Greek Finance Minister Urges Quick Deal on Debt Relief

by Nektaria Stamouli & Marcus Walker

Wall Street Journal
November 17, 2016

Greece’s finance minister warned Germany and other creditors to agree on a debt restructuring in coming weeks, or miss the best chance to bring the struggling country’s seven-year crisis to an end.

Finance Minister Euclid Tsakalotos’s comments, in an interview with The Wall Street Journal, came a day after U.S. President Barack Obama visited Athens, where he backed calls for Greek debt relief. Mr. Obama continued his European trip in Berlin on Thursday.

German leaders including finance chief Wolfgang Schäuble have said Greece’s debt can be addressed at a later date. Mr. Tsakalotos, however, warned that procrastination could undermine the country’s hopes of recovery in 2017, and that the coming weeks offer an important opportunity for the eurozone to show it can fix, rather than avoid, its problems.

“If we kick the can down the road and say ‘we will decide in two years’” about how to make Greece’s debt sustainable, then investors will also postpone decisions about investing in Greece, said Mr. Tsakalotos, a leading figure in Greece’s ruling left-wing Syriza party.

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The time is up! A realistic proposal to end Greece’s debt overhang

by Chris Marsh, Dominik Nagly, George Pagoulatos & Elias Papaioannou

Vox
November 17, 2016

It is now seven years since the Greek crisis began. As well as reflecting the chronic deficiencies of its own institutions, the failings in Greece also reflect substantial shortcomings in international institutions. This column argues that it is time for all sides to move on, and proposes a simple debt operation for Greece that can deliver debt sustainability with minimal adjustments to the ESM operating procedures.

It is now seven years since the Greek crisis began. Since 2008, real output has been reduced by one-quarter; unemployment has been above 23% for over five years, and youth unemployment around 50%. Meanwhile, Greek public debt-to-GDP remains above 175% – despite a huge debt write-down. The banking system has long since stopped intermediating savings and investment; the welfare state is in dire straits. Non-performing loans clog the banking system. An exodus of the most talented and vibrant young Greeks has begun, eroding the tax base. Trust in democratic institutions has plummeted. For many Greeks, hope has long since given way to hopelessness.

The Greek crisis reflects chronic deficiencies of its institutions, structural shortcomings, indecisiveness, and unwillingness of its political system to address long-lasting problems, among perhaps deeper societal issues. Yet, the failings in Greece also reflect substantial shortcomings in international institutions. The IMF failed to fulfil the promise of Bretton Woods to provide temporary financial support to facilitate external adjustment “without resorting to measures destructive of national or international prosperity.” EU institutions – those intended to foster peace through cooperation and shared prosperity – have turned upon each other.

It’s time for all sides to move on.

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Tsipras Expects Trump to Govern Differently Than He Campaigned. Tsipras Would Know.

by Emily Tamkin

Foreign Policy
November 15, 2016

At a joint Tuesday press conference in Athens, U.S. President Barack Obama and Greek Prime Minister Alexis Tsipras spoke about — what else? — the implications of Donald Trump’s election.

Obama noted America is not alone in the popularity of its populists. In Europe and America alike, “people are less certain of their national identities or their place in the world,” he said. “It starts looking different and disorienting. And there is no doubt that has produced populist movements, both from the left and the right.”

And Tsipras noted, as Obama did at his press conference Monday, that though Trump had an “aggressive manner” during the campaign, the U.S. president-elect is likely to act differently once in office.

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Obama Arrives in Greece to Reassure Europe on Continuity of U.S. Alliance

by Carol E. Lee & Nektaria Stamouli

Wall Street Journal
November 15, 2016

President Barack Obama arrived in Greece Tuesday for the start of a weeklong trip overseas that will be dominated by efforts to assure nervous world leaders of continuity in U.S. alliances and key policies in the wake of Donald Trump’s election victory.

With just two months left in office, Mr. Obama isn’t expected to make major policy strides during stops in Greece, Germany and Peru. He chose to visit Europe during the last foreign trip of his presidency to underscore his concerns about the economic and security future of the continent, White House officials said.

While in Greece, his first visit to the country as president, Mr. Obama will meet with Prime Minister Alexis Tsipras. He will also attend a state dinner Tuesday evening.

On Wednesday Mr. Obama will tour the Acropolis before delivering a speech that will “focus on the important work that’s been done to try to address the economic challenges in Greece and Europe and around the world,” said Ben Rhodes, one of the president’s deputy national security advisers.

Greece’s government hopes Mr. Obama’s visit will raise pressure on its international creditors, especially Germany, Europe’s dominant lender, to offer substantial debt relief. Mr. Obama is due to meet German Chancellor Angela Merkel, as well as other major European leaders, in Berlin later this week.

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Barack Obama calls for 'meaningful debt relief' for Greece

by Helena Smith

Guardian
November 13, 2016

The US president, Barack Obama, has signalled he will use a critical two-day visit to Athens this week to step up calls for the country to be given “meaningful debt relief”.

Weighing in on the potentially explosive issue of how best to revive the European Union’s most financially strained member state, the outgoing president said debt forgiveness would play a pivotal role in giving people hope. “I am a strong believer that to make reforms sustainable, people need hope,” he told the Greek newspaper Kathimerini before the trip, which will be his final state visit before leaving office. “The International Monetary Fund has said that debt relief is crucial to put Greece’s economy on a sustainable path and set the stage for a return to prosperity.”

Obama, who has blamed the excoriating effects of austerity on Europe’s slowing growth, said while Athens needed to implement reforms, a nominal write-down would help reignite an economy that has lost over 25% of its output since the nation’s financial woes first surfaced seven years ago. At around €330bn (£284bn), or 180% of gross domestic product, Greece’s staggering debt is by far the biggest in the EU.

“That is why I will continue to urge Greece’s creditors to take the steps needed to ensure the country is well placed to return to robust economic growth, including by providing meaningful debt relief,” he said in the interview. “Getting that done would not only fuel the Greek economic recovery, it would show that Europe can make its economy work for everyone.”

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Obama: Greeks 'need hope'

by Alexis Papachelas

Kathimerini
November 12, 2016

In a wide-ranging interview with Kathimerini, US President Barack Obama insisted that he will continue to urge the country's creditors to take the necessary steps that will ensure Greece returns to growth, including “meaningful debt relief.”

Speaking ahead of his two-day visit starting on Tuesday, the outgoing US president said that Greece must continue on the path of necessary reforms, which he said can only be sustainable if people are given hope.

Obama praised bilateral ties, lauding Greece's contribution to the NATO alliance despite its “economic hardships,” and the close cooperation on counterterrorism. He also commended the “inspiring” generosity the Greek people have shown to the refugees.

Has Greece become a “front-line state” in terms of security, energy and dealing with international terrorism? What does this mean for the US-Greek relationship? What is the message you want to convey to the citizens of Greece?

First, I want to say how much I appreciate the opportunity to visit Greece, and I thank Prime Minister [Alexis] Tsipras and President [Prokopis] Pavlopoulos for the invitation. My visit comes at a time when Greece is at the forefront of pressing challenges to our shared security and prosperity. The threat of terrorism from groups like ISIL endangers us all. The barbarity of the Assad regime in Syria and ISIL has contributed to the waves of migrants and refugees that have sought refuge in Europe, especially Greece. And on both sides of the Atlantic, we face the task of ensuring that our political institutions and economic policies are responsive to our people, many of whom feel that they have been hurt by globalization and trade.

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In Greece, Property Is Debt

by Nikos Konstandaras

New York Times
November 1, 2016

At law courts throughout Greece, people are lining up to file papers renouncing their inheritance. Not necessarily because some feckless uncle left them with a pile of debt at the end of his revels; they are turning their backs on what used to be a pillar of Greece’s economy and society: real estate. Growing personal debt, declining incomes and ever higher taxes as Greece’s depression grinds on have turned property and the dream of easy money into dread of a catastrophic burden.

The figures are clear. In 2013, two years after a property tax was introduced (previously, real estate tax revenue came mainly from transfers or conveyance taxes), 29,200 people declined to accept their inheritance, according to the Justice Ministry. In 2015, the number had climbed to 45,627, an increase of 56 percent in two years. Reports from across the country suggest that this year, too, large numbers of people are refusing to inherit.

“This can be very painful,” said Giorgos Voukelatos, a lawyer. “People may lose their family home. Because if the father or mother had debts, the child might be unemployed and unable to carry this weight as well.”

The growing aversion to property is evident in the drop in business at notaries public. The national statistics service, Elstat, reported in July that in 2014 there were 23,221 deeds in which living parents transferred property to their children, down from 90,718 in 2008. The number of wills drawn up or notarized has been steady through the crisis, at around 30,000 annually, suggesting that many inheritances being rejected were not part of formal wills. (More than 120,000 people die each year.)

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Tsipras Caught Between EU and Voter Demands

by Giorgos Christides & Katrin Kuntz

Spiegel
November 1, 2016

When he got elected nearly two years ago, Greek Prime Minister Alexis Tsipras promised to stand up to the EU's austerity demands and restore his country's dignity. His failure to deliver risks plunging the country into a new political crisis.

The neighborhood around Villa Maximos could be out of a fairy tale: There's an avenue lined with bitter orange trees in front of Alexis Tsipras' official residence, and the National Garden, with benches for couples, is located just next door. It has been reported that the Greek prime minister and his cabinet used to take calm strolls here. After his victory in early 2015, Tsipras had ordered that security barriers in front of parliament be torn down. "We don't need a police state," he announced. In other words: the 11 million Greeks who love us will take care of our security.

Today, 21 months later, the neighborhood has changed. Two riot police buses now seal the avenue leading to Villa Maximos. Officers stand watch in front of it around the clock.

The people's love of Tsipras has turned into anger. Because of their diminishing salaries, air-traffic controllers, doctors and teachers are standing up to the government. About four weeks ago, retirees tried to topple the police buses, their faces full of anger and disappointment. When police officers drove the seniors back with tear gas, an outcry swept across the country: Hadn't Tsipras promised that things like this would never happen again, they asked?

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Greek Homeowners Scramble as Repossession Looms: ‘It’s Like a Horror Movie’

by Niki Kitsantonis

New York Times
October 29, 2016

Even after retiring as an accountant, Michalis Hanis dutifully kept up with the mortgage payments on the small house in a suburb of Athens where he has lived for 23 years. That was until several years ago, when Greece’s economic crisis hit.

As part of belt-tightening measures demanded by Greece’s creditors, the government cut his pension by 35 percent. Like his country’s debts, his debts grew.

Now he has joined the tens of thousands of Greeks fighting to save their homes as a sudden wave of repossessions has struck this year, prompting mounting protests across Greece.

“It’s like a horror movie,” said Mr. Hanis, 63, who takes antidepressants and sleeping pills to cope. “You can never relax. I just want to protect my home.”

The country’s creditors have pressed the government to allow the auction of delinquent debtors’ properties, collecting billions of euros that could be used to prop up tottering Greek banks.

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Greece’s Syriza Defiant After Judges Annul Key Policy

by Marcus Walker & Nektaria Stamouli

Wall Street Journal
October 27, 2016

Greece’s ruling Syriza party vowed on Thursday to continue fighting for its radical agenda after judges struck down its plan to revamp Greece’s media sector, the culmination of a weekslong power struggle that produced allegations of blackmail and “fascist” methods.

Greece’s supreme administrative court, the Council of State, ruled late Wednesday that the government, led by the left-wing Syriza party, acted unconstitutionally by licensing TV broadcasters itself, a power that the constitution reserves for an independent media regulator.

“The decision creates a feeling of injustice,” said State Minister Nikos Pappas, an aide of Prime Minister Alexis Tsipras who has overseen the auction. “Governments are not brought down by judicial decisions, but only by the people.”

In early September, the government auctioned broadcast permits for only four private TV channels, leaving several existing TV stations facing closure. The court ruling annuls the government’s auction and removes the threat of forced closures.

The government billed its reform of Greek TV as necessary to combat corruption and dismantle a network of vested interests among media moguls, banks and the political establishment.

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Highest Greek court blocks Syriza media law

by Kerin Hope

Financial Times
October 27, 2016

Greece’s highest court has ruled that a media law pushed through parliament by the leftwing Syriza-led government is unconstitutional, raising the stakes in a dispute over the award last month of nationwide television licences to four local business magnates.

Wednesday night’s decision by the 25-member council of state, comprising the country’s leading judges, came after more than five hours of bitter argument, according to people briefed on the deliberations.

The ruling was passed by 14 votes for to 11. Nikos Sakellariou, president of the council, declined to comment, saying details of the decision “must remain confidential”.

According to one person with knowledge of the discussions, the court upheld a constitutional provision that the broadcasting regulator, not the government, was responsible for licensing commercial TV stations.

The ruling marks a damaging setback for the Syriza government, which went ahead with the auction after failing to reach agreement with opposition parties over appointing new members to the regulator’s board.

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Greek court blocks Syriza plan to shut TV channels

by Kerin Hope

Financial Times
October 19, 2016

The Syriza-led government’s plan to exert greater control over local media by limiting the number of nationwide television licences suffered a setback when Greece’s highest court upheld an appeal by six private channels facing imminent closure.

The decision by the 25-member Council of State, made up of the country’s leading judges, came five days before the six channels were due to shut down with the loss of more than 2,000 jobs.

The private channels had argued in their appeal that the decision by the government to shut down their stations was unconstitutional.

The court’s ruling has now opened the way for the council to hold a full discussion on whether a new media law allowing only four nationwide channels to operate in Greece is at odds with the country’s constitution.

Tuesday night’s ruling, which was approved by a 16 to nine majority after hours of fractious argument, is also likely to derail a procedure in which four local bidders were awarded nationwide licences at a closed auction last month for a total price of €246m.

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‘We’re never getting out of here’: How refugees became stranded in Greece

by Anthony Faiola

Washington Post
October 14, 2016

When Europe abruptly closed its land borders last spring to refugees fleeing war, it made a much-heralded promise: Wealthy nations across the European Union would take in tens of thousands of desperate Syrians and Iraqis who had made it as far as near-bankrupt Greece only to find themselves trapped.

But one by one, those nations have reneged, turning primitive camps such as this one into dire symbols of Europe’s broken pledge.

Amid allegations of Greek mismanagement, this site on the grounds of an abandoned toilet-paper factory still lacks basic heat, even as nighttime temperatures dip into the low 50s.

Mosquitoes infest the white canvas tents of refugee families stranded here for months. A 14-year-old Syrian girl was recently raped. There are reports of stabbings, thefts, suicide attempts and drug dealing.

“I won’t go out alone anymore,” said Rama Wahed, a 16-year-old Syrian girl hugging herself in her family’s tent.

In the opposite corner, her 17-year-old brother, Kamal, stared blankly ahead. Since their father died in Syria, he is the “man of the family.” But he looks like a lost little boy. Like so many other families here, their family of five has been waiting for word to go somewhere, anywhere but here. Caught in a broken system, they are losing hope.

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Syriza at odds with Orthodox clergy over religious teaching plans

by Kerin Hope

Financial Times
October 14, 2016

Damned as a “wretched man” and “religious racist” who should be excommunicated, Greece’s minister of education has ignited the anger of hardline Orthodox clerics with his plans to reduce their role in religious teaching.

Under the reforms, due to be introduced next year, the state will take control of religious education in schools, broadening it out to include other faiths.

“In our [party’s] opinion, religious studies are too confessional — they try to persuade pupils of the correctness of Orthodoxy, which is not the job of the educational system,” said Nikos Filis. “We’ve taken the decision to go ahead with changes [in the religious studies curriculum] to reflect the increasing diversity of faiths in our society, especially following the arrival in Greece of so many refugees.”

It is the latest salvo in a battle between Syriza — a hard left party which once campaigned for the separation of church and state — and a religious establishment that still holds huge political sway.

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Greek yogurt is no longer the trendiest yogurt

by Abha Bhattarai

Washington Post
October 13, 2016

Move over, Greek yogurt.

The protein-rich breakfast staple, which has enjoyed an astronomical ascent in recent years, is being replaced by a new form of dairy.

The latest fad: Yogurt drinks, according to a report by research firm Mintel.

Yogurt smoothies, kefir and other drinks are experiencing double-digit growth because, researchers say, they offer a more portable, spoon-less alternative to traditional forms of yogurt. As a result, sales of yogurt drinks have climbed 62 percent over the past five years and are projected to grow another 11 percent this year, according to Mintel. (Sales of “spoonable” yogurt, by comparison, grew 27 percent since 2011.)

Meanwhile, year-over-year sales of traditional forms of yogurt have been sliding since 2013.

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The IMF should stay in the Greek rescue squad

Financial Times
Editorial
October 11, 2016

Good news coming out of the dismal mess of the Greek economy and its international bailout has been a rare commodity over the past six years. So it is tempting to celebrate the decision of the eurogroup of finance ministers that Athens has done enough structural reform to receive the latest €2.8bn tranche of its bailout.

In practice, a quiet measure of relief would be more appropriate than unbridled joy. While Greece’s government has done better than many sceptics feared following the shambles of last year’s referendum and re-election of Alexis Tsipras as prime minister, the measures it has enacted are highly unlikely to make a material difference to growth in the short to medium run.

The repeated warnings from the International Monetary Fund that Greece needs more fiscal space — and, if necessary, debt relief — are more apposite in addressing the country’s immediate priorities. If the eurozone authorities want to translate Athens’ fragile recent achievements into growth, they will need to look at the demand side of the economy as well as its productive efficiency.

Despite some grumbling from the usual quarters (Berlin), the eurogroup ministers have decided that Greece has done enough to reform its expensive pension system, liberalise the energy sector and set up a new privatisation agency to warrant the release of the final part of a tranche of money originally due earlier this year.

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Greek reforms on target for €2.8bn EU bailout

Jim Brunsden & Mehreen Khan

Financial Times
October 10, 2016

Eurozone ministers gave the go-ahead for Greece to receive €2.8bn in bailout money, as Athens met the deadline to implement reforms needed to unlock the funds.

Ministers meeting on Monday in Luxembourg confirmed that Greece has successfully met all the policy “milestones” in areas such as liberalising of the energy sector, pensions reform, bank governance and management of a new privatisation agency.

This marks a turnround compared with last month, when Greece’s finance minister, Euclid Tsakalotos, was chastised by eurozone counterparts for Athens’ slowness in implementing the measures needed to release the funds. At the time, Athens had completed only two of 15 reforms.

Speaking after the meeting, Pierre Moscovici, EU economic affairs commissioner, said “all remaining milestones have been completed”. Earlier he praised the “tremendous” work done by the government of Alexis Tsipras in implementing “difficult reforms for Greek society”.

The €2.8bn, which is a leftover from a larger tranche of money released earlier this year, had threatened to become a symbol of the euro area’s difficulties in getting Greece to comply with the conditions of its bailout programme.

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