Death by 11.5 billion cuts

 

By Nick Malkoutzis

Is there another euro zone country where you can witness a finance minister being barracked on his way into the office? Few of Yiannis Stournaras’s counterparts will experience the kind of close encounters he did last week as he was harangued by protesting steel workers on his walk to the Finance Ministry in central Athens. Stournaras remained calm, hardly quickening his step, but was left in no doubt about the exasperation of his sidewalk critics.

Perhaps Stournaras would have felt aggrieved to hear shouts of “You’ve destroyed us” given that he has only held his position for a few weeks. But the abuse was not personal, it was purely business. The trading of blame and frustration is one of the few activities still flourishing in this seemingly moribund country. For the protesters, Stournaras was simply the representative of a political system that has watched helplessly and acted haplessly as Greece slides into decline.

He is one of the many targets of abuse in Athens these days. The latest round of negotiations between the government and the troika on the cuts demanded to secure further bailout instalments have brought back with a vengeance the sense of insecurity that has lingered over the country for the last three years. A fresh tug-of-war between Athens and its lenders is eroding the little confidence left. More talk of measures that have a direct and immediate impact on people’s livelihoods push further away any thoughts of stability or recovery.

In this climate, it is no surprise that the three-party coalition is treading carefully, reluctant to accept all of the troika’s demands and perhaps providing more counter-arguments on the specific cuts that should be made than the past. Despite coming in the wake of almost 50 billion Euros of measures since the crisis began, this package of 11.5 billion in reductions and 2 billion Euros in tax hikes is going to be the most painful of all.

For starters, the survival of the coalition - delicately balanced on the precipice created by the jolting of the political fault lines in this summer’s elections - depends upon being able to manage the new batch of measures. The parties each have to convince their supporters that there is good reason to abandon their pre-election pledges of renegotiating the bailout. Collectively, they have to convince the Greek public that further cuts are part of a winning strategy to lift an economic that has shrunk by about a fifth since 2008 out of its near comatose state.

This task is most difficult for Democratic Left Fotis Kouvelis. His party promised to hold back the reins of the troika but he finds himself being dragged through the thorny bushes of an intense fiscal adjustment. Three of his 17 MPs have already declared they will vote against the measures. Should this number rise by several more, the existence of Kouvelis’s party would surely be in doubt.

PASOK, battered from pillar to post at the recent elections, has no wish to sign its death warrant by associating itself with more brutal measures. In fact, its leader Evangelos Venizelos wants to distance himself as much as possible from the even deeper cuts to salaries, pensions and benefits that the troika has apparently demanded. His only hope of survival is that the worst of what is in this latest package is associated with Prime Minister Antonis Samaras and Stournaras rather than himself and Kouvelis. This seems one of the few ways PASOK, currently fourth in the polls behind neofascist Golden Dawn, could stop its slide into oblivion.

For Samaras, for so long the self-styled anti-austerity warrior, an excessive cut to wages and pensions would be morally and ideologically devastating. He will have difficulty reconciling the 11.5 billion Euros in cuts as things stand. If the troika force him and his party to abandon their long-held claims that some savings could be made from reforming the public sector, not just by cutting people’s earnings, the core thrust of his economic argument would implode.

A coalition unable to hold on to even a modicum of its original positions would be left with nowhere to go, even after just a few months in government. But political survival is only one aspect of Greece’s predicament; society’s survival remains the key factor.

The reason that the coalition is standing on shaky ground is because society is restless. On Wednesday, tens of thousands of people will march through the centre of Athens. One in four of those protesting will be unemployed, while one in three of the shops they pass will have shut down due to the crisis. Some will argue that is part of the process of creative destruction, or a necessary by-product of the internal devaluation, that Greece is undergoing. But three years into the crisis, the majority of Greeks have seen plenty of destruction but little in the way of creativity. Greece has reached the point of internal default, with the state refusing to pay some suppliers and reportedly attempting to strong-arm others into accepting a sizeable discount.

This is the result of a flawed adjustment program that failed to identify and prioritize key structural reforms and bailout that is recycling debt that an economically crippled Greece has little hope of paying. The only thing being created by one of the biggest post-Second World War fiscal consolidations ever seen is a complex of dead-ends: a country that can’t satisfy its lenders, an economy that is stuck in decline, a people running out of options and the absence of a way out.

In this atmosphere, it is perplexing that the troika, and the International Monetary Fund, in particular has chosen to intensify its dogmatism. Reports that the IMF’s representative Poul Thomsen rejected the savings Greece planned to make from structural reforms and demanded further cuts to wages and pensions suggest a troika that is oblivious to the political and social dangers of the consolidation program.

Some have interpreted this as an intentional manoeuvre by the IMF, which wants to make the Europeans face up to the fact that Greek debt is not sustainable and that the officials sector – the European Central Bank and the euro zone – will have to accept some form of restructuring. While the issue needs to be addressed, the IMF’s crude way of forcing it onto the negotiating table – if that is what the Fund is doing – is a high risk strategy.

There is a world of difference between the Europeans discussing a new restructuring for Greece because austerity is becoming counter-productive and them being forced to give Athens another break because it lacks the political courage to pass more cuts. Over the last few days, the failure to agree on the latest austerity package with the troika has led to some in Europe having the impression that the latter is the case. Reports confusing fiscal and financing gaps have created the impression that Greece will suddenly need to borrow 30 billion Euros more, thereby strengthening the impression that it is the so-called bottomless pit that some have suggested. Nowhere has it been made clear that as of next year, any money that Greece will be borrowing will be going towards paying debt, not to cover public expenditure.

See, for instance, the reaction of Michael Meister, a Christian Democratic Union MP in Germany, to suggestions that there should be a further write-down of Greek debt. “Where would it stop? We’re talking about loans from as recently as last year,” he told Bloomberg, before adding that it was “up to the Greeks” to make up any financing gaps.

The troika is due to return to Athens this week and some compromise is likely to be found but the fundamentals of the problem will remain. Agreeing the new austerity package will not resolve Greece’s situation and somehow all sides have to find their way out of the corners into which they’ve backed themselves into.

One factor that may play a part in concentrating minds is the apparent changing dynamic in Portugal, which as the Economist put it, has “in two short weeks gone from being a model pupil... to a cautionary example of the dangers facing governments which attempt to push austerity beyond the tolerance of long-suffering voters.” The Portuguese government buckled last week under public pressure over its decision to increase workers’ social security contributions, while cutting them for employers. This may end up being a landmark moment for the European debt crisis, as protests in Greece and Spain intensify.

The hope for Greece is that the limits to austerity and what it can achieve are becoming ever more visible to Europeans and that a more comprehensive method of tackling the crisis will be sought. Otherwise, a slow death, by 11.5 billion cuts lies ahead.

[Kathimerini English Edition]

ekathimerini.com | Death by 11.5 billion cuts

Greek crackdown on illegal immigrants leads to mass arrests

Helena Smith in Athens

guardian.co.uk, Tuesday 7 August 2012 19.16 BST

Thousands of migrants are being held in detention centres near Athens before being deported back to their home countries

A Greek police officer guards migrants during an identity check operation in Athens. Photograph: Pantelis Saitas/EPA

Greek authorities have begun one of the country's biggest crackdowns yet on suspected illegal immigrants, deploying 4,500 police around Athens and detaining more than 7,000 immigrants in less than 72 hours.

Most have been released, but about 2,000, mostly Africans and Asians, were arrested. They were sent to holding centres pending deportation in an operation that officials, bizarrely, elected to call Xenios Zeus after the Greek god of hospitality.

On Sunday, 88 undocumented Pakistanis were put on planes, accompanied by guards, back to their home country.

"We will not allow our towns, or our country, to be occupied and become a migrant ghetto," said Athens' hardline public-order minister, Nikos Dendias, as authorities discussed plans to build eight detention centres capable of holding up to 10,000 immigrants, in the capital.

Widely seen as the easiest entry point to the west, Greece has had a surge of new arrivals, with government figures showing more than 100 migrants daily crossing the country's porous border with Turkey. The majority go to Athens, a magnet for migrants desperate to find work before moving on to other parts of Europe. An estimated million immigrants are believed to live in Greece where the population is barely 11 million.

But the country's economic crisis and growing political radicalisation has given rise to a xenophobic backlash, the uncontrolled influx blamed for a sharp spike in violent crime.

The neo-Nazi party Golden Dawn, which has vowed to rid Greece of "migrant scum", has seen its popularity soar with the party capturing an unprecedented 6.9% of the vote in parliamentary elections six weeks ago.

Racist attacks by black-clad men associated with extremists have escalated dangerously, according to a recent report by Human Rights Watch.

On Tuesday anti-immigrant fervour grew following the prosecution of a Pakistani who appeared in court accused of assaulting a teenage Greek girl on the Cycladic iIsle of Paros.

In this atmosphere Athens' fragile conservative-lead coalition has taken action. Dendias described the problem of immigrants as "perhaps even bigger than our financial one".

"The country is being lost," he told Skai TV. "What is happening now is [Greece's] greatest invasion ever. Not since the Dorians invaded some 3,000 years ago has it received such a flow of immigration."

Defending the crackdown, he insisted it was imperative to preventing the debt-stricken nation sliding into further chaos and collapse. "Our social fabric is in danger of unravelling," he said.

In the coming weeks arrested migrants would be put in a detention centre outside Athens and unused police academies in the north of the country before being deported, he added. Immigrants were often living in such appalling conditions it was "to their benefit to be repatriated".

On Tuesday Walid Omar, an Iraqi Kurd, was sitting in an internet cafe in Athens' historic city centre when a policeman walked in. The migrant knew the officer well. As a friend of the cafe owner, Omar regularly stopped by and the policeman did too.

But the officer was unusually terse. "He told me and everyone else who did not look Greek to follow him. For the next two hours we were made to wait in a windowless bus, and then under the sun, before they first inspected our clothes and then inspected our papers at the police station," said the Iraqi Kurd whose documents proved he was legal in the country that has been his home for the past 15 years.

"The whole procedure took around five hours and there was a lot of shouting," he continued in fluent Greek. "An Algerian, a young boy, was badly beaten in front of everyone. People were really scared."

Officials said the campaign, which has coincided with the reinforcement of patrols along the Greek-Turkish border, had been also prompted by fears of a new influx of immigrants from Syria.

For the most part the media has welcomed the move with the Kathimerini newspaper opining on Tuesday that security was finally "returning to the centre of Athens".

But the scale of the operation has prompted widespread criticism. The left-wing main opposition Syriza party called the crackdown "a pogrom" and "insult to justice and humanity". Migrants, it said, were being used to divert attention from unpopular economic policies, including more savage spending cuts, demanded by the EU and IMF in return for much needed rescue funds.

"It is a communications stunt aimed at concealing the true crackdown against public-sector wages, pensions and benefits that the government has agreed to in recent days."

The Greek office of the UN High Commissioner for Refugees expressed fears that refugees from war-torn countries and genuine asylum seekers could be among those summarily deported.

Since the start of the year 8,000 migrants have voluntarily sought repatriation, with Greece's situation, economically, socially and politically, having become ever more inhospitable towards them.

Greek crackdown on illegal immigrants leads to mass arrests | World news | guardian.co.uk

Greek workers begin general strike

Helena Smith in Athens and agencies

guardian.co.uk, Wed 26 Sep 2012 08.19 BST

Anti-austerity walkout called by unions expected to ground flights, disrupt local transport and shut public service offices

Greek anti-austerity protests in June were marred by violence. About 3,000 police officers are standing guard in Athens to prevent the rioting that has marked past rallies. Photograph: Angelos Tzortzinis/AFP/Getty Images

Greek workers have begun their first mass confrontation with Greece's three-month-old coalition government, grounding flights, disrupting local transport and shutting public service offices.

The general strike is being backed by the country's biggest private sector force, the General Confederation of Greek workers (GSEE), the union of civil servants (ADEDY), and militant unionists attached to the KKE communist party.

All three groups are holding hold mass demonstrations in Athens – and some 65 cities and major towns nationwide – before protesters march on the Greek parliament.

"We call on everyone to take part in the strike and resist the austerity measures that hurt Greek people and the economy," said unionist Despina Spanou of ADEDY. "This strike is only the beginning in our fight."

The traditional summer break has allowed the conservative-led government of prime minister Antonis Samaras to enjoy relative calm on the streets since taking power in June.

About 3,000 police officers – twice the number usually deployed – are standing guard in the centre of Athens as authorities brace for the rioting that has marked past rallies. Athens last witnessed serious violence in February, when protesters set shops and banks ablaze as parliament approved an austerity bill.

Ships will stay docked, shops have pulled down shutters, and museums and monuments will be closed to visitors throughout the day. Air traffic controllers are to walk off the job for three hours and hospitals will operate on emergency staff.

Even tax collectors have said they will join in the action which has also closed archaeological sites, including the ancient Acropolis.

Much of the union anger is directed at spending cuts worth nearly €12bn (£9.5bn) over the next two years that Greece has promised the European Union and International Monetary Fund to secure its next tranche of aid.

The bulk of those cuts are expected from slashing wages, pensions and welfare benefits, heaping a new wave of misery on Greeks, who say repeated rounds of austerity have pushed them to the brink yet failed to transform the country for the better.

At a time when unemployment is at a record high – hitting almost 24% at a national level and 55% among young Greeks, the highest in Europe – protesters say the new round of belt-tightening, encapsulated in the €11.9bn package of cuts the government has been called to pass in exchange for extra aid, is nothing short of "unfair and anti-social".

A survey by the MRB polling agency last week showed that more than 90% of Greeks believe the planned cuts are unfair and burden the poor, with the vast majority expecting more austerity in coming years.

But with Greece facing certain bankruptcy and a potential eurozone exit without further aid, Samaras's government has little choice but to push through the unpopular measures, which have also exposed fissures in his fragile coalition.

With the country in its fifth year of recession and no light at the end of the austerity tunnel, analysts warn that Greek patience is wearing thin and a strong public backlash could tear apart the weak coalition.

"What people want to tell Samaras is that they are hurt and Samaras could use this to demand concessions from the troika," said MRB polling director Dimitris Mavros.

"The people are willing to give the government time, but on certain conditions like cracking down on tax evasion and securing a bailout extension. If the government succeeds in that, its life will also be extended."

Why are Golden Dawn members the darlings of popular Greek TV shows?

 

Aris Chatzistefanou

guardian.co.uk, Sunday 23 September 2012 15.00 BST

The response of journalists and TV producers to the neo-Nazi Golden Dawn party is at best muddled, at worst complicit

Supporters of Greece's extreme-right Golden Dawn party sing the National Anthem at a rally in Athens, May 29, 2012. Photograph: Yorgos Karahalis/REUTERS

Golden Dawn, the neo-Nazi party of Greece, made a rather strange proposal this week: let's create a new public holiday, they said, to commemorate victims of Communist guerrillas at the end of the second world war. By "victims", they mainly refer to the Nazi collaborators who were slaughtered after ferocious battles in southern Greece. Recalling the period before and during the civil war of 1946 to 1949 doesn't seem like the best suggestion for a debt-ridden country. Unfortunately the same idea seems to thrill the country's mainstream media.

Hardly a day goes by without the appearance of an article in a leading newspaper that presents Golden Dawn as some kind of "golden opportunity" for Greek society. Many well-known journalists seem eager to criticise the racist violence of the neo-Nazis only so they can pour scorn on what they characterise as the excessive "violence of the left".

"Those of us believing in democracy owe a big 'thank you' to Golden Dawn" wrote a columnist in Kathimerini daily, explaining that "it is an opportunity for legality to confront the quasi-legitimate violence of the left".

The following day a columnist in To Vima daily was wondering why the violence of the blackshirts (fascist death squads in Italy) is seen as worst than the violence of hooligans or "pseudo Che Guevaras" who clash with the police.

By leftwing "violence" commentators usually refer to big strikes that can lead to social unrest in the streets or even jeering and "yogurt throwing" against politicians. When hundreds of protesters battled riot police over plans for a gold mine in northern Greece recently, a newspaper compared their action with neo-Nazi squads who have been attacking foreign workers and stabbing immigrants.

This line of argument is reminiscent of the so called "horseshoe theory" according to which the far left and the far right, rather than being at opposite ends of the political spectrum, resemble one another like the ends of a horseshoe. This idea, which was at its peak during the cold war, appears in Greece disguised as the voice of "logic" against the "violence of the extremes". What the media seem to forget is that the country was brought to its knees by the "extremism of the political centre" – a neoliberal project that ruptured the fabric of the society and paved the way for Golden Dawn.

The 40% increase in suicides, the 50% rate of unemployment among young people and the breadlines in the centre of Athens are the result of a "systemic violence" imposed on the population by the political elites – not the "extremes". The fact that the internal devaluation increased the sovereign debt and the economy is forecast to contract by 25% by the end of 2014 is evidence of the total failure of the policy imposed by the IMF and the EU.

Under these circumstances the violence of the neo-Nazis represents a useful distraction from the social genocide of the austerity packages, but also a unique opportunity to attack those who oppose the measures.

A few days ago the president of the Greek journalists' association criticised the media for being "advocates" and "contractors" for the neo-Nazi party. It's a harsh criticism, but not unfounded. For several weeks after the last general elections party members of the Golden Dawn became darlings of popular TV shows. In the meantime horrendous crimes committed by neo-Nazis against immigrants are often hushed up. The Greek media need to answer a simple question: whose side are you on?

Why are Golden Dawn members the darlings of popular Greek TV shows? | Aris Chatzistefanou | Comment is free | guardian.co.uk

Greek Tax Evasion in 2009: €28 Billion - Austerity Package 2012: €11.5 Billion

Posted by keeptalkinggreece in Economy

It looks as if the total amount of uncollected taxes, included the Value Added Tax, in 2009, is more than twice the amount of austerity measures Greece needs to take in order to receive the next trance. That was the result of an academic research published a week ago.

Uncollected taxes 2009: 29 billion euro

Austerity package (2.bailout): 11.5 billion euro

Bailout tranche: 31 billion euro

This is the result of an academic research conducted by two economists at the University of Chicago and one academic from Virginia Polytechnic Institute. According to the survey, tax evasion in 2009 only, reached in Greece 28 billion euro. 

“Leading in tax evasion are self-employed professional groups like doctors, engineers, teachers, accountants, consultants and attorneys. Concerning employees, the list is led by media people, and freelancers at tourism and restaurant sector.”

The research leads to a very interesting conclusion: the weakness or indifference of the state apparatus in identifying hidden income related to the fact that the majority of Members of Parliament belonging to the Greek five occupations are champions evasion.

Broader attempts to crack down on the professions were blocked last year by the Greek parliament. MPs voted against a bill mandating tax audits on people who had incomes below a minimum threshold. The bill targeted 11 professions, including vets, architects, engineers, economists, doctors, lawyers and accountants.

They said: “Half of non-lawyer parliamentarians are in the top three tax-evading industries, and nearly a super-majority in the top four evading industries.”

The survey is based on data collected by Greek banks and it’s an in-depth study of how Greek banks, politicians and professional workers behave.

Primary Greek Tax Evaders are Professional Classes

Interestingly, their report, Tax Evasion Across Industries: Soft Credit Evidence From Greece, which documents the hidden, non-taxed economy, blames the current malaise not on dodgy taxi drivers or moonlighting refuse collectors, but on the professional classes.

They found that €28bn (£22.4bn) of tax was evaded in 2009 by self-employed people alone.

As GDP that year was €235bn and the total tax base was just €98bn, it is clear that this was a significant sum. At a tax rate of 40%, it amounted to almost half the country’s budget deficit in 2008, and 31% in 2009.

The chief offenders are professionals in medicine, engineering, education, accounting, financial services and law. Among the self-employed documented in the report are accountants, dentists, lawyers, doctors, personal tutors and independent financial advisers.

The authors, Adair Morse and Margarita Tsoutsoura from the Booth school of business at the University of Chicago and Nikolaos Artavanis from Virginia Polytechnic Institute, were given unprecedented access to the records of one of the top 10 Greek banks. They found that, when professionals approached the bank for a loan or mortgage, their tax returns showed their debts almost exceeded their incomes ( debt payments ate up 82% of their incomes). For the beleaguered tax authority, this meant their income was too low to qualify for income tax.

On average, they found the true income of self-employed people to be 1.92 times their reported income. Under generally accepted loan criteria, home ownership figure than the UK (80% versus 68%).

The customers would need to show that their debts, after their mortgage payments were taken into consideration, were less than 30% of their income.

To emphasise the global scale of the problem, the authors point out that World Bank studies show that 52% of corporations worldwide hide some of their income from the tax authorities, and 36% of European companies do so. Corruption is everywhere as companies and individuals seek to preserve their status, incomes and standard of living. (Guardian; Full Research Here)

Had the then political leadership rushed to collect these taxes instead for rushing to International Monetary Fund, we wouldn't be here nowadays, with our nerves crashed and our pockets looted from the upcoming austerity measures.

Not to mention the tax evasion amount of 2010.

PS Not a single portion of shame. Doctors still charge 80 euro for home visits, want 120 euro if patient asks for receipt. Other doctors charge 60 euro including receipt. Blame on the patient? The doctor? Or Both?

Greek Tax Evasion in 2009: €28 Billion - Austerity Package 2012: €11.5 Billion - Keep Talking Greece

Merkel's 'heart bleeds' but no wonder migrants find jibes no laughing matter

Louise Osborne The Guardian, Monday 17 September 2012 15.43 BST

Chancellor expresses sympathy, but stereotypes still abound as more Greeks move to Germany to escape the financial crisis

The German chancellor, Angela Merkel, meets the Greek prime minister, Antonis Samaras, in Berlin last month. Greeks in Berlin say Germany is justified in pushing for austerity in exchange for bailout funds. Photograph: Tobias Schwarz/Reuters

Germany's chancellor, Angela Merkel, who is among those forcefully pushing Greece to meet its ambitious savings targets, said that her "heart bleeds" for the Greeks facing hardship as a consequence of swingeing cuts.

At a Monday press conference , Merkel told journalists she was aware that the Greek population was suffering but said it was also necessary for their wealthier countrymen living overseas to do their part to help the country stay in the euro.

The comments came after a decision by Germany's constitutional court last week, which backed plans for the establishment of the European stability mechanism to create a €500bn (£400bn) rescue fund for the euro zone.

Greece has faced harsh cuts during the crisis, which has seen many lose their jobs and struggle to keep homes.

However, while Merkel's comments may seem to appear like a softening of her attitude towards Greece and its predicament, economists said the German government was unlikely to change its position on reforms.

Klaus Schrader, deputy head of the Economic Policy Centre at the Kiel Institute think-tank, said: "Everybody in the German government is wanting more progress, success and a willingness to enforce reforms [in Greece].

"It is not the fault of the Greek population, but decades of bad policy which has resulted in economic catastrophe," he added.

However, Merkel's almost sympathetic outpouring will come as cold comfort for Greeks living in Berlin, who say they are suffering jibes and discrimination as more immigrants from southern Europe's struggling economies relocate to economically resilient Germany.

Greeks who left their home country to escape the deteriorating situation of increased unemployment, cuts to services and low wages, say they have been branded as lazy and have become the butt of jokes about their finances.

"Sometimes when I meet German people for the first time they ask if I have money, but in a friendly way, that pisses me off," said Grigoris Pinakas, from the village of Leptokaria, on Greece's eastern coast.

Like the thousands of Greeks who have gone to Germany over the past couple of years, the 29-year-old said he had difficulties finding a job that paid enough to live in Greece, but would like to eventually return home.

"A few times in the volkshochschule [adult education college] some teachers made a joke about the Greek crisis. And a Greek friend told me he could not rent an apartment because the owner thought he couldn't afford the rent," he added.

Others, like 25-year-old Dimitris Soudias, who was born in Germany to Greek parents, report that they have had similar experiences. "People make jokes when I'm with German friends here and they make comments," said Soudias.

"The stereotypes are annoying. It has changed a lot since 2008 and when it comes to politics, many Greeks are not comfortable speaking about it."

According to figures from the German statistics office, there are more than 9,000 Greeks living in Berlin, with an estimated 230,000 across Germany.

In 2011, about 25,000 Greeks registered their arrival in Germany, although experts say there could be many more.

"There could be around 50,000 to 60,000, with those who haven't registered," said social scientist Vassilis Tsianos, of the University of Hamburg.

"The German people are very critical about anything to do with Greece and extremely mistrustful of the fantasy of a mass Greek immigration to Germany," he said.

Many Greeks blame Germany for their predicament, but many thought Germany was justified in pushing for harsh austerity measures in exchange for bailout funds.

"I would not criticise Germany because it is doing what it needs to: to protect its own economy and its own political future," said Thanasis Boucharas, 28, who has lived in Berlin for five years as a freelance photographer.

Greeks said they blamed the Greek politicians for the problems in their debt-ridden country. They also admitted they were anxious about what would happen once the European commission, the European Central Bank and International Monetary Fund submitted their report on whether Greece would be eligible to receive the next bailout instalment.

"I feel betrayed by the Greek politicians, who sabotage their own country," said Pinakas.

"I feel disgusted by the European politicians and their alleged 'help' and I feel ashamed when the whole world mocks my country. But no matter what, I will always feel proud to be Greek," he added.

Merkel's 'heart bleeds' but no wonder migrants find jibes no laughing matter | World news | The Guardian

Greece embarks on a fire sale

Helena Smith in Athens The Guardian, Wednesday 19 September 2012 21.07 BST

Islands, palaces royal estates and embassies must go as fears grow that country has entered full-blown depression

Greece's faded glory: the dilapidated Tatoi palace is one of many properties up for sale in a national 'fire sale' of assets. Photograph: AP

When you hit hard times, it is time to pawn or part with the family silver – and an unprecedented clearout is now under way in Athens.

Greece has announced it will sell anything it can do without – and in the case of the debt-choked nation that means letting go of islands, royal palaces, prime real estate, marinas, airports, roads, the state-owned gas company, lottery and post office. Indeed anything, really, that can be sold.

On Wednesday, the nation learned the downsizing would also include diplomatic residences abroad – starting with the Victorian townhouse that was once the Greek consul general's residence in London.

"There is a decision to lease and sell properties that for various reasons are not being used," said Gregory Dalevekouras, spokesman at the foreign ministry. The foreign ministry's finance department, he said, was hard at work evaluating "market conditions".

The sell-off emerged just a day after Athens's finance minister revealed what most Greeks feared but had never been officially told – that with national income projected to fall 25% by 2014 their economy is not just shrinking but slipping inexorably into a 1930s-style Depression. And officials are now working frantically to get the mother of all fire sales off the ground.

For potential buyers of ambassadorial homes and consul's quarters, the good news is that the foreign ministry is fully aware of what and where the properties are – unlike the Greek state, which until recently was still struggling to attain an inventory of what it actually owned given the lack of a proper land registry.

High-end estate agents are already being sounded out to sell the 10,000 square foot consular residence in London's upscale Holland Park – which is currently being renovated.

Property experts say homes similar to the 115-year-old stucco-fronted townhouse fetch rents of around £25,000 a week and could sell for as much as £12m. Richard Branson, a neighbour, put his own home on the market for £17m last year.

Since the outbreak of Greece's great economic crisis in late 2009, the country's diplomatic presence abroad, like so much else, has been dramatically scaled back as governments have sought to rake in expenditure. The consulate in London, home to a thriving Greek community, was one such victim.

In what will be surely be sad news for another UK resident, Constantine, the former king of Greece, officials have also let slip that the Tatoi palace, the royal family's historic estate at the foot of Mount Parnitha, will be sold off too.

The property, acquired by the family in 1871, was originally set in gardens laid out to "provide the typical charms of both the Greek and English countryside" and, as such, comes with some 40 outbuildings, stables, a swimming pool and several royal graves. Shortly after it was built outside Athens, Prince Christopher wrote that it was the only place where "we could forget that we were not supposed to be ordinary human beings." An array of old Rolls-Royces, and other paraphernalia that once belonged to Constantine before he was forced to flee into exile, can still be glimpsed on its now dilapidated premises.

The sell-off, which will include buildings in Brussels and Belgrade, Rome and Nicosia, is part of a privatisation campaign that may well be the most ambitious ever conducted on the continent of Europe. With Athens' debt load still at a whopping 166% of GDP – despite banks and hedge funds and other private creditors accepting a massive write-down in the value of their Greek holdings – the country has agreed to raise €19bn by 2015. Earlier this year, the cash-strapped culture ministry even announced it would make the Acropolis more "readily available" for photographers and film crews. Previously, the ancient site had been regarded as "too sacred' to rent out or besmirch with commercial use.

This month the conservative-led coalition, in power since June, declared that it had also pinpointed at least 40 uninhabited islands which it planned to lease out for the development of "tourism ventures".

Officials are not hiding that the drive has been spurred to great degree by the desire to placate the international lenders that are keeping the country afloat.

Since filing for its first €110bn bailout in May 2010, Greece has made almost no progress with its promise to press on with reforms. On the privatisation front, officials have invariably encountered the resistance of unions and political parties not only opposed to the arduous terms of the loan agreements but the sale of prized possessions regarded as "the family silver".

For many Greeks, the new drive is the most humiliating development yet in a process of brutal fiscal realignment that has seen poverty and unemployment hit record levels. "Foreigners have been allowed to occupy our country and now they are going to buy up our country at rock-bottom prices," Notis Marias, the parliamentary representative of the vehemently anti-bailout Independent Greeks party railed in parliament.

But government officials starting with Kostis Hadzidakis, who, as minister of development, is leading the campaign, say desperate times call for desperate measures. "We are in a war situation and we are all soldiers in civilian clothes," Hadzidakis recently averred.

With Athens's future in the euro zone still on the line – despite assurances from the EU's powerhouse, Germany, that it wants to keep the country in the bloc – Greek officials are acutely aware that time is against them. Making clear the privatisation programme is now the cornerstone of the government's economic policy, the newly installed privatisation chief this week called on investors to take up the rich pickings. Greece, he said, was set to become an El Dorado for those who did so.

 

Europe's family silver

The euro zone's weakest members have been selling off the family silver since the crisis began.

Portugal Raised nearly €3bn (£2.4bn) selling part of a power company to China's Three Gorges Corporation. A Chinese-Oman partnership snapped up a stake in Portugal's power and gas grid operator. Its national airline, TAP, and the post office are now up for grabs.

Ireland Hopes to raise €3bn selling off assets. Bidding for the right to run a new national lottery starts next month, and a stake in Aer Lingus is also up for grabs. It is also offering to sell parts of the country's Electricity Supply Board, and some of its forests.

Spain Hoped to raise €7bn selling a stake in the lottery, El Gordo – "the fat one", but no big bids were forthcoming. Madrid is now hoping to find buyers for various tourism sites and transport operators - and has put 100 office buildings on the block.

Italy In June, Italy agreed to sell €10bn of undefined assets, but progress is slow.

Greece embarks on a fire sale | World news | The Guardian

A Brief History of Contempt Between Germany and Greece

Posted on Aug 29, 2012

By William Pfaff

Photo by UggBoy (CC-BY)

The most important European casualty of the international financial crisis has been the solidarity that until recently existed within the European Union, whose foundation and continuing raison d’etre has been to consolidate nations and peoples formerly driven by nationalism and destructive national ego.

That solidarity has been placed in jeopardy by the German press’s and public’s reaction to the EU’s fateful act of prideful overreaching, creating the European Monetary Union and single currency. Seventeen of the EU’s members are currently full members, employing the euro in their internal economy and external trade. Others have been expected to join. The EMU’s conceptual flaw was to put small and large countries, politically fragile and politically advanced countries, rich ones and the economically fragile, all possessing rival temperaments and histories, into a single fiscal entity.

When crisis arrived, Germany, being the richest and most successful of the currency bloc members, was asked to contribute most to the effort to resolve the crisis. It has done so but in a hectoring manner and on terms that to the greatest degree possible exported its own values, economic culture and interests.

Its economic officials spoke condescendingly, if not contemptuously, of their neighbors. Part of the German press turned to invective, describing a European economic South characterized by indigence, indulgence and envy, as being against a North, led by Germany, composed of frugal, industrious and successful nations unwilling to be pulled down by the southerners.

Worst of the former was Greece, but Italy, Spain and Portugal were included, and France, characterized by the most important German weekly, Der Spiegel, as “obsessed” with Germany, “nostalgic” for lost greatness, “narcissistic ... wanting to belong to the North but with its heart in the South.”

Greece however has been the main target of German denigration, not without cause; Greece was accepted into the EU and then into the monetary union despite a general recognition among European officials that its finances were mismanaged (which the Greeks disguised with the help of Goldman Sachs).

History is not an alibi, but neither is ignorance or indifference to history, from which Germany has richly profited since 1948, when the U.S. decided that German manpower and military ability was indispensible in the developing Cold War confrontation with the Soviet Union, and passed an exculpatory blessing over the West Germans, making them for the nonce into defenders of democracy, wartime grudges waived.

Greece was less fortunate. Its Second World War began in October 1940 when Nazi Germany’s fascist ally, Italy, attacked Greece. The Greek army threw the Italians back into Italian-controlled Albania. An armed lull followed.

Germany, which already partly occupied Romania and Bulgaria, was preparing Operation Barbarossa, the invasion of Russia, assembling in Romania, Hungary and Bulgaria, some three million of its own and allied troops.

The Greek army counterattacked the Italians, overrunning a quarter of Albania and taking 28,000 prisoners. German troops then invaded Greece on three fronts. On April 23, 1941, Greece signed an armistice, turning to guerrilla resistance, which its people continued to the end of the war.

The weeks spent by the Germans in rescuing the Italian army from the Greeks is generally credited with having delayed the invasion of Russia, launched June 22, for a sufficient period to cause the German offensive to bog down in winter conditions short of Moscow and Stalingrad, allowing a successful Russian counteroffensive to be prepared. Germany’s defeat at Stalingrad coincided with Britain’s desert victory at El Alamein and was the turning point in the European war. Germany never won another major battle.

The wartime occupation of Greece by Germany, Bulgaria and Italy, as the Cambridge historian Richard Clogg has recently noted in the London Review of Books, caused “one of the most virulent hyperinflations ever recorded, five thousand times more severe than the [German] Weimar inflation of the early 1920s. Price levels in January 1946 were more than five trillion times those of May 1941.”

The occupation produced one of the worst famines in modern European history. It is estimated that some 200,000 Greeks starved between 1941 and 1943. In addition, savage war continued between Greek guerrillas and Axis occupation forces, with the usual torture and reprisals on the order of 150 hostages shot for every attack on a German soldier.

In 1944, the Germans conducted a scorched earth withdrawal, accompanied by atrocities for which many Greeks today consider German reparations inadequate. The official estimate is that 1.2 million Greeks—more than an eighth of the population—were made homeless by the occupation. There still is a controversy over what happened to Greece’s national gold stock.

The war itself was succeeded by civil war between Communist guerrillas, supported from Tito’s Yugoslavia and Russian Army-dominated Bulgaria, and Royalist Greek forces supported by Britain. British overstretch prompted the U.S. Truman Doctrine guaranteeing Greece and Turkey against Communist takeover. The civil struggle did not end until Tito’s break with Stalin in 1948 cut off support for the Communist guerillas.

The story of Greek relations with Germany are thus more complicated than seems currently appreciated in Berlin. Greek resistance to invasion can be credited with causing the defeat of Germany by the U.S.S.R.; Greece’s friends might argue that it gave the Allies victory in World War II.

(A declaration of bias: I have a daughter who is a French citizen, and a daughter-in-law who is Greek.)

William Pfaff: A Brief History of Contempt Between Germany and Greece - Truthdig

Athens is plastered with one message: enoikiazetai. To let

 

Peter Beaumont in Athens guardian.co.uk, Thursday 4 August 2011 22.00 BST

Shops, offices and factories close as Greek landlords 'refuse to drop commercial rents to prices that people can afford'

Traders in Athens are fighting to survive amid Greece's new poverty. Photograph: Louisa Gouliamaki/AFP/Getty

There's a word that is ubiquitous in the Greek capital: Enoikiazetai. For non-Greek speakers it might not be easy to pronounce but its meaning is bland, almost boring. It translates as "To let".

In today's Athens, it is as toxic and omnipresent as a plague notice stuck to the door. You will find it on shop fronts, office blocks and factories, where businesses have withered and died. Too many of them, and you know you're in an area where trade cannot prosper.

It is printed on white banners, strung across the windows of buildings 10 storeys high, and on cheap yellow paper signs plastered on the glass.

Inside one shop in a once busy commercial district, a banner is spread carefully across the floor, held down at its corners, visible only if you look through the window. On it is a telephone number. A few phone calls later, the failed history of the building starts to become clear.

The first call reveals that the premises used to be a doctor's surgery. Another call yields a firm of liquidators of failed insurance companies. The man who answers will not give his name but lists half a dozen companies that have gone under. His job, he says, is to rent out the building to help pay off the creditors; he has not managed to do that. George Fatoulis answers another call. He owns the building and once rented the ground floor to Toyota for a car showroom.

A woman answers the phone number displayed on the next empty property, again a car showroom. Like others, she does not want to give her name but says the company that rented her ground floor stopped paying and she threw it out.

A final call reveals Antonis Diamantaras, director of real estate company Ktirio Act, who with his colleague Dimitris Atzinas is happy to show the Guardian around some of the commercial properties he has on his books for rent.

Many of the buildings, he says, are owned by families. Near his own offices in Nea Smirni the majority are owned by just seven of them. "What I see is a country that is still not ready to confront this crisis," he says gloomily. Many of the landlords he represents are not willing to drop their rents to prices that people are willing to pay. Some 75% have unrealistic expectations and he has no idea how far the market will yet fall. One building has been on his books for four years.

"We have another building that belongs to a family with each of the floors owned by a different family member," says Diamantaras. "The family member who owns the first floor wants €12 a metre, the one who owns the second €16 a metre, and the third €14 a metre. At most it is worth €10. Only one of them is close to that."

The consequence is a proliferation of empty buildings and shops across the city, all labelled Enoikiazetai.

Diamantaras takes us to an empty, five-storey office block, once occupied by an insurance company, swelteringly hot with no power now to cool it. It is a hollowed-out husk empty of everything that once made it a busy workplace.

"When you go to a place where people used to work, where there once was life, it makes you feel miserable," says Atzinas. "If you go out in the streets of Athens everyone is saying the same thing, all the shopkeepers and small businesses. They'll say: 'No one bought anything today.' "

Shopkeepers blame Greece's new poverty. They blame immigrants selling cheap knock-offs – although in truth few of these are visible – and the Chinese "euro shops" that sell articles cheaply.

Marianna Pagoni of the Athens chamber of commerce – found in one of the city's most chi-chi streets where jewellers shops jostle shoulder to shoulder with high-class boutiques, and wealthy women still patrol the cafes and the shops – has a similarly jaundiced view.

Her shop – one of a chain of three – sells ties and silk scarves, some costing as much as €400. She is fortunate in that she owns the buildings where her businesses are located."We fell into the trap of the rush for Greek growth," she says. "Then it was like someone pushed a button and it was catastrophe. I'm afraid we don't have an understanding government or politicians."

Despite owning her own properties, her business has not been immune to the financial crisis. She fears she may have to close two of her three Athens outlets if trade does not pick up.

Then there will be two more signs reading Enoikiazetai to join the thousands of others.

Athens is plastered with one message: enoikiazetai. To let | World news | The Guardian

Debt crisis: Greece prepares to lease 40 uninhabited islands to cut debt

Bloomberg 3:36PM BST 12 Sep 2012

Greece has identified 40 uninhabited islands and that could be leased for as long as 50 years to reduce debt as pressure grows on the country to revive an asset-sales plan key to receiving international aid.

The shortlist includes islands ranging in size from 500,000 square meters (5.4 million square feet) to 3 million square meters, and which can be developed into high-end integrated tourist resorts under leases lasting 30 years to 50 years.

“We identified locations that have good terrain, are close to the mainland and have a well-developed infrastructure and, at the same time, pose no threat to national security,” Andreas Taprantzis,executive director for housing at the Hellenic Republic Asset Development Fund, said in an interview in Athens.

“Current legislation doesn’t allow us to sell them outright and we don’t want to.”

The fund is charged with raising €50bn from state assets by 2020 to meet conditions tied to pledges of €240bn in foreign aid.

As international inspectors in Athens scrutinise the country’s fitness to receive the latest aid payment, Prime Minister Antonis Samaras has said commercial exploitation of some islands could generate the revenue lenders need to see to continue funding the country.

The shortlist includes islands ranging in size from 500,000 square meters (5.4 million square feet) to 3 million square meters, and which can be developed into high-end integrated tourist resorts under leases lasting 30 years to 50 years, Mr Taprantzis said.

The fund announced an action plan to speed up the country’s privatisation program yesterday. In its statement, the fund named the companies it’s chosen to proceed to the next phase of tenders in three housing projects.

The fund reviewed 562 of the estimated 6,000 islands and islets under Greek sovereignty. While some are already privately owned, such as Skorpios by the Onassis shipping heiress Athina Onassis, the state owns islands such as Fleves, which is near the coastal resort area of Vouliagmeni, and a cluster of three islands near Corfu. Mr Taprantzis declined to identify any of the islands.

Legislation needs to be passed to allow development of public property by third parties and reduce the number of building, environmental and zoning permits needed before the plan can proceed, Taprantzis said.

Outright sales have been ruled out because the returns for the Greek state wouldn’t be higher than a leasehold arrangement, he said. Greece will attract more investment if an island is turned into a resort, he said.

Selling public land outright is a politically sensitive issue in Greece. In 1996, Greece and Turkey almost went to war over who owned the uninhabited Aegean islet of Imia, known as Kardak in Turkey. A proposal by Greece’s lenders last year to increase revenue from asset sales including property drew opposition from then-premier George Papandreou, who said he’d legislate to prohibit such sales.

The country has only raised about 1.8 billion euros from its asset sales program, sparking criticism among European officials that the government isn’t moving quickly enough to reduce debt. Months of negotiations over the country’s debt restructuring earlier this year, the largest ever, and two general elections that threatened Greece’s membership of the euro area also held back progress on sales.

Debt crisis: Greece prepares to lease 40 uninhabited islands to cut debt - Telegraph