Thursday, December 29, 2016

Greece: A question of independence

by Jim Brunsden & Kerin Hope

Financial Times

December 29, 2016

As Yannis Stournaras, the governor of the central bank of Greece, settled into his seat for the three-hour flight from Athens to Frankfurt, he felt a sense of relief that one of the many problems in his in-tray was about to be resolved.

Attica Bank, the country’s fifth-largest lender, was poised to install a new management team he thought was capable of turning round the struggling lender. The only step left was for Attica’s board to officially approve the appointment of Theodoros Pantalakis, a former chairman of Agricultural Bank of Greece, as its new chief executive.

When he landed in the German city that afternoon in early September, however, he realised something had gone wrong. While he was in the air, the government in Athens reversedthe decision to award the job to Mr Pantalakis. It was his introduction to a web of allegedly related events, ranging from a raid on his wife’s business to an unsuccessful bid for TV rights backed by Attica loans.

According to sources, government figures arranged with the Engineers and Public Contractors Pension Fund (TSMEDE), Attica’s largest shareholder, to hand the job instead to Constantine Makedos, a civil engineer with little banking knowledge. Attica has close ties to Syriza, Greece’s ruling party, through links with the trade union that controls TSMEDE.

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Wednesday, December 21, 2016

Greece’s New Year of Living Dangerously

by Yannis Palaiologos

Wall Street Journal

December 21, 2016

If last year was the year of upheaval and survival for Alexis Tsipras, this year has been the year of the slow grind. As we near the end of 2016, Mr. Tsipras finds himself squeezed—by Germany and the International Monetary Fund, by Turkey and the refugee crisis, by his false promises and collapsing popularity—to the point of political extinction.

The pace of decline in the Greek prime minister’s fortunes is remarkable. Coming into the final quarter of the year, the government appeared to have a narrative and a plan. In early October it put the finishing touches on the first review of its third bailout program—albeit a year later than initially expected. Mr. Tsipras and his economic team then set the ambitious target of finalizing the second review by the Dec. 5 meeting of the eurozone finance ministers. This would have cleared the way for the European Central Bank to buy Greek government bonds under its quantitative-easing program, sending a strong signal of confidence to investors.

There were warning signs, of course, that all would not go smoothly. Mr. Tsipras’s government ministers continued, for instance, to obstruct central planks of the bailout program, especially the privatization of state-owned assets. But doubters were told to ignore the noise. A cabinet reshuffle in early November, sidelining some members of this internal resistance, was an encouraging sign.

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Monday, December 19, 2016

The drawn-out drama of Greek debt has no end in sight

by Kerin Hope

Financial Times

December 19, 2016

In Athenian cafés where politics are discussed, a furious debate rages over when in 2017 Greece is likely to hold the next general election.

The question might seem premature, given that the current government of Alexis Tsipras, prime minister and leader of the leftwing Syriza party, is only 14 months into its four-year term.

However, as café analysts point out, the average lifespan of administrations since the country plunged into an economic abyss in 2009 is below two years.

“It [the election] will be early spring or early autumn next year. I’m betting on autumn,” says Miltiades, a civil servant who claims to have predicted correctly the timing and outcome of three recent elections. “Regardless of when it happens, it’s likely there’ll be a change of government,” he adds.

Some observers argue that the country’s political instability reflects the unwillingness of successive Greek governments to take decisive “ownership” of reforms despite urging by their main creditors, the eurozone countries and the International Monetary Fund.

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Greek asset sell-offs begin to attract foreign investors

by Kerin Hope

Financial Times

December 19, 2016

Stergios Pitsiorlas admits without hesitation that Greece has a problem with attracting foreign investors. “There’s a culture here that’s not friendly to investors and it’s deep-rooted,” he says. “But it’s beginning to change.”

To underline his point, Mr Pitsiorlas lists half a dozen disposals of state-controlled companies, infrastructure and chunks of real estate that were completed while he served as executive chairman of the Hellenic Republic Asset Development Fund (Taiped), the country’s privatisation agency.

All were eventually approved by the Greek parliament in spite of strong resistance from hard-left cabinet ministers in the Syriza-led government, trade unions and local municipalities.

Promoted recently to deputy economy minister for investment, Mr Pitsiorlas is optimistic that the country may finally be turning a corner. “There is serious interest now in Greece,” he says. Manufacturing is among the areas of interest, “as wages have fallen significantly during the crisis”. The fact that the country’s two biggest privatisation deals are now being implemented has given an overall boost to investor confidence, Mr Pitsiorlas argues.

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Tsipras walks tightrope of reform

by Kerin Hope

Financial Times

December 19, 2016

The fiery rhetoric against austerity is gone, at least for now. A more composed Alexis Tsipras says he welcomes foreign investment as “mutually beneficial” for business and for the country.

The prime minister and leader of the leftwing Syriza party is anxious to see Greece return to borrowing on international capital markets in 2017 after a three-year gap.

He has sacked some, though not all, of the far leftists in his cabinet who opposed an ambitious new €50bn privatisation programme agreed with the Greece’s creditors, the eurozone bloc and the International Monetary Fund.

Syriza’s policymaking has turned upside down since mid-2015 when voters in a referendum rejected tough new bailout proposals, heightening fears that Greece would crash out of the euro.

Mr Tsipras capitulated within days, signing up to a €86bn third bailout that carries harsh conditions. Nonetheless, Syriza won a snap general election in September last year and immediately renewed an unlikely coalition with the rightwing nationalist Independent Greeks (Anel) party formed after its first electoral victory in January 2015.

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The drawn-out drama of Greek debt has no end in sight

by Tony Barber

Financial Times

December 19, 2016

The geopolitical, economic and moral themes of the Greek debt crisis are engrossing. They make it one of the great international dramas of the early 21st century. But 2016 was the year when much of the audience lost interest and turned its attention elsewhere.

Britain’s vote to leave the EU, Matteo Renzi’s defeat in Italy’s constitutional reforms referendum and Donald Trump’s US presidential election victory were compelling theatrical spectacles. The repercussions will be profound for the UK, Europe and the post-1945 US-led liberal world order.

By contrast, spectators of the Greek drama feel cheated. It is a play that seems stuck in its third or fourth act, still a long way from either a happy or unhappy ending and not as likely to shake the world as seemed possible in 2015.

For the drama’s failure to reach a denouement, blame the scriptwriters. These include Greece’s political and administrative classes, the nation’s eurozone partners and the International Monetary Fund. Year after year, each contributes a farrago of actors’ lines and stage directions. Yet the curtain never falls and the play drags interminably on.

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Hangover cure and clutching at straws drive Greece’s export sales

by Kerin Hope

Financial Times

December 19, 2016

The challenges faced by Greece’s many small companies have mounted as the financial crisis has gone on. The country’s manufacturers in particular have been hit hard by falling domestic sales and a desperate lack of bank credit to finance export drives.

“Small producers are among the worst hit by capital controls and the squeeze on bank liquidity, especially companies that have to import raw materials,” says Kostis Michalos, chairman of the Athens chamber of commerce and industry.

Yet small companies in sectors such as food and beverages and specialised plastic products are improving their international competitiveness by targeting niche markets.

The makers of Tuvunu, a low-calorie soft drink, uses Greek mountain tea, a local herb, as the raw material for making a rival to international iced-tea brands, doing away with the need for imported raw materials.

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Wednesday, December 14, 2016

Tsipras will put pensioner bonus to Greek parliament

BBC News
December 14, 2016

The Greek Prime Minister Alexis Tsipras has refused to back down over his plans to give poor Greek pensioners a pre-Christmas bonus.

A government official said Mr Tsipras would ask parliament on Thursday to approve the payment, worth €617m (£517m) in total.

Earlier, eurozone lenders suspended their recently agreed short-term debt-relief plan for Greece.

They said they had not been asked to approve the bonuses plan.

The European Stability Mechanism (ESM), the body that helps eurozone governments in trouble, said it would now be scrutinising the proposed handout.

"Following recent proposals by the Greek government to spend additional fiscal resources for pensions and VAT, our governing bodies have put their decisions temporarily on hold," a spokesman for the ESM said.

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Monday, December 12, 2016

IMF denies it is trying to force more austerity in Greece

by Jim Brunsden

Financial Times

December 12, 2016

Senior International Monetary Fund officials have rejected claims that the organisation is seeking to impose more austerity on Greece, in a sign of tension over whether the fund will join the eurozone’s €86bn bailout of the country.

In a blog post published on Monday afternoon, Poul Thomsen, director of the IMF’s European department, and Maurice Obstfeld, the fund’s chief economist, say that their main worries are that Greece is pursuing policies that are “unfriendly to growth” and that country’s debt is “highly unsustainable”.

The post lays bare the gulf between eurozone and IMF visions of what the Greek bailout programme should look like. It also shows the level of frustration at the fund over what is sees as misrepresentation of its stance by leading eurozone policymakers.

Recent discussions have “spurred some misinformation about the role and views of the IMF”, the officials said. “We have not changed our view that Greece does not need more austerity at this time.”

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The IMF is Not Asking Greece for More Austerity

by Maurice Obstfeld & Poul M. Thomsen

iMFdirect

December 12, 2016

Greece is once again in the headlines as discussions for the second review of its European Stability Mechanism (ESM) program are gaining pace. Unfortunately, the discussions have also spurred some misinformation about the role and the views of the IMF. Above all, the IMF is being criticized for demanding more fiscal austerity, in particular for making this a condition for urgently needed debt relief. This is not true, and clarifications are in order.

The IMF is not demanding more austerity. On the contrary, when the Greek Government agreed with its European partners in the context of the ESM program to push the Greek economy to a primary fiscal surplus of 3.5 percent by 2018, we warned that this would generate a degree of austerity that could prevent the nascent recovery from taking hold. We projected that the measures in the ESM program will deliver a surplus of only 1.5 percent of GDP, and said this would be enough for us to support a program. We did not call for additional measures to achieve a higher surplus. But contrary to our advice, the Greek Government agreed with the European institutions to temporarily compress spending further if needed to ensure that the surplus would reach 3.5 percent of GDP.

We have not changed our view that Greece does not need more austerity at this time. Claiming that it is the IMF who is calling for this turns the truth upside down.

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Greece Heads Toward New Crisis in Debt Saga as Support for Tsipras Slumps

by Nektaria Stamouli & Marcus Walker

Wall Street Journal

December 12, 2016

Greece’s crisis is approaching a potential breaking point after a year of relative calm, as a government with declining political stamina confronts creditors’ unyielding demands.

The ruling left-wing Syriza party, grappling with slumping popularity, is considering the option of calling snap elections in 2017, as it loses hope of winning concessions on debt relief or austerity from the eurozone and International Monetary Fund.

No decision for elections has been made, said Greek officials, who added that they would review the state of negotiations in January, after pressing creditors again to show more flexibility.

Elections would allow Syriza—if not Greece—to escape from the pressures of an unpopular bailout program whose strained math has eventually brought down every Greek government since the crisis began in 2009. Syriza’s leader and Prime Minister Alexis Tsipras, like his predecessors, is struggling to meet strict fiscal targets in a recession-scarred country weary of austerity.

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Thursday, December 8, 2016

Greek Court Rejects Turkish Request for Extradition of Two Army Officers

by Nektaria Stamouli

Wall Street Journal

December 8, 2016

A Greek court rejected Turkey’s request to extradite the last two of eight military officers who fled to Greece in the wake of the failed coup attempt in their country, officials said.

This week, two sets of judges on the same court decided to extradite three of the soldiers while rejecting Turkey’s request for the extradition of the three others.

All decisions will be appealed to the country’s Supreme Court.

Turkey’s government has requested the rapid extradition of the men, whom it has described as traitors, to face charges of trying to overthrow the democratic constitution. Turkish prosecutors allege they belong to the network of U.S.-based Turkish imam Fethullah Gulen, who has been charged in absentia by Turkish prosecutors for leading a group Turkey lists as a terrorist organization. Mr. Gulen denies the claim.

The men have denied the charges and told the Greek court they fear for their lives if they are returned to Turkey. Greek and European laws don’t allow extradition to a country where the suspect will be in danger of torture or if his or her life is at risk.

The judges sitting on the Appeals Court on Monday and Thursday ruled that the officers’ lives will be in danger; they might be subject to torture and won’t get a fair trial, Greek officials said.

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Tsipras in Search of EU Allies as Workers at Home Strike

by Eleni Chrepa

Bloomberg

December 8, 2016

Greece is running out of friends in the European Union.

As Greek Prime Minister Alexis Tsipras faces workers protesting creditor demands for labor reform and new austerity measures, his key allies in southern Europe are fading from the political scene -- Italian Prime Minister Matteo Renzi resigned after a crushing referendum defeat and French President Francois Hollande has said he won’t seek a second term.

Renzi and Hollande have backed Tsipras’s calls against austerity as well as demands for more support on the refugee front, with the three of them joining forces to hold the first summit of Europe’s Mediterranean countries in Athens in September. With extreme right-wing parties and populists rising across Europe, Greece may need the pro-European German Chancellor Angela Merkel’s backing more than ever.

“Greece will keep having fewer allies,” said Aristides Hatzis, a professor of law and economics at the University of Athens. “Merkel is our only ally at the moment but even Merkel has her own limits as German elections are nearing.”

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Wednesday, December 7, 2016

Greece, Not Italy, Still Poses Biggest Challenge to Eurozone

by Simon Nixon

Wall Street Journal

December 7, 2016

Not for the first time this year, the doom-mongers have been confounded. The Italian referendum over the weekend resulted in a resounding defeat for Prime Minister Matteo Renzi, who promptly announced his resignation. Yet the sky didn’t fall in, the euro dipped and then rallied, and Italian bonds and bank stocks barely budged. Other European assets were also largely unmoved.

Why didn’t markets react how some had feared—and those who dream of the failure of the European project had hoped? One answer is that Mr. Renzi’s defeat was in the price: Markets had anticipated it. Another explanation is that the referendum, like the Brexit vote and the election of Donald Trump, doesn’t in itself change anything. Political consequences can and will follow from the decision, but it is too early to say what these will be and the markets will wait to assess them.

But the main reason Europe isn’t now in turmoil is that Italy’s problems are likely—for now, at least—to stay in Italy. These problems are hardly new and reflect a long-running crisis of domestic governance.

They became apparent in the years after Italy joined the euro and was no longer able to rely on frequent devaluations to maintain its competitiveness with Germany. These devaluations masked serious problems with its economic model: In a new world where goods, services, capital and people could move freely across the European Union, Italy’s high taxes, excessive bureaucracy, inefficient justice system and inflexible labor and product markets had made it uncompetitive, resulting in low investment, falling productivity and weak to nonexistent growth.

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Europe's Still Dithering Over Greece

Bloomberg
Editorial
December 7, 2016


This week, the European Union’s finance ministers granted some new debt relief to Greece. The new “short-term” measures are better than nothing -- but they’re less than a convincing solution to a problem that has dragged on far too long.

The deal, sketched out and agreed to in principle earlier this year, should help the Greek government convince voters to keep accepting much-needed domestic reform. That’s good. It isn’t enough, though, to put the country’s debts and budget plans on a sustainable footing. That’s why the International Monetary Fund, whose support will be necessary to achieve that larger goal, isn’t yet on board. After years of muddling through, the issue still isn’t resolved.

In the approach to the latest talks, French Finance Minister Michel Sapin acknowledged that “Greece has made huge efforts. This is the first Greek government in a long time that has implemented its commitments.” He said it was vital that Europe respond by recognizing its obligation to help ease the country’s debt burden, both as a reward and to encourage further improvements in the business climate.

All true. Greece can’t be accused of doing nothing to help itself. The banking system has stabilized after three bouts of recapitalization, and deposits are returning, albeit slowly. The economy is growing modestly. The country posted a primary budget surplus for the first 10 months of this year. State asset sales are proceeding slowly but surely.

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Sunday, December 4, 2016

Greece and Its Creditors Get Back on a Collision Course

by Simon Nixon

Wall Street Journal

December 4, 2016

In a continent beset by multiple crises, Greece remains the cradle of European dysfunction. The country may have dropped out of the headlines in recent months, its multiple challenges seemingly buried under a tide of bailout cash. Yet it still presents the greatest risk to the survival of the eurozone. That is because Greece’s circumstances oblige the eurozone to do something it has so far appeared incapable of doing, except under conditions of extreme financial stress: take a collective political decision.

The first test of the eurozone’s decision-making capacity will come at a meeting of eurozone finance ministers in Brussels on Monday. On the face of it, the decision facing them appears straightforward: They need to complete the second review of Greece’s bailout, which will set the targets for the remaining two years of the program. That decision, in turn, will unlock the next tranche of funding. The outlines of this deal are already in place: Greece has more or less reached an agreement with its creditors—the International Monetary Fund, the European Commission and the European Central Bank—on what it must do to get the cash.

In fact, the situation is far from simple. Germany and the Netherlands have promised their parliaments that they won’t ask for more money for Greece unless the IMF also resumes lending to Greece. But the IMF says it won’t do this unless it is satisfied that Greece’s debt burden is sustainable. For the IMF, this is a question of institutional credibility. It has already put its name to two failed programs, and it is determined that it will only join a third program if it is convinced that Greece can return to the markets at the end of it, its financial sovereignty restored.

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Friday, December 2, 2016

If you build it, they will come: Greece’s new temple to high culture

by Kerin Hope

Financial Times

December 2, 2016

Even the most starry-eyed philanthropist might balk at spending €600m to build a temple of high culture in a country grappling with its worst financial crisis in memory.

Yet in 2006 when the Stavros Niarchos Foundation decided to build a new home for the Greek National Opera and the National Library, economic growth was accelerating and Greece looked set to become a beacon of prosperity in south-east Europe.

“Greece won the European football championship in 2004, it staged a successful Olympic Games, the economy was doing well,” says Andreas Dracopoulos, co-president of the New York-based foundation named for his late uncle, a Greek shipping billionaire.

“We thought Greece had turned the corner. If anyone had suggested otherwise at that time we’d have said ‘are you crazy?’” he adds.

In spite of the country’s financial collapse in 2010, followed by a succession of huge bailouts, construction of the Stavros Niarchos Foundation Cultural Centre went ahead as planned.

“I remember there was a dark night in New York when I and several colleagues had some internal questioning . . . ‘What are we doing? Greece is falling apart and we’re going to build an opera house and a library?’” he recalls. “Then I said we had to build it, this project will bring hope, we can’t let the Greeks down. And let’s do it all, not cut corners because of the crisis.”

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Thursday, December 1, 2016

Tired of Syriza, Greece embraces a mainstream party

Economist
December 3, 2016

The headquarters of New Democracy, a centre-right political party, is in an unexpected part of Athens. The building, surrounded by warehouses, housed a branch of a Japanese technology firm before standing derelict for years. Few other political types are nearby. The rent, at €9,800 ($10,400) a month, is a tenth of what the party’s old office used to cost. Yet the relocation, which happened in August, is also symbolic. As the opposition party has moved to a cheaper part of town, so too does it hope that it can present itself to the public as a new, improved alternative to the Greek government. With Alexis Tsipras, the prime minister (pictured, on the left), growing less popular, New Democracy may well have a chance.

It has been a miserable year for Mr Tsipras and his left-wing Syriza government. A deal struck in March by the European Union and Turkey stemmed last year’s surge of migrants through Greece to northern Europe, but left 60,000 of them stuck in Greece in conditions that are often grim. Yet this is the least of the government’s problems. In May, after much squabbling, it pushed through €1.8bn of tax increases needed to qualify for the next chunk of cash in its current bail-out package from the EU, the third since the euro crisis began in 2010. In November Mr Tsipras reshuffled his cabinet, replacing hardline leftists with younger, pragmatic folk, seemingly in order to placate Greece’s creditors, who will meet on December 5th to tweak the latest bail-out programme.

Many of the government’s reforms have been widely hated. Business owners grumble at Scandinavian-level VAT rates of 24% and a series of new taxes. From next year self-employed professionals, such as lawyers and doctors, earning over €40,000 a year are being asked to pay tax in advance for the coming year, while their average pension contributions have tripled, says Constantine Michalos, the head of the Athens Chamber of Commerce and Industry. Many will be unable to bear the burden, and some have already moved their businesses to Cyprus or Bulgaria, he adds. “Uncertainty about taxes is the worst thing,” says Tina, who owns a betting shop in central Athens. “You don’t know what they’ll hit you with next.”

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Wednesday, November 30, 2016

Greece Will Not Sell Stake of Natural-Gas Operator to Azeri Firm Socar

by Nektaria Stamouli

Wall Street Journal

November 30, 2016

Greece said Wednesday it had failed to reach an agreement with Azerbaijan’s state energy company, Socar, to sell a 66% stake in Greek natural-gas operator Desfa, creating another obstacle in the country’s efforts to reach the privatization targets dictated by its bailout agreement.

The Azeri company proposed reducing the price of its investment, whose initial amount was €400 million. The proposal “was legally unfeasible and would cancel the tender,” a statement from Greece’s Energy Ministry said.

“The Greek government will decide on how it will re-launch the tender next week after consultation with its international creditors,” an energy ministry official said.

Greece must raise some €6 billion through the sale of state-controlled assets by 2018, according to the terms of its third bailout agreement with creditors, reached in 2015. The Azeri company first agreed in 2013 to buy a 66% stake in Desfa, per the privatization plans laid out in the second bailout, which was agreed to in 2012.

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Short-Term Debt Plan for Greece: All You Need to Know

by Viktoria Dendrinou

Wall Street Journal

November 30, 2016

A set of proposed short-term measures to ease Greece’s debt burden could reduce the country’s debt load by around a fifth in 2060, according to a paper drawn up by the the European Stability Mechanism, the eurozone’s bailout fund, and seen by The Wall Street Journal.

We wrote about the proposals here, but thought we should offer some more detail on what they would entail.

These are the proposed “short-term measures,” part of a framework agreed by Greece’s creditors in May which aims to make Greek debt more sustainable. The more controversial medium- and long-term measures are set to be discussed at the end of the bailout in mid-2018.

A spokesman for the ESM said the paper was “a working document that has not yet been endorsed by the euro area finance ministers.” He said ESM Managing Director Klaus Regling would present the proposals to eurozone finance ministers at their next meeting on Dec. 5.

The ESM paper outlines three such short-term measures.

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Eurozone Bailout Fund Proposes Short-Term Debt Relief for Greece

by Viktoria Dendrinou

Wall Street Journal

November 30, 2016

Confidential proposals drawn up by the eurozone’s bailout fund could reduce Greece’s debt load by about a fifth in 2060.

A six-page document, dated Nov. 25 and seen by The Wall Street Journal, was produced by the European Stability Mechanism, the Luxembourg-based eurozone bailout fund. It outlines measures that could be taken in the near future to reduce Greece’s large debt load.

The paper proposes to ease Greece’s debt load by extending some maturities and locking in the interest on some of Greece’s loans to shield it from future interest-rate increases.

The cumulative impact of these measures in 2060 would cut the ratio of debt to gross domestic product by 21.8 percentage points.

An official eurozone analysis in May projected debt-to-GDP of 104.9% in 2060, under a baseline scenario in which Greece fully implements its bailout program.

“This is an ESM working document that has not yet been endorsed by the euro area finance ministers. The document comes in response to the mandate the ESM was given by [euro area finance ministers] on May 25 to work for the short-term on a first set of measures to improve the debt sustainability for Greece,” an ESM spokesman said.

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Wednesday, November 23, 2016

Clock ticks for EU to reach IMF deal on Greece

by Jim Brunsden & Kerin Hope

Financial Times

November 23, 2016

The eurozone is running out of time to secure an agreement this year on International Monetary Fund participation in Greece’s €86bn bailout amid splits over the country’s economic reforms, budget targets and debt relief.

The fund still wants reluctant eurozone capitals to provide more detail about how far they will go to ease Greece’s mountainous debt burden.

Getting the IMF to take part in the Greek rescue has been a key objective for eurozone governments, notably Germany and the Netherlands, since the bailout was agreed last year. Berlin sees the fund’s participation as critical to convince sceptical German lawmakers of the rigour and robustness of the programme — but is also one of the governments most reluctant to grant Greece major debt relief.

People familiar with the talks also say a decision on IMF participation in the bailout is on hold until the latest progress review of the Greek programme, which began last month, is completed.

Officials are racing to make headway ahead of December 5, the last scheduled meeting this year of eurozone finance ministers. The IMF has indicated it will seek to decide by the end of 2016 on its participation.

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Friday, November 18, 2016

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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Thursday, November 17, 2016

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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Tuesday, November 15, 2016

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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Greece, Seeking Dose of Stability, Is Rattled by Trump’s Win

by Liz Alderman & Niki Kitsantonis

New York Times

November 14, 2016

Before last week, Greece expected that it might benefit from what was supposed to be a triumphal valedictory lap by President Obama as he lands in Athens on Tuesday to kick off his final world tour.

Mr. Obama has been supportive of Greece’s efforts to get its finances in order, and of Europe’s bid to keep Greece stable. Prime Minister Alexis Tsipras hoped that Mr. Obama, who travels to Berlin on Thursday, might even persuade the German chancellor, Angela Merkel, to offer Greece some debt relief by the end of the year.

But that possibility has all but evaporated with the victory of Donald J. Trump.

Instead, Mr. Obama will arrive in Athens with his legacy threatened and his leverage sorely reduced. His visit has turned into yet another reminder of the ways in which Mr. Trump’s ascendancy is changing the calculations of leaders across Europe. Mr. Tsipras is among the most vulnerable of them.

“The expectation was that Obama would relay a message about how impressed he was with Greece’s progress,” said Jens Bastian, an economics consultant based in Athens and a former member of the European Commission’s task force on Greece. “But given that Trump will assume the presidency, all bets are off.”

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Sunday, November 13, 2016

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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Saturday, November 12, 2016

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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Wednesday, November 2, 2016

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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Tuesday, November 1, 2016

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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Saturday, October 29, 2016

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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Thursday, October 27, 2016

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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Wednesday, October 19, 2016

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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Saturday, October 15, 2016

‘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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Friday, October 14, 2016

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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Thursday, October 13, 2016

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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Tuesday, October 11, 2016

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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Monday, October 10, 2016

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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Tuesday, October 4, 2016

Greece forecasts economic growth of 2.7% in 2017

by Helena Smith

Guardian

October 2, 2016

After more than half a decade of gruelling, austerity-driven recession, Greece has forecast economic growth in 2017, in what would be its first annual rebound in seven years.

Europe’s most indebted country will see growth of 2.7% next year partly as a result of an upsurge in tourism, according to the draft budget that Athens’s leftist-led coalition will table in parliament on Monday.

“We are at a turning point at which we can say, with certainty, that we are leaving the recession behind us,” the national economy minister, Giorgos Stathakis, said last week.

The blueprint, which officials hope will form the basis of talks when lenders begin a second review of the economy later this month, is expected to highlight better-than-expected tax revenues and renewed interest in investments under the country’s privatisation programme.

Insiders said Greece would easily meet its bailout goal of achieving a surplus – excluding debt-servicing costs – of 0.5% GDP this year. Its draft budget is projecting a 1.75% surplus for next year in line with last summer’s €86bn (£74bn) rescue programme.

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Monday, October 3, 2016

Greece’s 2017 Budget Plan Sticks With Robust Growth Forecast

by Stelios Bouras

Wall Street Journal

October 3, 2016

Greece’s budget plan for 2017 sees the economy rebounding strongly after a seven-year slump, but analysts say continued austerity and tight credit conditions are likely to weigh on its recovery prospects amid uncertainty over the country’s public debt.

Finance Minister Euclid Tsakalotos submitted a draft copy of the budget to parliament on Monday that is expected to be finalized in coming weeks after the country resumes talks with lenders on its reform program.

The 53-page budget sticks with Greece’s previous forecasts that the economy is expected to contract by 0.3% this year before growing by 2.7% in 2017. Many see these targets as too optimistic, saying the economy is now entering a period of stagnation, rather than growth, having shrunk by more than 25% since the debt crisis erupted in 2010.

“Although there are some indications pointing to some stabilization in the economy, tight fiscal policy, difficult credit conditions and muted external growth are expected to limit the recovery in 2017,” said Diego Iscaro, senior economist at consulting firm IHS Global Insight. Mr. Iscaro projects the Greek economy will grow by 0.7% next year.

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What’s Derailing Greece’s Plan to Sell State Assets? Its Own Government

by Nektaria Stamouli

Wall Street Journal

October 3, 2016

The day that Christos Spirtzis became responsible for much of Greece’s ambitious privatization program, he vowed to ensure it failed.

Greece’s leftist infrastructure minister has resisted every sale of roads, airports and trains, even though he and his government have promised to raise €50 billion from privatizations as part of the country’s international bailout.

“I hope the deal will not bear fruit,” the combative, chain-smoking former labor unionist said after his government, under pressure from Greece’s creditors, confirmed the sale of 14 regional airports to a German investor. He backed calls for local referendums to scuttle the deal. When he finally had to sign the contract, he did so “with a great deal of pain,” he told Greek radio listeners in a trembling voice.

The Greek government is at war with itself, and that is threatening to derail a key plank of Greece’s bailout, which consists of selling state assets to pay down debt and bring in foreign investment. Leaders in the ruling left-wing Syriza party are touring the world, from New York to Shanghai, lobbying investors to come to Greece and help kick-start its depressed economy. But Syriza’s roots in the Marxist, anti-globalization left make privatization a bitter pill.

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Friday, September 30, 2016

Greece’s Least Wanted Man Lives in Maryland

by Robert Schmidt

Bloomberg

September 30, 2016

For 21 years, Andreas Georgiou worked in relative obscurity as an economist at the International Monetary Fund in Washington. When the European debt crisis hit and his home country of Greece began teetering toward bankruptcy, Georgiou felt a patriotic urge to help. In early 2010 he applied online to run a newly created office designed to clean up Greece’s much maligned economic statistics. He got the job, and in August 2010 he moved to Greece for a five-year term as president of the Hellenic Statistical Authority.

Six years later, rather than being seen as a hero who helped fix Greece’s broken finances, Georgiou is vilified there. His review of the country’s public accounting exposed years of bogus statistics and along the way made him a target for critics who blame him for the strict austerity measures Greece’s creditors imposed. Last year, Georgiou, 55, moved back to suburban Maryland and now faces a variety of civil and criminal charges in Greece, including one that could put him in prison for life. “This is beyond my wildest imagination,” says Georgiou, who says he feels at times as if he’s living in a Kafka novel. “This would be funny if it weren’t so tragic.”

After arriving in Greece, Georgiou quickly realized that entrenched forces were aligned against him. Within months he discovered his e-mail had been hacked after a member of the board that oversaw the statistics office, known by its acronym, Elstat, showed him a copy of a message he’d written. Although that board was later replaced, its members were especially upset, Georgiou says, that they didn’t get to vote on the stats before he released them. “I told the staff that we are going to draw a line in the sand,” he says. “I don’t care what you did before. We are going to go by the book.”

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Thursday, September 29, 2016

4.1 Miles

by Daphne Matziaraki

New York Times

September 28, 2016



When I returned home to Greece last fall to make a film about the refugee crisis, I discovered a situation I had never imagined possible. The turquoise sea that surrounds the beautiful Greek island of Lesbos, just 4.1 miles from the Turkish coast, is these days a deadly gantlet, choked with terrified adults and small children on flimsy, dangerous boats. I had never seen people escaping war before, and neither had the island’s residents. I couldn’t believe there was no support for these families to safely escape whatever conflict had caused them to flee. The scene was haunting.

Regardless of the hardship Greeks have endured from the financial crisis, for a long time my home country has by and large been a peaceful, safe and easy place to live. But now Greece is facing a new crisis, one that threatens to undo years of stability, as we struggle to absorb the thousands of desperate migrants who pour across our borders every day. A peak of nearly 5,000 entered Greece each day last year, mainly fleeing conflicts in the Middle East.

The Greek Coast Guard, especially when I was there, has been completely unprepared to deal with the constant flow of rescues necessary to save refugees from drowning as they attempt to cross to Europe from Turkey. When I was there filming, Lesbos had about 40 local coast guard officers, who before the refugee crisis generally spent their time conducting routine border patrols. Most didn’t have CPR training. Their vessels didn’t have thermal cameras or any equipment necessary for tremendous emergencies.

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Wednesday, September 28, 2016

A New Twist on Greece’s Old-Style Dysfunction

by Yannis Palaiologos

Wall Street Journal

September 28, 2016

There’s been a lot of hand-wringing in Europe about the rise of right-wing populism, about the clampdown on media freedom and judicial independence in places such as Hungary and Poland. But Greece’s populist government, led by the hard-left Syriza party, seems to share many of the same authoritarian instincts of its formerly communist partners, whose values Syriza claims to abhor.

On Sept. 15, corruption prosecutors in Athens raided the advertising business of Lina Nikolopoulou-Stournara, whose husband, Yannis Stournaras, is the governor of Greece’s central bank. The raid was ostensibly part of an investigation into funds allegedly misused by KEELPNO, Greece’s centre for disease control.

But this raid had been ordered by the corruption prosecutor, Eleni Raikou, and not the magistrate responsible for the case, which is highly irregular. It occurred merely a few hours after Mr. Stournaras had notified the government that he was vetoing its picks for key positions, including the CEO and chairman, of the board at Attica Bank. Attica is a troubled lender closely linked to the construction sector. Mr. Stournaras further declared that until the leadership question was resolved (as it since has been, on his terms), all lending by Attica Bank would be frozen.

Mr. Stournaras has long been the villain in Syriza’s version of the Greek crisis. Their first skirmishes came when, as minister of development in the country’s caretaker government from May to June 2012, Mr. Stournaras tried to push through a number of major investments. Syriza accused him of attempting a “political coup d’etat.”

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Fatigued Investors Want Draghi to Buy Greece Before They Do

by Nikos Chrysoloras

Bloomberg

September 28, 2016

Michel Danechi isn’t buying the Greek turnaround story just yet.

As Greek business leaders and government officials presented to investors last week in London a list of reasons why valuations of the country’s assets make them attractive, Danechi’s Duet Asset Management took note. But what he wants to see is for Greece to show it can make good on pledges made to euro-area creditors so it can be included in the European Central Bank President Mario Draghi’s quantitative easing program.

“Valuation is there, but few believe that this government can deliver,” said Danechi, who helps oversee $1.5 billion in emerging-market assets at Duet. “If Greece goes into the QE program then the mood would turn automatically.”

Investors are in no rush to pour money into a market where the value of stock and bond holdings has been repeatedly crushed. In dozens of meetings at the annual Athens Stock Exchange roadshow, Greek executives were bombarded with well-worn questions about political risk, delayed reforms, lack of liquidity, excessive corporate taxes and an unfavorable business climate.


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Athens approves fund to speed up privatisation programme

by Kerin Hope

Financial Times

September 27, 2016

The Greek parliament has approved a fresh package of structural measures required to unlock another €2.8bn slice of bailout funding, including the establishment of a controversial fund to accelerate the country’s lagging privatisation programme.

The ruling leftwing Syriza party and its rightwing coalition partner, the Independent Greeks, won Tuesday night’s vote by a comfortable margin, with hard-left MPs backing the government even though some had decried the sale of public utilities and transport companies as a “crime”.

Among the other measures legislated were additional pension system reforms and further liberalisation of the electricity market. Several other reforms, including sweeping board changes at Greek banks, will be enacted by decree.

Privatisation is an especially sensitive issue for the Syriza-led government, which has been reluctant to complete a series of sales agreed by the previous centre-right government, despite having endorsed them last year as part of Greece’s €86bn third rescue package.

Several extreme-left Syriza cabinet ministers attempted to delay specific deals, among them a €1.2bn concession agreement with Germany’s Fraport to operate 14 regional airports and the €370m sale of a controlling stake in Athens’ port of Piraeus to the China Cosco Shipping group.

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Monday, September 26, 2016

EU's Dombrovskis: Greece government populism made adjustment worse

Reuters
September 26, 2016

Greece has had to go through tougher austerity than it would have otherwise been necessary, because of the populist stance of the left-wing government of Alexis Tsipras in 2015, European Commission Vice-President Valdis Dombrovskis said on Monday.

Tsipras, who took power in January 2015, rejected belt-tightening in public finances requested by lenders in exchange for emergency loans and reversed some of the reforms introduced by the previous Greek governments.

As new loans were frozen, Greece defaulted on the International Monetary Fund in July 2015 and had to introduce capital controls to prevent its banking system from collapse.

"Populism doesn't solve problems. Populism creates problems," Dombrovskis told a round-table in Riga in a discussion on the growing support for populist parties in many EU countries.

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Plan to Let Migrant Children Attend School Enrages Many Greeks

by Niki Kitsantoni

New York Times

September 25, 2016

Mariya bint Loqman Abdlkarim is 9. She arrived in Greece in February after fleeing Syria with her family and crossing from Turkey in a rickety boat. Since then, she has been living in a shabby state-run camp, her future uncertain, her present reduced to the bare necessities.

Not long ago, the Greek government decided to give her a shot at something closer to a normal life: Along with 22,000 other refugee children, she would be allowed to attend public school starting in October.

But as with many aspects of Europe’s effort to cope with the huge numbers of migrants who have come to its shores, the plan quickly ran into intense opposition, in this case from parents in a number of communities near camps in northern Greece. The refugee children, the parents said, might have contagious diseases. Cultural differences, they said, might disrupt learning.

Last week, an association representing the parents of schoolchildren in the small town of Filippiada in western Greece sent a letter to local officials and the Education Ministry, saying “explicitly and categorically that we will not accept, under any circumstance and without any compromise, that the children of so-called irregular immigrants” attend local schools, referring to migrants entering the country illegally.

“They come from another continent with completely different diseases and health conditions,” the letter said, adding that the refugees have a “different outlook regarding the role of the family, of women, of religion.” Their presence would “alter the Greek character of the schools,” the letter said, adding, “We will not allow religious fanaticism.”

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Friday, September 23, 2016

Greece: Staff Concluding Statement of the 2016 Article IV Mission

International Monetary Fund
September 23, 2016

A Concluding Statement describes the preliminary findings of IMF staff at the end of an official staff visit (or ‘mission’), in most cases to a member country. Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF's Articles of Agreement, in the context of a request to use IMF resources (borrow from the IMF), as part of discussions of staff monitored programs, or as part of other staff monitoring of economic developments.


The authorities have consented to the publication of this statement. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.

1. Greece has made significant progress in unwinding its macroeconomic imbalances, but growth has remained elusive and risks are high. Greece has managed to reduce its fiscal primary and current account deficits from double digits to around zero over the last six years. This is an impressive adjustment for a country belonging to a currency union, where policy levers are limited. The initial fiscal adjustment was based on important reforms. However, it has become increasingly reliant on one-off and ad-hoc adjustments that could not be sustained, denting policy credibility. Recurrent political crises and confidence shocks associated with the inability to sustain the reform effort resulted in a high cost for society, with output having declined by 25 percent and still stagnating, and unemployment and poverty rates remaining much higher than before the crisis. Looking forward, growth prospects remain weak and subject to high downside risks, and unemployment is expected to stay in the double digits until the middle of the century.

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