Friday, December 8, 2017

Erdogan wraps up tense Greece visit with trip to Thrace

by Kerin Hope

Financial Times

December 8, 2017

Turkish President Recep Tayyip Erdogan wrapped up a tense visit to Greece on Friday with a brief trip to the northeastern region of Thrace, the home of a Muslim minority of mainly ethnic Turkish descent.

“Erdogan, Erdogan, our leader,” shouted a crowd of several hundred people outside a mosque in Komotini where the Turkish leader attended midday prayers.

Later, Mr Erdogan addressed members of the minority at a Greek state highschool where most lessons are taught in Turkish. He also met with community representatives, including Muslim MPs from the governing left-wing Syriza party and Muslim religious leaders, before flying back to Ankara.

In Athens, Mr Erdogan on Thursday accused Greece of historic discrimination against the minority, asserting that the per capita income of the ethnic Turkish community was more than 80 per cent lower than that of other Greek citizens.

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Outspoken Erdogan shocks hosts on visit to Greece

by Kerin Hope

Financial Times

December 8, 2017

Greece has been left smarting after Recep Tayyip Erdogan used the first visit by a Turkish head of state in 65 years to make outspoken remarks on bilateral disputes between the two neighbours

During a two-day visit Mr Erdogan’s comments on minority rights, Cyprus and the treaty that defines the Greek-Turkish relationship visibly shocked Prokopis Pavlopoulos, his Greek counterpart, and put Alexis Tsipras, the prime minister, on the defensive at a joint news conference.

Mr Erdogan publicly rehearsed a series of bilateral grievances that at their most extreme have brought the two Nato allies and Aegean neighbours to the brink of war.

Athens had billed Mr Erdogan’s visit as an opportunity to consolidate bilateral ties and perhaps make progress towards reducing the continued flow of refugees and migrants from Turkey to the eastern Greek islands. While refugee arrivals have shrunk since last year’s deal between Ankara and the EU, Greek officials are concerned about an rise in numbers over the past six months.

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Monday, December 4, 2017

Greece Just Witnessed Something It Hasn’t Seen Since 2006

by Marcus Bensasson

Bloomberg

December 4, 2017

Greece’s economy expanded for a third straight quarter for the first time in more than a decade, providing a foundation for the country’s attempts to exit its bailout program next year.

Gross domestic product grew 0.3 percent in the three months through September after expanding a revised 0.8 percent in the previous quarter, the Hellenic Statistical Authority said in a statement on Monday. From a year earlier, GDP grew 1.3 percent.


Greece’s government and representatives of the country’s creditor institutions on Saturday agreed on a set of economic overhauls the country must undertake in exchange for fresh loans. The payout, supplemented by more bond market forays next year, will help the government build a cash buffer as it seeks to prepare for its bailout exit when the current program expires in August 2018.

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Sunday, December 3, 2017

Greece’s Dangerous Budget Surplus

by Yannis Palaiologos

Wall Street Journal

December 3, 2017

At first glance, Greece’s traumatic 2015 bailout—its third in five years—appears to be working. The government’s budget is back in surplus, excluding debt service, after the years of deficits that contributed to the country’s first crisis in 2010. The radical leftist prime minister, Alexis Tsipras, now touts the “restoration of Greece’s fiscal credibility.” As recently as 2014 he savaged his predecessor, who achieved much lower surpluses, for “austerity.”

The only problem is that the bailout is not in fact working, if you think the goal should be to restore Athens to sound public finances and to offer Greeks economic hope for the future.

The European Commission’s autumn forecast predicts eurozone economic growth of 2.2% this year, the fastest in a decade. But Greece is falling further behind. It was originally projected to grow by as much as 2.7% in 2017. Six months ago, the EU’s number crunchers reduced that forecast to 2.1%. Last month they cut it further, to 1.6%.

This anemic performance is caused both by excessively demanding fiscal targets and by persistent structural impediments to investment. On both fronts, Greece’s creditors are complicit in the country’s continuing woes.

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Greek central bank chief cleared over personal assets statement

by Kerin Hope

Financial Times

December 3, 2017

Greece’s central bank governor has been cleared by a Greek parliamentary audit committee of charges that he made false statements about his personal assets while serving as finance minister between 2012 and 2014.

Yannis Stournaras last month requested a fresh audit of his asset statements made between 2012 and 2014 after Documenta, a pro-government weekly newspaper, revived an earlier accusation in Hot Doc, an investigative magazine, concerning his family’s summer home on the Aegean island of Syros.

Documenta wrote that Mr Stournaras failed in 2012 and 2013 to declare alterations carried out at his property on Syros that increased its value.

“The new audit showed that everything [concerning the Syros property] took place according to the law . . . There is no outstanding legal or political issue,” a person involved in the parliamentary procedure said on Sunday.

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Greece hopes reforms deal will smooth bailout exit

by Kerin Hope

Financial Times

December 3, 2017

Greece has reached agreement with its international creditors on reforms required to release the next loan tranche under its current bailout, boosting the leftwing Syriza government’s hopes of achieving a smooth exit from the €86bn programme next August.

“The [EU and IMF bailout monitors’] visit is completed, we have closed the [technical] agreement,” Euclid Tsakalotos, finance minister, said after the week-long talks ended on Saturday.

An EU statement confirmed that a deal — which includes energy sector reforms and fiscal and structural measures bringing Greece in line with eurozone counterparts — had been reached. It must be approved by eurozone finance ministers, who are due to meet on Monday.

Since the creditors’ third review of progress made by Athens was launched in October, the Syriza government has shown greater willingness than previously to make compromises.

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Wednesday, November 29, 2017

Europe Needs a Way to Prevent the Next Greek-Style Debt Crisis

by Ferdinando Giugliano

Bloomberg

November 29, 2017

If there was ever a textbook example of how not to handle a sovereign debt crisis, it was Greece. Nearly a decade since Athens first asked for help from its euro zone partners and the International Monetary Fund, the Greek economy is still struggling to recover. Even after a steep restructuring, sovereign debt remains unsustainable. If Greece is not to be crippled by its debt load, European governments will have to accept further debt-reducing measures, on top of the maturity extensions and the cut in interest rates they have already agreed to.

So it's no surprise that one of the key debates on the future of the euro zone relates to how sovereign debt restructuring should be made easier. There is little doubt that forcing losses on creditors at an earlier stage, as some propose, would increase the chance that a program of financial assistance is successful. However, the euro zone should be wary of automatic triggers; they risk bringing on the very crisis they are designed to avert.

The debate on the future of debt restructuring in the euro zone largely involves two positions. The first, which is widely shared in Germany, sees an orderly debt restructuring mechanism as an essential next step for the currency union. When a country applies for financial help from the European Stability Mechanism (ESM), creditors should face some form of debt restructuring immediately. This would ensure a better distribution of risks between debt-holders and the ESM. The threat of a haircut will make investors more discerning in their lending, contributing to fiscal discipline within the euro zone.

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Tuesday, November 28, 2017

Greece prepares to do away with compulsory sharia in Western Thrace

Economist
November 28, 2017

As part of a passionate campaign to solve an apparently non-existent problem, American state legislatures have been presented, over the past decade, with at least 120 bills that sought to outlaw the practice of sharia, the Islamic legal system, and 15 of them have been enacted. With or without these laws, America’s attachment to its own constitution and judicial and legal system seems pretty robust.

Things are not quite so clear-cut on the other side of the Atlantic. Thanks to a vagary of history, there is one little patch of the European Union where sharia has hitherto held sway, not as a self-imposed code of behaviour but as a system under which Muslim citizens have been pressured to regulate their business, especially involving inheritance. That region is Western Thrace, a part of Greece adjoining the land border with Turkey. Alexis Tsipras, Greece’s leftist prime minister, is about to introduce legislation that will change that odd state of affairs.

The situation has its roots in regional history. Back in 1923, when Greece and Turkey were negotiating a massive, compulsory swap of religious minorities, it was agreed that two communities would have an exceptional right to remain where they lived: the Greek community of Istanbul (defined rather narrowly) and the Muslims of Western Thrace, a majority of whom spoke Turkish. Each community numbered around 110,000. After the vicissitudes of the past century, the Greeks of Istanbul have dwindled to a few thousand, while the Muslim population in Thrace has remained roughly level. (It would be much higher had there not been widespread emigration.)

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Sunday, November 26, 2017

Surge in Migrants Creates Abysmal Conditions on Greek Islands

by Nektaria Stamouli

Wall Street Journal

November 26, 2017

Three months ago, Shehab Kabalan, a 20-year-old from Syria, traveled in a small boat from Turkey to Greece in the hope of receiving asylum in Europe and starting a new life.

Instead he is trapped on the island of Samos, living in a flimsy tent among dozens of other migrants and refugees, prevented from traveling to the mainland and now bracing for a hard winter.

Earlier this month, he slashed his wrists. A doctor patched him up and sent him back to the tent camp. “I felt desperate,” Mr. Kabalan said. “We are dying slowly here.”

Greece’s migration crisis has faded somewhat from view since a March 2016 pact between the European Union and Turkey stanched the enormous flows of migrants crossing the Aegean Sea.

But a surge in recent months has created abysmal conditions here, sparking accusations that EU and Greek authorities are leaving thousands of migrants exposed to disease, cold weather and violence as a deterrent to other would-be refugees. Earlier this fall, 200 people were crossing to the Greek islands of Samos, Chios, Lesbos, Leros and Kos daily, a fourfold increase over the spring. Arrivals have declined in recent weeks but remain high despite the worsening weather.

“The EU-Turkey deal incorporates strong elements of deterrence,” said Gabriel Sakellaridis, head of Greek operations for Amnesty International. “No political considerations should tramp upon human rights like that.”

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Friday, November 24, 2017

The Refugee Scandal on the Island of Lesbos

by Giorgos Christides & Katrin Kuntz

Spiegel

November 24, 2017

Those wishing to visit ground zero of European ignominy must simply drive up an olive tree-covered hill on the island of Lesbos until the high cement walls of Camp Moria come into view. "Welcome to prison," someone has spray-painted on the walls. The dreadful stench of urine and garbage greets visitors and the ground is covered with hundreds of plastic bags. It is raining, and filthy water has collected ankle-deep on the road. The migrants who come out of the camp are covered with thin plastic capes and many of them are wearing only flipflops on their feet as they walk through the soup. Children are crying as men jostle their way through the crowd.

Welcome to one of the most shameful sites in all of Europe. Camp Moria was originally built to handle 2,330 refugees. But currently it is home to 6,489.

Omar Sherki crawls out of a tent set up against the outside wall of the camp, a thin, pale man who was studying to become an engineer in Syria and played guitar in a rock band. He lives with hundreds of other men in an orchard outside the walls because Camp Moria has become so dangerous. His mattress lies on a wooden palette, beneath which rainwater has collected.

Omar is waiting for aid workers to distribute food: rotten-smelling meatballs and a bowl of rice. "I left to escape one war and ended up in a new one," he says.

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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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