Saturday, October 18, 2014

Greek PM says he can ride out market turbulence and quit bailout

By Alessandra Galloni MILAN Friday October 17, 2014

Greece's Prime Minister Antonis Samaras attends a parliament session before a confidence vote for the country's coalition government in Athens October 10, 2014.  REUTERS/Yorgos Karahalis

Greece's Prime Minister Antonis Samaras attends a parliament session before a confidence vote for the country's coalition government in Athens October 10, 2014. Credit: Reuters/Yorgos Karahalis

MILAN (Reuters) - Prime Minister Antonis Samaras said on Friday Greece would ride out market doubts about whether it can survive without international support, telling Reuters he can lead his country out of a four-year bailout and not call early elections.

Samaras said Athens was talking with its lenders about what should happen if Greece succeeds in leaving its bailout program by the end of December, a year ahead of schedule, as Greek officials hope.

He sees one option as a credit line that Athens could tap post-bailout should it fall prey to future market turmoil.

"We can now stand on our feet; we have the resources to come out of the program, and we are preparing ... in constructive cooperation with lenders for 'the next day', after we exit the program," Samaras said in an interview.

But the details of any such credit line have yet to be negotiated -- nor has Greece finished a review with its international lenders of the measures it has taken so far. It is far from clear whether lenders would offer funds without strict conditions for the country where the euro zone's sovereign debt crisis began in 2009.

Samaras has been eager to tell voters that the pain of budget cuts imposed by outsiders is over after six years of recession. He also said Greece would not hold snap elections next year, a possibility that has worried investors who fear political instability might undermine reform efforts.

"Elections will be held in June 2016, at the end of the four-year parliamentary term," said Samaras. "Our new president will be elected early next year," he added, referring to a parliamentary vote in early February to elect the president, or head of state.

The outcome of the presidential vote could, in turn, prompt an early national election, if Samaras does not get enough backing to push through his candidate. So far, Samaras' majority in parliament is well below that needed to win the vote, so he needs backing from opposition parties.

Samaras is gambling that an early bailout exit can revive his fortunes and lure independent lawmakers to his side.


The conservative prime minister was speaking after participating in a meeting of European and Asian leaders in Milan. During the summit, Samaras had conversations with European leaders including German Chancellor Angela Merkel.

Greece's economy, for years the weak link in Europe, is turning the corner after austerity measures imposed in exchange of 240 billion euros ($306 billion) in bailout funds. The bailout has been very unpopular, and Greeks say pension and salary cuts imposed by its International Monetary Fund and European Union lenders have impoverished the population.

But before it can leave the international bailout behind it, inspectors from the European Union and International Monetary Fund must return to Athens after the publication of the results from a euro zone-wide bank health check.

Greece's bank bailout fund has 11 billion euros in leftover money, which Athens can tap if it needs to cover any future funding shortfalls, Greek officials say.

But a three-day sell-off in the markets has again pushed Greece's 10-year bond yields past 9 per cent and sent shares tumbling to their lowest since July last year. Bond and share prices recovered somewhat on Friday, with 10-year yields falling to 8 per cent while the Athens stock index was up 7 per cent.

The government says it has no need for more money, including some 9 billion euros that the International Monetary Fund is to give it between January 2015 and March 2016. It therefore wants to quit the program early.

Yet political uncertainty, coupled with worries over Athens' ability to tap markets post-bailout, meant Greek assets took a particularly heavy battering in this week's rout, triggered by concerns over the global economy.

Greek officials have for weeks been talking with their lenders about the possibility of a credit line that would be extended post-bailout by euro zone partners to provide financial support in the case of unexpected events, according to people close to the Greek government.

Greece wants this to come without strict conditions, saying it has shown its commitment to economic reforms. Athens would prefer that the IMF were not party to such a credit line, partly to avoid further conditions, the sources said.

But while Greeks see the IMF as the main author of the austerity measures of the past few years, many international investors see the Fund as the guarantor of future Greek creditworthiness.

One of the scenarios for Greece would be an Enhanced Conditions Credit Line (EECL), from the European bailout fund.

But even this would come with conditions, allowing the euro zone to retain control the Samaras government doesn't want.

Greek officials are hoping that they can come to a compromise, with the government's own reform agenda as a guarantee of economic discipline, according to people close to the Greek government.

Samaras told Reuters Greece would stay on the path of "fiscal prudence and structural reforms ... as the ticket to economic growth".

He added: "We have already paid a high price as a country for past mistakes. Wouldn't it be totally unfair and contrary to any logic, if we had to pay a price again, only this time due to our success?"

(Editing by Ruth Pitchford)

Greek PM says he can ride out market turbulence and quit bailout | Reuters

Greece’s latest woes signal next stage of the Eurozone crisis

Allister Heath

By Allister Heath 17 October 2014


Greece’s sudden relapse has left many equity, bond and commodity investors running for the hills

The downgrade from S&P follows MSCI which lowered Greece's rating last year, 12 years after its promotion from the category.

Interest rates on Greek debt have jumped. The last time this happened, in 2010, the eurozone was plunged into near-fatal crisis Photo: EPA

If Greece is the canary in the coal mine, then we are all in trouble. Interest rates on Greek debt have jumped in recent days, rocketing to around 9pc on 10-year bonds, an unsustainable financing cost for such a troubled government.

The last time this sort of thing happened, in 2010, the Eurozone was soon plunged into near-fatal crisis. Four years later, the debt crisis in the Eurozone's periphery was meant to be over, so Greece’s sudden relapse is one reason why so many equity, bond and commodity investors are running for the hills.

Unlike last time, no hidden debt has been discovered, and Greece’s budget deficit has actually fallen significantly.

While not quite a model student, Greece had at least been trying to mend its ways. The proximate trigger for the surge in bond yields is that the Athens government had been over-exuberant since the start of the year, hoping to leave the bail-out programme early, partly for the wrong, anti-austerity reasons.

None of this will now happen, and the European Central Bank has promised to help out, which may temporarily calm matters down.

The stark reality is that Greece is not out of the woods, contrary to what many had claimed – yet its crisis is containable. Its economy is too small; even under a worst-case scenario it would not be able to take down the whole of the Eurozone.

But what this latest flare-up confirms is that merely reducing budget deficits is not enough. Having an excessive national debt remains a major problem, especially now that economists are slashing their growth forecasts for the Eurozone as a whole and continent-wide deflation is looming. In such a Japanese-style scenario, the traditional debt-eroding mechanisms of inflation and growth no longer apply.

Falling prices – caused by a defective, one-size-fits-all monetary policy, and thus insufficient demand – will push up debt ratios as a share of GDP, especially when economic output is stagnating at best. As Capital Economics points out, any Eurozone country with high and rising debt ratios is vulnerable; Italy and Portugal, which both have debt to GDP ratios of about 130pc, could be next in the firing line. Once again, excess debt is the problem – though this time, burdens are rising for partly different reasons.

The euro has seen its value slide by 5pc against a trade-weighted basket of currencies since March, with Citigroup predicting that the total depreciation will hit 10pc over the next 12 months. In the past, this would have generated a 5pc boost to exports, translating to a 1pc rise in GDP over three years.

Sadly, the impact this time around is likely to be far more muted. Demand for the sorts of goods the Eurozone exports has weakened significantly. A greater share of the value of the region’s exports is in turn made up of imported components or raw materials, limiting the beneficial impact of the weaker euro, Citigroup correctly points out.

Firms will most likely make use of the weaker euro to increase their margins whenever possible, as their Japanese counterparts did recently when the yen lost some of its value.

How will all of this affect the UK? I’m still upbeat about the British economy, which has grown superbly in recent quarters and has delivered an excellent performance on jobs. But the chaos and turmoil will impact growth, as was the case during the previous Eurozone crisis.

Lower share prices are already having an impact, making it harder or more expensive to raise funds. Virgin Money, the bank 47pc owned by Sir Richard Branson, has postponed its float. Advisers report that several other stock market flotation have been suspended or pulled altogether. Millions of savers are now substantially poorer than they were, which will hit confidence and consumption.

Those forecasters who were still expecting an interest rate increase this year (in my view, entirely implausibly) are now busily changing their tune. As it happens, I don’t think any of this invalidates the case for a rapid normalisation of monetary policy but my view is now in even more of a minority.

All in all, the UK economy remains in a surprisingly good place compared with the performance of most of our neighbours.

Friday, October 17, 2014

Greek hate crimes law: Threat to free speech?

Jillian Kestler-D'Amours 16 October 2014

Anti-racism law strengthens penalties for racist incitement and violence, but some fear it may curb free speech.

Far-right Golden Dawn party lawmaker Ilias Kasidiaris delivers a speech in Athens in May [EPA]

Athens, Greece - After Greece's passing of an anti-racism law was hailed last month as an important step to stem a rising tide of xenophobic violence, rights groups are cautioning against potential curbs to freedom of speech and association.

"Racial motivation can be attached to any felony or misdemeanour in the Greek criminal code and this will hopefully make it more likely that the police and prosecutors will investigate [this] motivation … and easier for the courts to apply it," said Eva Cosse, a senior research assistant and Greece specialist at New York-based Human Rights Watch.

After being introduced in parliament in November 2013, Greece passed the latest draft of its anti-discrimination law on September 9. The law bolsters the country's decades-old hate crimes legislation, handing out three-year prison terms and levying fines of between $38,000-$125,000 for instigating racism, and inciting violence, respectively.

The law also criminalises the denial of crimes against humanity and acts of genocide, such as the Holocaust.

We need to take care, very seriously, about possible applications of the law which violate freedom of expression.

- Dimitris Christopoulos, Panteion University

"Reinforcing our legislative arsenal is demanded more than ever today, when the enemies of democracy and those who deny the human substance preach hatred," Justice Minister Haralambos Athanassiou told parliament last month.

While racist discrimination has been punishable in Greece since 1979, the courts largely failed to use the legislation. In 2008, Greece designated religious, national and racial hatred, and hatred based on sexual orientation as aggravated circumstances in criminal acts, allowing judges to apply the maximum penalty to perpetrators. But according to Cosse, this amendment was never applied in practice.

"Before, racist motivation could be considered only during a trial at the sentencing phase, after determination of guilt," she said. "Hopefully, now [with the new law], prosecutors will be willing to [consider it sooner]. They have the tools, and it's now their responsibility."

Greek police 'ill-equipped'

Greece has witnessed an uptick in xenophobic attacks in recent years. The UN-affiliated Racist Violence Recording Network documented 166 incidents of racist violence across Greece in 2013, resulting in at least 320 victims. The majority of the violent acts were carried out against immigrants or refugees, while 22 attacks targeted members of the LGBT community, and one was against a human rights worker.

HRW reported that Greek police were "ill-equipped or ill-disposed to investigate reports of racist violence", and discouraged victims from filing official complaints. Speaking to HRW, Afghan refugee Mahmoud said he did not file a police report after an attack in Athens injured his wife, Maria.

"Go to the police? Is that a joke? If you go to the police they tell you to go fight yourself," said Mahmoud.

If applied correctly, the law could reform the Greek authorities' disinclination to investigate racist motives for crimes, said Dimitris Christopoulos, associate professor in the department of political science and history at Panteion University.

"For the Greek policemen, a case where a man has been beaten for racist reasons is equivalent to a case where a man has been beaten because he was driving drunk in the streets, or had a dispute over a football match, or so on. The police never asked about the racist motivation," Christopoulos told Al Jazeera.

"That is something we will not change with a law … Of course, such a law can be in the good direction, but we need to take care, very seriously, about possible applications of the law which violate freedom of expression."

There is a big problem of racism in the atmosphere. A law cannot solve this issue if a big part of the population shares some racist views.

- Theodoidis Athanasios, European Network of Legal Experts

Curbing freedom of speech?

Human rights groups have pointed to the legislation's vague phrasing, and banning of racist speech and membership in groups that engage in inciting hatred, discrimination and violence, as potentially opening the door to violations of freedom of speech and association.

"These provisions … raise concerns about undue interference in freedom of expression. Speech should not be criminalised, except if it's direct incitement to violence," Cosse said.

When asked to comment, the Ministry of Justice referred Al Jazeera to a government website outlining the law's contents and parliamentary processes involved in amending it.

The measures are believed to target Greece's far-right, including the neo-Nazi Golden Dawn party, the third-largest in parliament. Golden Dawn leaders, including party head Nikos Michaloliakos, are facing criminal charges for suspected membership in a criminal organisation.

"One reason that the Golden Dawn party is so [popular] is the economic crisis. The reality of everyday life does not help people to think otherwise. An economic crisis is not a good framework to develop anti-racist policies," said Theodoidis Athanasios, a legal analyst for Greece in the European Network of Legal Experts in the non-discrimination field.

Athanasios told Al Jazeera while the new law may curb racist violence, the problem runs much deeper.

"It's not just the law; it's a matter of culture, education, mass media… There is a big problem of racism in the atmosphere. A law cannot solve this issue if a big part of the population shares some racist views."

Source: Al Jazeera

Friday, October 10, 2014

Greece's famous 'protest dog' Sausage dies of heart attack

Friday 10 October 2014


Sausage stands in front of police in Greece during 2010 anti-austerity protests Photo: The dog nicknamed 'Sausage' became an internet phenomenon for his appearances at major protests. (AFP/Aris Messinis)

Map: Greece

A ginger mongrel who became famous for appearing at anti-austerity protests and barking at riot police at the height of Greece's debt crisis has died of a heart attack, local officials say.

The stray dog, nicknamed Sausage or "Loukanikos" in Greek, became a media sensation and public darling in 2011 by regularly showing up on the side of demonstrators and yelping at police amid the chaos of teargas and flying petrol bombs.

He was named runner up for Time Magazine's Animal of the Year in 2011, only beaten to the top spot by the army dog that accompanied the US Navy SEAL team which took down Osama Bin Laden.

"He was Greek. Like all stray animals, Loukanikos somehow reflected the restlessness of Greeks who refuse to bow down," Anna Makri, a veterinarian who heads the city's stray animal service, said.

"The doctor's assessment was that he died suddenly, of a heart attack."

Sausage ended up appearing on the front page of most Greek newspapers and wagged his tail on television screens as violent anti-bailout protests raged behind him.

Ms Makri said a Greek animal welfare group took Sausage in about two years ago.

The leftist Avgi newspaper said he had been buried under a tree on a hill in the city centre.

Stray dogs are a common sight in Athens. Most are monitored by city authorities and wear collars and tags with a phone number to call if they are in - or causing - trouble.

Sausage the stray dog barks at riot police Photo: Sausage barks at a group of riot policemen who are struggling to avoid a petrol bomb thrown by protesters during a demonstration in Athens on October 5, 2011. (Reuters/Yannis Behrakis )


Greece's famous 'protest dog' Sausage dies of heart attack - ABC News (Australian Broadcasting Corporation)