Monday, October 7, 2019

Greece sets out ambitious budget based on faster growth

by Kerin Hope

Financial Times

October 7, 2019

Greece revealed an ambitious budget for next year that assumes growth will accelerate to 2.8 per cent from a projected 2.0 per cent this year, driven by higher investment inflows and cuts in corporate and personal income tax.

Theodoros Skylakakis, deputy finance minister, said on Monday the centre-right government was also committed to achieving a 3.5 per cent primary budget surplus next year — before making debt repayments — as agreed with Greece’s international creditors.

Greece will hit the 3.5 per cent surplus target this year, but faces a projected fiscal gap of about €800m in 2020, according to EU monitoring officials visiting Athens last week.

Mr Skylakakis gave reassurances the government will find enough additional measures to close the gap before the budget is presented to the European Commission on Friday.

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Sunday, October 6, 2019

In Lesbos’s Moria camp, I see what happens when a child loses all hope

by Jules Montague

Guardian

October 6, 2019

Ayesha is nine years old. As her father lays her down gently on a mattress at the clinic, the only perceptible sign of life is the slow movement of her ribcage as she breathes in and out. She otherwise remains almost motionless, in stark contrast to the other children who run around this Médecins Sans Frontières (MSF) paediatric clinic by Moria camp.

For two weeks now, Ayesha has not opened her eyes. She has not spoken. She has not walked. She has what the mental health team believe could be one of the first cases of resignation syndrome it has seen here.

I’m in Lesbos researching the psychological effects of trauma in these children who have often fled violent conflict in their home countries, only to arrive at a squalid camp where conditions are chaotic and inhumane. I quickly realise that Ayesha’s state embodies what can happen when a child loses all hope.

Resignation syndrome represents a state of extreme withdrawal that can last for months or even years and occurs in the context of severe psychological trauma. Hundreds of cases have been seen in Swedish refugee and asylum-seeking children, with others reported at Australia’s offshore immigration detention centre on Nauru. These children simply close their eyes and stop speaking, eating and drinking, their muscles wasting away. Children who were perfectly well weeks before need to be dressed in nappies and tube-fed. The prognosis is uncertain, but those who do recover often only do so when they and their family reach a place of stability, especially if their residency status becomes secure.

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Thursday, October 3, 2019

Can Kyriakos Mitsotakis ensure the Greek economy starts growing again?

Economist
October 3, 2019

The airport at Hellinikon, a few miles south of Athens, closed in 2001. Planes belonging to Greece’s now-defunct national carrier still litter the runway. Nearby a stadium built for the Olympics in 2004 gently crumbles. In the distance, a marina borders the glistening Aegean. In 2011, when Greece was in the throes of a sovereign-debt crisis, the government put the site, which is three times as large as Monaco, up for sale. In 2014 it was snapped up by a consortium that planned to build homes, hotels and a casino. At an expected cost of some €8bn ($8.7bn), it was Greece’s largest investment project.

Five years on, ground has yet to be broken. When Syriza, a left-wing party, formed the government in 2015, it reopened the terms of the sale. Ambivalent ministers held up licences. The authorities demanded numerous archaeological surveys. Locals sued. Apart from boats docking in the marina and the occasional security guard on patrol, the site now lies desolate.

Officials from the imf and European Union who flew into Athens’s new airport in September are thus not short of examples of the difficulties of doing business in Greece. When the sovereign-debt crisis struck they bailed the country out on condition that it enact deep fiscal cuts and far-reaching regulatory reforms. Last year the eu struck a debt-relief deal, allowing Greece to exit its third and final bail-out, despite a public-debt burden of 180% of gdp. It required Greece to continue with reforms while hitting eye-watering targets for the primary-budget surplus (that is, before interest payments) of 3.5% until 2022, and then 2.2%, on average, all the way to 2060. In return it offered some interest-rate relief and extended the maturity of some loans.

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Monday, September 30, 2019

Greeks sneer as Yanis Varoufakis reveals fortune

by Anthee Carassava

The Times

September 30, 2019

He made his name as the face of the anti-austerity movement but Yanis Varoufakis, Greece’s rebel economist, is now one of the country’s wealthiest politicians.

After being removed from a left-wing government in which as finance minister he became too radical, Mr Varoufakis wrote a book and built a media and speaking career that has proved so lucrative that he has bank accounts in Switzerland, a property portfolio and a boat.

His income in the past three years was €1 million, his tax returns have shown. Critics accused him of profiting from Greece’s misery and being a champagne socialist.

Mr Varoufakis, 58, who appealed publicly for Greeks to adopt “humble and frugal” lifestyles during the financial crisis, leads MeRA25, an anti-austerity party that won its first seats in July. As such he is required to disclose assets and earnings, which showed that he was making far more than other party leaders. The professor of game theory entered Greek politics in 2015, becoming the face of the left-wing government and its defiant strategy against debt negotiations with European leaders and international lenders at the height of the country’s financial crisis. His brinkmanship led to banks being closed and queues at cash machines.

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Thursday, September 19, 2019

There are reasons for moderate optimism about Greece

by Tony Barber

Financial Times

September 19, 2019

Ten years ago Greece plunged into a debt crisis that threatened to sweep away much of the political, social and economic progress achieved after democracy replaced military dictatorship in 1974. The economy shrank by a quarter, unemployment soared and Greece came close to crashing out of the eurozone. The crisis tore at the fabric of society and demolished one of the two political parties that had alternated in power since the return of civilian rule.

Today, on the face of things, the emergency is over and the outlook is bright. The authorities have lifted capital controls, imposed four years ago. Greece’s 10-year bond yield touched an all-time low in July. Consumer confidence is at its highest level since 2000. Elections in July produced a comfortable parliamentary majority for New Democracy, a conservative party committed under prime minister Kyriakos Mitsotakis to a well-designed programme of economic reform, fiscal responsibility and administrative modernisation.

New Democracy’s victory represented the delayed revenge of the Greek bourgeoisie against the Syriza party, which came to power in January 2015 as the most radical leftist government seen in a European democracy since the second world war. However, even critics of Alexis Tsipras, Mr Mitsotakis’s predecessor, ought to acknowledge that some of the credit for Greece’s recovery goes to the Syriza leader, who eventually swallowed the medicine prescribed by Greece’s creditors.

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Sunday, September 8, 2019

Greek PM announces fast-track reforms and red tape cuts

by Helena Smith

Guardian

September 8, 2019

Greece’s prime minister, Kyriakos Mitsotakis, has pledged that after almost a decade of being dependent on international rescue funds, his debt-stricken country will soon prove to be a “pleasant surprise for Europe”.

With investor confidence in Greek bonds better than at any time in the past 10 years, Mitsotakis said the country long at the forefront of the euro crisis had finally turned the corner. “Greece is no longer Europe’s black sheep,” he told the Thessaloniki trade fair, where Greek leaders traditionally outline economic policy.

“It is a country with self-confidence now,” he added in the keynote speech on Saturday.

Addressing Greece’s business elite two months after his centre-right New Democracy party ousted the leftist Syriza on a platform to revamp the economy, Mitsotakis said implementation of fast-track reforms to modernise the state and cut red tape were a priority if the EU member was to regain political credibility.

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Greece’s Mitsotakis calls for tax cuts and reforms

by Kerin Hope

Financial Times

September 8, 2019

Greece’s new prime minister, Kyriakos Mitsotakis, has announced tax cuts and structural reforms aimed at rebuilding the country’s credibility with investors, after three international bailouts and a grinding eight-year recession.

“Greece has turned a page,” the prime minister said in a speech on Saturday evening to businesspeople in the northern city of Thessaloniki. “Greece is no longer the black sheep of the EU, we’re a self-confident country now.”

The premier said the country was still committed to achieving high primary budget surpluses — before debt repayments — of 3.5 per cent of gross domestic product in 2019 and 2020, as agreed with European creditors.

Mr Mitsotakis hopes that if Greece delivers on reforms, the 2021 surplus targets will be cut to 2 per cent of GDP, freeing up funds for public investment projects frozen during years of austerity.

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Monday, September 2, 2019

Greece moves to ease asylum-seeker crowding on Lesbos

by Michael Peel, Kerin Hope & Laura Pitel

Financial Times

September 2, 2019

Greece has launched an urgent effort to move hundreds of asylum-seekers from a heavily overcrowded island camp as fears rise of a further influx of people fleeing a Turkish clampdown on migrants and the long-running war in Syria.

Athens started to take people on Monday from the Moria facility on Lesbos, which has drawn criticism over its dismal conditions as it ballooned to more than three times its roughly 3,000 capacity.

The effort comes as worries grow that more asylum-seekers could head to the Greek islands in the face of a Turkish crackdown on undocumented migrants and a Russia-backed military offensive to retake the rebel-held enclave in north-western Syria’s Idlib province.

More than 600 asylum-seekers from the Moria camp on Lesbos boarded a specially chartered ferry on Monday on their way to a camp in northern Greece as the government began implementing emergency measures to relieve overcrowding in reception centres on the east Aegean Islands.

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Monday, August 26, 2019

Greece fully lifts capital controls

by Kerin Hope

Financial Times

August 26, 2019

Greece will fully lift capital controls on September 1, ending four years of restrictions on transfers abroad by companies and individuals, finance minister Christos Staikouras told parliament on Monday.

The move, which was proposed last month by the country’s central bank, was agreed with the Single Supervisory Mechanism, the European Central Bank’s banking supervisory agency, Mr Staikouras said.

“Restoring free movement of capital will contribute significantly to strengthening confidence [in Greece] and attracting investments . . . and will lead to further upgrades of the country’s credit rating,” he said.

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Sunday, August 18, 2019

Greece’s new finance minister vows to prioritise tax reforms

by Kerin Hope

Financial Times

August 18, 2019

Greece’s new finance minister has said that implementing sweeping tax reforms will be his “key priority” as his country seeks to boost growth and rebuild credibility with investors following a decade of international bailouts backed by the EU and IMF.

Christos Staikouras told the Financial Times that the centre-right New Democracy government is planning “a comprehensive tax reform that will have a four-year horizon and will accelerate growth”.

The overhaul will focus on reducing income and corporation tax, cutting VAT, streamlining tax incentives for investors and abolishing emergency levies imposed during the Greek debt crisis to meet conditions set by bailout creditors.

“The fundamental objective is to achieve sustainable high growth rates so as to gradually restore the country’s lost wealth,” Mr Staikouras said in his first interview with a foreign media outlet since he took office after last month’s election.

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Monday, July 29, 2019

Greece’s new government promises tax cuts and spending increases

Economist
July 29, 2019

Over the past decade Greece has not been the easiest place for politicians who want to be liked by voters. The newly elected centre-right government is trying its best. In his first few weeks in office Kyriakos Mitsotakis, the prime minister, has announced tax breaks for ordinary Greeks as well as for corporations. He has promised not to cut social benefits or fire any public-sector workers. Jobs are being created in areas that suffered deep cuts during the country’s eight-year crisis: the health ministry is preparing to hire 2,400 hospital workers and another 1,500 police officers are being recruited.

Sadly, the good times are not guaranteed. The prime minister’s policy choices could derail Greece’s chances of hitting tough budget-surplus targets set by its creditors, the European Union and the International Monetary Fund. Economists fear that the relatively inexperienced Mr Mitsotakis—he held a fairly junior ministerial post from 2013 to 2015—may be overestimating his government’s capacity to shake up the country’s sleepy bureaucracy and push through reforms.

So far the markets have given Mr Mitsotakis and his New Democracy party a vote of confidence. On July 16th Greece issued its first seven-year bond since 2010. A modest target issuance of €2.5bn ($2.8bn) was hugely oversubscribed: offers exceeded €13bn, pushing down the yield on the new bond to 1.9%. Greece now borrows at the same rate that Italy does.

Winning over the EU and the IMF will be harder. Asked about the new Greek government at her annual summer press conference, Angela Merkel, the German chancellor, called the bond issue “very positive” but sounded a note of caution: “We will have to see how things evolve.”

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Friday, July 26, 2019

Can This Ancient Greek Medicine Cure Humanity?

by Frank Bruni

New York Times

July 26, 2019

Over my 54 years, I’ve pinned my hopes on my parents, my teachers, my romantic partners, God.

I’m pinning them now on a shrub.

It’s called mastic, it grows in particular abundance on the Greek island of Chios and its resin — the goo exuded when its bark is gashed — has been reputed for millenniums to have powerful curative properties.

Ancient Greeks chewed it for oral hygiene. Some biblical scholars think the phrase “balm of Gilead” refers to it. It has been used in creams to reduce inflammation and heal wounds, as a powder to treat irritable bowels and ulcers, as a smoke to manage asthma. I’m now part of a clinical trial in the United States to determine if a clear liquid extracted from mastic resin can, through regular injections, repair ravaged nerves.

That would have profound implications for millions of Alzheimer’s patients, stroke survivors — and me. The vision in my right eye was ruined by a condition that devastated the optic nerve behind it, and I’m at risk of the same happening on the left side, in which case I wouldn’t be able to see a paragraph like this one.

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Tuesday, July 16, 2019

Has Greece found the formula for defeating populism?

by Aristides N. Hatzis

Washington Post

July 16, 2019

Greece has a new prime minister. Kyriakos Mitsotakis took office immediately after leading his conservative New Democracy party to a landslide victory in the country’s general election on July 7. His dramatic victory ended 4½ of government by Alexis Tsipras and his far-left Syriza party. And that’s why the significance of this election extends well beyond Greece: Mitsotakis has shown how a traditionally oriented party can take on populists — and defeat them.

Syriza’s left-wing populism was based mostly on anti-market bias, a bit of technophobia and a strong measure of social envy. This kind of populism can be defeated relatively easily in liberal democracies — simply because the numbers don’t add up. That leaves a government of the type led by Syriza with two options: it can either succumb to its own anti-establishment paranoia or opt for pragmatism. Tsipras ultimately tried both, neither very convincingly. The voters didn’t appreciate the blatant contradiction and grew impatient with the anemic growth. In the end, they abandoned him for Mitsotakis, the quintessential anti-populist.

The first blow to Tsipras came after an ill-advised referendum in 2015 when Greek voters, reeling from the country’s financial crisis, had the chance to take a stand on a proposed European Union bailout package. (Sixty-one percent voted “no.”) Tsipras’s plans failed miserably, and the episode transformed the prime minister from a radical naysayer into a compliant enforcer of the E.U.'s tough conditions. He ended up resorting to a left-wing populist ploy: hitting the middle class with tax increases to offer handouts to groups he groomed as his core supporters. This small-scale redistribution was not as successful as he hoped. The fierce backlash from middle-class voters led to his eventual demise.

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Saturday, July 13, 2019

Kyriakos Mitsotakis: the new Greek PM hits the ground running

by Helena Smith

Guardian

July 13, 2019

It’s been barely a week but Greece’s new prime minister, Kyriakos Mitsotakis, has hit the ground running. Assuming power on Monday, the New Democracy leader announced parliament would not be going into recess for the summer: there was no time to waste, and bills had to be drafted.

By Wednesday, as his cabinet of established politicians, technocrats and ex-socialist reformers convened for the first time, the philosophy of his centre-right government became clearer still: ministers would not only set targets, they’d be monitored too. Placed before them were blue folders containing benchmark goals. As in any good business, progress reports would have to be kept.

In an era where appearance is everything, Mitsotakis, a former banker, has gone out of his way to set a new tone after four-and-a-half years of often rollercoaster rule under his leftwing predecessor Alexis Tsipras.

Police vans and barriers – which had come to represent the Tsipras government’s fear of protest – have been removed from the road approaching the prime minister’s office.

For many Greeks the new style is not just symbolic. Their first post-bailout government is viewed as the beginning of a new era; the crossing of a psychological threshold after a decade of austerity-driven depression, bailouts, extremist splinter groups and near bankruptcy on the frontline of Europe’s debt crisis.

“What we are seeing is a fresh generation of politician, Harvard-educated, result-oriented and with a more technocratic approach coming to the fore,” Pantelis Kapsis, a prominent political journalist, says of Mitsotakis.

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Friday, July 12, 2019

European democracy began in Greece. Thanks to its voters, it won’t die there.

Washington Post
Editorial
July 12, 2019


European Democracy began in Greece; some say it almost ended there, too. About a decade ago, as the world reeled from the financial crisis, Athens’s official financial data were shown to be badly misstated. In truth, the country was nearing insolvency, with potentially catastrophic consequences not only for Greece but for the 18 other countries that use the common currency, the euro. As the country spiraled into depression and chaos, it seemed ripe for the taking by extreme populists of the right and left. And, indeed, a far-left political neophyte, Alexis Tsipras, did win the prime ministership in 2015, promising to defy Greece’s international creditors and carry out revolutionary change.

Last Sunday, however, Greek voters went peacefully to the polls and calmly but decisively voted Mr. Tsipras and his party out, in favor of the center-right New Democracy party headed by Kyriakos Mitsotakis. Overall, it’s a soft political landing for Greece, with hopeful implications for the resiliency of Greek, and European, democratic culture.

To give Mr. Tsipras his due, he eventually abandoned radical policies in favor of the only realistic option: acceptance of a long-term bailout from German-led creditors, which required strict debt-control measures and a prolonged recession but did enable Greece to maintain the euro. Today, Greece’s economy is 24 percent smaller than it was in 2007, but it has at least resumed growth and job creation, modest though they may be.

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Wednesday, July 10, 2019

Greek bond yields dip even lower than US Treasuries

by Robin Wigglesworth

Financial Times

July 10, 2019

Greece’s borrowing costs have tumbled to a record low — dipping below even the US — thanks to rising hopes of a renewed bond-buying programme from the European Central Bank and the centre-right New Democracy party’s sweeping victory in elections last weekend.

This marks a stark turnround for Athens, which underwent the world’s biggest government bankruptcy in 2012 and is still labouring with one of the largest debt burdens, at about 180 per cent of gross domestic product.

ECB president Mario Draghi has stirred expectations that the eurozone’s monetary authority is set to ease policy, hopes that were reinforced last week by the nomination of the IMF’s Christine Lagarde as his successor.

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Greece voted populism out. Now it has to make sure it doesn’t return.

by Yannis Palaiologos

Washington Post

July 10, 2019

Sunday’s parliamentary elections amounted to a stinging defeat for both left and right populism in Greece. After a long slog in bailout purgatory, and 4½ years under a populist government of the hard left and the nationalist right, Greeks turned decisively to the establishment center-right New Democracy party, led by Kyriakos Mitsotakis. Now it is up to the new prime minister to deliver the reforms that will permanently consign the forces of extremism to the margins.

Ousted prime minister Alexis Tsipras, leader of the leftist Syriza party, came to power promising to end austerity and rid the country of the endemic corruption of the old political system. Tsipras’s defeat is a testament to his failure on both those fronts — and indicative of the struggles of populists everywhere to turn their simplistic and overblown campaign rhetoric into practical political reality.

Sunday’s returns were also disastrous for the Golden Dawn, a racist party with Nazi roots that became Greece’s third-largest party in 2015, even though its leaders had been arrested for running a criminal organization. (The trial is still ongoing.) This time, the group failed to cross the 3 percent threshold and make it into Parliament.

It was another sign of the resilience of Greek democracy, which was severely tested by the deepest depression ever faced by a developed country in peacetime, in a period of resurgent authoritarianism in Europe and the world. As the various populist myths about the causes and possible solutions to Greece’s crisis have been revealed as delusions and outright lies, the fuel that sustained extremism has been depleted.

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