Sunday, January 27, 2013

Greek subway strike ends after arrest threats

25 Jan 2013 16:21

Subway workers strike against wage cuts broken up by 300 riot police after paralysing public transport for nine days.

The showdown with train workers had turned into the latest test for the country's austerity program [GALLO/GETTY]

Striking Greek subway workers have trickled back to work after the government threatened them with arrest, ending a nine-day walkout that paralysed public transport in Athens.

Traffic slowly resumed on Athens' subway lines on Friday afternoon after workers protesting wage cuts were served orders to return to work or face jail, the first time the government has invoked such legislation since it took power in June.

The showdown had turned into the latest test for Greece's fragile three-party ruling coalition as it faces down unions to try to implement austerity measures demanded by foreign lenders as the price for bailout funds.

"The workers who were handed the notice didn't have a choice. We are exploring legal options," said Manthos Tsakos, general secretary of the main subway workers' union.

Earlier in the day, some 300 riot police stormed a train depot to break up the sit-in and briefly detained at least 10 workers.

The radical leftist opposition Syriza party, which is leading in some opinion polls, said the police intervention was a "barbaric" attack on workers' rights.

Eager to show lenders and Greeks that it is determined to implement promised reforms, Prime Minister Antonis Samaras has taken a hard line on the strikers despite facing criticism from one of his own coalition partners.

"When labour action is judged illegal and abusive, the law has to be implemented," government spokesman Simos Kedikoglou told state television.

"Everyone has made sacrifices and no one can ask to be made an exception."

Gridlock and exasperation

Other transport unions held strikes in solidarity with subway workers on Friday, leaving Athens without bus, tram, trolleybus or rail services, and causing gridlock across the city.

Traffic ground to a halt in the capital, fuelling public anger against the strike which affected more than a million commuters in a city of 5 million people.

But commuters, worn down by years of frequent strikes and exasperated by the long wait for a taxi to work, said the strike only made life more difficult for them. 

"This week has been hell. How can they [train workers] expect people to be on their side when they do this to us? It's very difficult to have any sympathy for them," said 50-year-old Dionisis Kefalas.

Subway employees oppose being included in a unified wage scheme for public sector workers drawn up under an austerity programme that would slash their salaries.

Under the emergency law invoked, which is meant to be used in times of war, natural disaster or risks to public health, workers can be arrested and jailed for up to five years.

Greek subway strike ends after arrest threats - Europe - Al Jazeera English

Saturday, January 26, 2013

Statistics chief fires back at Greek charges

5:39PM GMT 24 Jan 2013

The head of the Greek statistics agency fired back on Thursday against charges that he had deliberately swollen 2009 deficit figures, making life worse for compatriots, by saying that his numbers were respected by EU officials and criticising the Greek justice system.

Politicians in Athens were urged to make the “right decision” and avert the “terrible consequences” of their deadlock as fears of a Greek exit from the euro gripped financial markets.

On its website, Eurostat currently lists the Greek public deficit for 2009 as 15.6 percent of GDP. Photo: BLOOMBERG

Andreas Georgiou, head of the Hellenic Statistical Authority, or Elstat, faces legal action for "false attestation to the detriment of the state" and "violation of duty" for decisions that have led Greek leaders to implement austerity measures that have made life harsh for many.

The former IMF statistician counters that has simply respected "rules and methodology" required by Greece's international creditors and the European Union's statistics arm Eurostat.

Georgiou underscored that since he took over as head of Elstat in August 2010, its data has been "accepted by Eurostat without any reservations", whereas the EU body had serious doubts about official Greek data provided from 2004-2010.

Greece was admitted to the euro zone based on what is now widely accepted to be erroneous data, and its debt crisis erupted in late 2009 when an incoming government released figures that put the public deficit at more than 12 percent of Greece's annual output.

The figure had been estimated by the previous government at 6.0 percent of gross domestic product (GDP), and the difference sent shock waves across the 27-member EU.


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On its website, Eurostat currently lists the Greek public deficit for 2009 as 15.6 percent of GDP.

On Thursday, Georgiou said he found it "striking that a criminal prosecution" hadn't been launched for erroneous data when "'Greek statistics' were a constant source of concern for the European and international community" but instead when they had been accepted by Europe.

The statistics chief vowed to "continue to apply the law, despite the adversities" and expressed confidence that the faithful application of European law regarding the production of statistics would be recognised by Greek courts.

Charges against Georgiou are based on accusations by a former Elstat employee, Zoe Georganta.

She maintains that Georgiou approved a significantly higher deficit number to justify a Greek request for financial aid from the EU and IMF, which was granted in exchange for austerity measures and economic reforms that have led to large-scale street protests and violence.

Statistics chief fires back at Greek charges - Telegraph

Thursday, January 24, 2013

Greek prosecutor 'to charge statistics chief over deficit'

11:22PM GMT 22 Jan 2013

Greece's statistics chief will face felony charges over accusations he artificially inflated budget deficit figures in a bid to make the country's debt crisis appear even worse than it was, court sources told Reuters on Tuesday.

Politicians in Athens were urged to make the “right decision” and avert the “terrible consequences” of their deadlock as fears of a Greek exit from the euro gripped financial markets.

Unreliable Greek statistics with frequent data revisions have been blamed in part for pushing Greece to a financial crisis. Photo: BLOOMBERG

Greek statistics agency ELSTAT head Andreas Georgiou has previously denied wrongdoing and the EU's own Eurostat statistics agency has defended him, saying the deficit was calculated in line with its standards.

However, an economic crimes prosecutor recommended the felony charges be filed against Georgiou and two other ELSTAT employees after finding evidence that they falsified the country's 2009 fiscal data, a court official said on condition of anonymity.

The case stems from allegations by an ELSTAT employee who was dismissed that Georgiou inflated the deficit numbers as part of a German-led conspiracy to justify harsh austerity measures to accompany a bailout.

"The request concerns breach of duty and the falsification of fiscal data," the official said, without giving further details.

Georgiou, a 52-year old veteran IMF statistician and martial arts teacher, was not available for comment.

In the past, he has denied any wrongdoing and called it an "unprecedented" case of statisticians being investigated for producing figures under EU regulations.

The prosecutor's move reopens last year's domestic political row on whether wrong fiscal data was to blame for a loss of confidence in Greek debt in late 2009, before Georgiou took over the agency, forcing Athens to seek an international bailout that has since swollen to 240 billion euros - the biggest sovereign rescue in history.

Unreliable Greek statistics with frequent data revisions have been blamed in part for pushing Greece to a financial crisis and Georgiou was brought in as ELSTAT chief in 2010 to overhaul the agency and improve its data.

In November 2010, shortly after he took over, the 2009 budget deficit was revised to more than 15 percent of gross domestic product from 13.6 percent, indicating the scale of Greece's fiscal derailment and deepening the country's crisis.

A senior prosecutor is expected to formally file the charges against Georgiou in the coming days following the recommendation on Tuesday. A further inquiry will be conducted before a trial is held, the court official said.

If convicted on charges of breach of faith - a crime that usually applies to those who embezzle or misuse public funds - Georgiou could face at least five years in jail.

Source: Reuters

Greek prosecutor 'to charge statistics chief over deficit' - Telegraph

Saturday, January 19, 2013

Greek politicians launch inquiry into former finance minister

Helena Smith in Athens, Friday 18 January 2013 17.38 GMT

George Papaconstantinou faces investigation over claims he failed to crack down on tax evasion and protected relatives

George Papaconstantinou

Greece's former finance minister George Papaconstantinou, accused of removing relatives' names from a list of offshore accounts. Photograph: Icon/Reuters

A dramatic few weeks lie ahead for Greece after politicians moved on Friday to launch an official inquiry into allegations of misconduct by George Papaconstantinou, the former finance minister universally identified as the architect of the debt-stricken country's first austerity programme.

After a marathon 16-hour debate, Greek MPs voted overwhelmingly to investigate Papaconstantinou following accusations that he not only failed to crack down on tax evasion – widely blamed for the nation's financial woes – but deliberately erased the names of relatives from a list of possible culprits with holdings in the Geneva branch of HSBC.

The LSE-trained economist faces prosecution – and jail – if on the basis of their findings investigators decide by the end of February to try him before a special court.

In an atmosphere made shriller by public fury over belt-tightening, the beleaguered politician vehemently denied the charges, telling the 300-seat house that he had fallen victim to a vicious "smear campaign" and was clearly being made a "scapegoat".

"I did not tamper with the data. It is inconceivable that I would have acted in such a way that would so blatantly involve me," he said in a speech that was by turns poignant, angry and matter-of-fact.

On Friday he issued a statement saying: "The only thing that I want is to be given the opportunity to clear my name from the gross fabrication against me and for accountability to be attributed where it should be."

Highlighting the tensions the affair has unleashed, the debate preceding the 2am ballot was unusually intense, with the socialist Pasok leader, Evangelos Venizelos, who succeeded Papaconstantinou in the job, exchanging heated barbs with the main opposition Syriza leader Alexis Tsipras.

The party had proposed that Venizelos also be investigated for failing to act on the list, a dossier of more than 2,000 well-heeled Greeks with offshore accounts in Geneva that was first handed to Papaconstantinou in late 2010 by the then French finance minister, Christine Lagarde. Parliament rejected the motion along with the proposal of two other opposition parties that the former prime ministers George Papandreou and Lucas Papademos be similarly investigated.

"The Lagarde list is not an isolated incident, but the tip of the iceberg," Tsipras railed. "An iceberg that if revealed will show a lot that until now has been hidden under the surface of the waters." The leftist leader insisted the "kleptocratic" political establishment that had brought Greece to the precipice of economic collapse was in cahoots with wealthy tax dodgers whose interests it was determined to protect.

The catalogue of names was first handed to French authorities after a renegade HSBC employee allegedly stole the details of some 24,000 customers with offshore accounts in Switzerland. But while other countries, including crisis-hit Italy and Spain, acted on the list, Greece resisted the urge to rein in much-needed revenue with Papaconstantinou, who has since been expelled from the socialist Pasok party, admitting that he did not know what happened to the original list after his associates copied it on to a USB stick for "security reasons".

Wading into the furore, Lagarde, who now heads the IMF, said this week that she had handed over the data at Papaconstantinou's request because the moderniser seemed determined "to pursue every avenue" in the battle against tax evasion. "Not enough has been done," she told Greek reporters, addressing the issue of tax avoidance. "When we look at revenue it is not on target," she added, exhorting Athens's coalition government to get serious about rooting out tax dodgers if it wanted to receive further financial assistance from the IMF.

As Greeks endure their hardest winter yet, amid record levels of unemployment and poverty, the scandal the Lagarde list has unleashed looks set to deepen as demands mount for a political elite held responsible for the country's economic mess to be punished.

For many the list's mishandling has amplified, in the most egregious way, an indisputable fact: that while low-income Greeks and pensioners have paid a heavy price, enduring relentless cuts and tax increases since the debt crisis erupted, the rich have got off scot free.

Greek politicians launch inquiry into former finance minister | World news |

Tuesday, January 15, 2013

Greece faces decision over tax evasion scandal

By Anthee Carassava 10:30PM GMT 13 Jan 2013

Greek lawmakers will vote on whether two former prime ministers and a pair of ex-finance ministers should face criminal prosecution for turning a blind eye to potential tax cheats.

Greek Finance Minister George Papaconstantinou

George Papaconstantinou has hinted that his political foes are trying to incriminate him Photo: EPA

The parliamentary vote, scheduled for January 17, spawns from allegations of fraud and breach of duty levelled against George Papaconstantinou, a socialist politician, while at the helm of the country's finance ministry three years ago.

Last month, after a lengthy investigation, judicial prosecutors suggested that the former finance minister may have had a hand in the country's biggest tax evasion scandal in decades after the names of three of his relatives were deleted from a list of wealthy Greeks with more than $2bn in savings stashed away in an HSBC bank branch in Geneva.

The account holders include Eleni Papaconstantinou, a high-flying Harvard educated corporate lawyer, and her husband whose joint account hold $1.2m, as well as Ms Papaconstantinou's sister's spouse, an arms dealer.

Last week the parties appeared before an investigating magistrate, denying all allegations of tax evasion and providing written proof that their Swiss savings accounts were both declared and taxed, as required by Greek law.

Should that the declarations be proved true, Mr Papaconstantinou could be cleared of criminal prosecution and probable incarceration, slapped instead with misdemeanour charges for tampering with state documents to omit the names of relatives names from the so-called "Lagarde List."


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A suave, socialist-minded economist who ceded his international career to join forces in what he called 'the rebirth" of his country, Mr Papaconstantinou admits to having received a compact disc of the contentious list from Christine Lagarde, the now head of the International Monetary Fund, when she was French finance minister and he was serving in the socialist government of prime minister George Papandreou in 2010.

Two administrations that followed, including a brief 11-month government led by technocrat Lucas Papademos, last year, failed to expose billionaire tax cheats. No one on the Lagarde list has been charged, let alone probed.

Worst yet, when questioned by a first congressional subcommittee last year, Mr. Papaconstantinou maintained that the contentious CD had gone missing after he personally proffered a copy to the country's financial police (SDOE).

On Monday those former heads will face additional questioning after computer experts added another twist to the deepening scandal, suggesting last week that data contained in the memory stick which Papaconstantinou passed on to SDOE was "modified" long after the former minister left office in July 2011.

Papaconstantinou's successor at the finance ministry was Evangelos Venizelos, a pugnacious and mercurious lawmaker who has gone on to the helm of the socialist PASOK party and latched on to the government as a partner to the conservative-led coalition government that was stitched together last year, after two divisive elections in May and June.

"Not surprisingly," conceded a senior government official Friday, "it's his potential prosecution that we are most concerned about, not Papaconstantinou's.

"If he [Mr. Venizelos] goes, then that spells trouble for all of us."

Indeed, for the three-party ruling coalition, the unending almost daily flow of disclosures has spread a darkened stain over the government's bid to crackdown on widespread tax evasion.

Recent opinion polls showed 68pc of Greeks saying the government was not doing enough to bust tax cheats, preferring instead added spending cuts and tax hikes to make up for state losses.

Greece faces decision over tax evasion scandal - Telegraph

Saturday, January 12, 2013

Greece’s Rotten Oligarchy

By KOSTAS VAXEVANIS Published: January 6, 2013 Athens


DEMOCRACY is like a bicycle: if you don’t keep pedalling, you fall. Unfortunately, the bicycle of Greek democracy has long been broken. After the military junta collapsed in 1974, Greece created only a hybrid, diluted form of democracy. You can vote, belong to a party and protest. In essence, however, a small clique exercises all meaningful political power.

For all that has been said about the Greek crisis, much has been left unsaid. The crisis has become a battleground of interests and ideologies. At stake is the role of the public sector and the welfare state. Yes, in Greece we have a dysfunctional public sector; for the past 40 years the ruling parties handed out government jobs to their supporters, regardless of their qualifications.

But the real problem with the public sector is the tiny elite of business people who live off the Greek state while passing themselves off as “entrepreneurs.” They bribe politicians to get fat government contracts, usually at inflated prices. They also own many of the country’s media outlets, and thus manage to ensure that their actions are clothed in silence. Sometimes they’ll even buy a soccer team in order to drum up popular support and shield their crimes behind popular protection, as the drug lord Pablo Escobar did in Colombia, and as the paramilitary leader Arkan did in Serbia.

In 2011, Evangelos Venizelos, who was then the finance minister and is now the leader of the socialist party, Pasok, instituted a new property-tax law. But for properties larger than 2,000 square meters — about 21,000 square feet — the tax was reduced by 60 percent. Mr. Venizelos thus carved out a big exemption for the only people who could afford to pay the tax: the rich. (Mr. Venizelos is also the man responsible for a law granting broad immunity to government ministers.)

Such shenanigans have gone on for decades. The public is deprived of real information, as television stations, newspapers and online news sites are controlled by the economic and political elite.

Another scandal involves the so-called Lagarde List. In 2010, Christine Lagarde, then the French finance minister (and now the head of the International Monetary Fund), gave the Greek government a list of roughly 2,000 Greek citizens with Swiss bank accounts, to help uncover tax fraud. Greek officials did virtually nothing with the list; two former finance ministers, George Papaconstantinou and his successor, Mr. Venizelos, reportedly even told Parliament they did not know where it was. Meanwhile, several media outlets falsely accused some politicians and business figures of being on the list in order to conceal the ugly reality: rich people were evading taxes while their desperate fellow citizens were searching the trash for food.

When Hot Doc, the monthly magazine I edit and publish, made the list public in October, I was arrested and charged with violating personal privacy, but was acquitted. The result didn’t please those in power. So I am being brought back for a second trial (a date has yet to be set) on similarly vague allegations. Throughout the entire process — the publication of the list, my arrest, my acquittal — the Greek media were absent. The case was a top story in the international press, but not in the country where it took place.

The reason is simple. The Lagarde list implicates a corrupt group that answers to the name of democracy even as it casually nullifies it: officials with offshore companies, friends and relatives of government ministers, bankers, publishers and those involved in the black market.

After my magazine released the list, the Greek government made not a single statement about the case.

When Mr. Venizelos left the Finance Ministry last March, he failed to turn the CD with the list over to his successor. He took it with him. Only when his successor, Yannis Stournaras, told The Financial Times in October that he had never received the list did Mr. Venizelos turn it over to the prime minister’s office. He was never asked about the delay, and leaders of the three parties in the coalition government have not referred his conduct to Parliament’s investigatory committee.

Meanwhile, a newly released version of the list made clear that someone had removed the names of three relatives of Mr. Papaconstantinou, who was the finance minister from 2009 to 2011, before Mr. Venizelos. Last month, Mr. Papaconstantinou was expelled from Pasok. He now faces a Parliamentary investigation, the potential lifting of his immunity from prosecution as a former minister, and charges of tampering with the data. It appears that he may become a new Iphigenia, a scapegoat sacrificed so that the corrupt political system can survive.

This is all unfolding at a time when Greece is walking a tightrope above the abyss of bankruptcy, while the coalition government is instituting new taxes on the lower classes. Half of young Greeks are unemployed. The economy is shrinking at an annual rate of 6.9 percent. People are scrounging for food. And a neo-Nazi party, Golden Dawn, is on the rise, exploiting the resentment and rage toward the ruling class.

The Greek people must remount their bicycle of democracy by demanding an end to deception and corruption. Journalists need to resist manipulation and rediscover their journalistic duties. And the government should revive Greece’s ancient democratic heritage — instead of killing the messenger.

Kostas Vaxevanis is a magazine publisher and television journalist. This essay was translated by Karen Emmerich from the Greek.

A version of this op-ed appeared in print on January 7, 2013, on page A19 of the New York edition with the headline: Greece’s Rotten Oligarchy.

Greece’s Rotten Oligarchy -

Greece over the last decade

Angelos Tzortzinis for The New York Times Updated: Dec. 13, 2012

Over the last decade, Greece went on a debt binge that came crashing to an end in late 2009, provoking an economic crisis that has decimated the country’s economy, brought down its government, unleashed increasing social unrest and threatened the future of the euro.

Since a change in government revealed the true size of the country’s massive deficits, Greece has been kept afloat by its fellow euro zone countries, but at a steep price: the austerity measures demanded by France and Germany in return for two massive bailout packages, totaling 240 billion euros, have ripped holes in the Greek safety net and plunged the country into a recession of near-Great Depression dimensions.

After long resisting the idea of a default, European officials in March 2012 helped Greece negotiate a landmark debt restructuring deal with the vast majority of its private sector lenders, who agreed to swap $77 billion in Greek debt for new bonds worth as much as 75 percent less. It was the largest default in history.

The deal cleared the way for the so-called troika — European Commission, the European Central Bank and the International Monetary Fund — to begin releasing funds from the second, 130 billion euro ($163.4 billion) bailout package, avoiding an uncontrolled default. But many economists said it still left Greece saddled with unsustainable debts and little prospects for growth.

While Greece received billions of euros in emergency assistance from the lenders overseeing its bailout, almost none of the money is going to the Greek government to pay for vital public services. Instead, much of it is flowing directly back into the troika’s pockets. The European bailout that was supposed to buy time for Greece is mainly servicing the interest on the country’s debt; other funds have been set aside for propping up the nation’s shaky banks. Meanwhile, the Greek economy continues to decline.

In early May 2012, voters upended the country’s political system in a parliamentary election that saw the crushing defeat of the dominant parties, who were blamed for Greece’s collapse. Parties representing the left and the far-right made gains, as Greeks protested the austerity pact.

More Austerity, but Bailout Terms Are Eased

A second round of elections was held in June, after no party was able to form a government. The winner was Antonis Samaras, the leader of the center-right New Democracy party, who became prime minister after cobbling together a shaky coalition and began seeking concessions from the country’s lenders.

In late July, officials in Germany began to speak openly of the possibility that Greece would leave the euro in the fall. But in August, when Mr. Samaras made a plea in the German press for “a little breathing room,’' there were signs of a more conciliatory atmosphere. Euro zone leaders also began to acknowledge that the austerity program imposed on Greece by the troika had taken such a toll on living standards that it had become counterproductive.

In September, Mr. Samaras drafted a plan for an €11.5 billion austerity package that included fresh cuts to pensions, salaries and other expenses, hoping to convince the troika to release nearly 32 billion euros, or $40.7 billion, in financial aid that the country needs to stay solvent. But the troika rejected an initial version of the plan, saying in effect that they did not think he would be able to deliver.

Even as Mr. Samaras worked to revise the plan, public opposition to more austerity deepened, with polls showing both Syriza and Golden Dawn, a right-wing party linked to anti-immigrant violence, making gains. In summer and fall 2012, Golden Dawn stepped up its attacks against immigrants.

In October, Greece reached an agreement with the troika of lenders on a revised plan, totaling $23 billion in savings over four years. In November, after some of the most violent protests to date, Parliament passed the plan, but the coalition was shaken by the large number of defections. 

By the end of the month, it was clear that Europe’s leaders planned to release the next round of financing, and to give Greece some measure of relief, perhaps by extending the deadline for bringing the budget back into primary surplus. But they remained at loggerheads over how to do so without angering residents of northern countries, since any extension would require more money to patch Greece’s deficit.

After weeks of wrangling with the International Monetary Fund, which insisted on steps to lower Greece’s debt burden, finance ministers agreed on a complicated set of measures meant to provide some relief without having to actually write off loans, through longer maturities and lower interest rates on bailout loans. Greece was also able to buy back 32 billion euros’ worth of deeply discounted privately-held bonds, using new money it borrowed from the troika; the step wiped 20 billion euros in debt off the country’s books. The next day, the E.U. approved the release of nearly €50 billion in badly needed new bailout funds.

But many questions remained, and many economists remained dubious that Greece would be able to pay off its remaining debt without stronger measures to spur growth, or at least to counteract the contractionary effect of austerity.

The new target is a reduction of the debt to 124 percent of gross domestic product by 2020, rather than 120 percent. That would be down from the current level of 175 percent.

The New Austerity Package

The new austerity measures passed by Mr. Samaras’s government — including sharp cuts to pensions, salaries and social services, as well as tax increases and increases in the retirement age to 67 from 65 — were designed to persuade Greece’s foreign creditors to unlock around $40 billion in aid that the country needs to meet expenses.

With state coffers virtually empty, an economy near depression and unemployment at a record high of 25 percent, Greece is counting on the money to keep the government running. It also needs to pay off a portion of more than 8 billion euros in arrears that it owes suppliers for basic products, like medicines, that some companies have stopped supplying to Greece until they are paid.

And yet most of the money would not be put directly back into the economy. Instead, about 85 percent of the loan installment would go to replenishing the capital reserves of Greece’s shaky banking system. Those cushions were depleted early in 2012 after the banks lost huge amounts of money, when the government forced its creditors to take a 50 percent loss on the Greek bonds — held in large part by Greece’s banks.


In late 2009, the new government of Prime Minister George A. Papandreou announced that it had discovered that its conservative predecessor had falsified budget figures, concealing a swollen debt that was growing rapidly in the wake of the global economic meltdown.

The roots of the crisis go back to the strong euro and rock-bottom interest rates that prevailed for much of the past decade. Greece took advantage of this easy money to drive up borrowing by the country’s consumers and its government, which built up $400 billion in debt, much of it lent by banks in France and Germany.

When the global economy crumpled, those chickens came home to roost.

After the revelation of the true size of its deficit, Greece was quickly frozen out of the bond markets, and in May 2010 began to rely on an aid package of €110 billion, or $152.6 billion, agreed to by its richer European neighbors.

The price was a series of austerity measures meant to cut the country’s bloated deficit and restore investor confidence. Greece cut the pay of its public workers — a quarter of the work force — by 10 percent — but continued to miss deficit targets as its economy sank deeper into recession, shrinking by an estimated 5.5 percent in 2011.

Throughout 2010 and 2011, investors continued to demand ever higher interest rates for Greek borrowing as the market appeared to conclude that some sort of default was inevitable. Mass demonstrations turned violent in October 2011 as Parliament barely passed additional austerity measures Europe demanded to keep the bailout money flowing.

Also that month, European leaders won agreement from banks to reduce some of Greece’s debt by 50 percent. But the conditions coming along with the aid plunged Athens into turmoil, and in November, Mr. Papandreou decided to step down. Lucas Papademos, an economist and former vice president of the European Central Bank, was named prime minister and assembled a temporary government of national unity that pledged to quickly approve the tough terms of a second European aid package of $150 billion.

Tensions in the Euro Zone

For Greece — and for Spain, Italy, Ireland and Portugal — the financial crisis has highlighted the constraints of euro membership. Unable to devalue their currencies to regain competitiveness, and forced by E.U. fiscal agreements to control spending, they are facing austerity measures just when their economies need extra spending.

Other economies like Germany, the Netherlands and Austria have kept deficits down while retaining an edge in global markets by restraining domestic wage increases. France lies somewhere between the two camps.

The chief difficulty in working out a package to support Greece was the popular sentiment in Germany — deeply concerned about becoming the answer to the debt problems of all of Europe’s endangered economies — that Greece should pay a penalty for its former profligacy.

Since the euro’s inception in 1999, no member had sought support from the I.M.F., which typically comes to the rescue of emerging-market economies rather than developed countries. Beside unsettling the markets, Greece’s troubles have undermined the common currency it and 15 and other European nations share.

Meanwhile, questions were widely raised about the role played by banks, including Goldman Sachs, in constructing elaborate financial deals that helped the previous government hide the extent of its deficit.

Bond Losses, Second Bailout Package

By early 2012, the sense of crisis had returned, as the leaders of France and Germany threatened to withhold the second aid package without further cuts and promises of structural economic changes. Greece plunged into meetings with banks and hedge funds about deeper writedowns on its debt.

With elections looming in the spring, the parties that make up Mr. Papademos’s coalition feared that they were essentially being told to commit political suicide to save the country, and one party to the alliance bailed out. But with an uncontrolled default seeming unthinkable, the government shrugged off violent demonstrations and hurried to pass the necessary legislation.

The European Union’s plan of tax increases, spending cuts and wage cuts pushed the country into a deep recession; the economy shrunk by almost 12 percent between 2009 and 2011 and is expected to shrink by up to 6 percent in 2012. The crisis also stripped Greece’s political center, weak to begin with, of its last shreds of political legitimacy. With unemployment at 21 percent, businesses closing, credit scarce and the proposed new wage cuts expected to further decimate the shrinking middle class, the hard left and extreme right are rising.

In early February, Mr. Papademos reached a deal to support the new austerity measures with two of his coalition members, the Socialists and New Democracy, a center right party. The right-wing party, Popular Orthodox Rally, balked, but is too small to block the deal, which includes a 22 percent cut in the benchmark minimum wage and cuts of 150,000 public sector layoffs. Greek workers responded by walking off the job for the second general strike in a week. Street demonstrations in Athens turned violent, and 80,000 people marched in protest the day before Parliament approved the package on Feb. 13.

On Feb. 21, after more than 13 hours of talks in Brussels, European finance ministers approved a new bailout of 130 billion euros, or $172 billion, subject to Greece taking immediate steps to put the deep structural changes that they agreed to into effect.

The agreement included a reduction in interest rates on loans from Greece’s first rescue in 2010, and European central banks foregoing profit on their Greek bond holdings, that allowed the deal to satisfy a mandate set by the International Monetary Fund that Greece’s debt come down to 120.5 percent of gross domestic product by 2020.

The bailout cash is likely to be paid into a special “escrow” account that will prioritize debt servicing before money is released to general government coffers.

Though Greece may have dodged a default with its last-minute bailout deal — it faced payments it would not be able to make on March 20 — longer-term doubts over its ability to repay its staggering debts remained, raising questions about whether even more rescue money will eventually be needed.

It is uncertain if another round of austerity can bring Greece to a point whereby it generates enough revenue to pay off its obligations — even if the private sector debt deal goes through — and return to the market on its own.

The Debt Deal

In early March 2012, Greece announced that it had clinched a landmark debt restructuring deal with its private sector lenders. The deal clears the way for the release of bailout funds from Europe and the International Monetary Fund that will save the country from imminent default.

The Greek finance ministry said that 85.8 percent of private creditors holding 177 billion euros in Greek bonds participated in the bond swap. After invoking collective action clauses, provisions that will force the holdouts to accept the offer, the participation rate would rise to 95 percent and meet the target set by Europe and the I.M.F. for the release of crucial rescue funds.

The ministry also said that 69 percent of investors holding a category of Greek bonds issued under laws other than Greek law had agreed to the exchange — or about €20 billion worth. This figure was much higher than anticipated because many of these investors were expected to either challenge Greece in court or hold out for better terms.

For Greece, the better than expected numbers highlights the success of the aggressive legal strategy to force bond holders to take up the exchange even though they would accept a big loss in the process. Seen at first as a risky gambit that could end up badly, the take-it-or-leave-it approach — mixed in with tough rhetoric from public officials in Greece and Europe — proved to be highly effective as it forced even the most reluctant investors to tender their bonds.

The value of Greek 10-year bonds had shortly before hit a record low of 16 cents on the euro.

When the bailout was finalized on March 14, European officials said that if the reform program is successful, Greece’s debt level by 2020 could equal 116.5 percent of gross domestic product.

However, European officials said that Greece needed to do more to crack down on tax evasion. While acknowledging that Greek authorities made strides in 2011, collecting 946 million euros ($1.2 billion) in back taxes, Horst Reichenbach, the head of the European Commission’s task force on Greece, said it was a fraction of the potential in Greece, where tax evasion is endemic.

Concern Grows in Greece Over the Bailout

Even as the European Union signed off on the bailout deal for Greece, many people in Athens saw no end to their country’s woes.

The deal was reached amid a growing air of stalemate and concern. Greece’s foreign lenders expressed doubts that the new austerity measures the Greek Parliament passed — including a 22 percent cut to the private-sector benchmark minimum wage — would actually be carried out, at least before early national elections in the spring.

Others were concerned that in the fine print of the 400-plus-page document, Greece relinquished fundamental parts of its sovereignty to its foreign lenders, the European Commission, the European Central Bank and the International Monetary Fund.

While their country’s fate was being decided in abstract, high-level negotiations, many Greeks said they had begun to feel that the debt writedown and new loan is aimed at saving the banks more than the country and its citizens.

Privately, Greek and European officials said they did not believe that Greece’s increasingly weak political class would have the will or the time to carry out the new austerity measures, which they say require complex legal expertise and cooperation among ministries in a state that lags in administrative capacity.

May 2012 Parliamentary Elections

In the May vote, the center-right New Democracy gained 111 of Parliament’s 300 seats, and the socialist Pasok party won 42. The Coalition of the Radical Left, called Syriza, which opposed the terms of Greece’s agreement with its foreign lenders, won 50 seats, dominating in all major metropolitan areas. In a sign of the depth of the social turmoil here, the far-right Golden Dawn party, whose members perform Nazi salutes at rallies, pulled in 6.8 percent of the vote — compared with less than 1 percent in 2009 — enough to enter Parliament for the first time with 21 seats.

The vote raised fears across Europe that Greece would back away from the debt deal, which requires that a new round of budget cuts equal to 5 percent of GDP be adopted in June. A second default by Greece could undermine banks across the continent that hold its debt.

One by one, the leaders of the chief parties tried and failed to form a coalition, as the leader of Syriza, Alexis Tsipras, said that he would not work with either New Democracy or Pasok unless their leaders repudiated their support of the debt deal. President Karolos Papoulias made a last-ditch appeal for the parties to form a unity government, but that also failed.

Leaders in Germany and elsewhere in Europe made clear that as far as they were concerned, a Greek departure from the euro was no longer unthinkable — and far more likely than additional aid.

And depositors were voting with their feet, pulling billions from Greek banks to protect against the losses that would accompany a switch to a depreciated drachma. The head of the new caretaker government said the central bank had warned of “a great fear that could develop into a panic.”

Fear of ‘Drachmageddon’

In the weeks following the May 2012 elections, talk of “drachmageddon” could be heard in conversations all around Athens — despite the fact that 80 percent of Greeks said they wanted to stay with the euro.

Any departure from the euro, if it did occur, would not come quickly, even if a new government repudiates Greece’s bailout terms; orchestrating the exit would be legally complicated and lengthy. European leaders may also move to prevent a Greek default or exit at the 11th hour, considering the almost unending uncertainties.

But few people are taking chances.

Big tourism operators like TUI of Germany and Kuoni of Britain were demanding the addition of so-called drachma clauses to contracts with Greek hoteliers should the euro no longer be in use. British newspapers were filled with advice columns for travelers worried about the wisdom of planning a vacation in Greece, or even Portugal and Spain, should the euro crisis worsen. Large multinational companies like Vodafone Group, Reckitt Benckiser and Diageo have taken to sweeping cash every day from euro accounts back to Britain to limit their exposure.

But coming up with a Plan B is proving difficult for Greek businesses, especially smaller ones. There are so many unknowns involved that many of them cannot even conceive of how they would cope. Economists say the drachma would be devalued by an estimated 50 to 70 percent compared to the euro.

Tens of thousands of Greek businesses could collapse from one day to the next, said Constantine Mihalos, the president of the Athens Chamber of Commerce and Industry. Around 85 percent of Greek companies employ fewer than 10 people, and many are already near bankruptcy as the Greek economy nose-dives and bank credit dries up.

With a devalued currency, inflation would rise rapidly, and Greek companies would struggle to pay the euro-denominated bills of their suppliers. Trade with other countries would slow sharply for a while, as suppliers halted deliveries, further crippling Greek businesses that depend heavily on imports.

Even large Greek exporters who might benefit from a devalued currency are opposed to a return to the drachma, fearing damage to the country’s image as a place to do business.

The troubled Greek banking system, which is already running on fumes, would face a serious run as depositors pulled their funds. An estimated 250 billion euros, or about $315 billion, has already left Greek banks since the crisis first broke open three years ago.

The International Monetary Fund estimates that a Greek exit from the euro would lop more than 10 percent from Greece’s gross domestic product for at least the first year after a return to the drachma.

After that, the thinking goes, a new dawn would break, as the weakened Greek currency lowers the cost of Greek labor and products like olive oil. As was the case in Argentina, businesses and consumers in other countries would eventually start buying Greek goods and services once they improved in value.

Aside from shipbuilding, most of Greece’s industrial base has eroded in the 30 years since the government nationalized large areas of industry following a seething civil war. Wealth-generating businesses diminished, and tens of thousands of laid-off workers were absorbed by the state to reduce unemployment.

Today, Greek exports of manufactured products account for only 10 percent of gross domestic product, compared with a 30 percent average for the rest of the euro zone. In addition, Greece’s adoption of the euro hastened a steady shift away from agricultural production. Today, Greece imports nearly 40 percent of its food, most of its medicine and almost all of its oil and natural gas.

Cracking Down on Illegal Immigrants

With its position on the southeastern flank of the European Union, Greece has long been the most common transit country for impoverished migrants from Africa, Asia and the Middle East. But the global economic malaise and the revolutions of the Arab Spring have sharply increased the flow of migrants, and the government has been calling for more help from the European Union.

The growing population of immigrants in Greece — about 800,000 are registered, and an estimated 350,000 or more are in the country illegally — adds to the anxieties of many Greeks, who are seeing the government’s once generous social spending evaporate. They complain that the foreign residents are depriving them of jobs and threatening the national identity.

Such frustrations have been exploited politically, notably by Golden Dawn, a far-right group that has been widely linked to a rising number of apparently racially motivated assaults but vehemently denies being a neo-Nazi group. Once obscure, it drew 7 percent of the vote in the June elections.

A new report by Human Rights Watch warned that xenophobic violence has reached “alarming proportions” in parts of Greece, and it accuses the authorities of failing to stop the trend.

In early August, a vast police operation in Athens aimed at identifying illegal immigrants found that, of 6,000 people detained over the weekend, 1,400 did not have proper documentation, leading the minister of public order to say that Greece was suffering an “unprecedented invasion” that was threatening the stability of the nation.

The minister, Nikos Dendias, defended the mass detentions, saying that a failure to curb a relentless influx of immigrants into Greece would lead the country, which is surviving on foreign loans, to collapse.

Economy Continues to Contract

Official data released in August showed that the Greek economy continues to contract rapidly, a painful reminder of how Greece is chasing a moving target in trying to meet its bailout obligations.

Gross domestic product slid 6.2 percent in the second quarter of 2012 from a year earlier, the Hellenic Statistical Authority reported in Piraeus. That followed a 6.5 percent year-over-year contraction in the first quarter.

Sarah Hewin, an economist at Standard Chartered Bank in London, said the second quarter had been a fraught time, with two parliamentary elections, tough austerity measures and a flight of deposits from Greek banks all weighing on confidence.

She noted that the Greek economy, which was stumbling even before the collapse of Lehman Brothers in 2008, has shrunk almost 18 percent since the April-to-June quarter of that year, a decline that suggests economic depression. So far, there appears to be little reason for optimism, with the unemployment rate in May 2012 reaching a record 23.1 percent, up from 22.6 percent in April. The jobless rate among youth has reached almost 55 percent.

Rise in Right-Wing Extremism

Just a few months ago, the name Golden Dawn was something to be whispered in Greece.

But, since July 2012, after the extremist right-wing group won an electoral foothold in Parliament, talk of Golden Dawn seems to be on everybody’s lips.

In cafes, taxis and bars, Greeks across the political spectrum are discussing the palpable surge in Golden Dawn’s popularity, which has risen in recent political polls even as the group steps up a campaign of vigilantism and attacks against immigrants.

The poll gains come amid growing disenchantment over rising illegal immigration, and with the government of Prime Minister Antonis Samaras, which is being forced by its international lenders to push through $15 billion in additional, highly unpopular, austerity measures. If Greece were to hold new elections soon, Golden Dawn could emerge as the third largest party in Parliament, behind Mr. Samaras’s New Democracy and the left-wing Syriza. Currently, Golden Dawn is the fifth largest, with 18 out of 300 seats.

Golden Dawn’s tactics are similar to ones it used in the run-up to parliamentary elections in June. Preying on fears that immigrants are worsening crime rates and economic hardship, the group has been stepping up attacks against immigrants, many of whom are legal citizens, with the police frequently standing by. It is also trying to expand its reach with the Greek diaspora.

The group recently opened an office in New York City, announcing its presence with a sleek Web site depicting a stylized Swastika against a darkened Manhattan skyline. The Web site was disabled by hackers less than a day later and remains down, and the American Hellenic Educational Progressive Association condemned the group’s outreach, saying that “fascism has no place in the United States.”

Golden Dawn has also established an outpost in Australia, where Greeks have been emigrating by the thousands to escape the crisis in their homeland.

The group is still far from being a major threat to Mr. Samaras’s party, or to his fragile three-party coalition government. Most Greeks express alarm at the group’s rise, and anti-fascist organizations in Athens are continuing efforts neighborhood by neighborhood to counter its increased vigilantism.

Investigations of Corruption

In September 2012, the Greek news media published a list of 36 politicians who were ostensibly under investigation on corruption charges. It included the speaker of Parliament, who temporarily stepped down on Sept. 24, and several former ministers and mayors. It was also believed to include Leonidas Tzanis, 57, a Socialist politician and former deputy minister. Mr. Tzanis’s wife found him dead in the basement of their house, where he had apparently hanged himself on Oct. 4, days before he was expected to testify to the authorities, the Greek news media reported.

Greece’s financial crimes unit has not confirmed the existence of the list but has not denied that it is investigating politicians for corruption. It did not respond to requests for comment.

In another investigation, the authorities are looking at a list of 54,000 people who transferred nearly $29 billion abroad since 2009 and, in 15,000 cases, declared income significantly smaller than that found in the foreign accounts.

Government at Odds Over a Missing List of Names

A missing list of nearly 2,000 Greeks with Swiss bank accounts was rapidly turning into a full-blown political crisis that was imperiling Greece’s fragile coalition government at a crucial time.

When the Greek finance minister and one of his predecessors said in September 2012 that the list was missing — and another former finance minister then said he had belatedly handed it over to the authorities — the story was seen as an almost laughable caper. But amid other high-profile corruption investigations that have opened in recent weeks, it assumed a darker cast.

The corruption investigations are seen as a gloves-off fight, with politicians breaking allegiances in a destabilizing climate of suspicion and even blackmail. The same people singled out in the investigations are in the parties that form the pillars of Mr. Samaras’s government — a government blessed and supported by European leaders — and it remains to be seen how much self-examination, and how many criminal charges, it will take before the entire structure collapses.

The investigations have also revealed the close ties between Greece’s political establishment and its oligarchs and business elite. There is growing public outrage that no Greek government wanted to touch the infamous list of 1,991 Greeks with accounts at a Geneva branch of the global bank HSBC that the French government gave Greece in 2010 to crack down on tax evasion.

Widely Differing Accounts

After the Greek finance minister told The Financial Times in September 2012 that the bank list appeared to have gone missing in the Finance Ministry, one of his predecessors, George Papaconstantinou, gave an interview on Greek television saying that he had received the list in late 2010 from Christine Lagarde, then the French finance minister and now the managing director of the International Monetary Fund. He said he had given a handful of names from the list to the chief of Greece’s financial crimes unit in early 2011 and the full list to that official’s successor, Ioannis Diotis, in June of that year.

Speaking to Parliament’s ethics committee in early October, Mr. Diotis said he had received a memory stick with the names from Mr. Papaconstantinou in June 2011, the month the finance minister left office. Mr. Diotis said that he had passed the list to Mr. Papaconstantinou’s successor, Evangelos Venizelos, the current Socialist leader, but that Mr. Venizelos had not instructed him to investigate it. Mr. Diotis also suggested that the list appeared to have been obtained illegally and might not have been usable in an investigation.

On Oct. 8, the committee said it would summon the current and three former finance ministers to testify about the list. In a television interview in early October, a furious Mr. Venizelos said he had handed the memory stick to Mr. Samaras when he realized that no investigative agencies had a copy. He said he never received the list from Mr. Papaconstantinou.

Beneath the Veneer of Normalcy, a Nation Unraveling

As the economic crisis grinds along in Greece, austerity is fraying the bonds of civility, forcing long-submerged divisions to the surface.

Members of the neo-Nazi Golden Dawn party, who are widely seen to have the support of the police, clash violently with leftists and immigrants, raising fears of the precariousness of the rule of law. But the discord is not confined to them.

Lawmakers, increasingly mired in corruption scandals that alienate the public, curse one another in Parliament. Friends fall out, disagreeing over how deep the country’s troubles run and who is to blame.

The divisions are not only political. With unemployment at 25 percent, and exceeding 50 percent for young people, tensions are rising between generations, public- and private-sector workers, haves and have-nots.

As the talks drag on between the government of Prime Minister Antonis Samaras and Greece’s foreign lenders over politically toxic new austerity measures in exchange for more aid, the news media are filled every day with leaks about possible cuts to salaries and pensions, leading to a state of constant, low-grade panic.

Mr. Samaras recently provoked public outrage when in an interview with a German newspaper he likened Greece today to Weimar Germany, referring to the fragile democratic republic in which fascists and Communists fought for power while the political center eroded before Hitler came to power.

Critics warn of a climate of intimidation against journalists. Those who are seen as representing the business elite often need security details to protect them from angry citizens. Investigative reporters for Reuters looking into the Greek banking system said they were followed, Reuters reported.

Public Rage in Athens Over Merkel Visit

Earlier in October, Chancellor Angela Merkel of Germany visited Athens in a show of solidarity with the country. While Greek authorities sought to shield her from rowdy protesters who see her as the arch-villain of the euro crisis and their national pain, Prime Minister Samaras greeted her as “a friend of Greece.” He tried to reassure the Greek people that Ms. Merkel was not here “as a teacher, to give grades” but rather “as a good friend and a real partner.”

Unpersuaded, furious Greeks held rallies and protests that included a job walkout by civil servants, including teachers and doctors. Some banners read “Don’t cry for us Mrs. Merkel” and “Merkel you are not welcome here.” A group of protesters burned a flag bearing the symbol of the Nazi swastika while protesters dressed in Nazi-style uniforms drew cheers of approval as they rode a small jeep past a police cordon.

Ms. Merkel’s visit stood as the high point thus far of her recent efforts to show a renewed dedication to European solidarity after years of harsh words and increasingly strained relations within the bloc. At a joint news conference with Mr. Samaras, Ms. Merkel said Greece must make good on its commitments to creditors but acknowledged the suffering that the Greek people had endured as the government forced through deep spending cuts in the midst of a recession that has lasted for years. But she said the country was headed in the right direction. “I am convinced that the path, which is a difficult path, will lead to success,” Ms. Merkel said.

Nationwide Strikes to Protest Austerity Cuts

On Sept. 26, clashes erupted in Athens as unions called a nationwide strike to protest the plans for new cuts.

On Oct. 18, tens of thousands of Greeks joined a second nationwide strike, moving to bring the country to a near-standstill in a bid to show European Union leaders meeting in Brussels that new austerity cuts being demanded by Greece’s lenders would cripple society and further depress the economy.

Protest rallies in Athens began peacefully but were disrupted when demonstrators broke away from the crowd near Syntagma Square outside Parliament and threw rocks, bottles and firebombs at the police, who responded with tear gas. A police spokesman said 40,000 people joined rallies in central Athens, while organizers put the figure at around double that. Smaller rallies were held in other Greek cities, including the ports of Thessaloniki and Patra, in northern and western Greece.

Editor Not Guilty in Publishing Names With Swiss Accounts

Kostas Vaxevanis, the owner and editor of a respected investigative magazine was acquitted on Nov. 1, 2012, on charges of breaching privacy laws in publishing the names of more than 2,000 Greeks believed to be holding accounts at a bank in Switzerland. The case tested news media freedom in Greece and fueled a scandal over whether officials failed to aggressively pursue people suspected of evading taxes.

The verdict came four days after a phalanx of police officers arrested Mr. Vaxevanis, as his magazine, Hot Doc, hit newsstands with the list. Before a packed court, Mr. Vaxevanis and his lawyers portrayed him as the target of a politically motivated campaign aimed at damping the public anger at Greek officials.

The list that Mr. Vaxevanis obtained and published was handed to the Greek authorities two years previously by Christine Lagarde, then the French finance minister and now the head of the International Monetary Fund, to help Greece crack down on tax evasion as it was trying to mend its economy. The list held names of 2,059 Greeks who held accounts at a Geneva branch of the British bank HSBC, which includes a former culture minister, several employees of the Finance Ministry and a number of business leaders. “The court finds the defendant innocent,” Judge Malia Volika said in handing down the decision.

Greece News - Breaking World Greece News - The New York Times

Greek youth unemployment edges toward 60pc

By Telegraph Staff and agencies 1:09PM GMT 10 Jan 2013

Joblessness among Greek youth edged closer to 60pc in October, figures from the state statistics agency revealed on Thursday, with the country's unemployment rate hitting a new high of 26.8pc in October

Protesters march towards the Greek Parli...Protesters march towards the Greek Parliament in Athens on December 19, 2012, as Public services in Greece are hit by a 24-hour strike called by unions in protest at damage to the sector caused by sweeping austerity measures. The European Central Bank said today that it will begin accepting Greek bonds as collateral for central bank loans again, at a discount, a move that will give a boost to eurozone banks still holding the risky instruments. Photo: AFP PHOTO / LOUISA GOULIAMAKILOUISA GOULIAMAKI/AFP/Getty Images

The number youths aged between 15 and 24 out of work in October rose to 56.6pc, compared with 22.1pc in the same month four years ago, statistics service ELSTAT said.

Greece's jobless rate has almost tripled since September 2009 as the country's debt crisis emerged, and is more than double the average rate in the 17-nation euro zone, which stood at 11.8pc in November.

A record 1.34 million Greeks were without work in October, up 38pc from the same month in 2011, with another 36,219 lost after September when the jobless rate stood at 26.2pc.

Austerity policies imposed by the bailed-out country's international lenders to shore up public finances have taken a toll on the battered economy, which was shrinking at an annualised rate of nearly 7pc in the third quarter.

Greece is expected to stay in recession for a sixth consecutive year in 2013, with national output seen contracting by 4.5pc, the Athens-based IOBE think-tank said on Thursday, as budget cuts and tax increases worth €9.4bn weigh.

The forecast is slightly worse than the recession estimate from the government and the country's international lenders.

The European Union and the International Monetary Fund bailing out the country expect the economy to contract 4.2pc in 2013.

Greece has been struggling through a severe financial crisis since late 2009, and has been dependent on international rescue loans since May 2010.

In return, the government has imposed strict austerity measures that have slashed salaries, increased taxes and plunged the country into a recession. Tens of thousands of businesses have shut down.

Trades unions say the real jobless figure is much higher.

Greece saw a fall in inflation in December to 0.8pc compared to 2.4pc in the same month a year earlier. However, the cost of housing has jumped by 11pc compared to the level last year owing to fuel and electricity price rises, and the price of clothing rose by 5.3pc.

Health costs and communication charges fell by 3.9pc over the same period.

Greek youth unemployment edges toward 60pc - Telegraph

Tuesday, January 8, 2013

“Jobless on voluntary work without payment,” says ex Greek Finance Minister Doukas

Posted by keeptalkinggreece in Economy, Society

Former Greek deputy Finance Minister Petros Doukas came with a revolutionary proposal to reduce unemployment. Jobless should work on voluntary basis and without payment. On his private website, and in his article “90+ Suggestions for a Greek New Deal II”, Doukas proposes that the state, the municipalities and even the private sector should invite unemployed Greeks to work with “no charge for the businesses that will employ them”.

The country’s jobless can offer work for no payment in sectors like “picking olives, cleaning beaches and streets, plant trees, making ancillary technical works in shops and other businesses depending on age, skills and demand. The businesses can hire the unemployed for three months. The state organisations can pay them, if they have money available. The jobless will have the chance to be active and meet future employers,” notes the genius ex finance ministry deputy of conservative Nea Dimocratia.

As Doukas explains, his proposal is based on the fact that taxes scare foreign investors and local businessmen cannot hire personnel because they have no money available.

Petros Doukas calls his 90+ suggestions as Get Greece back to work: Manifesto of 90+proposals to take the country out of the crisis and for Greece of creativity. Petros Doukas served as deputy finance minister 1992-1993 and 2004=2007 under Mitsotakis and Karamanlis  governments of conservative Nea Dimocratia. He was assigned in the sector of the … Public Debt lol

Now let me think…. when was the last time we heard about similar voluntary work offered by jobless without payment in order to reduce unemployment? Oh, that was in Germany, they called it “Reich Labour Service” (Reichsarbeitsdienst or RAD) an institution established by Nazi Germany as an agency to help mitigate the effects of mass unemployment through a state sponsored voluntary organisation that provided services to civic and agricultural projects.

And how was the slogan later?  

Arbeit macht frei  Labour makes (you) free?

PS What I would like very much to know is whether “expired” and active Greek politicians do smoke or just drink something, we, normal Greeks, have no access to.

“Jobless on voluntary work without payment,” says ex Greek FinMin Doukas

Greece's 'Lagarde list' sparks calls for catharsis over tax avoidance

Helena Smith, Monday 7 January 2013 15.54 GMT

Ex-finance minister George Papaconstantinou accused of doctoring list of suspected evaders to remove names of relatives

George Papaconstantinou and his cousin Eleni, in 2005

George Papaconstantinou (right) and his cousin Eleni, in 2005 Photograph: Pantelis Saitas/EPA

At the height of Greece's economic crisis, a few weeks after he had been replaced as finance minister, George Papaconstantinou received a text message from Christine Lagarde. "We miss you!" declared the then French finance minister.

For observers of the Greek political scene, it was easy to see why: the sophisticated, LSE-trained economist Papaconstantinou, who had spent more than half his life abroad, in London, New York and Paris, was a far cry from his less cosmopolitan successor, Evangelos Venizelos.

Lagarde, only months away from becoming head of the International Monetary Fund, felt she had lost a friend.

Now, however, as he stands at the centre of the biggest tax evasion scandal to erupt in Greece in decades, Papaconstantinou's name engenders shock and consternation among mandarins in the EU and at the IMF. From being the darling of reform-minded policymakers in the west, the man most associated with the modernising policies Greece so desperately needs faces accusations of not only failing to crack down on tax-dodging – which, at more than €27bn (£21.8bn) a year, is the biggest single drain on the debt-stricken Greek economy – but also of doctoring a list of suspected culprits to remove the names of three of his own relatives.

The catalogue of the deposits, held by more than 2,000 wealthy Greeks at the Geneva branch of HSBC, was given to Papaconstantinou by Lagarde with the express purpose of pursuing tax offenders in October 2010.

This week prosecutors are poised to summon his relatives for questioning, amid mounting calls for Athens' fragile coalition finally to clean up Greece's scandal-plagued political scene. The former minister faces a parliamentary investigation that may well pave the way to his being tried before a special court. Within hours of the revelations surfacing he was summarily expelled from the socialist Pasok party, headed by Venizelos.

As Greece prepares for its hardest winter since the debt crisis erupted three years ago, and with middle-class Greeks joining the record numbers struck by unemployment, poverty and despair, calls for justice to be meted out to the privileged elite have become ever louder.

For many, the "Lagarde list" is the best proof yet that Greece's rich have got off lightly, spiriting their money abroad while the vast majority endure the punishing reforms the EU and IMF has demanded in return for rescue funds to prop up the lifeless economy.

But Papaconstantinou has vehemently denied the accusations. In an environment made ever shriller by a population now baying for the blood of politicians, who are widely blamed for the country's financial mess, the ex-minister was already a hate figure for many as a result of his negotiation of Greece's first, and highly controversial, €130bn bailout. He says he has become a convenient scapegoat.

"I have been framed," he said recently. "It is very convenient for the entire responsibility for this issue to be held by just one person."

Over the weekend he went further, saying he knew who had erased the names of his relatives from the list.

Leaked documents prepared by Greek prosecutors suggest the erstwhile economics chief tampered with the list, excising the name of his cousin Eleni Papaconstantinou and her husband, with whom she reportedly held $1.2m (£746,000) in a joint HSBC account, and the spouse of her sister, Marina. The prosecutors allege he removed the names when he transferred the data from a CD containing the original information to a USB memory stick "for security reasons". A fresh copy of the list, obtained by three state officials who flew to Paris shortly before Christmas, revealed the missing accounts.

"Who put their hand in the list – the minister, or some cunning schemer, to set him up?" asked the prominent political commentator Pavlos Tsimas.

On Monday the main opposition leftist Syriza party raised the political temperature by demanding that parliament also investigate Venizelos, who replaced Papaconstantinou and is now one of the government's tripartite leaders.

The stridently anti-bailout party, which since the ascent of the prime minister, Antonis Samaras, to power in June is the country's most popular, says it is clear a witch-hunt is under way, and is demanding a wider investigation.

"Those who have destroyed Greek society over the past three years," it said in a statement on Sunday, "are rushing to limit the Lagarde affair solely to the person of Papaconstantinou to cover their friends and themselves."

If Venizelos were implicated in the scandal it would place serious pressure on the ruling alliance at a time when Greece's continued membership of the euro zone is still far from assured.

The coalition is already under immense strain over the adoption of draconian austerity measures to trim budgets by an estimated €9.2bn this year alone.

"Venizelos should also be brought before an investigative committee in parliament for dereliction of duty," said Kostas Vaxevanis, who caused uproar by publishing the list in his investigative magazine, Hot Doc, last October.

"First of all, he did not utilise the information on the list, thus denying the Greek state of revenue that would have resulted through the clampdown on tax evasion. And, secondly, he did not hand over the list when he left office but took it with him and held on to it for the next seven months," the journalist told the Guardian. "It is evident they don't want to upset him because Venizelos is threatening to bring the government down."

Greeks' scepticism over the ability of the political class to tell them the truth was reinforced not only by the apparent "loss" of the list – before it was leaked to Vaxevanis – but also by the bizarre decision to try the editor for breaking privacy laws after he went public with it.

Although acquitted of the charges, he has been ordered to stand trial again later this year.

Venizelos, a professor of constitutional law by profession, argues that he decided not to pursue the names on the list after the head of the country's financial crime squad (SDOE) said the information could not be used because it had been "obtained illegally".

Other countries that were handed similar lists by the French authorities – initially stolen by a renegade bank clerk at HSBC – did not have such compunctions, with Spain and Italy both raising huge amounts in revenue by pursuing suspected tax evaders.

"The most interesting question is why, of all the countries that received the same list, Greece is the only one that did not use it," Tsimas wrote in the weekend edition of Ta Nea. It was, he said, especially odd, given that Greece was the leading state in Europe, and the second in the world, in terms of tax evasion and a black economy.

Last week Eleni Papaconstantinou, a leading corporate lawyer, defended having an account abroad, saying the money in it was "the legal wealth of myself and my husband".

Friends expressed disbelief that Papaconstantinou, who long headed the association of Harvard alumni in Greece and is a passionate advocate of the country clearing up its business environment, would have concealed her wealth.

"We are talking about people who belong to the school of western-minded reformers," said one. "They are Greece's great hope."

Eleni Papaconstantinou has since resigned as an adviser to Taiped, the agency overseeing privatisations in Greece.

She is unlikely to be the last. The 300-seat Athens parliament has until mid-January to vote on whether to set up a special investigative committee into the actions of her former-politician cousin. If, as expected, the committee is established, parliament will then have to decide on the basis of its findings whether to convene an extraordinary panel of judges formally to try Papaconstantinou.

Prosecutors are working quickly. And Samaras, mindful that further international rescue funds will rest to a large degree on Greece's ability to clean up its act, has gone into the New Year promising "catharsis".

The scene is being set for more drama in the country where Europe's debt crisis was born.

Greece's 'Lagarde list' sparks calls for catharsis over tax avoidance | World news |

Saturday, January 5, 2013

Greece's only certainty in 2013? Predictions are futile

 Nick Malkoutzis

Nick Malkoutzis The Guardian, Thursday 3 January 2013 19.30 GMT

Forecasts of collapse, 'Grexit' and even civil war proved unfounded but Greek society is under immense pressure

satoshi kambayashi

Illustration by Satoshi Kambayashi

You cannot look upon 2012 as anything other than a momentous year for Greece. During those 12 months, it agreed a second massive bailout, carried out an unprecedented restructuring of its public debt, held two tumultuous national elections, was led by three prime ministers, had a fifth straight year of recession and saw unemployment climb to a euro zone high of 26%.

As epic as these events proved, though, they barely lived up to Greece's billing in some reports. Spurred on by analysts' predictions, such as the one by Citigroup's chief economist William Buiter that Greece would leave the euro zone at the start of 2013, a plethora of commentators predicted that 2012 would be its last in the single currency. The forecasts were accompanied by musings about what level of chaos would accompany the "Grexit". Some reports focused on the destabilising effect on the country's economy and society, while others heralded the imminent return of cheap island holidays.

An inconclusive general election in May convinced many observers that Greece was about to be reunited with the word it had introduced to the world: chaos. The failure to agree on a coalition government after the May polls, prompting a new election in June, triggered a bank run and intense speculation about an imminent collapse. Plummeting support for Greek political mainstays conservative New Democracy and centre-left Pasok, the rising popularity of anti-austerity Syriza and the emergence of neo-Nazi Golden Dawn was interpreted by some as evidence that Greece was destined for a clash of extremes, which even led commentators such as James Poulos in Forbes to raise the possibility of a new civil war.

Civil war never materialised, and neither did a euro exit or collapse. There were many times last year when Greeks could take very little about their future for granted, but the most ominous predictions often seemed driven by morbid fascination rather than measured analysis. In 2012, Greece teetered on the edge of leaving the euro zone but never strayed over the line. Its economy was battered but not beaten. The political system experienced a seismic shift but democracy did not disappear between the fault lines. And society's fabric had frayed but was not worn completely.

Nevertheless, Greece finds itself in a precarious situation at the start of 2013. To maintain its euro membership, the government had to agree to another round of confidence-sapping austerity measures from which its euro zone partners, Germany in particular, refuse to waver. Between now and 2016, Athens will have to implement a minimum of €18bn in cuts and tax hikes. That's the equivalent of roughly 10% of GDP and comes after three years of similar measures, which produced the biggest fiscal adjustment achieved by any OECD country for the last 30 years.

This produced remarkable fiscal results. New figures from Greece's finance ministry show the country on course to produce a primary surplus for 2012, its first since 2002. But this adjustment strangled the economy. Businesses closed at an alarming rate and about 1,000 jobs were lost every day. At the end of 2012, Greece's economy had contracted by about 20% from its 2008 peak.

This decline is putting immense pressure on Greek society. Joblessness, which some experts believe will reach 30% this year, means families are trying to provide a safety net for their loved ones at the same time as wages and pensions are being slashed. More Greeks are living at the margins of society, cut off from welfare and facing rising healthcare costs. In this environment, the extremism of Golden Dawn, which offers food and jobs to Greeks, has flourished. Its racism has made life hell for immigrants and fuelled much-criticised sweep operations by the government.

The governing coalition is an odd alliance of former rivals New Democracy and Pasok, with the moderates of Democratic Left. Its parliamentary majority has already been eroded due to a tense vote on the latest austerity package. The prime minister, Antonis Samaras, has pinned his hopes on rebuilding trust with Greece's lenders through a policy of full co-operation. He believes that with continued euro zone funding and support, Greece will weather another year of recession and banish lingering doubts about its future in the euro.

It is a high-risk strategy as public scepticism about the EU-IMF formula is overwhelming and Syriza has already risen to first place in opinion polls. The leftists have stepped up attacks on the political establishment following allegations that a former Pasok finance minister doctored a list of Greeks with Swiss deposits to remove the names of his relatives.

In recent weeks, the euro zone has shown a greater commitment to keeping Greece in the single currency but the country's precarious economic, social and political situation means it will not be a straightforward process. Perhaps the greatest wish Greeks could have for 2013 is for some certainty about their future: to be able to know that the worst of their troubles are behind them, that structural reforms will change the unsustainable economic model of the past, while creating a fairer society, and that recovery is in sight. There is very little about Greece's condition that can provide them with this comfort. The only thing they can be certain of is that 2013 won't be a year for predictions.

Greece's only certainty in 2013? Predictions are futile | Nick Malkoutzis | Comment is free | The Guardian