EU and IMF rachet up pressure on greece to do its bidding , while the economy of Greece continues to wither away....

Fresh warnings from EU and IMF  Creditors threaten to withhold country’s next loan tranche By Prokopis Hatzinikolaou After the unexpected cut in May’s 5.2-billion-euro tranche this week, it now appears that the disbursement of the June installment of Greece’s bailout package is in doubt due to the political uncertainty in the country. A German Finance Ministry spokesman said on Friday that there should first be a positive report by the inspectors of the European Commission, the European Central Bank and the International Monetary Fund (known collectively as the troika) before the next tranche of 4 billion euros is released, which had originally been scheduled for the end of next month. Similarly, the IMF has noted that it will not disburse its share of the tranche before its inspectors have issued a favorable report. This has resulted in Athens halting the settlement of domestic dues and containing its outgoings to the payment of salaries and pensions. Already in April it reduced its expenses by 924 million euros. The size of the problem becomes evident when one takes into account the continuing lag in revenues, which has been aggravated by the governmental vacuum of the last few days. According to the January-April data released on Friday by the Finance Ministry regarding the execution of the state budget, net revenues came in at 14.6 billion euros, or 335 million euros off target. The biggest problem is in the collection of value-added tax, which was hit by a 435-million-euro shortfall. On the other hand, primary expenditure came down to 16.3 billion euros, from a targeted 17.2 billion. The state has curtailed the Public Investment Program over this period by 929 million euros, with an obvious impact on growth. As a result the primary deficit has beaten expectations, as it amounted to 1.6 billion euros against forecasts for 3.2 billion. Bank of Greece data showed that in April revenues dropped to 3.30 billion euros, from 3.53 billion in the same month last year, while expenditure went down to 4.9 billion euros from 5.5 billion in April 2011. The government had been aiming at revenue growth of 2.6 percent this year from last, but the considerable decline seen in the first few days this month is making this ever more unlikely. and..... Grim predictions by Brussels By Sotiris Nikas The European Commission is now expecting extra cuts of 7.8 billion euros for 2013 from Athens, while considering the current salary drop rate insufficient and expecting unemployment to reach 20 percent, according to its spring report issued on Friday. “Salaries in the private sector have been going down in the last few quarters,” the report suggested, but “at a rate that is not sufficient to assist the country in regaining its competitiveness, which is partly due to the continuing containment of salaries in the country’s trade partners.” The Commission sees the economy contracting by 4.7 percent of gross domestic product this year, with this figure approaching zero in 2013. It also forecasts deflation of 0.5 percent for this year and 0.3 percent in 2013. Unemployment is expected to come to 19.7 percent this year and 19.6 percent in 2013, after a rate of 17.7 percent in 2011. The current account deficit is at “unsustainable levels,” according to Brussels, as it will amount to 7.8 percent of GDP this year and 6.3 percent in 2013. and.... More airline carriers dropping Greece from itineraries By Alexandra Kassimi Greece is at risk of finding itself isolated in terms of air connections if carriers continue to strike the country off their itineraries at the current rate. The most recent hit came from Delta Airlines, which has decided to stop all of its direct flights between Greece and the United States as of this coming fall, even though up until three years ago the American carrier had five direct flights a week linking the two countries and is the only remaining carrier to operate direct flights, along with US Airways, although the latter’s Athens-Philadelphia connection is set to remain for this summer season only. Olympic and Continental have also stopped their direct Greece-US flights, as did United Airlines one year ago. Come this fall, the only way to travel to the US will be via connection with other airports in Europe. It must be noted, however, that transatlantic travel has been affected not just by the situation in Greece, but by the international crisis that began in 2008 as well, with leisure travelers preferring to take the longer route when it is cheaper. Other than business travel, which has also experienced a slump, though not to the degree of leisure travel, direct flights between Greece and the US were also important in boosting Greek cruises, according to market experts. The cancellation of direct flights, the experts say, is therefore expected to have a negative impact on demand for cruises. Air Canada, meanwhile, is still holding off from pulling its flights entirely, though it has reduced its Athens-Montreal route to twice rather than three times a week, while it has also decided not to increase flights to Toronto as it had planned to earlier. Links between Greece and the US are not the only ones that have taken a hit. A great loss for the Greek market and for Athens International Airport (AIA) in particular was the pullout of Thai Airways, which had been present in Greece for more than 36 years, and which no longer provides direct flights to Bangkok. Gulf Air has stopped its Athens-Bahrain route as well as its Athens-Damascus line, while Singapore Airlines has chosen Istanbul over Athens as its regional connection. As far as the European market is concerned, Czech Airlines stopped its flights to Prague, an example that will be followed by SmartWings, which used to connect the Greek to the Czech capital with three flights a week. Only Aegean Airlines still flies to Prague today. Other than carriers pulling out of the market completely, travel has also been reduced by companies cutting back on the number of flights they operate. Croatia Airlines, for example, now has two rather than three flights a week to Dubrovnik, and Aerosvit has just one instead of two flights a week to Odessa. Finland’s Blue1 will be operating one flight a week to Helsinki until July 5, when it will increase that to three a week until August 4, in contrast to four flights a week last summer to serve tourists. and.... Hotels slash their prices By Stathis Kousounis Greek hotels, such as the Palladium on Myconos (pictured), have slashed their prices this year in a bid to attract more visitors in the context of a growing domestic crisis as well as problems being faced by the eurozone as a whole, but it seems this will not be enough to offset a drop in bookings from last year. Hotel comparison website Trivago’s data show that Greece has this month become the third cheapest destination among 24 European countries as far as accommodation is concerned. It also has lower prices compared with its direct Mediterranean competitors, Turkey, Spain and Cyprus. In Athens hotel rates have gone down by 16 percent year-on-year this month, dropping from an average rate of 114 euros in May 2011 to 96 euros now.