EU court throws out freedom of information request relating to credit swaps which allowed the country to increase its debts
Greece's finance minister Yannis Stournaras arrives for a news conference in Athens this week following news that the EU and IMF had agreed a €40bn bailout. Photograph: Yorgos Karahalis/Reuters
The EU's general court has blocked an attempt to force the European Central Bank to release files showing how Greece used derivatives to hide its debt in the run-up to the financial crisis. The case was brought by Bloomberg News under the EU's freedom of information rules in August 2010 but was thrown out on Thursday by the court in Luxembourg.
"Disclosure of those documents would have undermined the protection of the public interest so far as concerns the economic policy of the EU and Greece," the EU's general court said.
Goldman Sachs and other investment banks have been criticised by European leaders over claims that they helped Greece disguise the true scale of its debts over several years. German chancellor Angela Merkel said in February 2010: "It's a scandal if it turned out that the same banks that brought us to the brink of the abyss helped to fake the statistics."
The ECB is headed by a former Goldman banker, Mario Draghi.
The ruling means European taxpayers who are footing the bill for the €240bn Greek bailout will not find out whether EU officials knew of irregularities in Greece's national accounts before they became public in 2009.
Georg Erber, a specialist in financial market regulation at the German Institute for Economic Research, told Bloomberg: "The courts are bending the rules to legalise the policies of the European institutions and help stabilise the region. It reveals implicitly that the EU was well informed about what was going on and didn't take steps to avert the crisis."
Bloomberg sought access to two internal papers drafted for the ECB's six-member executive board. In April 2009, ECB officials spotted a "swap operation in unusual terms" involving the National Bank of Greece, according to a cover note to the two documents seen by Bloomberg. From October 2009, repeated revisions of Greece's budget figures drove up the country's borrowing costs and eventually forced it to seek aid from the EU and the International Monetary Fund.
Euro stat accounting rules allowed member states to use off-market rates in swaps to manage their debt until 2008. The use of swaps, which Greece had not disclosed as debt, allowed the country to increase borrowings by €5.3bn (£4.3bn), Euro stat said in 2010. In the largest derivative disclosed, Greece borrowed €2.8bn from Goldman Sachs in 2001.
The mood on stock markets was lifted by optimism that US lawmakers will be able to avoid the "fiscal cliff" of higher taxes and spending cuts looming in the new year. Republican speaker John Boehner said his party could broker a deal with the White House while Barack Obama said he thought it could be done by Christmas.
The comments propelled the FTSE 100 index in London to three-week highs. It closed up nearly 70 points, or 1.2%, at 5870.30 while Germany's Dax gained 0.8% and France's CAC rose 1.5%.
David Madden, market analyst at spread betting firm IG, said the comments "have filled investors with confidence that the US economy will not plunge into a recession come new year. However, just because Mr Obama says everything will be OK doesn't make it so, and dealers will want more than words as we approach the deadline.
"I think we are in for a see-saw ride on the run-up to Christmas, as traders closely follow politicians' statements – take last night for example. All we need is an 'optimistic' outlook to move the market higher but if there is any doubt that a deal will not be in place, we will see another sell-off."
The better mood was also helped by an increase in business and economic confidence in November in Europe which ended eight monthly declines in a row, while German unemployment rose by less than feared, leaving the jobless rate at 6.9%.
Bond yields in struggling euro zone countries fell in the wake of a successful Italian bond auction and the Greek deal earlier in the week, with Italian 10-year yields briefly touching levels last seen in December 2010. Italy sold €2.98bn of 10-year bonds, just shy of the maximum targeted amount, and paid a yield of 4.45%, down almost 50 basis points from a sale at the end of October. A year ago, Italy paid a record 7.56% to get 10-year bonds away.
New data also showed the American economy grew faster than previously thought in the third quarter, by an annual rate of 2.7% rather than the 2% estimated by the government last month. This was due to companies building up stocks more quickly than thought but is not expected to be sustained as the nation prepares for tax increases and spending cuts.
Friday, November 30, 2012
My family's experience shows how easily Greeks and Germans forget what they have in common
Employees of finance and development ministries in Athens on 29 November working on the debt buyback plan. Photograph: John Kolesidis/Reuters
I recently bumped into a cousin in Switzerland. I hadn't known she even existed – she and I never moved in the same family circles when I visited relatives in Athens. But since the start of the crisis, Greeks abroad have become more aware of their family trees. My relative completed a degree in Germany 25 years ago and returned to Greece to get a job in the food industry. Two years ago she was made redundant. For 18 months she tried to find work, then gave up and begged her mother to call her contacts in Germany – such as my father, her cousin once removed, who helped her move to Germany, and from thereon to Switzerland.
Although the German parliament should on Friday pass a deal that eases the pressure on the Greek economy, many Greeks have gone back to doing what they have always been good at: they activating networks of relatives in the Diaspora and moving abroad. Statistics released this month show that Greek migration to Germany has shot up almost 80% in the past few years. They are a different breed to the unqualified workers from rural areas who moved abroad in the 1960s, however, the new migrant comes from one of the crisis-hit cities and has a bagful of degrees and qualifications.
In this respect, the Greek disaster is a German boon: the brain drain from the Mediterranean is helping to plug Germany's chronic lack of qualified workers. And yet Greeks who arrive are rarely welcomed with open arms at German borders. A large part of the population still insists that "we" will end up having to cough up for "their" welfare. Out come all the old clichés: haven't "those Greeks" always been feckless layabouts? People empathise with the situation in Greece but often wouldn't want to go as far as letting out their flat to a Greek family.
Accepting that migration is once again part of the Greek experience isn't easy for Greeks, either. Expectations are higher than they used to be. In the 90s, Greece had managed to turn itself from an emigration into an immigration country (even if not a particularly welcoming one, as the rise of Golden Dawn shows). In 2004, when Athens hosted the Olympics and the Greek football team won the European Championship, it briefly looked like the country had finally arrived in Europe. That dream has now come to a sudden end: in the eyes of most Europeans, we've been pegged back to "oriental" levels.
I grew up in Germany with a Greek father and a German mother, and I find it relatively easy to look at the situation from both sides of the divide. But for Greeks in Greece to accept partial responsibility in their downfall isn't easy. Greece experienced modernisation, but no real reforms. Mentally, it never kept up with economic progress. The EU and the euro arrived and living standards rose, but in politics the same old family structures remained intact, tourists were served the same old souvlaki and moussaka for notched-up prices, and the country continued to consume, "Balkans-style" – as if the whole dream could be over by tomorrow.
Analysing what really happened during the boom years is much harder than blaming the big bad Germans, those heartless, work-obsessed robots. Of course you can question Angela Merkel's austerity politics. And there's no question that some Germans – much like many Greeks – have simply failed to grasp where the European project is at: there's a widespread and enormously inflexible fixation with savings, wage restraint and fighting inflation that is simply outdated.
But ultimately Germany and Greece are simply opposite poles at a new phase of European integration. If you look at the relationship between the two countries from a distance, the overwhelming impression is not of a culture clash but a historical enmeshing. You only have to remember that the blue-and-white Greek flag is based on the colours of the state of Bavaria – whose Prince Otto became the first king of independent Greece. These shared links and influences – all too quickly forgotten – should be the starting point for solving Europe's problems.
Europeans are currently going through an astonishing learning curve: Greeks are coming to terms with the fact that the European Union isn't just the friendly aunt from the distant west that sorts out our infrastructure but that it can make demands too. And Germany is slowly starting to grasp that the EU can't just be an export market with a stable currency. A union also has to involve solidarity with people who don't speak the same language as you.
In that respect, the crisis could be an opportunity to complete European integration. But that chance will come and go if we don't get a glimpse of a light at the end of the tunnel. I am pleased that the Bundestag will, in all likelihood, pass a measure on Friday to cut Greek's debt mountain by €40bn. For the short term such measures are important, but in the long run "rescue packages" are no recipe for a Europe in which Greece and Germany can coexist happily.
Translated by Philip Oltermann
Thursday, November 29, 2012
As austerity tightens its grip, many of the middle class find themselves in a desperate struggle to make ends meet
A wood poacher's warehouse near Mount Pelion, Greece. Illegal logging has recently taken on epidemic proportions. Photograph: Despoina Vafeidou/AFP/Getty Images
It is early Sunday. The sun has barely risen above the chestnut forest that lies somewhere near the crest of Mount Pelion, but loggers' pick-up trucks are already streaming through the muddy slush, their cargo bouncing in the back. Theirs are rich pickings, much in demand as winter envelopes the villages and towns of an increasingly poverty-stricken Greece. As they pass, they do not look up because many do not have permits to do what they have just done.
From their new home a little further on, Yiannis Chadziathanasiou and Natasa Rempati watch the ebb and flow of this traffic. So, too, do the residents of Tsagarada, the picturesque hamlet where the sound of chainsaws pierces the morning air. "Things are getting desperate," says Chadziathanasiou, who clothed Greek celebrities before he moved to the countryside. "You hear all the time of people illegally clearing forests for firewood. It's horrible if you're a green like me."
In their wellington boots and designer jeans, the couple stand out in Tsagarada. Like most middle class Europeans raised in cities, nature is a new world and one that does not come naturally to them. Until last year, both enjoyed successful careers in fashion and architecture. "But then we did our sums," said 29-year-old Rempati, whose firm had designed hospitals and metro stations before being forced to close down. "And although we were both earning good salaries, taking home around €3,500 a month, we were really squeezed. There was never a euro left over. Our heating bill alone cost €3,000 and that was before the €500 we spent on petrol and all the new taxes. We were stressed and really anxious and didn't think we could afford to go through another winter in Athens."
The young professionals then did something they never thought they would do. In June, they got into their black Chrysler and drove 200 miles north of the capital to Mount Pelion, where Chadziathanasiou had spent holidays as a child. "All our friends ever did was talk about the crisis and a lot of them were leaving," he said. "You'd turn on the TV and all it did was bombard you with terrifying news, day after day, about how this country was going down the tubes."
There was also the issue of survival. The fashion aficionado had always had a dream of opening a luxury hotel and with its spectacular villages and rivulets, streams and beaches, Pelion appealed as an all-year-round tourist destination. "We thought if we try this out, living in a little stone house, working in the industry, we might be able to make ends meet," said the 33-year-old. "I'm not used to chopping firewood and my body aches but then doing it this way we only spend €300 on heating our home."
As the eurozone's poorest member state stares at the prospect of a sixth straight year of recession with unemployment and poverty levels reaching peaks not seen since the second world war, growing numbers of Greeks are experiencing the effects. After first felling society's most vulnerable, with pensioners and low-income workers at the fore, debt-stricken Greece's great economic crisis is now destroying the middle class. The announcement this week that €44bn in emergency aid will soon be funnelled into the country – the latest in a series of rescue programmes by the EU and IMF to prop up an economy running on empty – comes as little consolation for people on the ground.
Poised for their worst winter since the eruption of the crisis three years ago, Greeks who once thought nothing of heating their homes now hesitate. After relentless waves of austerity and tax rises that have seen their purchasing power drop by up to 50%, even doctors and lawyers are feeling the pinch, with many saying they cannot afford the 40% surcharge the government has slapped on heating oil.
"In my own block of flats," said boutique owner Tina Kanellopoulou, who lives in the posh Athens neighbourhood of Kolonaki, "the central heating hasn't been turned on because most of the flat owners haven't got the money to pay for it. We're all rushing out to buy little electric heaters. You go to a doctor or lawyer and you see they are doing the same."
Having been on the frontline of Europe's debt drama from the outset, Greece embraced austerity in return for international financial assistance that has kept bankruptcy at bay and tied it to the family of single currency nations. But the effect has been ever more devastating on its social fabric. Middle class downsizing is the latest tell-tale sign in a country whose GDP officials predict will shrink 25% by 2014 – a contraction unheard of in an advanced western economy since America's Great Depression.
The side effects of taming runaway deficits and a debt mountain projected to amount to 190% of national output has been brutal, with once proud Greeks now openly speaking of their nation being brought to a point of economic, political and psychological collapse. Nationwide, suicides have soared, with the public order minister, Nikos Dendias, saying last week that 3,100 people had taken their own lives since the onset of the crisis in a country that in 2009 had the lowest suicide rate in the EU.
Last week, Greece heard that malaria, officially eliminated 40 years ago, had also made a comeback with cases being noted in eastern Attica and the Peloponnese. News of the outbreak came on the day Greek sports, already a dying art, took another blow with the Hellenic Olympic committee unexpectedly announcing the closure in the capital of the pool used by elite swimmers because authorities can no longer afford heating oil. Insolvency has rocked schools and hospitals, where staff complain they not only do not have the money to heat classrooms and wards but even to purchase painkillers for children and patients.
"Greece is being taken back to the 1970s," said Gikas Hardouvelis, chief economist at Eurobank. "People are desperate. The recession has affected every home with the drop in living standards not being distributed equally. People who once lived decently have seen their wages drop by 80%."
Average income has dropped to levels not seen for more than a decade, according to the Greek Labour Institute. But it is the latest round of spending cuts and structural reforms that are expected to hit Greeks the hardest. In return for long-overdue bailout loans and a deal that will see the country's debt pile cut by €40bn, Athens' coalition government has agreed to a draconian €13.5bn package of belt-tightening measures. The policies, to be implemented over two years from January, have been described as the death knell for the urban middle class, already hit by a barrage of taxes on incomes, purchases and property by governments desperate to meet deficit targets set by foreign lenders. To keep up, the older generation has begun pawning heirlooms and jewellery to get through the winter.
"If 2012 was the year of 'the death of a salesman', 2013 will be the year of 'the death of the middle class,'" said Takis Pavlopoulos, a senior aide of main opposition leader Alexis Tsipras. "It will be Year Zero for Greece. For the first time self-employed professionals will see their income taxed from the first euro they earn, adding to their already reduced turnovers as a result of five years of austerity. And civil servants will have their salaries cut once again. That in turn will lead to a dramatic drop in consumption and internal demand."
Pavlopoulos's views might be less important if he were not also Tsipras's speechwriter. The US-trained economist has a way with words and they are paying off. Tsipras's vehemently anti-bailout radical left Syriza party is leading in every poll conducted since prime minister Antonis Samaras's fragile alliance assumed power in June.
"The further downward pressure on the middle class, to the point of disappearance, will radicalise it," he said. "And in so doing it will bring it closer to Syriza, the only realistic alternative political choice for power with a government programme to immediately end catastrophic austerity."
So far Greeks have shown remarkable fortitude in the face of such adversity. Although soup kitchens have proliferated and hunger levels have grown, the younger generation has hunkered down, opening new businesses with a display of entrepreneurial skills not seen before the crisis.
Analysts and insiders worry that as the crisis moves into another phase with new middle class victims, the potential for the protest base to widen will also grow. With the number of jobless Greeks topping 1.2 million, extremism on left and right has risen alarmingly, with the neo-Nazi Golden Dawn now the third biggest party with 12% in the polls.
"I am concerned that everyone is angry and that somehow this anger can be channelled in the wrong direction," said Hardouvelis, the economist. "I am worried about nazism, yes."
Up in Tsagarada, the younger generation embodied by Yiannis and Natasa say hope is in short supply. "This is not a country where you can even have children anymore," they say. "Under these latest measures you're taxed even harder if you have kids."
But as new as their brave new world is, the couple are giving it their best. "All our friends have gone to England and Holland mostly," said the fashion designer. "We could easily go to New York where I'd often attend shows and have lots of contacts but we want to give it a go here. Greece is a beautiful country even if our politicians have destroyed it. Come back in a year and see if we have survived."
Wednesday, November 28, 2012
Europe’s leaders have reached Plan C in their efforts to rescue Greece. Unfortunately, it lacks a crucial element also absent in Plans A and B: adequate debt relief.
The agreement between euro-area finance ministers and the International Monetary Fund is welcome and overdue. It provides much-needed support for a Greek government that has taken enormous political risks to meet the conditions for aid. It also puts an end to weeks of bickering between Europe and the IMF over how to cover Greece’s funding shortfall -- a delay that had threatened to undermine faith in the bailout program, even among Greeks who believe in making the changes and sacrifices demanded.
The deal, however, doesn’t do enough to address the biggest issue: a Greek government debt burden that, at about 170 percent of gross domestic product, remains unbearable under any reasonable scenario. The agreement assumes that Greece will largely grow its way out of the problem, reducing its debt to less than 110 percent of GDP by 2022 even as it endures the crushing austerity required to sustain a budget surplus of 4 percent of GDP. In other words, this is just the latest in a long line of stopgap measures to fend off the kind of disorderly default and euro exit that could trigger contagion in the much larger economies of Spain and Italy.
Germany and other creditor nations refused to consider the simpler and more effective solution of writing off some of Greece’s debt to official lenders, a move that would amount to an explicit fiscal transfer. Instead, they agreed to reduce Greece’s debt-service costs, extend its repayment period and lend it money to buy back bonds held by private investors. Taken together, these measures are supposed to amount to debt relief equivalent to about 20 percent of GDP by 2020. The IMF, for its part, relaxed its previous requirement that Greece get its debt down to 120 percent of GDP by 2020.
The contortions might be necessary to help the deal get through the various national parliaments that must ratify it, but they could extract a higher price down the road. Some euro- area countries, for example, will now be paying more to borrow money than they receive in interest from Greece. That’s a fiscal transfer by sleight of hand, as is the 10-year extension of some debt maturities and a repayment holiday on loans that the European Union and the IMF pledged earlier this year. Perversely, much of the burden will fall on countries that are also in economic trouble. Italy and Spain, for example, will have to pay Greece for the privilege of lending to it, because their financing costs are higher than the reduced interest rate at which Greece will borrow.
The debt buyback from private investors, too, promises to be problematic. The idea is that the low market price of Greece’s debt creates an opportunity to retire it on the cheap, by borrowing new money to buy old bonds. If, for example, Greece can buy back its bonds at 33 cents per euro of face value, it can get rid of about three euros in debt for each new euro it borrows. Problem is, the price of the bonds tends to rise as markets come to expect the buyback, eroding the benefits to Greece. The country’s 10-year bonds currently trade at almost 36 cents on the euro, up from about 31 cents in early October.
In a ham-handed attempt to ensure the buyback’s benefits, the bailout agreement stipulates that Greece can’t pay more than the closing price of its bonds on Nov. 23. As a result, the government might not be able to find investors willing to sell their bonds at its offer price -- an outcome that could jeopardize the release of the IMF’s 43.7 billion euro share of the bailout money, which is contingent on the completion of the debt buyback. The euro’s initial bounce from the deal announcement has faded as this reality has sunk in among investors.
Perhaps the biggest difference between Plan C and its predecessors is that responsibility for failure has shifted. Previously, Greece shouldered the blame for its inability to come to grips with the task at hand. Now, the creditors’ plan itself is more likely to be the sole culprit. German Finance Minister Wolfgang Schaeuble seemed to acknowledge its flaws in a news conference Nov. 27, saying that if the buyback fails, the troika -- the IMF, the European Commission and the European Central Bank -- will have to take “other measures.”
When the time comes to craft Plan D, Europe’s leaders would do well to move ahead with the Greek debt writedown they have tried so hard to avoid. If, for example, they cut the government’s debt in half, and if its market borrowing cost could be brought down to about 5 percent, Greece could hold its debt burden steady by running a primary budget surplus (excluding interest payments) of roughly 1.5 percent of GDP -- well within the range of what it has been able to achieve in the past. The upfront costs would be greater, but so would the chances of success.
Antonis Samaras says it is a 'new day for Greeks' after creditors agree to redraft package, free up funds and cut debt mountain by €40bn
A man reads a newspaper at Syntagma square, Athens, after the EU and IMF redrew a rescue package. Photograph: Angelos Tzortzinis/AFP/Getty Images
After months of drama in the eurozone and its own solvency hanging by a thread, Greece reacted with euphoria on Tuesday at the news that international creditors had decided to not only revitalise its rescue programme, releasing long-overdue aid, but cut €40bn (£32bn) from its debt mountain.
Addressing the Greek nation, the prime minister, Antonis Samaras, said the landmark agreement opened the way to the country's "rebirth" after one of the darkest periods in its modern history. The deal had not only averted bankruptcy and secured Athens' position in the eurozone but placed it on a path of economic recovery.
"A very grey and very dark period for Greece closed definitively," said the prime minister, whose fragile coalition had put its future on the line by endorsing a fresh round of unpopular austerity measures and structural reforms in return for further assistance from the EU and IMF.
"Greece has managed to win its credibility again. It has managed to transform a programme of endless austerity into a programme that dares [to enact] reforms and will lead to growth," added a tired looking but visibly relieved Samaras.
Three years after Europe's economic crisis erupted in Athens, the foundations had finally been laid to ensure that Greece's "most tortuous and destabilising problem" – its massive pile of debt – would become sustainable, he said. From being the eurozone's most indebted nation, Greeks can now expect to see their debt load cut to 124% of GDP in 2020 from the projected 190% of national outlay in 2014, under a package of measure that include a bond buy-back and various interest rate cuts on official loans.
"The agreement has secured the immediate disbursement of capital," Samaras told Greeks, emphasising that the installment would be bigger than the €31.5bn Greece had been on track to receive. "The recapitalisation of banks will protect the deposits of Greek people and primarily pave the way for liquidity to return to the Greek economy."
Following months of uncertainty over Athens' place in the 17-nation eurozone bloc – spawned to a great degree by debate over its ability to deliver reforms – officials described the deal as a major vote of confidence in Greece.
Until last week, the issue of reducing Greece's debt – a source of great friction between the EU and IMF – had not even been on the table. "It guarantees Greece's place in the hardcore of Europe," said the interior minister, Evripides Stylianides, a senior cadre in Samaras' centre-right New Democracy party.
"We got the maximum that we could have won," he told state-run TV, emphasising that Athens had not only succeeded in achieving the cash injection but an extra two years to meet fiscal targets.
But while there was universal consensus that the deal will go down as a defining point in the euro debt drama, party leaders on both the left and right also agreed that for a country that has constantly defied easy quick fixes the latest rescue formula was another case of foreign lenders – especially pre-election Germany – buying time. With austerity the price of continued assistance, analysts questioned the efficacy of a rescue that would once again preclude growth and development in a country whose economy is on course to contract by an unprecedented 25%, all a result of internationally mandated spending cuts.
"It does not include a viable plan [of growth and development] for Greece and that's why it's not a deal," said the main opposition leader, Alexis Tsipras, whose radical left Syriza party has argued that Greece's only hope is to reject the very policies that have prompted the economic death spiral. Economists, likewise, claimed that Athens' debt mountain would only become manageable once it had been reduced to 90% of GDP, in keeping with other eurozone member states.
Tuesday, November 27, 2012
Greek Parliament needed several hours to swallow and confirm the news that an employee at the parliament earns 10,000 EUR per month in times when wages and pensions cuts leave many Greeks with a thin income. The office of the Greek Parliament confirmed that the employee is the liaison officer between the Greek and the European Parliament and receives a monthly salary plus expenses, overtime bonus and a juicy bonus of 8,000 euro per month for working abroad.
According to Proto Thema and NewsIt, Greek Parliament had two employees to carry out the duties of liaison officers in the Brussels office paying 192,000 euro annual in form of allowance. However due to the economic crisis the two employees were replaced by the current employee ( a former aide of ex EU Commissioner and ex PASOK Minister Christos Papoutsis) in 2010.
General secretary of Parliament, Thanos Papaioannou, trying to justify the annual allowance of 96,000 euro, said that the employee has a degree in English Literature, a Master in Political science and speaks four languages.
Papaioannou added that the allowance is not being paid by the Parliament but by the Foreign Ministry and that this allowance is the same for all civil servants working abroad. He also dismissed claims that the the whole of allowance is tax-free, saying that 50% of this is being taxed. The other 50% is tax-free.
Of course, the allowance for working abroad is not the same for all civil servants.
In Greek private sector an employee with the same skills would not get more than 1,800-2,000 euro per month. Before the crisis. Now it’s even less.
But now, of course, we get an identity crisis, when we read such monthly salaries.
PS I really do not understand why Greek taxpayers got angry about this news. At least, we feed only one of these species and not two as it was the case between 2005 and 2010, when borrowed money was plenty in this country
Greece now looks to have the finance to keep it solvent until 2014. It will stay in the euro, at least for now
Managing Director of the International Monetary Fund (IMF) Christine Lagarde arrives for Eurozone finance ministers meeting in Brussels, capital of Belgium on Nov. 26, 2012. Photograph: Wu Wei/xh/Xinhua Press/Corbis
There was something for everyone in the latest Greek debt deal. Athens gets enough money to stop the country going bust, Angela Merkel has done enough to keep Greece in the euro until after next year's German elections. The European Central Bank has fended off calls for it to take a haircut on its holdings of Greek bonds. Last but not least, the International Monetary Fund has forced Europe to get real about Greek's unsustainable debt position.
If all that sounds a bit too good to be true then that's because it is. This was a classic late-night serving from the Brussels fudge factory and it will certainly not be the last time Europe's finance ministers spend long hours discussing Greece.
Let's start with the good things about the plan. Firstly, the meeting in Brussels accepted that something had to be done – and fast – to prevent Greece running out of money. Next month will see the latest tranche of bailout money – €23.8bn for starters – handed over, just in the nick of time.
Secondly, there has been an acceptance that Greece needs additional help to make its debt sustainable. The IMF has been making the point that Greece is going through an immense amount of pain for no purpose, since tax increases and spending cuts to reduce the budget deficit are being outweighed by the revenue loss from a country five years into a brutal depression.
European policymakers, after some resistance, have now agreed that there should be a strategy for getting Greek debt down to 124% of GDP by 2020 – almost but not quite the 120% of GDP the IMF was calling for, and substantially below 110% of GDP in 2022.
A number of measures have been proposed for achieving this objective. Greece could see the interest rate on its borrowings reduced by 100 basis points (a full percentage point). It could pay a smaller guarantee fee on its loans. It could benefit from extra time to pay back its debts. European countries could agree to return any profits they make on their holdings of Greek debt back to Athens.
The key word here, of course, is "could". Monday night's deal was conditional on Greece sticking to its austerity programme in full and the debt-relief plan will only be implemented gradually to ensure there is no backsliding. The coalition government in Athens, given the economic and political pressures it is under, will find it tough to stick to these conditions.
Most worryingly of all, the package does nothing to address Greece's fundamental problem: the lack of growth. Past plans to make the country's debts sustainable have foundered because a far too rosy view has been taken of Greece's ability to cope with the austerity demanded by its creditors. This plan is no different.
In the short run, this deal should do the trick. Greece looks to have the finance to keep it solvent until 2014. It will stay in the euro, at least for now. The Germans can say that they have not given an inch. Investors, relieved that the uncertainty is over, will probably push the single currency higher on the foreign exchanges.
But Greece's economic agony will go on. The financial package is enough for the government to pay its bills but not enough to end the recession and start reducing unemployment from 25%. As growth falters, the debt position will not improve as quickly as Greece's eurozone partners anticipate. And there will be more burning of the midnight oil in Brussels.
Tuesday November 27, 2012
Greece has won big breathing space with long-frozen eurozone loans to restart from December and a first clear admission that a chunk of the country's debt burden will need to be written off down the line.
After 13 hours of talks in Brussels, the eurozone and the International Monetary Fund agreed to unlock 43.7 billion euros ($A54.63 billion) in loans and grant significant debt relief going forward for decades to come.
Greece must still meet a series of agreed conditions but 'the decision will certainly reduce the uncertainty and strengthen confidence in Europe and in Greece', said European Central Bank President Mario Draghi, who left the talks before a final.
Starved of bailout financing since the summer, Greek Prime Minister Antonis Samaras hailed the deal in Athens, while German Finance Minister Wolfgang Schaeuble said the package would be presented to German MPs by the end of the week.
'Everything has gone well,' Samaras told reporters in Athens.
'All Greeks have fought (for this decision) and tomorrow is a new day for every Greek person,' he added.
Finance ministers, the IMF and the ECB said the money would be paid in four instalments from December 13 through until the end of March, conditional on Greece funnelling income back to creditors at source and on the implementation by Athens of tax reforms settled with creditors.
The results of the 'laborious' negotiations according to IMF head Christine Lagarde are intended to see Greece's debt-to-GDP ratio fall from an estimated 144 per cent to 124 per cent come 2020, and 'substantially below 110 per cent' of gross domestic product by 2022.
'The IMF wanted to make sure the euro partners would take the necessary actions to bring Greece's debt on a sustainable path,' said Lagarde. 'I can say today that it has been achieved.'
There will be a mixture of techniques used to bring down Greece's debt burden.
These will begin with a buyback by Greece of old debt that has fallen in value on commercial money markets as well as national central banks across the eurozone foregoing profits on holdings of Greek debt whose worth has slumped.
Interest rates due to eurozone creditors will also be trimmed or deferred -- Ireland and Portugal can now be expected to demand parity -- while maturity dates will be pushed back by years.
The original bailout rewrite agreed for Greece in March was meant to see Greece's debt fall to 120 per cent of gross domestic product by 2020.
'Greece has delivered, now it's delivery time for the Eurogroup and the IMF,' said Rehn.
The IMF is pushing for a so-called 'haircut' or write-down of debt by eurozone partner governments in the way banks wrote off most of the loans due to them earlier this year, but Germany has come out against this ahead of a general election next year.
Other Triple A-rated states, though, have said they would 'not exclude' the possibility of a write-down of debt from 2015 onwards.
France has long been a firm backer of all efforts to keep Greece in the eurozone club, and having lost its Triple-A status, Finance Minister Pierre Moscovici said: 'Let's assume our responsibilities.'
Greece has been waiting since June for a loan instalment of 31.2 billion euros, part of a 130-billion-euro rescue granted earlier this year.
In exchange, Athens has pledged to implement a new series of radical austerity measures to cut its annual overspending.
Samaras' government pushed a fresh batch of deeply unpopular cuts through parliament earlier this month.
Greece's public creditors have decided to give Greece an extra two years, until 2016, to balance the books.
Greece's private creditors have written off more than 100 billion euros in debt, and the IMF has urged the ECB to accept this solution.
But both the central bank and Germany have so far held out against making any similar move, saying it would violate EU mandates against bankrolling individual countries.
German Chancellor Angela Merkel has said she is 'against this debt write-off and I want to find another solution'.
Saturday, November 24, 2012
Greece is facing a humanitarian crisis and growing racism, two international church groups said on Thursday, and appealed to the European Union to help the struggling nation.
In an open letter from Greece, the secretaries-general of the World Council of Churches (WCC) and the Conference of European Churches (CEC) said the country faced youth unemployment of over 50 percent and basic services were at risk. Photo: Reuters
In an open letter from Greece, the secretaries-general of the World Council of Churches (WCC) and the Conference of European Churches (CEC) said the country faced youth unemployment of over 50 percent and basic services were at risk.
Noting the EU had been awarded this year's Nobel Peace Prize, they said: "The economic and humanitarian tragedy today in Greece challenges the EU as a peace builder for the next generation."
Olav Fyske Tveit of the WCC and Guy Liagre of the CEC urged EU leaders to give "urgent and proper attention to the emerging humanitarian crisis in Greece."
The Geneva-based WCC and CEC represent Christian churches in the world and in Europe respectively, with the exception of the Roman Catholic Church. Their leaders met government officials and Greek Orthodox Church leaders during their visit.
European leaders were due to meet in Brussels from Thursday for difficult negotiations over EU spending in the period 2014-2020.
"In Greece, basic human services such as health care and even the availability of medicines are at severe risk," the letter from the WCC and CEC said.
"Together with the Church of Greece, we also take seriously the political and societal implications of growing racism and extremism in Greece," it said. "These are storm clouds on the horizon that cannot be ignored or wished away."
Assistance estimated to be as much as €17.5bn as Cyprus becomes fourth country to apply since debt crisis erupted
Cyprus president Demetris Christofias - the country has asked for an international bailout. Photograph: Olivier Hoslet/EPA
After months of haggling over the details, Cyprus announced on Friday that it had struck a deal with the EU and IMF to bail out its once vibrant but increasingly flagging economy, making it the fourth EU state to apply for a rescue programme since the eruption of Europe's debt crisis.
Hours after a government spokesman announced the step, international creditors confirmed that headway had been made, although they stopped short of confirming an agreement had been sealed.
The island's finance minister, Vassos Shiarly, earlier estimated the financial assistance could be up to €17.5bn – as much as its entire annual economic output – following the battering of Cypriot banks by their exposure to debt-crippled Greece. The final amount will depend on a forthcoming analysis of how much Nicosia will need to recapitalise its lenders.
"Discussions are expected to continue from respective headquarters with a view to making further progress toward a potential programme," creditors representing the EU, ECB and IMF said in a joint statement.
Acutely aware of the plight of Greece – whose unprecedented recession through endorsement of internationally-mandated austerity measures has been covered copiously by the Cypriot media – the bloc's easternmost member has argued doggedly with potential lenders over issues ranging from pension reforms to the privatisation of state-owned organisations.
The island's veteran communist president Demetris Christofias, who trained in Moscow, has publicly flirted with the idea of securing funds from Russia as an alternative despite Nicosia currently holding the EU's rotating presidency.
Well-placed insiders said the leader, whose five-year term runs out in February, was privately appalled when he learned this week that the bailout, originally set for some €10bn, would now amount to around €20,000 per capita for the former British colony's internationally recognised Greek-controlled south. "On hearing the amount he went ballistic," said one source. "He's got his legacy to think about."
Visiting Athens last month Christofias openly conceded that he did not want Cyprus to experience the same fate. "We've seen what has happened to you and we don't want [to suffer] the same," he told reporters.
Despite having come up with a package of €13.5bn of austerity cuts and now heading for a sixth year of recession, the Greek government has been kept waiting for a promised tranche of aid worth up to €44bn, with Euro zone policymakers this week yet again deferring a decision, now set for a finance ministers meeting on Monday.
In the island's war-divided capital, the government spokesman Stefanos Stefanou admitted the aid would come at a price, insisting that the government had tried strenuously to avoid being admitted into the financial assistance programme. Leaked documents have indicated that as in Greece creditors known collectively as "the troika" will demand the government drastically pares back the public sector as part of savings worth €1bn between 2012 and 2015.
"The bailout deal includes unpleasant measures," said Stefanou, refusing to elaborate on what the policies would be. "We negotiated very hard … to achieve the best conditions because from the moment a country goes into a stability mechanism things become very difficult and very hard. We tried as a government to avoid the mechanism, but unfortunately with the expiry of the deadline set by the European Central Bank for the recapitalisation of the banks we had to resort to the mechanism."
Within hours of the announcement, the government got a taste of the backlash life under the bailout will almost certainly bring, with the mass-market daily Politis running the headline "We have a memorandum and God help us".
Describing the measures that are likely to be meted out as tantamount to a "massacre", powerful trade unions instantly vowed to put up a fight in a country where workers' rights are held up as being even more sacred than in Greece.
"Whatever happens for us collective agreements and the right of collective negotiations in matters regarding workers' rights cannot be written off," said Babis Kyritsis, general secretary of the Pancyprian Federation of Labour, an umbrella organisation of unions. "In no circumstances will we abandon them."
Thursday, November 22, 2012
Reuters 6:11PM GMT 21 Nov 2012
The Greek prime minister Antonis Samaras warned the stability of the eurozone hangs in the balance after eurozone finance ministers failed to agree a deal over bail-out funds.
Eurozone finance ministers will meet again on Monday after failing to reach a deal on Greece Photo: Alamy
The stability of the eurozone hangs in the balance, the Greek prime minister warned, after eurozone finance ministers failed to agree a deal to release its latest tranche of bail-out funds.
Antonis Samaras urged fellow euro members, the International Monetary Fund and the European Central Bank to settle their differences, after a 12-hour meeting into the small hours of Wednesday morning ended in stalemate.
“It’s not only the future of our country but the stability of the entire eurozone which depends on the success of the conclusion of this effort in the next few days,” he said in a statement.
Greece is waiting for €31bn (£25bn) of aid, which is being held up by a disagreement between the eurozone’s finance ministers and the IMF over how to make Athens’ debt load manageable.
The eurozone countries, led by Germany, are refusing to write off a portion of Greece’s loans. Norbert Barthle, budget spokesman for Chancellor Angela Merkel’s party, said doing so “would cost money [and] ... be a fatal signal to [fellow bail-out recipients] Ireland, Portugal and possibly Spain, as they would immediately ask why they should accept difficult conditions and push through difficult measures.”
Instead, they want to give Greece an extra two years, to 2022, to bring its debt down to its target 120pc of gross domestic product (GDP), from the 176pc level forecast for this year.
However, the IMF’s head, Christine Lagarde, is thought to favour eurozone states taking a hit over the loans.
Finance ministers from the 17 euro member nations are to meet again next Monday to address the issue.
As Greece waits for them to agree a path for the release of the funds, an increasingly frustrated Athens has had to issue short-term debt to pay maturing treasury bills and tide it over.
“Whatever technical difficulties [there might be] ... do not excuse any ... delay,” said Mr Samaras. “Greece has done what it had to and what it had committed to doing. Our partners, along with the IMF, also must do what they have undertaken.”
Separately, Spain’s central bank governor warned that the country could miss its target to reduce its budget deficit for 2012, due to the “very unfavourable” economic situation. Luis Maria Linde warned the current data “still doesn’t allow us to rule out the possibility of budget slippage.”
European finance ministers fail to agree on unlocking long-delayed emergency aid for Greece
Rubbish piles in an Athens street following the walkout of municipal workers in the Greek capital. Photograph: Louisa Gouliamaki/AFP/Getty Images
The failure of European finance ministers to agree on unlocking long-delayed emergency aid for Greece, after unprecedented efforts to satisfy international conditions for the rescue funds, was met on Wednesday with anger and dismay in Athens. With the near-bankrupt country living on borrowed time, the inability of officials to sign off on the financial lifetime or agree on how to make Greece's debt mountain more sustainable exacerbated an explosive political atmosphere.
In a rare display of pique, prime minister Antonis Samaras issued a scathing statement reminding Greece's euro zone partners that Athens had carried out a series of deeply unpopular reforms, including spending cuts of €13.5bn (£10.85bn), in return for the assistance. Prior to the meeting Greek officials had expressed the hope that finance ministers would at the very least draw up a timetable for the disbursement of a projected €44.6bn in bailout funding now desperately needed to energise an economy running on empty.
"Greece has done what it had to and what it had committed to doing," Samaras said on learning of the deadlock after marathon talks in Brussels. "Our partners, along with the IMF, must also do what they have undertaken to do. Any technical difficulties in finding a technical solution do not justify any negligence or delays."
The leader, whose tripartite coalition has become increasingly shaky amid deepening disgruntlement over the way the crisis has been handled, will press his case when he holds discussions on the sidelines of a two-day EU summit with Jean Claude Juncker, who presides over the euro zone group of finance ministers, aides said.
Juncker, prime minister of Luxembourg, emerged from the 12-hour long euro meeting expressing disappointment that a solution to prop up the 17-nation bloc's weakest member had still not been found. Acknowledging that the sustainability of Greek government debt remained the stumbling block, he commended "the considerable efforts made by the Greek authorities and citizens to reach this stage".
The praise did little to allay fury among Greece's political elite. Throughout the day politicians, including Samaras' two junior partners, reacted with anger to the news that the cash injection, delayed since June, had once again been put on hold.
With the country's coffers practically dried up and its real economy mired in a recession not seen since the second world war – mostly as a result of austerity measures mandated by international creditors – the deadlock was widely viewed as deeply humiliating for a government that has sought so strenuously to meet foreign lenders' demands in the five months since it assumed power.
Against a backdrop of mounting fears of a social explosion – with support for the euro plummeting among Greeks from 81.6% before the June general election to 63% this week according to a GPO opinion poll – Evangelos Venizelos, whose socialist Pasok party is a member of the power-sharing alliance, lambasted the euro zone for "using Greece as an alibi to justify its own weakness to effectively deal with the various manifestations of the crisis". The issue of Greece's debt viability had been on the table since February, said Venizelos, who as former finance minister negotiated Greece's second bailout accord with the EU and IMF.
Piling the pressure on the government, the main opposition leader, Alexis Tsipras, denounced the failure as further proof that Athens' conservative-dominated government had been left helplessly watching events from the sidelines.
"Europe finds itself before the dead end that its political choices have created," said the politician whose stridently anti-bailout radical left Syriza party is leading in the polls. "Day by day it is confirmed that the path of [the bailouts] is catastrophic for the European structure and painful for the people of Europe."
Tuesday, November 20, 2012
Telegraph staff and agencies 7:00AM GMT 20 Nov 2012
European leaders remained at odds over how to reduce Greece's growing debt mountain on Monday, ahead of a key meeting where they will try to finalise a deal to unlock the next tranche of the country's bail-out.
Greece approved laws on Monday to enforce budget targets and ensure privatisation proceeds are used to pay off debt, seeking to appease foreign lenders before the critical meeting of euro zone finance ministers on Tuesday. Photo: Reuters
"We are headed for an agreement, but a partial one," one European diplomat told AFP, suggesting that the finance ministers could require yet another meeting before the end of November to address outstanding issues.
Greece approved laws on Monday to enforce budget targets and ensure privatisation proceeds are used to pay off debt, seeking to appease foreign lenders before the critical meeting of euro zone finance ministers on Tuesday.
Athens said the decrees - in addition to an austerity package passed this month - completed its obligations to lenders before Tuesday's Euro group meeting, which it hopes will unlock more aid to stave off bankruptcy.
Yannis Stournaras, Greece's finance minister, said that Greece was "totally ready" for the meeting.
"There are no longer any pending issues on our side. Greece is totally ready," he said.
The country has been waiting since June for an instalment of aid worth €31.2bn from a EU-IMF loan it was initially granted early this year.
By the end of the year, Greece is also due to receive two more aid payments, worth between €5bn and €8.3bn, in exchange for which it has pledged to implement a series of unpopular austerity budget measures.
IMF head Christine Lagarde, who has clashed openly with Euro group head Jean-Claude Juncker on issues related to the Greek rescue plan, says the gathering is crucial to getting stricken Greece back on its feet and its debt mountain cut sharply to sustainable levels.
"It's a question of... making sure that we focus on the same objective, which is that... Greece can operate on a sustainable basis," Lagarde said last week.
Germany is reportedly pushing Greece to buy back half of its outstanding bonds from private investors at 25pc of their value as one way to reduce its unsustainable debt.
The voluntary proposal would leave private sector holders of Greek debt who have already seen most of their investments wiped out with just cents per euro, even while euro zone countries demand 100 percent of their principal back for official loans, according to Reuters.
A finance ministry spokeswoman said on Monday that a "haircut", or reduction, of the official debt level was "unimaginable".
"We are working intensively to find a common line," she said.
Greece's debt burden is nearly 180pc of GDP and expected to rise to 190pc by 2014. That is about three times the EU's 60-percent limit and way beyond what the country can support, meaning it has to be reduced one way or another.
Under the current bailout, private sector creditors also agreed to write-off €100bn of Greek debt, and it has been suggested that official creditors should now do the same - an option both the IMF and the European Central Bank (ECB) rule out.
The IMF cannot extend more aid to countries if their debt is classed as unsustainable. The ECB meanwhile cannot accept a write-down because doing so would mean in effect that it was giving a government direct financing, which its rules forbid.
5:18PM GMT 19 Nov 2012
Greece's recession-hit businesses face "annihilation", a leading chamber of commerce has warned, as a fatal combination of falling sales and job cuts meant the country was in its worst economic shape for 14 years.
The association, representing a sector which employs nearly 18pc of the Greek workforce, presented an annual study forecasting a further drop in sales and job cuts in an economy where the unemployment rate currently exceeds 25pc. Photo: Reuters
"Returning to 1984 purchasing power levels, 1998 employment levels and 1999 salary levels will not help Greece's economy in 2013," said Vassilis Korkidis, chairman of the National Confederation of Hellenic Commerce (Esee).
The association, representing a sector which employs nearly 18pc of the Greek workforce, presented an annual study forecasting a further drop in sales and job cuts in an economy where the unemployment rate currently exceeds 25pc.
More than 40pc of limited liability companies and 70.6pc of general and limited partnerships expect a fall in sales, and one in three businesses in both categories expects to shed workers next year, the report showed.
"If this situation continues, the trader sector... will be threatened with annihilation," Mr Korkidis said.
"The recipe of successive (fiscal overhauls) appears to have failed," he said.
Greece's parliament earlier this month approved a new round of austerity worth €18.5bn that includes additional salary and pension cuts and other reforms to be implemented by 2016.
The measures have been prescribed by the European Union and the International Monetary Fund which have been propping up the near-bankrupt Greek economy with billions of Euros in loans since 2010.
After a third year of austerity, eight in ten businesses report a fall in sales and seven in ten have lost access to bank funding, Korkidis said.
"Europe needs a three-pillar approach: regain confidence, implement needed structural reforms, provide growth-enhancing measures," said Gunilla Almgren, president of the European association of craft, small and medium-sized enterprises (UEAPME).
Development Minister Costis Hatzidakis said the government had pledged to pay businesses outstanding state debts of three billion Euros by the end of the year.
The state owes private suppliers more than €8bn in total.
Sunday, November 18, 2012
Bulgaria does not have a problem with Macedonia and its aspirations for EU membership but with the nationalist rhetoric of some of its political leaders, Bulgarian Foreign Minister Nikolay Mladenov declared at a trilateral meeting with his Greek and Romanian counterparts.
Mladenov hosted in Sofia Monday Greek Foreign Minister Dimitris Avramopoulos and Romanian Foreign Minister Titus Corlatean for a mini-summit of Balkans' three major EU member states, Bulgaria, Greece, and Romania.
Bulgaria, Greece, and Romania have thus set out to "speak with one voice" in the European Union, their foreign ministers made it clear at their trilateral meeting.
In addition to Mladenov, the Foreign Ministers of Greece and Romania have also made it clear that Macedonia needs to prove its good-neighborliness before it can be allowed to join the European Union.
In their words, Macedonia's EU path needs to rest on a resolution of its "name dispute" with Greece – which has been blocking Macedonia's NATO and EU integration since the former Yugoslav republic is claiming a name that is also borne by an administrative district in Northern Greece – as well as on the Macedonian leaders' ability to do away with their nationalist rhetoric and verbal assaults on Bulgaria.
Bulgaria's President Rosen Plevneliev recently told EU Enlargement Commissioner Stefan Fuele that Macedonia is not ready for EU accession talks.
Plevneliev thus in effect reiterated the position of Foreign Minister Nikolay Mladenov who recently made it clear that Bulgaria does not support Macedonia's EU entry unconditionally.
Earlier, in a special statement in August 2012, Bulgarian Foreign Minister Nikolay Mladenov reacted strongly to hate speech against Bulgaria in Macedonia media.
Since the early Middle Ages, all the way to the first half of the 20th century, Macedonia and its Slavic population were considered part of the Bulgarian nation not just by Bulgaria but also by its neighbors and the international community. This is why from its National Liberation in 1878 till 1944 Bulgaria waged five wars attempting to unite all of the Bulgarian-populated lands in the Balkans, including Macedonia – after the San Stefano Treaty of March 1878 providing one state for almost all Bulgarian-populated regions was revised three months later by the European Great Powers in the Treaty of Berlin leaving the regions of Thrace and Macedonia out of Bulgaria.
After both World War I and World War II, however, Serbia/Yugoslavia kept control of 40% of the territory of the geographic and historical region of Macedonia, the so called Vardar Macedonia (which in 1991 became the Republic of Macedonia), Greece retained about 50% of the region – the so called Aegean Macedonia, while only 10% of the region – the so called Pirin Macedonia – remained in Bulgaria.
The foundations of the contemporary Macedonian nation were laid in 1943-44 by Yugoslavia's communists at a special congress that also proclaimed the creation of a Macedonian language and a Macedonian alphabet designed to differentiate the dialects spoken in the region of Macedonia from the Bulgarian language and to underline the creation of a distinct Macedonian national identity.
The so called question about the perceived Macedonian minority in Bulgaria exists since the late 1940s when the dictators of the Soviet Union and communist Yugoslavia – Joseph Stalin and Josip Broz Tito – attempted to arrange the post-World War II order on the Balkans through the creation of a Balkan federation between Bulgaria and Yugoslavia.
One of the provisions of this state engineering project of the two notorious communist dictators was the creation of a Macedonian republic within the future federation. For that to happen, the leadership of communist Bulgaria had to cede Pirin Macedonia to Yugoslavia in exchange for the territories of the so called Western Outlands (the towns of Tsaribrod (Dimitrovgrad) and Bosilegrad where the recognized Bulgarian minority in Serbia lives today).
This provision was accepted unconditionally by the Bulgarian communist leader Georgi Dimitrov who acted under direct orders from Stalin. As a result, in the late 1940s, the Bulgarian Communist Party undertook an unprecedented campaign to force its own population in the Pirin Region (today's Blagoevgrad District in Southwest Bulgaria) to change its Bulgarian nationality and identity into the newly invented Macedonian one, and the official census figures out of the blue recorded that 250 000 Macedonians living in Bulgaria.
The campaign to force the people of the Blagoevgrad District to become "Macedonians" was dropped by the Bulgarian Communist Party after the entire project for a Balkan federation between Bulgaria and Yugoslavia was killed with the falling out between Stalin and Tito in 1948-49 – a rift that had wide repercussions for Europe during the entire Cold War period. This left the population of Southwest Bulgaria – which was harassed by its own government on orders from Moscow – to shake off the imagined ethnic Macedonian identity imposed on it.
Ever since, however, the authorities in Skopje whose legitimacy relies primarily on the doctrine described by the Bulgarian historians as "macedonianism", i.e. the distinct national identity of the Slavic population of the region of Macedonia, have resurfaced claims of "hundreds of thousands of ethnic Macedonians" living in Bulgaria under some sort of "brutal oppression." Macedonian media cite as evidence for such claims statements by the so called ethnic Macedonian party "OMO Ilinden-Pirin", whose members according to publications in the Bulgarian media are paid from Skopje and Belgrade to declare themselves as "Macedonians."
The provocations in the Macedonian media on the "question" of "ethnic Macedonians" abroad seem to be in line with last year's construction of monuments in Skopje of Alexander the Great and the medieval Bulgarian Tsar Samuil, both of which are deemed to be great Macedonians by the government of Macedonian Prime Minister Nikola Gruevski and his party VMRO-DPMNE – a move that caused anger in Greece, ridicule in Bulgaria, and criticism by the European Commission.
Some 50 000 Macedonians have granted Bulgarian citizenship in the past decade, and that the figure has seen a staggering increase in the past couple of years, as many Macedonians are, in the worlds of Bulgarian historian, ex Diaspora Minister and current head of the National History Museum, Bozhidar Dimitrov, returning to their "Bulgarian roots."
As of 2010, it is much easier for Macedonians to get Bulgarian citizenship because the Bulgarian authorities no longer ask them to provide a document of Bulgarian origin – which is usually some sort of a church or municipal certificate from the time of their grandparents; instead, for the purposes of granting citizenship, the Bulgarian state has switched to assuming that all Macedonians are of Bulgarian origin.
Unlike Greece, which gets enraged by FYROM's moves toying with the cultural heritage from the Antiquity period and is tangled with Macedonia in the notorious name dispute, Bulgaria's governments traditionally react to propaganda fits by Skopje with disregard, while the general public in Bulgaria accepts them with ridicule. To the extent that Bulgaria has made any claims towards Macedonia, those have boiled down to the refusal to allow Skopje to hijack Bulgaria's historical heritage from the Middle Ages and the 19th century Revival Period.
Bulgaria was the first sovereign nation to recognize the independence of the Republic of Macedonia in 1992.
US Embassy in Athens updated its safety and security information on Friday raising the awareness of US citizens of African, Asian, Hispanic or Middle Eastern descent. The American diplomatic mission explained the update with ‘unprovoked harassment and violent attacks against person perceived as foreign migrants.’
US Embassy Excerpt:
“Security Message 16. Nov 2012
The U.S. Embassy informs U.S. citizens that the “Threats To Safety and Security” section of the Greece Country Specific Information page has been updated to inform U.S. citizens of a rise in unprovoked harassment and violent attacks against persons who, because of their complexion, are perceived to be foreign migrants. U.S. citizens most at risk are those of African, Asian, Hispanic, or Middle Eastern descent in Athens and other major cities. Please review the Country Specific Information for Greece.
We encourage all U.S. citizens to review their personal security plans; remain aware of their surroundings, including local events; monitor local news stations for updates; and report specific incidences of targeted violence to the U.S. Embassy in Athens or the U. S. Consulate General in Thessaloniki at the numbers below. U.S. citizens should maintain a high level of vigilance and take appropriate steps to enhance their personal security. For additional information, please refer to “A Safe Trip Abroad.” (Full Text here)
Furthermore the US-Embassy warned American citizens of the protest rally on Saturday, November 17, gave telephones numbers, where its citizens can report cases of racist attack.
Prompt was the answer by Greek Foreign Ministry with spokesman Grigoris Delavekouras issuing a statement saying:
“Greece is and remain a safe country. It is a state of law where every citizen or visitor enjoys the protection of law. The isolated incidents of racist violence are foreign to Greeks, to our culture and the long tradition of Greek hospitality.
The state and the Ministry of Citizen Protection follow a policy of zero tolerance to such phenomena and takes all necessary measures to prevent and combat such behaviour that we categorically condemn.” (FM statement)
Journalist 'dumbfounded' at legal move just weeks after he was acquitted for publishing list of alleged tax evaders
Greek journalist Kostas Vaxevanis faces a retrial over alleged data privacy breaches. Photograph: Demotix/Corbis/Stathis Kalligeris
A Greek journalist who published the names of more than 2,000 wealthy Greeks with Swiss bank accounts faces a retrial, barely two weeks after he was acquitted of breaking data privacy laws.
Kostas Vaxevanis was arrested, tried and found not guilty within days of the list's publication. But court officials said on Friday the verdict "lacked credibility". Vaxevanis told the Guardian he was "dumbfounded" at the news, and attributed the move to concerted efforts on the part of the judiciary to silence the press.
"It's absolutely unprecedented. The court has yet to even write up its decision finding me innocent and the prosecutor's office is already ordering a retrial," he said. "They not only acted illegally, resorting to violence when I was arrested last month, they not only ridiculed Greeceinternationally trying to censor the press, when I am found innocent they want to overturn the judgment, doing whatever they can to get the result that they want."
Acquitted Greek editor adds that only foreign media stopped news of arrest over publication of 'Lagarde list' being buried
Vaxevanis, whose case has aroused international uproar over media censorship in the crisis-hit country, said he wanted the new trial to take place as soon as possible. Announcing that the acquittal on 1 November was erroneous, the Athens public prosecutor's office said the journalist should be retried by a higher misdemeanour court on the same charges.
"The prosecutor believes that the decision in favour of the journalist is legally wrong," a court official told Reuters.
Three people named on the list have also requested an appeal on the verdict, the official added. If found guilty, Vaxevanis could be jailed for up to two years or face a fine.
"No trial date has been set, as far as I know, but if I have to be tried again I want the hearing to happen straight away," he said.
"They clearly want to terrorise me, and in doing so shut up the press so, and I don't want to be their hostage. I want to get this over with as soon as possible."
Greeks were outraged by the initial decision to prosecute the reporter who published the so-called "Lagarde List" in his bi-monthly magazine Hoc Doc. In a nation hit by relentless rounds of austerity, many had publicly praised the editor for revealing the names of the 2,059 Greeks who had opened accounts at the Geneva branch of HSBC amid widespread speculation that the account holders were also suspected tax evaders. Although successive governments had been in possession of the list – first given to Greek authorities by the IMF chief, Christine Lagarde, who was then French finance minister – it had never been acted on with one former finance minister, George Papaconstantinou, going so far as to had "lost" the catalogue of names.
"Instead of chasing tax evaders they are chasing me," said Vaxevanis, who had described his original trial as "targeted and vengeful". The journalist, who has become an unwitting international media star, has vowed to continue unveiling the truth in a country he insists is governed by a "corrupt clique".
"There's a huge problem in Greece, a problem of democracy and essence," he told the Guardian recently. "The country is governed by a poisonous combination of politicians, businessmen and journalists who cover one another's backs. Every day laws are changed, or new laws are voted in, to legitimise illegal deeds. Had it not been for the foreign media taking such an interest in my own story, it would have been buried."
Greece has so far failed to convict any big names of tax evasion, fuelling popular disenchantment with a political class that has promised but failed to force the wealthy to share some of the pain of the debt crisis that erupted in Athens three years ago.
Friday, November 16, 2012
German mayors at co-operation event with Greek counterparts target of municipal workers incensed by overstaffing comments
A Greek protester shouts as Germany's consul in Thessaloniki, Wolfgang Hoelsche-Obermaier, centre, arrives at a conference of Greek and German mayors. Photograph: Alexandros Michailidis/Demotix/Corbis
But before mayors from both countries could even face each other across the table at Thessaloniki's exhibition centre, furious municipal workers had not only stormed the building but gone on the attack, hurling coffee, water bottles, eggs and abuse at German officials.
In the melee, the German consul general to the Greek city, Wolfgang Hoelscher-Obermaier, (pictured, in blue shirt) was pelted with projectiles and his speech was snatched from him as protesters shouted "Nazis out" and "It's now or never." Riot police were left chasing protesters as they pushed their way into the complex and its various halls.
Barely a month after a combustible visit to Athens by the German chancellor, Angela Merkel, relations between the eurozone's richest and poorest partners are still a long way from cordial.
"You could say it was quite tense," said an employee at the city Thessaloniki's town hall, where the bilateral meeting took place. "Municipal workers are angry anyway, but the remarks made by [German politician Hans-Joachim] Fuchtel really made them mad."
Fuchtel, Germany's deputy minister of labour and social affairs, is Merkel's choice to promote bilateral ties away from big government at a regional level. On Wednesday, however, the politician, who has island-hopped and mountain-trekked to win favour with ordinary Greeks, ignited a firestorm after saying local authorities in Greece were overstaffed.
"There are studies and research which have shown that as far as local administration is concerned 3,000 workers are needed in Greece to do the work carried out by 1,000 Germans," he said on the eve of the two-day conference whose aim is promote regional co-operation by bringing together mayors from both countries. "Answers should be given especially to those [EU] partners who are financing processes in Greece, as to why there is not a more effective exploitation of the labour force."
Berlin has been the biggest bankroller of the €240bn (£193bn) bailouts propping up the debt-choked Greek economy – and with it the toughest advocate of austerity in Athens.
But for Greek municipal workers who stand to be axed in the latest round of belt-tightening demanded of the country – and who have begun occupying town halls nationwide – Fuchtel's statement appears to have been the last straw.
"These people haven't come to help us, but to announce our death sentence," said Themis Balassopoulos, who, as head of the municipal workers' union, had travelled to Thessaloniki to attend the demonstration.
In Berlin, a spokesman at the foreign office, mindful of the meeting's raison d'etre, tried to play down the incident. "We can confirm that there was a demonstration on the margin of the conference but to our knowledge there were no injuries," he said.
Later in the day Hoelscher-Obermaier emerged from the building to say he thought Fuchtel's comments had been misconstrued. "It was a misunderstanding. I am more pro-Greek than I was before today," he told reporters.
Even Merkel, who had been the target of virulent anti-German sentiment during her six-hour stopover in Athens last month, said she believed the Thessaloniki meeting was "a good thing". "I heard that there were some very constructive talks," she said, before adding: "Violence is no means for political disputes."
Saturday, November 10, 2012
Eurozone ministers will not release next tranche of rescue funds before it has been established that Greek debt is sustainable
Progress report on Greece from the IMF, ECB and European Commission is expected before the crucial meeting on Monday. Photograph Orestis Panagiotou/EPA
Greece cannot receive its much-delayed and critically-needed bailout tranche of €31.5bn (£25bn) unless its national debt level is deemed to be on a path of eventual sustainability, but Athens will not be allowed to default on €5bn of debt that needs to be redeemed next week, a senior eurozone official said on Friday.
Ahead of a meeting of eurozone finance ministers, International Monetary Fund officials and the European Central Bank on Greece on Monday, the official made plain that there was unlikely to be any quick agreement. Privately senior officials in Brussels say that the Europeans and the IMF are in deep dispute about Greece, meaning that little can be resolved and "everything is open."
Monday's meeting, postponed from this week, had been expected to sign off on the big tranche of loans delayed since the summer, after the Greek parliament's adoption of a new austerity package this week and its anticipated passing of a new budget on Sunday.
"One round of discussions may not suffice to come to a final decision on the whole package," said the official. "I am not pretending we'll come to a result and a solution on this. There's a high degree of possibility of the need for a second round of discussions."
He made it plain that there could be no further loans until that decision was taken.
The long-awaited report on Greece from the troika of IMF, ECB, and European Commission officials is expected at the weekend before Monday's meeting. It will report on Athens' compliance with the bailout terms and also include a "debt sustainability analysis" which is the main sticking point and the focus of the row between the IMF and the Europeans.
At IMF insistence, the bailout terms stipulate that Greek national debt may be no higher than 120% of gross domestic product by 2020 to qualify for the verdict of being sustainable. The troika report is certain to state that this goal is unachievable.
The official raised the prospect of extending that deadline to 2022. Eurozone officials had been seeking to "decouple" the debt sustainability issue from the release of the tranche of loans, but have given into IMF pressure to link the two factors.
Several eurozone governments would only be prepared to release the loans "once [the debt] is seen as sustainable and we are convinced of this," said the official.
Some €5bn of Greek short-term debt will mature next Friday, and it will not have the money to repay the loans unless the next aid tranche is released. The ECB is under pressure to give Greek banks permission to hold more of the country's sovereign debt, allowing the €5bn of bills to be rolled over.
The official emphasised that Athens would not be allowed to default on the debt, meaning that the ECB may act.
Despite IMF pressure on the eurozone and the ECB to write down their loans to Greece and take losses, the official said the ECB "won't tolerate any haircuts on its Greek bond holdings." The German government takes a similar stance.
There is broad agreement that the Greek bailout regime has to be extended by two years to 2016, generating a financing gap of up to €30bn. But there is no deal on how to fill that hole. Debt buybacks ("much more complicated than you can imagine"), lower interest rates on the eurozone loans and extending their maturities were all being considered.
But the official said that Greece's cash needs for this month and next should be "easily covered".
"There will not be any defaults on 16th November."
Friday, November 9, 2012
The latest draconian austerity measures imposed on the Greek people can be a catalyst to bring about the end of the old system
A protestor against the vote for further austerity measures in the Greek parliament this week. Photograph: Aristidis Vafeiadakis//Zuma Press/Corbis
The passing of the third and most draconian tranche of austerity measures by the Greek parliament on Wednesday was a pyrrhic victory. It marks the beginning of the end of the coalition government and offers a textbook example of the terminal decay of a system of power. The signs are everywhere.
The procedure followed during the parliamentary debate violated both the rule of law and democracy. The one-clause bill incorporating a large number of unrelated measures amounted to several hundred pages but was given to MPs only the day before the debate, making detailed discussion impossible. New measures were added, one of which, removing parliament's independent control of its business, created such a reaction that the government had to withdraw it immediately.
The bill introduces new spending cuts, tax rises, education and social security "reforms", attacks on labour and trade unions rights, and miscellaneous unrelated provisions. A number of measures in the bill were declared unconstitutional by the areios pagos (the supreme court), the audit commission and parliament's legal service. Their incorporation into a single clause meant to turn the occasion into a vote of confidence and stop government MPs from rejecting parts they found beyond the pale. Under guillotine procedures, the debate was limited to 10 hours and was dominated by party leaders and spokespeople, disenfranchising backbench MPs. This indicates the government's contempt towards parliament and democratic debate. Still the Democratic Left, the minor partner in the coalition government, abstained from the vote and seven Pasok and New Democracy MPs voted against or abstained, cutting the government majority from to 29 to three.
The new cuts in salaries and pensions come on top of the 40% reductions already in place. Greece has experienced a 24% GDP contraction over five years, with unemployment at 25.5 % and youth unemployment at 55%, the highest in Europe. A humanitarian crisis has followed, with homelessness, mental illness and suicide at unprecedented levels. Hospitals cannot work for lack of basic medicines, schools have no textbooks or fuel for heating, people scour rubbish bins for food. The various lists of potential tax evaders, many of them supporters of the mainstream parties, disappear in the drawers of the elites. Politicians and rich tax evaders enjoy permanent immunity, while journalists who reveal them are prosecuted. Greek society is collapsing before our eyes and the neo-Nazi Chrysi Avgi rises on its ashes.
According to Sigmund Freud, the superego imposes impossible demands on the ego and keeps augmenting them if the self obeys. Something similar is happening to Greece. The troika and government measures have a sadistic character. They claim that austerity and internal devaluation will lead to growth. Yet the results show precisely the opposite. In April 2010, the IMF predicted that austerity Greece would have -1% growth in 2011 and move to steady growth in 2012. In April 2011, it changed its forecast for the year to -3% growth. It turned out -7%. In April 2012, the IMF predicted -4.7% for the year. Most economists are now predicting -7% or more.
It does not take great expertise to explain this abject failure. Public spending cuts and tax increases during a deep depression reduce demand, increase unemployment and halt growth. The slowdown reduces tax revenues and increases spending on unemployment and other benefits. Fiscal targets are missed and new austerity is demanded to plug the ever-increasing gap. The austerity measures are not about fiscal discipline but about turning Greece into a weak country under foreign diktat. If the IMF and government economists were first-year students they would have failed their exams. Unfortunately, their diktat makes millions fail their lives.
When a power system becomes historically obsolete radical change follows. The ancien regime may survive for a while, however, and even frustrate the "spirit" of history. Radical change requires three elements. Strong popular desire, a political agent prepared to take power and, finally, a catalyst, which combines the other two and gives the moribund power system the final push. In Greece, all three elements are present. The will for change was evident in last year's resistances and occupations and in the recent strikes and demonstrations. The Syriza party, which has been adopted by the people as the agent of change, is asking for elections. In a symbolic gesture, the Syriza MPs left the chamber on Wednesday and joined the rally in Syntagma Square. The disastrous austerity measures have become the catalyst for changing the 40-year-old power system that has brought the country to its knees.
The number of government MPs backing the measures under the principle that "turkeys don't vote for early Christmas" is fast diminishing. The combination of strong parliamentary opposition, social mobilisation and the decay of the minor coalition parties will soon impose elections and change.
A sense of deja vu coloured the proceedings. The collapse of George Papandreou's government last year started in the same way. The early austerity was approved by the Pasok-dominated parliament in June 2011 with a few MPs defecting and huge rallies and clouds of teargas in Syntagma. The prime minister, Antonis Samaras, who had voted against the earlier austerity, now finds himself in Papandreou's shoes. According to the philosopher Hegel, history repeats itself because radical change takes two efforts to succeed. On this occasion, the repetition will not be a farce but a huge relief.