Godot Watch Goes On ........

http://globaleconomicanalysis.blogspot.com/2012/02/new-merkozy-proposal-i-will-give-you.html


European officials are insisting any new Greek bail-out programme specifically earmark funds to pay off remaining holders of Greek debt, giving lenders the freedom to withhold aid to Athens without risking a messy default that could reignite panic in financial markets.

Under a new Franco-German plan that senior European officials said is likely to be included in a new Greek rescue, eurozone officials would create an escrow account to accept new bail-out funding instead of paying it all directly to Athens as in the past.

The new fund would then ensure bondholders are paid off, while additional cash to run the Greek government could still be withheld if Athens did not live up to tough new reform demands.

Eurozone officials said they believed the escrow account would give European Union and International Monetary Fund lenders strong control over Greece’s use of bail-out funds without stripping Athens of its budgetary sovereignty

“This is a better idea than the proposal of a debt commissar,” said the senior French official. “It is more acceptable.”


http://www.athensnews.gr/portal/8/53085

PM to meet coalition leaders this afternoon

7 Feb 2012

A demonstrator attends a Communist Party of Greece (KKE) rally against new austerity measures during heavy rainfall, 6 February 2012 (Reuters) The prime minister and the three coalition party leaders are expected to meet for crunch talks on Tuesday at 4pm to agree on unpopular reforms to secure a second, 130bn euro bailout that the state needs to pay a looming bond repayment deadline next month.   At the talks, the leaders – Pasok’s George Papandreou, New Democracy’s Antonis Samaras and Yiorgos Karatzaferis of the Popular Orthodox Rally (Laos) – will be informed by Prime Minister Lucas Papademos on the outcome of his latest meeting with troika representatives that went on until the early hours of Tuesday morning.   Finance Minister Evangelos Venizelos also attended the midnight talks.   In a statement issued after the conclusion of the talks, which lasted until 3am, Venizelos described the negotiations as "very tough", saying that great pressure was being exerted on Greece and the Greek people.   "The negotiations with the troika on the new programme are continuing and it is obvious that very great pressure is being exercised on Greece, on the Greek people, he said.   He added that citizens were faced with the “dramatic and acute quandary” because the country’s salvation, its continued presence in the euro, the debt restructuring deal, the finalisation of the new loan agreement and the disbursement of the money “entail a huge social cost and sacrifices".   "No one wants to restrict salaries and pensions or living standards. But on the other hand, a failure of the [troika] negotiations, a failure of the programme, or a Greek default would entail even greater sacrifices," he said.   The finance minister compared the negotiations with the troika to battling with multithreaded beast.   "It's like the Lernaean Hydra: we are constantly closing fronts and to find new fronts opening up," he said. "And because no one is a Hercules on his own to face the Lernaean Hydra, we need ... to wage this battle together."   "A lot of work, a very great effort and persistence are needed so that we may be proud once again," he added.     Strikes   The government talks come amid a nationwide 24-hour general strike called by the country’s two main unions against the austerity measures.   The meeting between Papademos and the three leaders was due to take place yesterday but was postponed.   The leaders are also under pressure from their increasingly frustrated partners in the European Union for failing to pass the reforms quickly.   In Paris, German Chancellor Angel Merkel on Monday expressed the exasperation among eurozone leaders at seemingly endless arguing in Athens that has yet to produce a definitive acceptance of the austerity and reform demanded by the lenders.   "I honestly can't understand how additional days will help. Time is of the essence. A lot is at stake for the entire euro zone," she told a news conference with French President Nicolas Sarkozy. (Reuters, AMNA) http://www.athensnews.gr/portal/1/53084 Press Watch, Feb 7 by George Gilson 7 Feb 2012 The tough message of Chancellor Angela Merkel and President Nicolas Sarkozy – that Greece must do what the troika says if it is to get the new loans that it needs to survive – captured broad attention in Tuesday’s Athens dailies, as did the harsh new measures that will cut wages and pensions.   Today’s general strike by the country’s biggest umbrella unions is a response to the misery – and increasing cases of outright poverty – wrought by the measures being insisted on by creditors. The troika has effectively razed all labour rights, slashed wages and pensions, and removed any semblance of sovereignty and national dignity from Greece.   Despite the press celebrations about preserving employees’ holiday bonuses (the two monthly salaries that for decades have been factored into the cost of labour), many analysts stressed that the reduction in the minimum wage and the side-tracking of sectoral contracts (profession-wide) will lead to equally deep wage cuts in the private sector.   The reduction of the minimum wage is expected to lead to cuts in monthly unemployment benefits. Amid all that, many expect that Greece could go bankrupt within the euro, as a departure of Greece from the eurozone (voluntary or forced) would be more of a disaster for the eurozone than for Greece.   Premier Lucas Papademos is scheduled to meet with the three coalition party leaders today to approve the newest harsh measures, even as some are clamouring for extending the term of the Papademos government.   “Setting for [foreign] occupation” read Avyi’s headline, which added that the reduction of the minimum wage leads effectively to a 20 percent wage cut for all employees. That, it noted, is tantamount to the loss of three monthly salaries for private sector employees.   Another front page story was entitled “They are sending the state coffers abroad”. It referred to a Merkel-Sarkozy proposal that Greek state revenues be put into a bank account abroad so as to pay off the national debt, without allowing Greeks to get their hands on their own money. “Choking pressure from Merkel-Sarkozy” reported Kathimerini’s front-page headline, referring to Merkel’s threat that Greece will not get its new loan package if Athens does not first satisfy the dictates of the troika.   “Ministers unwilling to enforce spending cuts” reported another title.   “Our small change” declared Ta Nea’s headline on the final cutbacks demanded by the troika, which may well deal a mortal blow to social services in Greece. Healthcare and medicine, defence, and the public investment programme are some of the key areas in which spending will be slashed.   “The sacrifices in wages, pensions and layoffs” reported Ethnos’ headline. The paper reported that the measures proposed by the troika will lead to the loss of three monthly salaries for private sector employees.   The sale of Cezanne’s “Cardplayers” for 250m dollars also captured attention with a front-page photo, as the work belonged to a Greek collector named George Embiricos, a shipping magnate. The buyer? The cultured royal family of Qatar, the people who in the past expressed an interest in buying choice Greek state assets.