give Greece a chance".

The campaign is backed by several of Greece's biggest companies, including Aegean airlines, Hellenic Petroleum, Piraeus Bank and a dozen other Greek companies.

It is aiming to win back support from the eurozone to "ensure that the sacrifices made by every Greek under the toughest austerity package in modern history do not go in vain".

The Greece is Changing campaign was launched online as the Greek cabinet met to approve swingeing private sector pay cuts and prepared to vote on Tuesday night on a fresh round of public spending cuts to meet tough demands set by the European Union. The Greek government must vote through more than 80 fresh austerity and reform measures over the next few weeks to secure ongoing support to prevent the country's economy from collapsing.

The launch of the campaign comes a day after Germany approved Greece's second €130bn (£110bn) emergency bailout and the S&P default ruling. Greece is expected to remain in selective default until its debt swap offer as part of a €206bn closes on 12 March.

Nobel prize-winning economist Paul Krugman warned that Greece is "very close to running out of alternatives" to being forced to leave the eurozone.

The new business lobby group warned that "careless rhetoric" about the country could have a "catastrophic effect" on the country's future.

"As we enter our fifth year of recession we want to rebalance the agenda [and] inject some more facts into a debate sometimes overrun by fiction," the lobby group said as it launched its internet campaign. "[Greeks] have already made sacrifices and are ready to do more and just need a chance to change Greece.

The campaign group said Greece has already made good progress in reducing its vast public spending budget. It said more than 85,000 public sector jobs have been axed since 2009, wages have been cut by 30%, pensions reduced by 10% and are due to fall by a further 4% since year.

VAT has been increased on all goods and services, with taxes on fuel, cigarettes and alcohol increased by 33%.

The minimum wage has been cut by 22%, and by 32% for those under 25. Official unemployment stands at 21%, up from 8% in 2010. The real rate of unemployment is likely to be far higher, because only people that have previously been employed are able to claim benefit.

The businessmen implored Europeans to "see through the stereotypes and realise that there is another Greece which believes in modernity, in the stability that being part of Europe brings, that is fighting a battle for change that can be won".

Greek police, firefighters and harbour police staged a rally in Athens on Tuesday night and the country's two biggest unions have called for a demonstration on Wednesday.

Greece battered by recession, debt and now unseasonal snowstorms | Business | The Guardian