While Greece is patting themselves on the back , dig this news flash - Greece’s situation will remain “very difficult,” with the swap trimming the country’s outstanding debt to 161 percent of gross domestic product from 164 percent, Bofinger said. European leaders aim to reduce the figure to 120.5 percent in 2020.

Political parties fail to ease financial burden PASOK and New Democracy, as well as two of Greece’s smaller parties, failed in a bid to pass a law on Thursday that would have given them more favorable borrowing terms, helping to reduce their mounting debt. The two main parties, along with the Communist Party (KKE) and the Coalition of the Radical Left (SYRIZA), struck on a formula that would have eased the financial pressure they find themselves under, especially with a view to the early elections due to be held in April or May. The legislation that was submitted to Parliament after being tagged onto a bill concerning livestock breeding proposed that the future interest on the parties’ loans be reduced from 8.65 percent to 4 percent. This would have saved PASOK and New Democracy about 8 million euros a year. It also proposed that the interest on loans which have yet to be repaid would be written off. The draft law, which was submitted following an agreement between PASOK and ND, also suggested that only 50 percent of state funding for the two main parties be given directly to banks to pay off their debt. A recent proposal by Interior Minister Tassos Yiannitsis put this figure at 60 percent. The bill put forward in Parliament foresaw that parties owing under 20 million euros, which relates to KKE and SYRIZA, would only have 20 percent of their state funding set aside for paying off their debt. The would-be legislation was opposed by the nationalist Popular Orthodox Rally (LAOS), which does not have any bank loans, the centrist Democratic Alliance, which has campaigned for more transparency in party funding, and the Democratic Left, which has not received any state money so far. It is not clear if the parties will attempt to change the amendment and resubmit it to Parliament. There is concern at PASOK and ND headquarters about the financial strains of running an election campaign if the parties’ debts, which total about 250 million euros, are not eased. And while Pasok , ND , KKE and SYRIZA try to do their own  bailout dance , look where the non - elite stand to be by year end.... http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_13714_08/03/2012_432009 Quarter of Greeks likely to be out of work by end-2012  GSEE: «Sacrifices are not bearing any fruit"Two days after the Labor Ministry’s official announcement regarding programs to boost employment, the Hellenic Statistical Authority (ELSTAT) announced on Thursday that the jobless rate in Greece has climbed to 21 percent from 14.8 percent a year earlier. The official unemployment figure came to 1,033,507, while the number of those employed went down to 3,899,319. The economically non-active population totaled 4,424,562 people. Worse still, joblessness affects one in every two young people aged between 15 and 24, and even the 35-44 age group is saddled with an unemployment rate of 18 percent. Within 2011 there were 300,000 newly out of work, while the non-active population rose by more than 70,000. The unemployment rate is even greater among women, amounting to 25.3 percent. Commenting on the data, the General Confederation of Greek Labor (GSEE) warned that the jobless rate is going to climb to one in four this year (25 percent). It added that “the number of those without a job combined with the reduction in unemployment benefits create an explosive mixture with unpredictable social consequences.” “The sacrifices that Greeks are being put through with the aim of emerging from the crisis are not bearing any fruit,” GSEE stated yesterday, while calling for “immediate and effective growth measures for the bolstering of employment, as well as generous social measures for the support of the unemployed.” At the same time the number of stores that have closed down in Athens has grown by 30 percent within a year, according to the Commerce and Services Institute of the National Confederation of Greek Commerce (ESEE). An ESEE report published on Thursday shows that 29.6 percent of shop spaces in the city center were empty last month, up from 23.4 percent a year earlier and 24.4 percent in August. Stadiou Street has suffered the most, due to repeated riots, with 42 percent of stores shut. and..... http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_08/03/2012_431850 Athens to need more funds in a year, Merkel aide says Greece will require additional debt relief within the next 12 months even after the bond-swap offer that ends on Thursday, said Peter Bofinger, an economic adviser to the German government. Given that Greece’s debt load will remain at “very high levels” after the writedown, policy makers will have to begin thinking about further debt relief in the next “half a year” that could involve cuts among “official bondholders.” “What will have to be achieved is a real debt relief for Greece -- and it will have to come in the next 12 months,” Bofinger said in an interview from Berlin on Thursday with Bloomberg Television. The Greek government’s offer to private bondholders to exchange 206 billion euros ($271 billion) of debt, the biggest sovereign restructuring in history, ends at 10 p.m. Athens time. Euro-area finance ministers are due to discuss the results at 2 p.m. tomorrow Brussels time. Investors holding about 60 percent of the bonds eligible for the swap have so far indicated they’ll participate. The Greek government has said it wants participation above 90 percent and is seeking a minimum level of 75 percent, including with use of so-called collective-action clauses forcing holders of bonds under Greek law into swapping. The swap “will go through,” and markets won’t be jarred should a majority fall short of the targeted amount, Bofinger said. “I think that the markets are aware of the risk that a majority for voluntary restructuring is not available, and so I think the surprise won’t be too big if tonight when they realize the collective action clauses will have to be applied,” he said. Greece’s situation will remain “very difficult,” with the swap trimming the country’s outstanding debt to 161 percent of gross domestic product from 164 percent, Bofinger said. European leaders aim to reduce the figure to 120.5 percent in 2020. [Bloomberg]