Sunday, November 19, 2017

Greece probes central bank head over alleged leak

by Kerin Hope

Financial Times

November 19, 2017

Greece’s central bank governor is under investigation by an anti-corruption prosecutor over the alleged leaking of an auditor’s report on Piraeus Bank, a troubled Greek lender accused of violating capital controls imposed at the height of the country’s financial crisis.

According to two people with knowledge of the case, Yannis Stournaras, the governor, is accused of “violating his duties” by leaking an internal document produced by the central bank’s audit team detailing irregular practices by former senior executives at Piraeus.

Mr Stournaras strongly denied wrongdoing. He also rebutted an allegation, made last week in Documento, a Greek newspaper, that the central bank “selectively leaked” the Piraeus report as well as an earlier report by the Single Supervisory Mechanism, the European Central Bank’s bank supervisory arm, detailing poor governance at Attica Bank, a small Greek lender.

“I have full confidence in the competence and the conduct of the Bank of Greece staff. There was absolutely no leak of the audit on Piraeus and not a word of the text has appeared in any media,” Mr Stournaras told the Financial Times.

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Struggling Greek businesses cling to recovery hopes

by Kerin Hope

Financial Times

November 19, 2017

Greek carpenter Vassilis Tsigas surveys the cavernous shop floor of his family’s woodworking business where a handful of employees are finishing balcony doors for a boutique hotel on an Aegean island.

His company, which produces high-quality wood fittings for homes and hotels, was once a flourishing business, but annual turnover has dropped from €9m during the building boom a decade ago to just €1.5m last year.

“We just about managed to hold on . . . We got export orders from a few Greek architects working abroad because we could offer cheaper prices,” Mr Tsigas says.

But for the first time since the crisis began almost a decade ago, things have begun to get better. In July, the Tsigas brothers landed a contract to provide fittings for a luxury hotel in Athens being renovated by foreign investors. It will provide enough work for the company to re-hire a dozen employees laid off during the crisis.

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Monday, November 13, 2017

Greece announces €1.4bn ‘social dividend’

by Jessica Dye

Financial Times

November 13, 2017

Greek prime minister Alexis Tsipras made an unscheduled television appearance on Monday night to announce a €1.4bn “social dividend” to be paid next month to more than 3m Greeks who have been hit hardest by the country’s seven-year recession.

The handout was approved by the country’s bailout creditors, the EU and International Monetary Fund, in a teleconference earlier in the day. It amounted to more than double a similar payment of €617m made last year without prior agreement with the creditors, prompting a clash with the left-wing Syriza government.

The premier said this year’s fiscal performance “exceeded our most optimistic forecasts with the primary budget surplus (before payments on the public debt) set to beat the target of 1.75 per cent of gross domestic product by a large margin.”

The primary surplus for 2017 could reach an unprecedented 3 per cent of GDP thanks to higher-than-forecast revenues from social security contributions and tax revenues, according to analysts in Athens.

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Beyond Mamma Mia! Hollywood courted as Greece vies for slice of movie millions

by Helena Smith

Guardian

November 13, 2017

Nikos Giannopoulos still vividly recalls the excitement that swept the people of Amorgos when French film-makers arrived to make The Big Blue three decades ago.

“Everyone wanted to be a part of it,” says Giannopoulos, the movie’s executive producer, as he takes in the remote island’s dramatic landscape.

“It was a game changer that helped put Amorgos on the map.”

Luc Besson’s film about two free divers was a huge commercial success that went on to become a cult classic, and tourist arrivals soared. But more than a decade would elapse before blockbusters were shot again in Greece, with star-studded casts descending on the islands of Cephalonia and Skopelos in 2001 and 2008 for Captain Corelli’s Mandolin and Mamma Mia!

Subsequent pleas by film-makers to exploit the country’s unique natural attributes – its distinctive light, rugged landscape and aquamarine sea – invariably fell on deaf ears. Repulsed by a cumbersome bureaucracy and lack of financial incentives, Hollywood turned elsewhere.

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Thursday, November 9, 2017

Greek terrorist’s temporary release sparks fury

by Kerin Hope

Financial Times

November 9, 2017

A convicted terrorist from Greece’s extremist November 17 group released from an Athens prison on Thursday on a two-day furlough prompted a storm of protest from politicians and civil society against the leftwing Syriza government.

Dimitris Koufodinas’s request for parole was approved by the Korydallos prison council, which specified he must report to his local police station twice a day.

A leading member of N17, Koufodinas is serving a series of life sentences for killing 11 prominent Greeks and foreign officials between 1976 and 2000.

The council had rejected several of his previous requests, which were made under a regulation that allows short furloughs for prisoners serving life sentences once they have spent eight years in jail. Mr Koufodinas was sentenced in 2003 alongside 14 other members of N17.

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Wednesday, November 8, 2017

Greek notaries begin 2-month strike

by Kerin Hope

Financial Times

November 8, 2017

Greece’s notaries have begun a two-month strike aimed at blocking the leftwing Syriza government’s plan to launch electronic auctions of repossessed properties this month, as agreed in the country’s current bailout deal with the EU.

The notaries resorted to industrial action after their requests for protection from attacks by leftwing extremists protesting against foreclosures were ignored by the authorities, according to Giorgos Roskas, president of their union.

The walkout raises concerns that Greek banks will miss this year’s target for reducing non-performing loans, with potential knock-on effects for the outcome of stress tests that the European Central Bank will conduct in Greece early in 2018.

News of the strike prompted Mario Draghi, president of the European Central Bank, to call for a swift solution to the dispute during Monday’s meeting of euro area finance ministers. Mr Draghi also stressed the importance of tackling the issue of non-performing loans, according to a Greek official.

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Tuesday, October 31, 2017

Man arrested for Papademos parcel bomb faces terrorism charges

by Kerin Hope

Financial Times

October 31, 2017

A 29-year-old man allegedly involved in a letter-bomb attack in May that wounded former Greek prime minister Lucas Papademos appeared on Tuesday before an Athens district attorney on terrorism charges, a judicial official said.

Constantine Giagtzoglou, who was arrested at the weekend at an apartment in central Athens, is also accused of sending a booby-trapped package in March to the Berlin chancellery addressed to finance minister Wolfgang Schauble, report Kerin Hope and Pavlos Papadopoulos.

The package was defused by German security experts before it reached the minister’s office.

Greek anti-terrorist police found a “small” explosive device under construction in the apartment Mr Giagtzoglou rented under a false name, along with explosives, detonators and a handgun, a security official said.

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Greece finally growing, but taxes crushing new businesses

by Derek Gatopoulos

Associated Press

October 31, 2017

If Greek business needed a role model, Stathis Stasinopoulos would make an ideal candidate.

An athlete, engineer, and entrepreneur, he invented an easy-folding bicycle design and began building them himself and created a small company. The project was shortlisted for a national start-up award in 2014 and, the following year, he peddled onto the stage to applause to give a motivational speech.

Today, he has some advice for young Greeks with a good idea: "Get your passport and leave."

In July, Stasinopoulos took his family and dream of a self-made business and moved them from Athens to bicycle-friendly Bremen, a city in northwest Germany. Years of effort had been crushed by high taxes and outdated bureaucracy.

"There are a number of reasons why I made the move. Many of them have to do with taxes," Stasinopoulos said, speaking at the small workshop of his newly-registered German firm, Velo Lab GmbH.

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Saturday, October 28, 2017

Greek police make Papademos parcel bomb arrest

by Kerin Hope

Financial Times

October 28, 2017

Greek anti-terrorist police have arrested a man believed to be involved in a parcel bomb attack in May that wounded the former Greek prime minister Lucas Papademos.

The 29-year-old, who was not identified, was arrested early on Saturday at an apartment in central Athens that he rented using a false name, a police official said.

He is suspected of being a member of Conspiracy of the Cells of Fire, a radical anarchist group that claimed responsibility for sending a booby-trapped package in March to the Berlin chancellery addressed to finance minister Wolfgang Schäuble. Members of the group took part in numerous anti-bailout protests during the Greek crisis.

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Why Greece's Fate Helps Make Sense of Catalonia's Gamble: The lessons of economic pain

by Stathis Kalyvas

Atlantic

October 27, 2017

Anticipating the Spanish government’s decision to suspend Catalan autonomy, the Catalan government proceeded today to unilaterally proclaim independence. At about the same time, the Spanish Senate voted to suspend Catalan autonomy, following which Spanish prime minister Mariano Rajoy deposed Catalan premier Carles Puigdemont and other Catalan high officials, and called for elections in Catalonia to be held in December. Jointly, these actions are escalating the Catalan crisis. How are things likely to develop from now on?

Every political crisis is unique, yet sometimes analogies are useful—especially when crises are unfolding and the flow of information can be extremely confusing. Seen from this perspective, the Greek crisis of 2015 offers some useful analogies.

In 2010 Greece found itself unable to refinance its debt. Faced with the prospect of default, it accepted a massive bailout from its eurozone partners along with the IMF, in exchange for which it agreed to implement a large set of fiscally restrictive policies (“austerity”) and structural reforms. In turn, these policies led to an acute economic recession and a parallel political crisis which went through various phases and resulted in a massive political realignment. This process culminated in the January 2015 elections, which produced a victory of an anti-austerity party, Syriza.

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Friday, October 27, 2017

Greek PM to defend $2.4bn spend on US-made fighter jets

by Kerin Hope

Financial Times

October 27, 2017

Alexis Tsipras will defend a controversial decision by his leftwing government to spend up to $2.4bn on upgrading Greece’s elderly fleet of US-made F-16 fighter aircraft.

The Greek prime minister will insist in parliament on Friday that the agreement, while costly for a country struggling to emerge from recession, is critical to enhancing its strategic role in the unstable east Mediterranean, according to one government official.

Greece’s strategic importance for Nato is likely to increase as Turkey’s relationship with the alliance becomes increasingly strained over Ankara growing ties with Russia and other points of tension with its western allies.

The ruling Syriza party has set aside its former anti-American rhetoric since coming to power in 2015 in favour of building what party officials term a “pragmatic” working relationship with Washington based on “mutual interests”.

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Tuesday, October 24, 2017

Greek lessons for Brexiters

by Tony Barber

Financial Times

October 24, 2017

The Greek word kolotoumba, meaning “somersault”, is enjoying a return to favour — this time, in the context of Brexit.

Kolotoumba became a fashionable term in 2015 in response to the tactics of Alexis Tsipras, Greece’s once radical leftist prime minister. After insisting for months that he would not yield to Greece’s international creditors, Mr Tsipras “somersaulted” and accepted an emergency financial rescue, whose terms were more stringent than those he was offered to begin with.

At a Greek-British symposium held over the weekend at Nafplio, the Peloponnese seaport town that was modern Greece’s first capital, participants found themselves debating whether a kolotoumba might be in the offing with regard to Brexit. Was it plausible that the UK, despite the June 2016 referendum result, might not leave the EU?

Many participants favoured such an outcome, but few thought it probable. One opponent of the UK’s EU membership put the chances of a kolotoumba at zero to 0.1 per cent. By contrast, one supporter suggested a range from 10 to 30 per cent.

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Monday, October 16, 2017

Greek January-September government budget surplus slightly below target on lower revenues

Reuters
October 16, 2017

Greece’s central government attained a primary budget surplus of 4.5 billion euros (£4 billion) in the first nine months of the year, slightly below target due to lower tax revenues, finance ministry data showed on Monday.

The government’s target was for a primary budget surplus - which excludes debt-servicing costs - of 4.556 billion euros for the January-to-September period, meaning the surplus missed the target by 54 million euros.

The central government surplus excludes the budgets of social security organizations and local administration. It is different from the figure monitored by Greece’s EU/IMF lenders but indicates the state of the country’s finances.

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Tuesday, October 10, 2017

Greek transgender community hopes new law will improve lives

by Elena Becatoros

Associated Press

October 10, 2017

Before she had even reached puberty, Anna Kouroupou knew she wasn’t what her birth certificate said she was: a boy. But having herself officially declared female was a painful process, and one that could only legally be done if it included gender reassignment surgery.

Stigmatized, often abused and rejected, Greece’s transgender community is now hoping a controversial new law passed by parliament Tuesday will improve their daily lives and foster greater acceptance in what is often a deeply conservative society.

The law, passed with 171 votes in favor in the 300-member parliament, allows Greeks over the age of 15 to change the gender listed on their identity cards and other official documents at will, following a simplified procedure in court. Until now, those wanting to change how their gender is officially defined had to prove they had undergone sex-change surgery and psychiatric assessment.

“The legal recognition of gender identity is a huge positive step,” said 53-year-old Kouroupou, who began hormone therapy at the age of 17 and underwent gender reassignment surgery abroad at the age of 24. “The world of a trans person won’t change that easily,” but it will improve the daily problems and humiliations suffered by her community, she said.

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Greece Faces a Rerun of Its Refugee Winter of Discontent

by Daniel Howden & Apostolis Fotiadis

News Deeply

October 10, 2017

The shelter offered to Amira since she got to Europe amounts to a plastic sheet she has slept under for the past ten days. The Syrian mother of three was taken to Vathy, a camp on the Greek island of Samos where nearly 3,000 people are spilling out of a facility built for 700. She struggles to explain to her children, who lost their father in the war, why they must sleep rough being bitten by insects.

“I had protected them until now from the war, but I can no longer protect them here,” said the 32-year-old, who has no diapers for her five-month-old daughter. “It makes me want to scream, but I can’t, not in front of the children.”

October downpours have signaled the coming of winter on Greece’s Aegean Islands and with it the very real prospect of another fiasco to match the frozen misery of last year when six people died. While conditions have improved for asylum seekers on the mainland, the deal between the European Union and Turkey that staunched the flow of refugees and migrants in March 2016 aimed to deter future arrivals by confining them to “hot spot” camps on five Greek islands.

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Thursday, September 28, 2017

Why Germany's Shakeup Won't Help Greece

by Leonid Bershidsky

Bloomberg

September 28, 2017

Those cheering the looming departure of Wolfgang Schaeuble from the German Ministry of Finance should hold the champagne. His successor may not be as ornery, but southern Europeans -- and above all Greeks -- shouldn't expect any better treatment.

Schaeuble has held a wide range of positions since he was first elected to the German parliament in 1972; he's been interior minister, chief of staff to the chancellor and the leader of the Christian Democratic Union, the party now headed by Chancellor Angela Merkel; he nearly became president at one point and chancellor at another. Only one of his post-World War II predecessors at the Ministry of Finance has served longer than his eight years, and not by much. But Schaeuble has always served his party in whatever position it could offer, and he'll still be a formidable figure as speaker of the parliament, formally the second most senior office-holder in Germany after the president, just ahead of the chancellor.

Schaeuble's protestant philosophy of political service is important for the understanding of his tenure as finance minister. Of course, it took personal conviction to steer his unwavering course of austerity, balanced budgets and respect for rules. Schaeuble was trained at the University of Freiburg, where ordoliberalism was developed in the 1930s through 1950s. This theory married a liberal, pro-market approach with a strong state, whose role is to maintain a high level of social security. Ordoliberalism has faded somewhat since the 1970s, but it still influences much of German economic thinking, and Schaeuble was close to its origins in his formative years. As finance minister late in his life, he tended to lean toward the "ordo" part. He once confessed to his brother: "The older I get and the more I see as finance minister, the more skeptical I get about capitalism."

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Statement on Greek Banking System

International Monetary Fund
September 28, 2017

Mr. Poul Thomsen, Director of the European Department, made the following statement at the FT Investment Management Summit in London today:

"On the subject of the Greek banking system, let me emphasize that we see no financial stability concerns at all in Greece. The issue is that we need to be sure that there is a strategy to deal with Greece's exceptionally high level of nonperforming loans over the medium term. In this regard, we had suggested to update the 2015 asset quality review (AQR) by next spring. The European Central Bank (ECB) has instead proposed bringing forward the already scheduled stress tests and undertaking targeted asset reviews, suggesting that this will allow us to gather the information necessary to assess whether the current strategy for ensuring the soundness of the banking system is adequate, without having to go through a full asset quality review. We think that this is a constructive proposal that achieves the same broad objectives, and we are now discussing the exact modalities with our colleagues at the ECB."

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Monday, September 25, 2017

Draghi: ECB may frontload 2018 bank stress tests with view to Greece

Reuters
September 25, 2017

The European Central Bank may ‘frontload’ its bank stress test next year, ECB President Mario Draghi said on Monday, when asked if supervisors plan any early checks on the health of Greek lenders.

The International Monetary Fund has been pushing for a fresh asset quality review at Greek banks, possibly as part of an bailout review that is slated to start soon.

The ECB has rejected the call, saying that the next check is the regular 2018 stress test, but Draghi’s words suggest that ECB may be somewhat flexible with its timeline.

“The SSM (Single Supervisory Mechanism) will take its decision with full independence,” Draghi told members of the European Parliament.

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EU ends Greece's deficit procedure in positive signal to markets

Reuters
September 25, 2017

European Union states decided on Monday to close disciplinary procedures against Greece over its excessive deficit after improvements in Greece’s fiscal position, confirming the country’s recovery is on the right track.

The move, although largely symbolic, sends a new signal that Greece’s public finances are again under control, facilitating the country’s plans to tap markets after a successful issue of bonds in July which ended a three-year exile.

EU fiscal rules oblige member states to keep their budget deficits below 3 percent of their economic output or face sanctions that could entail hefty fines, although so far no country has received a financial penalty.

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Monday, September 18, 2017

When Is It Dangerous to Declare a Crisis Over?

by Jeremy Grant

Strategy & Business

September 18, 2017

When is it a good time to declare that a crisis is over? This is not an academic question. For people leading large organizations and governments, crises are part of the new normal. A recent PwC survey of chief executives found that 65 percent of CEOs had experienced at least one crisis in the past three years. About one-third predicted they would face more than one crisis in the next three years compared with just 16 percent who felt they’d face fewer.

There has been no shortage of corporate crises in the headlines recently, from the massive IT outage that hit British Airways in May, to the hack of Equifax data that was made public in early September. And for the past decade, the authorities that oversee the European economy have been grappling with a financial and economic crisis that began in 2007.

There is, of course, a natural tendency to want to see a crisis as being behind us when not all the facts support that view. Among the many cognitive biases humans grapple with is one that leads us to have, as Madan Pillutla, a professor in organizational behavior at London Business School puts it, a “more positive forecast for things than is statistically likely or possible.”

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Saturday, September 16, 2017

The eurozone may be back on its feet. But is Greece?

by Helena Smith

Observer

September 16, 2017

Is the eurozone on the mend? Jean-Claude Juncker certainly thinks so. The EU president was upbeat in Brussels last week as he gave his annual state-of-the-union address, proclaiming that “the wind is back in Europe’s sails”.

Juncker’s optimism appeared to match the view from Greece, the currency bloc’s problem child. In Athens only the previous week, the visiting French president, Emmanuel Macron, had been even more enthusiastic, declaring against the backdrop of the Acropolis that Greece’s prolonged crisis was over, and that therefore Europe’s was too.

Macron’s finance minister, Bruno Le Maire, went further, calling the Greek prime minister, Alexis Tsipras, “a real leader [who] works for the common good … a prime minister who works with great courage”.

But if progress on Greece’s privatisation programme is anything to go by, the eurozone’s most troubled economy is still in the foothills of recovery. Despite signs of resurgence – at 0.7%, Greece recorded two consecutive quarters of growth this year for the first time since 2006, and made a successful test return to the markets – foreign sell-offs have been plagued by red tape and political resistance.

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Wednesday, September 13, 2017

A New Challenge Looms for Greece’s Far Left

by Yannis Palaiologos

Wall Street Journal

September 13, 2017

Among the casualties of Greece’s extended economic crisis has been the country’s establishment left. The near-decimation of the center-left Pasok party has meant that in recent years the political space between the governing Syriza party on the far left and the parties of the center-right has had little effective representation. But now, after many false starts, an effort is under way to re-energize the center-left with a new political party, and Prime Minister Alexis Tsipras is concerned.

Pasok governed Greece for 21 of the 30 years between 1981 and 2011, never dropping below 38% in parliamentary elections. Under the weight of its own mishandling of the country’s fiscal collapse, however, the party’s support nosedived to 12% from 44% in two-and-half years. By the January 2015 election, its support plummeted below 5%. Meanwhile, Syriza won 35% of the vote in 2015, up from less than 5% in the October 2009 election.

Several initiatives since then to regroup and unify the ranks between Syriza and the center-right New Democracy party achieved little. The legacy of fragmentation and conflicting personal strategies that long bedevilled the political center seemed impossible to overcome.

Meanwhile, Mr. Tsipras’s abandonment of his radical agenda and his embrace, however half-hearted, of the reform-and-austerity policies of his predecessors, made him a plausible candidate to take up the leadership of Greek social democracy.

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