Wednesday, August 9, 2017

Minister’s court win intensifies fears for rule of law in Greece

by Kerin Hope

Financial Times

August 9, 2017

Fears for the independence of the Greek judicial system are mounting after the foreign minister won a court order freezing the bank accounts of a leading magazine over a reader’s letter describing him as a former “fanatical” Stalinist.

The ruling in favour of Nikos Kotzias has drawn sharp criticism from academics and public figures, who say it violates EU law on freedom of expression. It also highlights broader concern over perceived interference in the justice system by the leftwing Syriza government.

The concerns widened beyond Greece last week when senior eurozone officials warned the government that the continued prosecution of Andreas Georgiou, its former statistics chief, over claims he inflated the size of the country’s budget deficit in 2009, threatened to drive a wedge between Athens and its euro area creditors.

The affair comes as Brussels is already locked in stand-offs with Poland and Hungary over the rule of law that have raised questions over the EU’s ability to enforce the democratic standards at the core of the European project.


Monday, August 7, 2017

Lessons for the eurozone from Greece’s painful crisis years

by George Pagoulatos

Financial Times

August 7, 2017

Greece is finally growing again. But it has been arguably the eurozone’s greatest failure. Catapulted into a debt crisis with a 15 per cent government spending deficit in 2009, the country suffered eight years of economic contraction. Unemployment is still 23 per cent, youth unemployment 45 per cent. Greece’s “Great Depression” has been as deep as that of the US in the early 1930s, but twice as long.

Can Europe learn from the country’s painful experience? A first lesson is to reform at the top of the cycle. Greece had to adjust in recession because it failed to do so in its pre-crisis boom. Reforms should always be adopted in times of growth, when people are confident and losers can be compensated. An upswing can buy time to implement reforms, but should not be invoked as evidence that reforms are unnecessary. The eurozone is now in its strongest period of post-crisis recovery. But it should avoid complacency. Reforms are necessary for the long-term viability of the monetary union. We need a stabilisation budget and joint-borrowing capacity; greater risk sharing; and financial union to break the doom loop between banks and government.

After September’s election in Germany, and assuming Emmanuel Macron delivers domestic reforms in France, Europe will be at the top of its political cycle. This is the time to push ahead with eurozone reforms. They will require painful concessions: the Germans refuse joint deposit insurance or a fiscal backstop, the French are not keen to surrender control over the national budget and the Italians reject ceilings on bank exposure to sovereign debt. But something must give.


Elstat suspends preliminary Greek GDP estimate after discrepancies

by Kerin Hope & Eleftheria Kourtali

Financial Times

August 7, 2017

Greece’s statistical agency will no longer public “flash” estimates of the country’s gross domestic product after delays in data collection have led to frequent revisions of official growth figures.

Elstat said on Monday that its second quarter GDP estimate for 2017, which was due to be announced on August 14, would not be made public. Instead it said the provisional estimate, which is calculated using a bigger range of inputs from the economy, would be published on September 1 as scheduled.

The agency said it decided to suspend the flash estimate “in order to explore the availability of the necessary data sources that would help improve the consistency of the flash estimate.”

An Elstat official said some data used to calculate the flash estimate was incomplete, making revisions necessary when updated figures arrived.


Sunday, August 6, 2017

A legal farce calls Greek reform into question

Financial Times
August 6, 2017

After years of punishing austerity, Greece finally has grounds to hope it will regain its financial independence when its bailout programme ends next summer. The economy has returned to modest growth. Against expectations, Athens has hit its fiscal targets and secured a pledge of further debt relief from creditors. Yet despite the huge efforts made to put the public finances on a more sustainable trajectory, there remain serious doubts over the government’s commitment to reform the Greek state, rid institutions of political influence and guarantee the rule of law.

The conviction last week of Andreas Georgiou, the country’s former chief statistician, for “violating” his duties during the sovereign debt crisis, is especially worrying. Mr Georgiou has for six years been fighting accusations that, as head of Elstat, the statistical agency, he inflated Greece’s 2009 budget deficit, forcing the country to undergo deeper austerity.

No matter that he had been acquitted of these charges a few months earlier, only to have the case reopened. No matter that the EU’s statisticians — whose standards he was supposed to be following — have endorsed both the procedures he followed and the figures he produced, describing last week’s trial as a “preset farce”. Mr Georgiou — a former IMF official and thus part of a hated international technocracy — is a convenient scapegoat for the failures of Greece’s political class.


Friday, August 4, 2017

Greece scapegoats a statistician who only did his job

Washington Post
August 4, 2017

In Greece, the lucrative tourism industry is threatened this summer by millions of oversized jellyfish washing ashore on the nation’s beaches. An even slimier development is the ongoing persecution of the country’s first independent chief statistician, whose tough-minded steps to straighten out Greece’s notoriously fraudulent economic data have been repaid with farcical prosecutions by a judicial system rapidly discrediting itself in the world’s eyes.

Andreas Georgiou, an American-trained economist who spent two decades working at the International Monetary Fund, was hired as Greece’s top statistician in 2010 as the country’s debt crisis was spiraling out of control. His goal was to honestly report economic data that for years had been fudged by politicians and officials seeking to minimize their own fateful fiscal mismanagement.

Having done just that, by applying reporting standards widely accepted across Europe, he is now scapegoated as the cause of the painful austerity program imposed on Greece by the IMF and European Union. Four times in recent years, an array of criminal accusations against Mr. Georgiou have been dismissed by prosecutors, only to be revived by judicial authorities amid fury by politicians and media outlets. This month, an Athens appeals court gave Mr. Georgiou a two-year suspended sentence — essentially for reporting accurate information to European authorities during the debt crisis.


Thursday, August 3, 2017

By convicting an honest statistician, Greece condemns itself

by Megan Greene


August 3, 2017

Greek economic data is completely unreliable. That’s what I told Andreas Georgiou — as politely as I could — shortly after he had been put in charge of the Greek statistics agency in 2010.

He must not have been surprised at my answer. After all, that was exactly the problem he had been hired to fix by ensuring that the agency broke free of political influence.

And fix it he did, injecting the agency with a stiff dose of independence and markedly improving the data it produced.

His reward? Prosecution and, ultimately, conviction.

On Tuesday, Georgiou was handed a two-year suspended sentence for “breach of duty” during his stint at the head of the statistics agency, Elstat — a travesty that goes beyond the unfair treatment of one statistician to questions about the progress of Greece’s economic recovery and the sustainability of the eurozone.


Wednesday, August 2, 2017

Eurozone officials in warning on Greece statistics trial ‘farce’

by Jim Brunsden, Arthur Beesley & Kerin Hope

Financial Times

August 2, 2017

Senior eurozone officials have warned that the continued prosecution in Greece of its former statistics chief is threatening to drive a wedge between Athens and its euro area creditors, only weeks after the country brokered a deal on the next stages of its €86bn bailout.

A suspended sentence handed down this week against Andreas Georgiou has prompted consternation among EU policymakers, reviving what many capitals fear is a series of politically motivated trials intended to restore the economic reputation of previous governments.

The long-running affair is likely to be put on the agenda of eurozone finance ministers in September amid “concern about the conviction across institutions”, said a diplomat. The judicial proceedings centre on Mr Georgiou’s time in charge of Elstat, the independent statistics agency set up as a condition of the first Greek bailout.

In remarks on Twitter that reflect deep unease in Brussels at Mr Georgiou’s conviction, Valdis Dombrovskis, European Commission vice-president, said he was following developments with concern. It was “important that [the] independence of Elstat and people who do their jobs are protected in line with the law”, said Mr Dombrovskis, who has responsibility for euro affairs.


Tuesday, August 1, 2017

Former Greek data chief given suspended sentence

by Kerin Hope

Financial Times

August 1, 2017

An Athens appeal court has handed Greece’s former statistics a two-year suspended sentence for “violating” his duties during the country’s sovereign debt crisis.

The conviction of Andreas Georgiou came as a surprise as the former chairman of country’s statistical agency, Elstat, had been acquitted of the same charges by another appeals court only eight months ago. The case was reopened by Greece’s top prosecutor on grounds that a possible misjudgment had occurred.

Mr Georgiou is seen by many in Athens as the victim of a campaign to shift the blame for Greece’s financial mismanagement away from the New Democracy government who ran the country in the run-up to the debt crisis and which is blamed for borrowing recklessly on international markets.

The former statistics chief is accused of deliberately inflating the 2009 budget deficit figure from 13.6 per cent to 15.4 per cent of gross domestic product so that Greece would be forced to seek additional bailout aid and prolong harsh austerity policies required by the EU and International Monetary Fund, his former employer.


Greek Court Finds Former Statistics Chief Guilty of Breaching Duties

by Marcus Walker

Wall Street Journal

August 1, 2017

A Greek court found the country’s former top statistician guilty of breaching his duties, ruling he should have sought approval before he told European Union authorities of the full extent of Greece’s budget deficit at the start of its debt crisis.

The Athens Appeals Court handed Andreas Georgiou, head of Greece’s official statistics agency in 2010-2015, a two-year suspended jail sentence on Monday for his handling in 2010 of the revision of Greece’s deficit data for previous years.

Mr. Georgiou denies any wrongdoing and has won widespread support from international statisticians, who say he is the victim of unjust persecution.

The EU has repeatedly certified that Mr. Georgiou reported Greece’s fiscal data accurately, in contrast with earlier Greek practices that EU bodies have said deliberately hid the scale of the country’s deficits.


Monday, July 31, 2017

Greece’s former data chief ‘violated’ his duties, court told

by Kerin Hope

Financial Times

July 31, 2017

An appeals court prosecutor has called for Greece’s former statistics chief to be convicted for “violating” his duties during the period when the country was gripped by a worsening sovereign debt crisis.

Andreas Georgiou is accused of failing to hold the correct board meetings when he was chairman of Elstat, the Greek statistical agency, and of secretly endorsing austerity policies backed by the International Monetary Fund, his former employer.

“He neglected his duties by failing to hold the required monthly meeting of the board of directors . . . What did he want? To be the sole arbiter of Greek statistics and the star of the show?” prosecutor Lambros Patsavelis told a packed court in his summing up of the case against Mr Georgiou.

The former Elstat chief, who denies the charges, is facing his second trial over the affair after being acquitted in December by an appeals court. A senior Greek prosecutor ordered the case to be reopened with a different panel of judges, after examining documents from earlier hearings.


Greece’s Road to Bailout Exit: 140 Reforms Down, Many More to Go

by Eleni Chrepa & Sotiris Nikas


July 31, 2017

Greece’s hard times aren’t over.

A return to the bond market last week, the pledge of 8.5 billion euros ($9.5 billion) in new loans from euro-area creditors, the possibility of more money from the International Monetary Fund and a S&P Global Ratings outlook upgrade have coalesced to bolster investor sentiment that Greece has turned a corner.

Trouble is, much depends on the country implementing reforms -- dozens of the 140 measures agreed to are in various stages of application and more than 100 additional actions are needed to access the remaining 26.9 billion euros in funds before the current bailout program ends in August 2018.

While the evidence of belt-tightening is everywhere in Greece, from falling incomes to rising poverty, the country has less to show in terms of structural overhauls. Creditor demands for more measures threaten to become politically explosive as Greek citizens and businesses count the cost of the financial crisis that has thrown their lives into turmoil over the last seven years.


Thursday, July 27, 2017

Crisis-Plagued Europe Sees a New Dawn After Greek Market Return

by Viktoria Dendrinou & Nikos Chrysoloras


July 27, 2017

Five years after the sovereign debt crisis nearly tore the euro area apart, the currency bloc’s biggest problem child appears on the road to recovery as the region continues to tick off boxes underscoring its revival.

Greece sold 3 billion euros ($3.5 billion) of bonds this week for the first time since 2014, when the prospect of Alexis Tsipras’s election catapulted borrowing costs to unsustainable levels. The country’s return from the wilderness comes as a new French president has raised expectations about deeper economic integration following successive defeats of europhobic parties.

While there are still uncertainties clouding the euro area’s outlook, Greece’s rebound draws a line under a seven-year crisis, when the fight to preserve the currency union had become a daily routine.

“The euro zone’s recovery is real and political risk has receded,” said Manolis Galenianos, a professor of economics at the Royal Holloway, University of London. “This is not a facade.”


Wednesday, July 26, 2017

Greece Still Hasn't Turned the Corner

July 26, 2017

Greece returned to the private debt market this week for the first time in years, raising 3 billion euros at a relatively affordable interest rate of 4.6 percent. That’s encouraging news -- but it doesn’t mean the euro zone’s most flattened economy is on course for sustained growth.

The economy is showing signs of life, growing a bit in the first quarter, and the government has gotten a tighter grip on the budget. But Greece’s long-term debt position is still dire, and its deeper structural reforms have barely begun. Greece hasn’t yet put its problems behind it.

Investors are apparently willing to take an optimistic view of their likelihood of getting repaid. The International Monetary Fund has helped fuel this optimism by approving “in principle” new assistance to Greece, which serves as a seal of approval for its policies and those of its euro-zone official creditors.


Greek bond sale wins rare praise from Germany’s Schäuble

by Kerin Hope

Financial Times

July 26, 2017

Two years ago Wolfgang Schäuble said “it would be better” for Greece to leave the eurozone. But in rare praise this week Germany’s steely finance minister struck a much warmer note.

“Greece has carried out many reforms and is on a good path,” said Mr Schäuble in a media interview — support that shows how far the country has come since the EU’s tense five-month stand-off in 2015 with the leftwing government of Alexis Tsipras.

His comments came in the same week that Greece returned successfully to the sovereign debt market with a €3bn bond offering, which was more than twice subscribed. A buoyant Mr Tsipras hailed the issue as “the most significant step towards ending this unpleasant adventure of the memorandum [bailout].” Euclid Tsakalotos, the finance minister, said Greece would hold another two or three bond sales in the coming months with the aim of building a sufficient cash buffer to keep the government afloat after it exits an €86bn bailout in August next year.


Tuesday, July 25, 2017

Greece stages a welcome return to capital markets

Financial Times
July 25, 2017

It is precisely five years since Mario Draghi declared the European Central Bank ready “to do whatever it takes” to preserve the euro. With the eurozone’s recovery in full swing and the ECB starting to edge towards an exit from stimulus, there could be few better ways to mark the anniversary than a successful sovereign bond issue by Greece — the biggest casualty of the single currency area’s debt crisis.

The €3bn sale of a 5-year bond — of which about half came from existing investors who swapped their holdings of debt maturing in 2019 — is a tentative first step. It may say as much about investors’ desperate search for yield as it does about Greece’s rehabilitation with capital markets (a yield of 4.625 per cent on the new bond is less impressive than it seems, given the negative yield on German 5-year debt). Yet it is still a breakthrough to be celebrated.

The last time Athens was able to raise money on the open market was in 2014, shortly before the radical Syriza coalition arrived in government, throwing Greece’s bailout programme into disarray. Yet for all the turbulence, investors who bought those bonds — even as recently as February — stand to make a healthy profit.

Yesterday’s bond sale is a reflection of the progress Greece has made and a precondition of further progress.


Greece Gets Solid Demand for First Bond Issuance in Three Years

by Nektaria Stamouli, Christopher Whittall & Emese Bartha

Wall Street Journal

July 25, 2017

Greece got solid demand Tuesday for its first bond issuance in three years, in what the government sees as the first of several moves that will enable the debt-ridden country to wean itself from new bailouts.

Tuesday’s deal included an invitation for holders of a bond coming due in 2019 to swap their securities for new ones due in 2022.

Greece sold €3 billion worth of the 2022 bond, Greek government officials and bankers said. About half of that is new money, and half is existing investors in the 2019 bond who switched, according to one of the banks managing the deal.

The new bond matures in August 2022 and will yield 4.625%. The 2019 bond is yielding around 3.2%, so investors will be paid a decent premium for participating in the swap.

Greek bonds have been on a tear of late. Greece paid €102.60 per €100 face value of the 2019 bond. A year ago, the bond was trading below €90.


Greece Raises EU3 Billion in Bond Market Return After 3 Years

by Sotiris Nikas, Eleni Chrepa & Lyubov Pronina


July 25, 2017

Greece raised 3 billion euros ($3.5 billion) in its first tapping of the bond market since 2014, with investors piling in on expectations the worst may be over for what was once the epicenter of Europe’s debt crisis.

Yield-hungry investors welcomed the new Greek paper, which carried a 4.625 percent yield. The sale by the sub-investment-grade rated country drew 6.5 billion euros in more than 200 offers, said a Greek government official, requesting anonymity because the information is not public. Greece’s last five-year bonds in April 2014 priced at 4.95 percent. Greece sold the new bonds along with a tender offer for the notes due 2019.

With the sale, the government of Prime Minister Alexis Tsipras is seeking to chalk out a path for an exit from the current bailout program, which ends in August 2018, while also capping the country’s financing needs in 2019 -- expected to be about 19 billion euros. Greece decided to test the markets after it failed to convince creditors to immediately reduce its debt burden and was left out of the European Central Bank’s bond-purchase program.

The outcome “was better than we expected,” Greek Finance Minister Euclid Tsakalotos said in comments broadcast live on state-run ERT TV. “This is not the end. There will be a second and a third” bond sale to ensure the country exits its bailout program in August 2018, he said.

“Tsipras left behind ‘collision economics’ a long time ago, and has apparently decided that the best strategy for re-election in 2019 is to exit the bailout program,” Nicholas Wall, manager at Old Mutual Global Investors, said in e-mailed comments.


Monday, July 24, 2017

Greece Looks to Turn a Corner After Years of Economic Pain

by Liz Alderman

New York Times

July 24, 2017

Greece, long Europe’s economic problem child, is trying to prove that it has made progress in its recovery efforts by announcing plans to sell debt for the first time in years.

The proposed bond sale, the details of which were released on Monday, offered hope that Greece might at last be preparing to wean itself off the international bailouts totaling 326 billion euros, or about $380 billion, that it has relied on since 2010 to stay afloat.

The sale is a pivotal moment in the painfully fought efforts of Greece to recover from troubles stemming from the financial crisis that began on Wall Street nearly a decade ago and that at one point threatened to break up Europe’s currency union.

If investor interest is strong, it would be a landmark moment, not only for Greece but also for the eurozone, the 19 countries that use the euro. If Greece struggles to find buyers, however, the debt sale could represent yet another blow for a country that has only recently started to see signs of a turnaround after nearly veering out of the currency union just two summers ago.


Greece names six banks for first bond issue since 2014

Financial Times
July 24, 2017

The Greek government has hired six banks to manage its return to the international bond markets after three years.

Goldman Sachs, Citi, Deutsche Bank, HSBC, BNP Paribas, and Bank of America Merrill Lynch will manage the deal to issue a five-year bond maturing in 2022 – Greece’s first since 2014. The new debt is due to launch tomorrow.

Greece’s left-wing Syriza government has eyed a return to the debt markets to underscore its economic rehabilitation after it was bought to the brink of a eurozone exit two years ago. The government has managed to secure its latest tranche of bailout cash and is looking to slowly build up its cash buffers ahead of the end of its current rescue programme in August 2018.

On Friday, S&P ratings upgraded its outlook on Greek government debt from stable to “positive” on the back of hopes the country will receive further debt relief from its EU creditors.


Sunday, July 23, 2017

Greece on brink of return to sustainable growth, economists believe

by Tim Wallace

Daily Telegraph

July 23, 2017

Greece could be close to returning to sustainable economic growth at last after almost a decade of devastating recessions and crises, economists believe.

The country’s government is getting closer to restoring a degree of financial stability through the latest round of talks with the EU and the International Monetary Fund. After several false dawns, UBS’s chief economist for the region hopes that only a few more steps could be required to put the troubled economy firmly on the right track.

Gyorgy Kovacs believes that finalising the debt relief plan combined with Greece’s inclusion in the European Central Bank’s bond-buying programme would be one serious improvement, and that further improvements in economic sentiment, with the liberalisation of capital controls, is another.

“What we have seen is that, compared to the first quarter, there has been a positive turn in the economy. If we add on top of that the closure of the review, hopefully it will bring improved confidence into Greece,” he said.

“Hopefully it will allow the end of capital controls, or the easing of those.”


Friday, July 21, 2017

To exit (to borrow from the markets) or not to exit: Greece’s new dilemma

by Theodore Pelagidis

Brookings Institution

July 21, 2017

Athens desperately needs to sell a 3 billion euro, five-year Greek government bond with a yield of around 4.5-4.7 percent as it strives to convince the markets—as well as domestic voters—that the economy is about to recover after eight years of depression and austerity. So, it is willing to pay much more than the 0.89-1.2 percent that the European Stability Mechanism (ESM) is currently charging as part of Greece’s bailout program. Indeed, on July 11, the ESM announced that 7.7 billion out of a total tranche of 8.5 billion euros would flow to the Greek state, of which 6.9 billion euros will cover loan maturities that expire this month. Then, on July 21, the board of the International Monetary Fund approved in principal a conditional loan worth as much as 1.6 billion euros for Greece—just the reassurance requested by many euro-area creditors. Yet Greece’s Gordian knot is far from untied and the most recent conditional acceptance by the fund regarding what amounts to a “precautionary stand-by arrangement” won’t translate to an immediate disbursement.

The urgent need for a “Grexit” to the global borrowing markets’ either amounts to a symbolic government effort to show investors that the economy is recovering or is something political. Despite recent optimism expressed about the likelihood of a Greed re-entry, its timing is far from guaranteed. According to the latest news, the European Commission, the European Central Bank and the IMF—also known as the troika—seem to have reacted by favoring a postponement of a bond issuance by Greece for the next few days, weeks, or even months. But questions remain, as the troika surely knew in advance about the Greek government’s intentions.

The IMF is insisting that Greece’s debt is hugely unsustainable, especially in the long-term. According to the fund, measures either taken or proposed so far by the Europeans, such as the 15-year interest deferral and maturity extension for some of the European Financial Stability Facility/ESM loans, won’t make the country’s debt burden sustainable. The IMF’s July 20 Debt Sustainability Analysis (DSA) just confirmed this view. Greece is not qualified by any standard to exit its program and re-enter the markets. Among other things, such a move would add new debt to the already colossal burden it currently carries, which is equivalent to around 180 percent of GDP. So, even if Greece successfully borrows with a 4.5 percent interest rate, which will make the debt even more unsustainable, mainly by adding to the government’s gross financial needs (GFN).


Greece Approved for $1.8 Billion Conditional Loan From IMF

by Marcus Bensasson, Viktoria Dendrinou & Andrew Mayeda


July 21, 2017

The International Monetary Fund agreed to a new conditional bailout for Greece, ending two years of speculation on whether it would join in another rescue and giving the seal of approval demanded by many of the country’s euro-area creditors.

The Washington-based fund said Thursday its executive board approved “in principle” a new loan worth as much as $1.8 billion. The disbursement of funds is contingent on euro-zone countries providing debt relief to Greece.

“As we have said many times, even with full program implementation, Greece will not be able to restore debt sustainability and needs further debt relief from its European partners,” IMF Managing Director Christine Lagarde said in a statement. “A debt strategy anchored in more realistic assumptions needs to be agreed. I expect a plan to restore debt sustainability to be agreed soon between Greece and its European partners.”

IMF officials estimate that, even if Greece carries out promised reforms, the nation’s debt will reach about 150 percent of gross domestic product by 2030, and become “explosive” beyond that point. European creditors could bring the debt under control by extending grace periods, lengthening the maturity of the debt or deferring interest payments, the IMF said in a report accompanying the announcement.


Wednesday, July 19, 2017

Yes, Greece Can

by Marcus Ashworth


July 19, 2017

Greece's hopes of returning to the debt markets after a three-year absence have been held up by one of its main creditors, the International Monetary Fund.

Under the strict conditions of its bailout, the country's debt burden is still too high to contemplate selling more debt, according to the IMF.

But there is a compromise option, which Greece should pursue.

The Hellenic Republic had been laying the groundwork to issue as much as 4 billion euros ($4.6 billion) in five-year bonds after repaying 6 billion euros of its existing debt this week. But the funds to pay down that debt came from the European Stability Mechanism, so Greece's overall debt hasn't been reduced, simply extended.

The IMF's opposition to issuing new debt doesn't stop Greece from shuffling its debt stack by lengthening maturities.


Tuesday, July 18, 2017

Greece aims to sell bonds for first time since 2014

by Kate Allen & Dan McCrum

Financial Times

July 17, 2017

Greece is looking to sell government bonds for the first time in three years in the latest sign of investor willingness to forget the past problems of former pariah sovereign borrowers.

The southern European nation is expected to sell a five-year bond this week or next, say bankers with knowledge of the plans.

Bond market conditions have steadied since the turbulence of last month when central banks signalled what appeared to be a co-ordinated shift towards monetary tightening, although benchmark yields have continued to tick upwards.

There is a “lot of positive momentum” and “credit markets still feel very healthy”, one banker said. “The market is open for Greece,” said another.

With much eurozone sovereign debt generating negative yields, investors are also on the hunt for paper offering better terms.

Last week an €813m auction of Greek 13-week treasury bills was priced at 2.33 per cent and attracted strong international demand, said the first banker.


Monday, July 17, 2017

Piraeus Bank Races to Reach ECB Target for Reducing Bad Loans

by Christos Ziotis


July 17, 2017

The new chief executive officer of Piraeus Bank SA is trying to make up for lost time.

CEO Christos Megalou must offload 4 billion euros ($4.6 billion) in bad loans by the end of the year under a restructuring plan worked out with the European Central Bank’s supervisory arm months before he took over at the largest Greek lender.

"There is a decision of this management to accelerate the implementation of the restructuring plan in order to pay back state aid as soon as possible," Megalou said in an interview at the bank’s headquarters in Athens. Piraeus has received 2.72 billion euros in government funding since November 2015, and Greece’s rescue fund owns more than a quarter of the lender.

Megalou got a late start on the overhaul, joining the bank from Eurobank Ergasias SA only in March after a leadership struggle that makes him the third CEO in less than two years. Two predecessors stepped down in a dispute with Paulson & Co. Inc., one of the lender’s main shareholders.


Tuesday, July 11, 2017

Greece Should Avoid Tapping Bond Market Too Early, Says Central Bank Chief

by Tom Fairless & Nektaria Stamouli

Wall Street Journal

July 11, 2017

Greece’s central-bank governor said the country has no need to return to bond markets this year, and called on the government to focus instead on privatizations as a way to win investors’ confidence.

“I think it’s a bit early” to tap public markets, Yannis Stournaras said in his first comments on the issue since Greece reached a deal with its international creditors in mid-June.

“I think it would be even better, for instance, if Greece proceeds with two or three emblematic privatizations in the period to come. That would be more helpful to tap markets later,” he said.

The comments indicate a division among top Greek officials over how to get the crisis-struck country back on its feet. Greece’s privatization program, which has repeatedly missed targets set under the country’s bailout, is lately speeding up, despite Greece’s left-wing government initially opposing many of the projects.


Q&A With Greek Central Bank Chief Yannis Stournaras

by Tom Fairless & Nektaria Stamouli

Wall Street Journal

July 11, 2017

Greece’s central bank Governor Yannis Stournaras suggested the country has no immediate need to return to international markets and said the government should instead focus on proceeding with some big privatizations to win investors’ confidence. He also said the country’s European creditors should specify debt-relief measures or else the country may need another bailout program. Here is an abridged transcript of his conversation with Journal reporters in Athens on Monday.

WSJ: Greece reached an agreement with its creditors in June. What do you think about it—doesn’t it just kick the can down the road again?

Yannis Stournaras: No, I think it is a good agreement. It was long overdue. It will remove uncertainty regarding the payment of Greece’s obligations in July so it is important as such. Of course I would have preferred to have more clarity on debt relief because the expression regarding the extension of maturities of interest payments and amortization from zero to 15 years does not say much and did not allow the [European Central Bank and International Monetary Fund] to work out a debt sustainability analysis. So I hope that soon the Eurogroup will say something more about that and preferably closer to the 15 years.

WSJ: So you don’t think it gave much clarity regarding Greece’s debt?

YS: No it didn’t. It gave a direction, we now know the Eurogroup thinks of extending maturities, interest and amortization payments. And the closer this extension is to 15 years the better. As you may know, in the Bank of Greece we have done a study which shows that at a minimum we need about 8.5 years of weighted-average extension of interest payments to secure debt sustainability. But this is only a minimum, this is at the margin. So I prefer something closer to 15 years that the Eurogroup has included in the statement.


Greece’s Antismoking Effort Has One Major Problem: Greeks

by Nektaria Stamouli

Wall Street Journal

July 10, 2017

When Katerina Dervenioti decided in 2013 to open a bar in central Athens, she was sure of one thing: there would be no smoking. She had always disliked it, and after all the government had passed a law banning smoking in interiors back in 2009.

It took only a few hours after opening her cafe in a trendy Athens neighborhood to be sure of a second thing: Greeks believe rules are meant to be broken.

Despite the law, patrons at her vintage-inspired spot lighted up without a thought. She removed ashtrays, added signs and spoke to customers directly, but it was futile. Customers now smoke all they want, she said, starting early in the morning with coffee and ending late at night with a cocktail.

In Greece, star athletes celebrate championships with cigarettes dangling from their lips—star center Ioannis Bourousis of the Panathinaikos basketball team was seen toking on a cigar at a bouzouki bar after a big win in June.

Taxi drivers smoke while driving, holding their cigarettes out an open window only when they have passengers.

On a recent visit by Amin Mohamed to the local municipality office to take care of paperwork for his dry-cleaning business, the smoke was so thick that he finally asked the employee there to put out his cigarette. The employee simply opened a window and kept on smoking, he said.

“Nothing will ever change,” Mr. Mohamed said.


Friday, July 7, 2017

UN Says Current Talks to Reunify Cyprus End Without Agreement

by Paul Tugwell & Georgios Georgiou


July 7, 2017

Efforts of the past 10 days to reach a landmark deal to end over four decades of division on the eastern Mediterranean island of Cyprus ended without agreement, United Nations Secretary General Antonio Guterres said.

Despite the strong commitment and engagement of the Greek and Turkish Cypriot delegations, Greece, Turkey, the U.K. and the European Union as an observer, “I am deeply sorry to inform you that the conference on Cyprus was closed without an agreement being reached,” Guterres told reporters early Friday in the Swiss resort of Crans Montana.

Cyprus has been divided since 1974, when Turkey invaded the north to protect the Turkish Cypriot minority against a coup to unite the island with Greece. It went on to take more territory and thousands of people were displaced. An agreement to stitch Cyprus back together would draw a line under one of the world’s biggest diplomatic challenges.


Wednesday, July 5, 2017

Greece Has Eliminated Its Trade Deficit, But at a High Cost

by Colombe Ladreit de Lacharrière & Melina Kolb

Peterson Institute for International Economics

July 5, 2017

Greece has erased what used to be a very large current account deficit between 2007 and 2016. This would appear to be good news, but it is not. The reason is that the deficit was reduced by Greece cutting back on imports, not on boosting exports, a result of a dramatic drop in economic output.

A reduction of the trade deficit through a decrease in imports is usually welcome when high imports reflect an unsustainable boom. Greece's output gap, a measure of how much an economy is operating above or below its optimal level, was 8.9 percent in 2007 based on the latest data from the Organization for Economic Cooperation and Development (OECD). Ideally, Greece would have eased the output gap to zero percent and lowered imports in the process. Instead, economic output collapsed to a level far below potential, with the gap reaching –11.8 percent in 2016.


Thursday, June 29, 2017

Greek trash collectors back to work after 2-week protest

Associated Press
June 29, 2017

Greek municipal garbage collectors on Thursday decided to return to work after nearly two weeks of protests that left mounds of uncollected refuse in the streets amid a heatwave.

The municipal workers’ union, which wants employees on fixed-time contracts to be granted full-time jobs, said rubbish collection trucks would hit the streets beginning at midnight Thursday.

The decision came two days after unionists rejected a compromise proposed by Prime Minister Alexis Tsipras that would see workers’ contracts renewed for several months until full-time hirings are arranged.

The leftist government had initially pledged permanent jobs for long-term contract workers, but it faced tight budget obligations under Greece’s international bailout agreements.


Greece Gets Investor Thumbs Up on Possible Return to Bond Market

by Sotiris Nikas & Anchalee Worrachate


June 29, 2017

If Greece returns to the bond market this year, Mark Dowding would be a buyer.

“We have been bullish on Greece over the past year or so,” said the partner and portfolio manager at BlueBay Asset Management in London, which owns some long-dated Greek bonds. “We’ve also formed the view that lenders would remain committed to helping Greece. I feel relatively confident that Greece will be returning to market in the second half of this year.”

The change in sentiment toward Greece -- the epicenter of the European financial crisis -- is reflected in the fact that country’s bond yields are the lowest since before the turmoil even as the debt remains deep in junk territory. Adding to investor confidence, Greece’s euro-area creditors agreed to release 8.5 billion euros ($9.5 billion) in new loans on June 15 even as they postponed until mid-2018 a binding decision on what measures they will provide to ease the country’s burden.

Although Athens has not definitively said it will be selling bonds this year, many in Prime Minister Alexis Tsipras’s administration say the question is not if but when. A successful second bailout review, an improved economy and greater support from euro-area partners may embolden Greece to consider a return to the market for the first time since 2014. All indications are that yield-hungry investors would welcome new Greek paper even though the country isn’t part of the European Central Bank’s quantitative-easing program.

Tuesday, June 27, 2017

The IMF’s New Role in Greece Proves Its Value for Europe and the United States

by Anna Gelpern

Peterson Institute for International Economics

June 27, 2017

Greece’s economic problems are far from solved, but the International Monetary Fund (IMF) deserves part of the credit for the glimmers of progress on official debt relief in the Eurogroup announcement on June 15. The IMF is expected to issue its “approval in principle” for Greek policy commitments under the European Stability Mechanism (ESM) program, but it will not contribute money until it gets more comfort on debt relief from European governments and institutions. On balance, this makes the IMF a force for good in Greece and in Europe. The Fund’s hard line may be an effort to compensate for past missteps; now it is doing the right thing. It should remain engaged in Europe, and the United States should support its engagement as an independent source of policy expertise and funding.

Europe wants the IMF involved in Greece primarily for political reasons. Its presence can validate the policy and financing package, and commit both sides to perform. The Fund’s reputational capital is pledged to the notion that Greece will recover if the government and its euro area creditors do as they say they will. The IMF has not lent to Greece since 2015. It would be a small part of the financing if it got back in. Paradoxically, the IMF has become more influential as its financial contribution to Greece has diminished. This is an achievement to build on in Europe and beyond.


Monday, June 26, 2017

Cyprus rivals restart talks over reuniting island

by Arthur Beesley & Kerin Hope

Financial Times

June 26, 2017

Cypriot leaders are set for fresh talks to try to reunite the Mediterranean island in spite of sharp differences over new security and political arrangements.

The UN-brokered talks in Switzerland aim to settle decades of ethnic division between the Greek Cypriot and Turkish Cypriot communities.

Security remains the most serious barrier to a deal between Nicos Anastasiades, the Greek Cypriot president, and Mustafa Akinci, the Turkish Cypriot leader.

Cyprus has been split since 1974, when Turkey invaded and occupied its northern third in response to an Athens-inspired coup aimed at uniting the island with Greece. A UN buffer zone divides the Greek-Cypriot state, an EU member, from the breakaway Turkish-Cypriot state, which is recognised only by Ankara.


Saturday, June 24, 2017

The startup culture battling the Greek brain drain

by Yannis Palaiologos

Irish Times

June 24, 2017

Greece has been in crisis now for a decade. Since sliding into recession in 2008, it has seen its annual output collapse by about a quarter. Its unemployment rate has been above 20 per cent for more than five years. Close to a half a million Greeks, mostly those with the best education and career prospects, have left the country to seek their fortunes elsewhere.

There have been few rays of hope to cling to in this dark period. One of them has been the steady emergence of the Greek start-up ecosystem. In the years since four EU-backed venture capital funds started operating in early 2013, there have been notable successes, including multimillion dollar investment rounds and buyouts by major global companies.

One active player in the Greek start-up scene has been Stavros Messinis, founder of CoLab, a co-working space in Athens, in 2009 and, in 2013, another space known as the Cube.

“We’re currently hosting around 20 companies. They are mainly software tech companies but we have one or two hardware companies, a software agency and even a company that makes trendy handbags,” Messinis says.

“We offer them facilities to work from, mentoring and other services such as legal and accounting. The fact that they’re together in a shared office means they help each other out.”


Tuesday, June 20, 2017

The Eurogroup on Greece: Debt Relief with a Fiscal Straitjacket

by Jeromin Zettelmeyer

Peterson Institute for International Economics

June 20, 2017

Greece’s latest deal with the Eurogroup—the group of eurozone finance ministers—is bigger news than you might think from the press reactions so far. As expected, Greece got its next disbursement of funds to avoid default, the International Monetary Fund (IMF) gave a symbolic stamp of approval, no actual debt relief will transpire until the end of Greece’s EU-supported reform program, and the IMF will not be prepared to disburse until that happens (if at all). This feels like business as usual. But there is more to the story.

The June 15 statement of the Eurogroup contains at least three new and significant points. For the first time, it delivers an unequivocal commitment to debt relief. Second, it confirms that the Eurogroup (read: Germany) will accept interest deferrals as part of the package, a point that had recently been in doubt. Third, it lays out specific fiscal assumptions—not just for the next 2 or 5 years, but all the way to 2060. The first two are good news. On the third, the news is not so good, for reasons explained below. As a result, there is a high risk that the debt relief package that we will see next year—probably without endorsement by the IMF—will yet again kick the can down the road.


EU Says Greece Needs More Debt Relief Despite Buffer

by Marcus Bensasson, Sotiris Nikas & Birgit Jennen


June 20, 2017

Greece will need additional debt relief to regain the trust of investors, even though it’s likely to exit its bailout with a 9 billion euros ($10 billion) cash buffer, the European Commission said in a draft report obtained by Bloomberg.

The country’s 86 billion-euro third bailout program from the European Stability Mechanism, agreed by Prime Minister Alexis Tsipras and European creditors in 2015, will expire in August 2018 with 27.4 billion euros left unused, the commission estimates in the so-called “compliance report” dated June 16. Disbursements up to then should also “cater for the build-up of seizable cash buffer” of around 9 billion euros, according to the document.

The report contains an analysis of the country’s public debt that points to potential wrangling with the International Monetary Fund following an agreement last week to disburse bailout funds, in which the Washington-based fund only agreed to a new program “in principle.” Even as the commission’s analysis points “to serious concerns regarding the sustainability of Greek public debt,” its assumptions about the country’s future growth prospects are still more optimistic than those of the IMF.


What Britain’s European Union negotiators can learn from the Greeks

by Chris Bickerton


June 20, 2017

On 24th April 2015, the Greek finance minister, Yanis Varoufakis, attended a meeting of his Eurozone counterparts in the Latvian capital, Riga. Believing the gathering to be largely ceremonial, a sop to the Latvian government which held the rotating presidency of the European Union at the time, Varoufakis was expecting a short session on uncontroversial matters. Instead, the EU’s big hitters—in particular the Eurogroup’s Dutch president Jeroen Dijsselbloem and the German finance minister Wolfgang Schäuble—ambushed him. They threatened him with “plan B,” the vague term used to refer to Greece’s exit from the euro.

Journalists covering the meeting reported that Varoufakis, a radical, leather-jacketed game-theory specialist turned politician, had lost his temper. They claimed that other finance ministers had called him all manner of names, from “gambler” and “amateur” to “time-waster.” There was even talk of a scuffle, something unheard of at these usually soporifically dull meetings. As if to confirm that there was no smoke without fire, Varoufakis had declined the invitation to attend the Eurogroup dinner, preferring to enjoy beer and sausages with his Greek entourage. Stories of his growing isolation from the rest of the Eurozone tribe spread across the media.

A month later, in a long interview with the New York Times, Varoufakis dropped a bomb. All the allegations about name-calling in Riga were false, he said. The meeting had remained perfectly civil—and he could prove this because he had recorded it on his mobile phone. Though he said he could not release the transcript because of confidentiality, his message to the media—and those who had confected the story—was clear: tell the truth, or I will prove you wrong.

With that kind of material in his back pocket, and with a fondness for provocation and controversy, it was only a matter of time before Varoufakis—who was removed from his post in July 2015, after just six months—spilled the beans. The result is Adults in the Room—a whistle-blowing memoir that doubles as a penetrating analysis of the eurozone crisis, one caused in Varoufakis’s view by the stubbornness and ideological dogmatism of what he calls Europe’s “deep establishment.” As Britain prepares to enter exit negotiations with the EU, many will turn to this book for insights. Varoufakis thinks he can help—he wrote an open letter to Theresa May in the Evening Standard in which he urged her to “listen and learn from our Greek tragedy.”



Friday, June 16, 2017

Greece Gets a Break in Its Seven-Year Drama

by Viktoria Dendrinou, Nikos Chrysoloras & Sotiris Nikas


June 16, 2017

As last-minute Greek bailout deals go, this one wasn’t the worst.

The euro region’s finance ministers approved 8.5 billion euros ($9.5 billion) of aid on Thursday, and its most indebted state got a commitment that creditors will make sure it’s able to service future debt. If necessary, repayments can now be extended on emergency loans by up to 15 years.

While not perfect for anyone, it was a product of compromise. Germany agreed to come up with some figures on possible debt relief and to less ambitious budget targets. The International Monetary Fund then lent its credibility to the Greek bailout, if not its money. Greece got some cash and clarity.

Typically for these trade-offs, painful decisions were postponed and everyone will have to sit down again in a few months. But it feels like a question was answered, one that’s lingered since Prime Minister Alexis Tsipras clashed with Brussels over Greece’s crippling austerity two years ago: whether the country is a sustainable member of Europe’s single currency.


In the Pantheon of Greek Deals, Is This One Big?: QuickTake Q&A

by Eleni Chrepa


June 16, 2017

After months of wrangling, Greece’s creditors granted the struggling nation an 8.5 billion euro ($9.5 billion) aid payment and committed to debt relief if needed, putting an end to the latest round of political bickering. They also bound at least two more generations of Greeks to stringent austerity measures required to meet a new series of economic targets. Investors applauded the move as they digested what the latest deal means for stability in Athens.

1. What’s different this time?

The accord, reached by euro-area finance ministers in Luxembourg on Thursday, will cap Greece’s gross financing needs at 15 percent of gross domestic product for the medium term and at 20 percent thereafter, while extending maturities and deferring the interest payments on some bailout loans by as much as 15 years. Greece agreed to additional austerity measures -- equal to about 2 percent of GDP -- that go beyond the end of its latest bailout in 2018, including a lower threshold for tax-free income and a further cut in pensions. The steps will be offset by other measures if the country beats its ambitious budget targets.

2. What does this mean for Greek politics?

The decision will give Greek Prime Minister Alexis Tsipras some time to breathe “at least for the next six months, ’’ according to Nikos Marantzidis, a professor of political science at the University of Macedonia in Thessaloniki. Greece’s prolonged financial drama has made its citizens less sensitive to such decisions and a significant shift in opinion polls isn’t expected immediately. The payout will calm Greece’s financial markets, and the fact that it was larger than expected could mean fresh money can be directed to the economy starting in September, Marantzidis said.


Greece Wins 8.5 Billion Euro Payout as Debt Clarity Deferred

by Viktoria Dendrinou, Nikos Chrysoloras & Alexander Weber


June 15, 2017

Greece’s creditors agreed to release 8.5 billion euros ($9.5 billion) in new loans for Athens, capping a key chapter of the country’s bailout and ending months of uncertainty over whether it could meet large bond payments due in July.

The decision came after euro-area finance ministers sought to offer more clarity on Greece’s future debt path and outline possible measures they could take to ease its burden in the future. Meeting in Luxembourg on Thursday, they reinforced their commitment to extend Greece relief if needed and offered more specifics on what this could entail. But they stopped short of providing definitive steps, which they said would only come at the end of the bailout in mid-2018. The news sent the Athens Stock Exchange to a two-year high Friday.

“It’s a very constructive decision that will help Greece, also on the international market, to gradually get more credibility,” Luxembourg Finance Minister Pierre Gramegna said after the meeting. “The goal is for Greece to go back to the markets in the coming months or year.”

The compromise, nonetheless, leaves Greece with less than what it had sought, as it wasn’t enough to get the International Monetary Fund to acknowledge the country’s debt is sustainable. The Washington-based fund will consider signing off on a 14-month credit line for Greece, but only dole out fresh loans once it receives further assurances on debt relief measures. IMF Managing Director Christine Lagarde said she will propose the “approval in principle” of a new precautionary stand-by arrangement “probably in the range of $2 billion” that would depend on debt-relief measures materializing.


Greece and creditors reach deal on next part of bailout

by Jim Brunsden

Financial Times

June 16, 2017

Greece and its international creditors have reached a deal on the next stages of Athens’ €86bn bailout, removing the risk that it could default on more than €7bn in debt repayments that fall due next month.

The deal ends months of uncertainty that have weighed on Greece’s recovery and spooked investors, allowing the country to secure money it badly needs while putting off difficult discussions on debt relief.

Jeroen Dijsselbloem, the Dutch finance minister who chaired the meeting, said the outcome was “a major step forward” that would help put Greece’s economy on a sounder footing.

Thursday’s deal resolves a stand-off between the Washington-based IMF and the EU over the conditions for the fund to take part in Greece’s bailout — a step Berlin says is essential if Greece is to receive any more aid.


Thursday, June 15, 2017

Greece and Creditors Reach Deal

by Nektaria Stamouli

Wall Street Journal

June 15, 2017

Greece’s creditors agreed on Thursday to release the next tranche of its €86-billion ($96.5-billion) bailout but put off a final decision on relieving the country’s crushing debt burden until August of next year.

The agreement, reached in Luxembourg among the finance ministers of the eurozone, unlocks €8.5 billion of the bailout fund. While that brings Greece a small step closer to the end of an eight-year ordeal, the creditors’ refusal to address debt relief leaves the depleted country with bleak prospects for the future and at risk of needing yet another bailout down the road.

Greece’s travails remain a black mark in a eurozone that has otherwise found fresh confidence this spring, underscoring the bloc’s failure to root out the problems that threatened the single currency’s integrity five years ago.

The government of Prime Minister Alexis Tsipras enacted unpopular austerity measures whose effects extend well beyond next year’s end of the current bailout program with the aim of convincing creditors to go beyond releasing the next payment and restructure Greece’s debt.


Greece Set for Case `Full of Money,' No Detailed Debt Relief

by Viktoria Dendrinou, Radoslav Tomek & Rainer Buergin


June 15, 2017

Euro-area finance ministers meeting in Luxembourg will seek to close a key chapter in Greece’s bailout drama on Thursday, unlocking aid needed to end months of uncertainty while stopping short of a definitive deal to ease the country’s debt load.

A resolution at the so-called Eurogroup meeting would free up an expected 8.5 billion euros ($9.5 billion) in cash the Aegean state needs to repay bonds maturing next month. However, the euro-area finance chiefs, including Greece’s Euclid Tsakalotos, likely won’t finalize details on how to give Greece breathing room on the future of its debt obligations, a situation the International Monetary Fund has called unmanageable in the long term.

“The time is right to conclude the second review and give a green light for the disbursement aimed to cover Greece’s summer liquidity needs,” Slovak Finance Minister Peter Kazimir said in an interview in Bratislava before the meeting. “I expect Euclid will leave Luxembourg with a briefcase full of money.”

The IMF, which is mulling participation in the rescue program, has demanded more clarity on future relief measures to make the nation’s 315 billion euros of obligations sustainable. While all the creditors say Greece has completed the necessary economic reforms to receive the next slice of aid, euro-area nations are reluctant to further ease repayment terms on bailout loans.


Only debt relief will end the Greek crisis

by Yiannis Mouzakis & Nick Malkoutzis


June 15, 2017

As Greece heads into another meeting of eurozone finance ministers, it finds itself in a painfully familiar position: in desperate need of more bailout funding and a dose of clarity about its future.

But the country isn’t doomed to be the eurozone’s wounded animal forever. If the bloc can agree to give its weakest member a chance of turning itself around, Athens has the means to lift itself — and the rest of the Continent — out of an excruciating cycle.

Eurozone finance ministers are likely to agree that Greece should receive more than €7 billion in fresh loans, but domestic political concerns and all-around fatigue mean Thursday’s Eurogroup meeting is unlikely to be a watershed moment.

Luckily, there is one thing on which everyone can agree. Greece will only shed its pariah status — and free its lenders to end their laborious monitoring of its economy — if it can successfully conclude its third bailout program next summer.


Greece: A Case Study in Capital Controls

by Nektaria Stamouli

Wall Street Journal

June 15, 2017

When Greece imposed capital controls in the summer of 2015, the measures were a critical bulwark for banks left teetering after fears of a Greek exit from the European Union caused citizens to pull billions of euros in deposits.

Two years later, the country is a case study in capital controls. The measures prevented a collapse in the banking system, and predictions they would throw grit into the wheels of the economy haven’t materialized. Instead, controls have produced some surprising results, including helping Greece combat tax evasion, a perennial scourge.

As Greece’s creditors prepared to approve Thursday the final payment in the country’s up-to-€86 billion ($96.5 billion) bailout, there was no talk of lifting the measures—a reflection of the continued fragility of its battered economy.

“If we put aside the chaos created in the first couple of months, the mechanism currently in place is running smoothly,” says Nikos Manesiotis, who runs a food-import company and has had to navigate the measures to pay foreign suppliers. “But Greece remains the black sheep of Europe.”


Wednesday, June 14, 2017

Is Greece’s labour market bouncing back?

by Zsolt Darvas


June 14, 2017

The Greek economy has suffered greatly since the 2008 crisis, but one bright spot in the Greek economy is the rebound of the labour market. This resurgence is touching many sectors.

Although employment in Greece shrunk by an astonishing 19 percent from late 2008 to early 2014, employment figures now show signs of recovery.

Figure 1 below shows the number of persons employed relative to the first quarter of 2014. Employment started to expand in 2014, with a short-lived setback in the first quarter of 2015, when the Syriza government came to power and discussions with official creditors stalled. However, since the second quarter of 2015, employment has been expanding again in many sectors of the economy.

The largest sector – trade, transport and tourism – recorded 7.5% more employees in the first quarter of 2017 than three years earlier. This is a remarkably positive development. Industry, professional services, and information and communication services also recorded substantial job gains.


Why Greece is Germany’s ‘de facto colony’

by Matthew Karnitschnig


June 14, 2017

Poor Alexis Tsipras.

For days, the Greek leader has been working the phones, trying to secure the best possible terms for his country as it enters the last mile of its seemingly endless cycle of bailouts. So far, his efforts have won him more mockery than respect — especially in Germany.

“He keeps calling the whole time, and the chancellor says again and again, ‘Alexis, this issue is for the finance ministers,’” German Finance Minister Wolfgang Schäuble told an audience here on Tuesday, referring to the Greek prime minister’s attempts to win over Angela Merkel to his cause.

Eurozone finance ministers are set to decide at a meeting in Luxembourg on Thursday whether to release a more than €7 billion tranche of aid to Greece. No one doubts Athens will get the money. Schäuble all but committed to it on Tuesday. But Tsipras wants something even more precious: debt relief.


Papademos bomb blast raises ‘revenge attacks’ concern

by Kerin Hope

Financial Times

June 14, 2017

From his hospital bed, with the unruffled calm of the central banker he once was, Lucas Papademos describes the moment that a booby-trapped package exploded in his lap.

“It resembled a box containing some CDs tightly wrapped in plastic as if by a machine,” recalls the former Greek prime minister, who opened the package while being driven home from his office in central Athens. “I tried to tear the plastic — then the box exploded.”

The attack on May 25 shocked Greece’s political and business elite.

Mr Papademos, a former European Central Bank vice-president, led a national unity government in Greece that in 2012 carried out the largest sovereign debt restructuring in history. It was the first time that a Greek official involved with handling the country’s seven-year economic crisis had been targeted, raising worries about a possible campaign of “revenge” attacks by radical anarchists linked to anti-austerity protests.


Tuesday, June 13, 2017

ECB Said to Be Unlikely to Include Greece in QE in Coming Months

by Alessandro Speciale


June 13, 2017

The European Central Bank is unlikely to include Greek bonds in its asset-purchase program for the foreseeable future, a person familiar with the matter said, as European creditors aren’t prepared to offer substantially easier repayment terms on bailout loans to improve the nation’s debt outlook.

Euro-area finance ministers will meet in Luxembourg on June 15 to discuss debt-relief measures that the ECB has said are needed before it will consider purchasing Greek bonds. The so-called Eurogroup is expected to complete a review of Athens’s rescue program that would allow for the disbursement of at least 7.4 billion euros ($8.3 billion) in aid needed for a similar amount of bond repayments in July.

An agreement among the ministers will likely allow the International Monetary Fund -- whose participation in the rescue program is a requirement for many nations -- to commit in principle to a conditional loan, said the person, who asked not to be named because the discussions are private. But the extent and wording of debt-relief commitments probably won’t convince the Governing Council of the ECB to buy Greek bonds.