http://news.investors.com/article/602944/201203020802/iceland-fixes-bank-crisis-ireland-a-mess.htm?p=full
An email from Barclays Capital Explains the Greek election process and dates:
Here is a point that Barclays missed.
SYRIZA came in second place in this election. Perhaps SYRIZA comes in first place in the next election. If so, it would pick up an extra 50 seats.
As I have said on numerous occasions, Eventually, Will Come a Time When ....
Alexis Tsipras is saying all the right things (in terms of what most Greeks want to hear). His surprise second-place finish is likely to become a surprise first-place finish in the next election, perhaps by a lot more than anyone thinks.
http://www.athensnews.gr/portal/1/55397
Lesson From Iceland And Ireland:
Don't Bail Out Banks
To bail out or not to bail out?
The most definitive answer to that central question for managing banking blowups comes from Iceland and Ireland, home to two of the biggest financial bubbles of the past crisis.
More than three years after the two national governments made opposite decisions — Iceland only protected depositors, while Ireland also extended a broad guarantee to bondholders — there is little doubt among economists that Iceland chose the wiser path.
Iceland, which had its investment-grade rating restored in February by Fitch Ratings, has stabilized net debt at 65% of gross domestic product and returned to financial markets.
Meanwhile, Ireland, still on credit life support after saddling taxpayers with bank-related debt equal to 40% of GDP, remains a potential land mine in the euro area's road to recovery.
Ireland's government said this week that it will put the new European Union fiscal compact in front of voters in a referendum in coming months. Approval is needed to continue to access a credit line from the euro zone's sovereign rescue fund, but it's no slam-dunk.
The risk is that Irish households, struggling with high debt levels and diminished job prospects, will see the vote as a chance to shed bank liabilities and seek a Greek-like debt restructuring.
"In light of the initial Irish 'No' to the EU Treaty in the June 2008 referendum," Fitch said, it sees a possibility of another rejection.
The disparate ways in which Iceland and Ireland addressed their bank crises provide only a partial explanation for Iceland's recent, dramatic economic outperformance.
Iceland's jobless rate of 7.2% in the third quarter was half that of Ireland's 14.4%. Iceland is expected to see growth of 2%-2.5% this year, down from a near 3% pace in 2011. As for Ireland, its central bank estimates growth of less than 1% in both years.
Iceland has been aided by a swift adjustment of its currency, the krona, which boosted the competitiveness of domestic production.
For Ireland, by contrast, the euro has impeded its adjustment because its exchange rate is to a large extent determined by Germany's economic strength.
Still, analysts put great weight on Iceland's decision not to bail out its banks.
Unlike countries such as Greece and Italy, which entered the financial crisis with high sovereign debt levels that infected their banks, Iceland and Ireland are examples of countries whose problems were bank-focused.
In a sense, they faced a choice of whether to sandbag their economies by nationalizing excessive bank debt. Ireland's policymakers, in the heat of the crisis, didn't believe they had an alternative.
Iceland's path was far from the mainstream, but it is becoming conventional wisdom.
"Iceland's unorthodox crisis policy response has succeeded in preserving sovereign creditworthiness in the face of unprecedented financial sector distress," Fitch wrote.
At a recent conference on Ireland's recovery, Financial Times chief economics commentator Martin Wolf said he regarded "protect(ing) the sovereign from the banks" as "the single most important rule in economic management."
Citigroup economist Willem Buiter told the Reykjavik conference that a central lesson of Iceland's experience is: "Do not bail out financial institutions."
In some ways, the country of 320,000 had little choice because its banking sector had grown to 10 times the size of its economy in what Buiter called an episode of "national collective madness."
Iceland's three biggest banks would default on $85 billion in debt. Instead of taking those debts as its own, Iceland's government capitalized a new banking sector from scratch that was free of toxic assets.
While Iceland did not execute to perfection, Buiter said the principle was sound: "Don't cripple the new lending activities of a bank. Go for the good bank/bad bank model."
If Iceland's approach has become the new conventional wisdom, that doesn't mean it can be applied safely. Economists have warned that it isn't "scalable" as long as Too Big To Fail is a reality.
and consider where things presently stand in Greece and where they could be heading ....
http://globaleconomicanalysis.blogspot.com/2012/05/syrizas-tsipras-lists-bailout-rejection.html
SYRIZA's Tsipras Lists Bailout Rejection as Key Demand; Don't Rule Out a SYRIZA Coalition; Eventually May Be At Hand; Why SYRIZA Will Win the Next Election
The opportunity for Greece to tell the Troika to "go to hell" is at hand, if only the political left can stop bickering long enough to form a coalition.
Bailout Rejection Key Demand
Alexis Tsipras (SYRIZA's leader) says he will use all three allotted days to do so. His key demand is a bailout rejection, which would mean a eurozone exit whether that is his intention or not.
Please consider SYRIZA's Tsipras to make bailout rejection key bargaining point
Bailout Rejection Key Demand
Alexis Tsipras (SYRIZA's leader) says he will use all three allotted days to do so. His key demand is a bailout rejection, which would mean a eurozone exit whether that is his intention or not.
Please consider SYRIZA's Tsipras to make bailout rejection key bargaining point
The SYRIZA leader is expected to meet the head of the Democratic Left, Fotis Kouvelis, at 3.30 p.m., Ecologist Greens representative Ioanna Kontouli at 5.30 p.m. and the Social Pact president Louka Katseli at 7 p.m.
Tsipras has indicated that he will use the full three days at his disposal to talk with all the party leaders, including those of New Democracy and PASOK, but barring Chrysi Avgi (Golden Dawn).
Because of the 50-seat bonus received by the first party, in this case New Democracy, there is no way SYRIZA can form a government without ND if it does not secure the support of PASOK and the Communist Party (KKE).Tsipras' Five Point Proposal Please consider Tsipras lays out five points of coalition talks
KKE leader Aleka Papariga has already rejected any idea of cooperation with SYRIZA, although Tsipras will meet with her to discuss the matter.
The only other option open to SYRIZA is to receive the backing of ND and PASOK, which seems unlikely.
Sources have suggested that Tsipras will present a three-point proposal to his counterparts, which will include the rejection of the bailout terms.
Leading SYRIZA MP Panayiotis Lafazanis told Skai radio on Tuesday that the party would seek for some of Greece’s debt to be written off.
“SYRIZA will ask for the debt to be renegotiated with the aim of its larger party being written off,” he said, adding that the leftist party does not recognise debt that is not sustainable and which Greeks cannot pay.
- The immediate cancellation of all impending measures that will impoverish Greeks further, such as cuts to pensions and salaries.
- The immediate cancellation of all impending measures that undermine fundamental workers' rights, such as the abolition of collective labor agreements.
- The immediate abolition of a law granting MPs immunity from prosecution, reform of the electoral law and a general overhaul of the political system.
- An investigation into Greek banks, and the immediate publication of the audit performed on the Greek banking sector by BlackRock.
- The setting up of an international auditing committee to investigate the causes of Greece's public deficit, with a moratorium on all debt servicing until the findings of the audit are published.
An email from Barclays Capital Explains the Greek election process and dates:
Political uncertainty remains high in Greece. A new electoral round (which would probably be held on 10 or 17 June) looks increasing likely at this stage as, in our view, none of the three parties with the most votes seem likely to be able to secure Parliamentary support for a coalition government.
ND's leader Samaras (who came first at Sunday's ballot) declared yesterday he was unable to form a government, while Alexis Tsipras (SYRIZA's leader, who came second) seems likely to face difficulties to find support of other large left-wing parties. According to sources quoted by Kathimerini, Mr. Tsipras (SYRIZA's leader) will try in fact to reach an agreement with Communist Party (KKE) and Democratic Left, a moderate, pro-Europe grouping, although KKE has already ruled out any cooperation.
While PASOK will be also entitled to try to form a government (should SYRIZA's attempt fail), we think it will be difficult by then to form a coalition able to secure an outright majority in the Parliament.Eventually May Be At Hand
In a second general election only the seven parties who received seats in Sunday's vote would be eligible to participate. Were there to be a second election, we think New Democracy and PASOK would probably seek to turn the election into a decision on Greece's membership of the euro. If there was still an inconclusive result after a second election, then it is likely that Lucas Papademos would be invited to form another technical government.
Here is a point that Barclays missed.
SYRIZA came in second place in this election. Perhaps SYRIZA comes in first place in the next election. If so, it would pick up an extra 50 seats.
As I have said on numerous occasions, Eventually, Will Come a Time When ....
Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the "bail out" debt foisted on their country to be null and void. That person will be elected.Why SYRIZA Will Win the Next Election
Alexis Tsipras is saying all the right things (in terms of what most Greeks want to hear). His surprise second-place finish is likely to become a surprise first-place finish in the next election, perhaps by a lot more than anyone thinks.
and you think the EU / Germany / Troika and establishment greek pols rolled out the threats the first time , you haven't seen anything yet....
http://hat4uk.wordpress.com/2012/05/08/greek-coalition-talks-tsipras-clinches-deal-with-democratic-left-lays-out-bold-anti-troika-plan-28/
GREEK COALITION TALKS: Tsipras clinches deal with Democratic Left, lays out bold anti-Troika plan
But SYRIZA plan has only a slim chance of success
Following a meeting with President Karolos Papoulias, who delivered the mandate to Alexis Tsipras of SYRIZA to try and form a government in Greece, the 38-year-old politician said it was “a historic moment for the left and a great challenge for me.”
Tsipras soon afterwards met with Democratic Left leader Fotis Kouvelis. The veteran Kouvelis said later he will support second-placed Coalition of the Radical Left (SYRIZA) in an anti-memorandum coalition government.
“I told Mr. Tsipras that he has the potential to proceed with a government of the left with the support of Democratic Left,” said Kouvelis. Earlier Tsipras spoke on the telephone with Greek Communist Party leader Aleka Papariga, who turned down the chance of a face-to-face meeting.
The SYRIZAS five point plan laid out by Tsipras isn’t going to go down well in Berlin-sur-Brussels:
* The immediate cancellation of all impending measures that will impoverish Greeks further, such as cuts to pensions and salaries.
* The immediate cancellation of all impending measures that undermine fundamental workers’ rights, such as the abolition of collective labour agreements.
* The immediate abolition of a law granting MPs immunity from prosecution, reform of the electoral law and a general overhaul of the political system.
* An investigation into Greek banks, and the immediate publication of the audit performed on the Greek banking sector by BlackRock.
* The setting up of an international auditing committee to investigate the causes of Greece’s public deficit, with a moratorium on all debt servicing until the findings of the audit are published.
Equally, it isn’t going to go down well with the IIF’s Charles Dallara, many of whose members are hereby being served notice that Tsipras will be on their case regarding the question of how Greece wound up in so much debt in the first place. I would also imagine that one or two senior Goldman Sachs partners are making good use of the executive bathrooms there at the minute.
Tsipras has indicated that he will use the full three days at his disposal to talk with all the party leaders – including those of New Democracy and PASOK – barring Chrysi Avgi, the leader of neo-Nazi Party Golden Dawn. That, if nothing else, is encouraging.
We must, however, put this attempt into some kind of realistic perspective. To say that Alexis Tsipras has a mountain to climb here is a bit like saying Evangelo Venizelos needs to eat fewer pies. Not only would his plans collapse the euromarkets if he was able to form a government, the chances are he won’t be able to. He still has well under 100 seats, and without the cooperation of the KKE Communists, the only path left open to him is to break off the more nationalist MPs among the PASOK and New Democracy ranks, while perhaps getting the tacit support of those occupying Independent Greeks’ 33 seats.
That’s a tall order. But at least he’s having a go – which is more than can be said for the risible performance of Antonis Samaras yesterday.
As for the threats , here we go.....
| Germany warns: no cuts, no aid | ||||||||||||||||
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Leading German politicians warned Greece on Tuesday that the country would not receive a cent more aid, unless it fulfills all the conditions of its international bailout.
On Tuesday, the leader of the Left Coalition party, which benefited from rising anger over austerity to take second place in Sunday's poll, declared Greece's policy pledges under its EU/IMF rescue null and void.
As Europe's largest economy, Germany has contributed the biggest share of the financial guarantees under Greece's bailout, which is paid out in installments on the condition that the country meets specific savings goals.
"The agreements must be respected. I don't think we can or should renegotiate," said Martin Schulz, a German politician and president of the European Parliament, on a visit to Berlin.
Gerda Hasselfeldt, a senior member of the Bavarian Christian Social Union (CSU), sister party to Chancellor Angela Merkel's Christian Democratic Union (CDU), echoed Schulz in warning Greece against any backsliding.
"Our position is unchanged. Aid can only flow if the conditions are met," Hasselfeldt told reporters.
Greece must push a new round of spending cuts through parliament next month to qualify for an 11.5 billion euros aid installment that it needs to avoid bankruptcy. The post-election deadlock has raised questions about whether that timeline can be met.
The vote in Greece and the victory of Socialist Francois Hollande in a French presidential election at the weekend underscored a growing backlash in Europe against austerity measures favoured by Berlin as the way out of the single currency bloc's debt crisis.
"PRECARIOUS" FRANCE
France is struggling with weak economic growth, a gaping trade deficit, 10 percent unemployment and strained public finances that prompted ratings agency Standard & Poor's to cut its triple-A credit rating in January.
Despite this backdrop, Hollande promised during his campaign to raise the minimum wage, hire tens of thousands of new teachers and dilute the increase in France's retirement age that outgoing President Nicolas Sarkozy pushed through against strong opposition from unions and the French left.
Hollande has promised to push back against German austerity policies, but many expect him to water down his plans after an audit of state finances that could be completed next month.
Peter Altmaier, a leading conservative ally of Merkel, said on Tuesday that a new French government would have very little room to manoeuvre on fiscal policy.
"The French economy and the country's finances remain in a precarious position," Altmaier, parliamentary whip for Merkel's CDU, told reporters. "Any country that attempts through higher deficits ... to run a supply-driven policy will run foul of the markets very quickly and see its interest rates rise," he added. "There simply isn't any wiggle room."
Altmaier said he was hopeful that, once French parliamentary elections are over in June, Berlin could reach a policy consensus with Paris that reaffirmed the path of budget consolidation in Europe "once and for all".
Merkel, who publicly supported conservative incumbent Sarkozy in the French race, telephoned Hollande on Sunday after his victory and invited him to Berlin for talks.
The two leaders are due to meet next week, after Hollande is sworn in as president, to try to iron out their differences.
and....
http://www.athensnews.gr/portal/1/55396
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