Thursday, March 23, 2017

The Greek God of Populism

by Alexander Clapp

Foreign Policy

March 23, 2017

In September 2012, as the European economic crisis entered its third autumn, a plump Greek man from the port city of Patras came to Athens and put on a press conference at the President Hotel, a few blocks away from the Acropolis. Few in the audience had heard of him, but he brought an astonishing charge against the Greek state. “Artemis Sorras here,” he began mildly. “You should know that your government is in league against you. Now is the time for them to come clean with it!” Sorras went on to explain that he was the inheritor of bonds from the Bank of Anatolia, which had been acquired — and, it was generally thought, incorporated into — the National Bank of Greece in the 1920s. Nonsense, Sorras said. Anatolia’s bonds, far from expired, had in fact accrued tremendous value. Just two of them could more than pay off the Greek national debt. Sorras claimed to possess 40 — a fortune of 145 trillion euro.

Few took notice, at first. Greek government spokesmen dismissed the story; Athens talk radio mused how a man missing three teeth could possess more wealth than the rest of Greece combined. Sorras waved off the critics, doubled down on his claims — he said he also possessed bonds in Montreal-based banks and would be willing to bail out the personal debt of all his supporters, as well as that of Cyprus and Jefferson County, Alabama — and watched as a following of thousands gathered behind him, carrying him to the brink of being elected into Greece’s parliament. Now those thousands of followers are clinging desperately to the latest saga in the Sorras story: a warrant for his arrest stemming from an old case in which Sorras was caught illegally exchanging expired Kuwaiti dinars for his best man’s used luxury car. Summoned to court, Sorras fled — to the innards of the Peloponnese, some now claim; to Italy, allege others; to Central America, runs still another rumor. He remains at large.

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Monday, March 20, 2017

Greece Edges Toward Another Crisis as Bailout Quarrel Persists

by Nikos Chrysoloras, Ian Wishart & Sotiris Nikas

Bloomberg

March 20, 2017

Greece is set to miss yet another deadline for unlocking bailout funds this week, edging closer to a repeat of the 2015 drama that pushed Europe’s most indebted state to the edge of economic collapse.

Euro-area finance ministers meeting in Brussels on Monday will reiterate that the government of Alexis Tsipras has yet to comply with the terms attached to the emergency loans that have kept the country afloat since 2010. While Tsipras had promised the long delayed review of the latest bailout would be completed by March 20, a European official said last week that reaching an agreement even in April is now considered a long shot.

The two sides are still far apart on reforms demanded by creditors in the Greek energy market and the government in Athens is resisting calls for additional pension cuts. And while discussions continue on how to overhaul the labor market, a finance ministry official said in an email to reporters on Friday that the issue can’t be solved in talks with technocrats.


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Friday, March 17, 2017

IMF under pressure in Washington over Greek bailout

by Shawn Donnan

Financial Times

March 17, 2017

Conservatives in Congress are pushing Donald Trump to block the International Monetary Fund from participating in a European-led bailout of Greece, as his administration signalled it would take a tougher line with global institutions.

In what was labelled an “America First” budget revealed on Thursday, the president proposed a $650m cut in US funding over the next three years for multilateral development banks including the World Bank. He also this week nominated two conservative economists with a history of criticising the IMF and the Bank for the two top international posts at the US Treasury.

Those two moves came as Steven Mnuchin, Mr Trump’s Treasury secretary, travelled to Germany to meet his G20 counterparts. They also signal that Mr Trump, who railed against “globalists” throughout his run for president, is likely to deliver on campaign pledges to take a fundamentally different approach towards international organisations and the global economy.

But conservative Republicans in Congress are eager for him to go a step further. They want him to assert US power over such bodies by taking a hard line and opposing further IMF involvement in Greece, which is sliding towards another crisis this summer unless its European creditors agree to cover billions more in debt payments.

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Monday, March 13, 2017

How does jailing the statisticians fix Greece’s financial crisis? It doesn’t.

by Anbar Aizenman, Anisha Chinwalla & Benjamin A.T. Graham

Washington Post

March 13, 2017

The Greek government’s ongoing attempts to imprison Andreas Georgiou will reshape the Greek economy — in ways that may last for decades. Georgiou is a statistician who’s been accused by the government of inflating data on the size of the Greek deficit. He’s awaiting trial — for telling the truth about the Greek economy.

Georgiou has been acquitted in four trials since 2011, most recently in December. Greek politicians are still pushing the case, which is now at the Greek Supreme Court. Georgiou appears to be a convenient scapegoat for Greek politicians trying to avoid blame for their country’s ongoing financial crisis.

The prosecution of Georgiou undermines the rule of law. As a member of the European Union, the Greek statistical office is required to follow E.U. accounting rules. By prosecuting Georgiou for following those rules, the government is telling other bureaucrats that they must break the rules if they want to stay out of jail. In particular, they are signaling to government statisticians that it is dangerous to report bad news about the economy.

Prosecuting statisticians effectively lets Greek politicians shut off the flow of reliable public information about the economy. If statisticians fear the consequences of publishing negative information, then it is in their best interest to hide bad news.

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Emergency central bank funding to Greek banks rises by 300 million euros in February

Reuters
March 13, 2017

Emergency central bank funding to Greek lenders rose by 300 million euros, or 0.7 percent, in February compared to the previous month, Bank of Greece data showed on Monday.

Emergency funding, which is more costly than borrowing from the European Central Bank, increased to 43.1 billion euros (37.66 billion pounds) at the end of February from 42.8 billion euros at the end of January, the data showed.

Banks have relied on emergency liquidity assistance (ELA) drawn from the Greek central bank since February 2015 after being cut off from the ECB's funding window due to stalled bailout talks between the government and its official lenders.

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Friday, March 10, 2017

Greece: Playing with Matches in the Ammunition Warehouse

by Miranda Xafa

Centre for International Governance Innovation

CIGI Policy Brief No. 100
March 10, 2017


The current standoff with creditors over the second review of the third bailout increasingly resembles the catastrophic 2015 negotiations that brought Greece to the brink of Grexit. The protracted negotiations are taking a toll on the economy. Depending on when agreement is reached — or elections are called — three possible scenarios could unfold, none of which involves Grexit. After the July 2015 referendum, Greek Prime Minister Alexis Tsipras presented the proposed program as an improvement over the one rejected by voters because it included debt relief and excluded the “tough” International Monetary Fund from the troika. Now he will be asking Parliament to vote for tough measures for the exact opposite reasons.

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Thursday, March 9, 2017

Piraeus picks Christos Megalou as its new chief executive

by Martin Arnold & Kerin Hope

Financial Times

March 9, 2017

Piraeus Bank has hired Christos Megalou as its chief executive, ending one of the longest senior job vacancies in European finance. The top job at Greece’s biggest lender has been vacant for 14 months.

Mr Megalou, a former investment banker in London, was chief executive of Piraeus’ Greek rival Eurobank for almost two years before stepping down in January 2015.

He is one of only a few Greek bankers deemed to meet the Greek financial stability fund’s criteria for heading one of the country’s systemic lenders — at least 10 years experience in a senior position abroad.

He worked for Credit Suisse for 15 years holding several investment banking positions before joining Eurobank in 2013 to oversee its restructuring and recapitalisation as Greece struggled to emerge from its first crisis.

Mr Megalou took credit for bringing in a group of anchor investors, among them Fairfax Financial, the Canadian group headed by Prem Watsa, and Wilbur Ross, the US investor. Eurobank successfully raised €2.9bn in 2014, to become the first Greek bank to return to private ownership after the crisis.

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Wednesday, March 8, 2017

Greek economy flat last year, stats service says

Reuters
March 8, 2017

Greek economic growth was flat last year, the country's statistics service ELSTAT said on Wednesday, releasing its first estimate of full-year 2016 gross domestic product.

It said gross domestic product in volume terms and measured at constant prices was 184.5 billion euros last year, unchanged from 2015.

ELSTAT's estimate, based on seasonally unadjusted data, showed the economy performed worse than the country's official creditors were expecting based on their recent forecasts.

The European Commission, in its winter forecast published in February, projected GDP growth of 0.3 percent in 2016 while the International Monetary Fund's upwardly revised estimate saw GDP growth of 0.4 percent.

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Monday, March 6, 2017

The Refugee Archipelago: The Inside Story of What Went Wrong in Greece

by Daniel Howden & Apostolis Fotiadis

Refugees Deeply

March 6, 2017

Widad Madrati remembers the first snowfall at Oreokastro like most children would, as a thing of wonder. It threw a brilliant white cover over the squalor of a refugee camp pitched in the grounds of a disused warehouse in the hills above Greece’s second city, Thessaloniki. The 17-year-old Syrian did not mind that the water pipe to the outdoor sinks had frozen. She took photographs of the icicles.

The photos on her phone show nothing of the broken chemical toilets or the discarded, inedible food; nor of the flimsy tents pitched on freezing ground by refugees, like her family, who arrived too late to find a spot inside the concrete shell of the old warehouse. Instead, her photos show children playing in the snow.

Stranded outside the Oreokastro buildings, in a tent dusted with snow, the other members of the Madrati family were more realistic about survival and begged the authorities and volunteers for a way out of the camp. A family of four when they left Aleppo who became five along the way when Widad’s sister Maria was born in Turkey, they had endured worse indignities in Greece than pleading.

The family was also among the last to leave their previous temporary home at Idomeni, where they held on for 10 weeks after the chaotic encampment on Greece’s northern border closed in March 2016, in the hope it would reopen. It did not.

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Sunday, March 5, 2017

Greece’s economy has turned corner, says central bank chief

by Kerin Hope

Financial Times

March 5, 2017

“Growth turned positive for the year [2016] as a whole, contrary to initial forecasts,” he told the Delphi Forum, an annual gathering of Greek economists, businesspeople and politicians, on Saturday. “A rapid closure of the review will help the economy build on the 2016 outperformance and move quickly to a faster growth path.”

Sounding an upbeat note for the first time this year, Mr Stournaras endorsed the EU’s latest growth forecast for Greece of 2.7 per cent this year rising to 3.1 per cent in 2018. The economy expanded by 0.3 per cent last year, despite falling back into negative territory in the fourth quarter

“Some recent softening of economic indicators can be put down to uncertainty in the face of delays in closing the second review of the programme. Hopefully this is now moving forward,” he said.

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Friday, March 3, 2017

Greece seeks France's help on bailout, eyes 2017 bond 'test'

by Derek Gatopoulos & Elena Becatoros

Associated Press

Mar. 03, 2017

Greece is seeking help from France, its close ally in the 19-country eurozone, as it seeks to overcome stubborn sticking points in its bailout talks and return to international bond markets later this year.

France's Prime Minister Bernard Cazeneuve and Finance Minister Michel Sapin were in Athens Friday for talks, as negotiations with bailout inspectors in the Greek capital continued for a fourth consecutive day.

Cazeneuve met Prime Minister Alexis Tsipras and described recent improvements in Greek economy as "spectacular," while Sapin said France was working to keep the International Monetary Fund in the Greek rescue program.

"France is here to facilitate things, to show to everyone and to the institutions that it is time to reach an agreement, that it's time to look to the future," Sapin said.

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