http://www.athensnews.gr/portal/1/56349
9.39pm To wrap up today's events, the parties that broadly back the country's international bailout will agree to form a coalition government on Tuesday, a senior official with New Democracy party told Reuters on Monday.
"We are going to clinch a deal tomorrow, we will form a government," the official, who declined to be named, said.
The official said that Pasok party would appoint members in the next cabinet and also expressed hope that the Democratic Left, would take part.
That brings us to the end of today's blog, we hope you've enjoyed it and we'll see you again tomorrow with another live blog, as we head ever closer to a new government.
9.31pm Upon completing his meeting with Antonis Samaras, Democratic Left leader Fotis Kouvelis said that he re-stated his position that a government needs to be formed, one that is however built on very specific foundations. "I repeated the seven positions that our party holds onto" he said, "positions that concern a strategy that needs to be followed so as to keep Greece within the eurozone, but will take it away from the terms of the memorandum".
He then went on to say that his party would not hand over a blank cheque and that for a coalition to be formed there would have to be an agreement on the government programme, as well as on the government personnel.
Soon after, Samaras was happy to describe his talk with Kouvelis as constructive, saying that he would continue discussions with the Democratic Left head on Tuesday.
9.01pm Fotis Kouvelis, leader of the Democratic Left, meets with Antonis Samaras, to discuss a possible coalition government.
8.55pm International partners will not decide on fresh loan payments to Greece until a new government there has signed a memorandum of understanding (MOU) with the so-called troika of EU, IMF and ECB, a senior euro zone official said.
"No new decisions on disbursements will be made until a new MOU has been negotiated and signed," Thomas Wieser, head of the Eurogroup Working Group that supports the work of euro zone finance ministers, told reporters on Monday.
8.46pm German Chancellor Angela Merkel, a football fan, will not be in Gdansk, Poland to watch the football game between the national teams of Germany and Greece at the Euro 2012 quarter-finals, because she will be in Rome at the time of the game.
Alternate government spokesman Georg Streiter stated that the chancellor could not be in Gdansk “unless she was beamed there” because on Friday she will be in Rome as the guest of Italian Prime Minister Mario Monti.
“She can do a lot of things but I am not sure if she can do something like that,” Streiter said jokingly.
German President Joachim Gauck will not be in Gdansk for the game either.
8.25pm Panos Kammenos, making his statements after the conclusion of his meeting with Antonis Samaras. He doesn't look best pleased, we will say that.
"The election in Greece yesterday indicates a positive prospect for not only them forming a government, but also them working constructively with their international partners in order that they can continue on the path of reform and do so in a way that also offers the prospects for the Greek people to succeed and prosper," Obama said.
Also attending the summit was German Chancellor Angela Merkel who noted that "the result of the Greek election lets me hope that there will be a quick creation of a new stable government. This is good news for the whole of Europe. The new government will and must stick to the commitments, which the country has agreed on."
8.10pm The European Union is confident that the Greek government to be formed after Sunday's election will adhere to the joint EU/IMF bailout programme, the president of the European Council said on Monday.
"The euro area member states are determined all the more after the choice made by the Greek people. Greece wants to stay in the euro zone," Herman Van Rompuy told a news conference.
"We are confident that the new government will take ownership of the adjustment programme to which the Greek authorities had committed to earlier this year."
8.09pm A narrow victory for pro-bailout parties in Greece's election has no immediate impact on the country's credit ratings, Standard & Poor's said on Monday, but does not remove the risk of an eventual Greek exit from the euro zone.
While S&P said the results reduced the chances that Greece would ditch the euro in the near term, it added that it still sees at least a one-in-three chance of that happening in the future.
S&P's currently rates Greece CCC, which puts it deep into speculative, or "junk," territory.
8.03pm ND leader Antonis Samaras and Independent Greeks chief Panos Kammenos pictured here during their meeting earlier today. It ended quickly, with Kammenos confirming that "we can't co-operate with the terms that Mr. Samaras adheres to". He noted that while agreeing with Samaras for the need to form a government, he said that he proposed a national unity government, which Samaras turned down. Kammenos then said that they will support any laws or policies that would help the people disengage themselves from their lenders, but then went on to say that would be hard in their opposition role, stressing that "the country's path through the memorandums is a path towards oblivion. It can only be stopped if the people stop it".
Soon after, Antonis Samaras confirmed that he has reached an initial agreement with Evangelos Venizelos, with whom he is to have further talks, but said that Kammenos "does not want to co-operate, does not realise the importance of the situation and makes up all sorts of excuses".
7.20pm As expected, the Pasok chief re-stated his position that the ideal solution would be for a coalition government to be formed, made up by Syriza, New Democracy, Pasok and the Democratic Left. However, speaking after his meeting with Samaras had ended (the New Democracy leader now having moved on to a meeting with Independent Greeks head Panos Kammenos) he distanced himself from Syriza and Alexis Tsipras, saying that"the statements made by Mr. Tsipras are both dissapointing as well as politically and democratically provocative. Syriza is essentially saying that the rest of us should form a government, which however would have to stay true to the political line drawn by them".
He then went on to stress that Samaras should conclude the process of the exploratory mandate by tomorrow with a meeting of the four political leaders under President Papoulias.
"The people have voted for the country's stay in the euro, the re-negotiation of the memorandum and have given us a clear order to work together", he said.
7.00pm The editorial team of the German-based Financial Times Deutschland have defended their decision to make recommendations on how Greece's electorate should vote - in an article warning them against putting their faith in Syriza's 'populist' leader Alexis Tsipras - two days before the country went to the polls.
In Monday's issue of the FTD, they said it was their obligation to include not just news but also opinion concerning what they consider right and wrong.
"An open and transparent expression of opinion is more productive and honest than an indirect expression of sympathy, a policy followed by the other newspapers," the paper's leadership added.
They noted that the recommendation on how to vote in the elections should not be dealt with as an expression of faith in any specific party but concerned only the specific elections.
Noting that they usually confined such opinions to German elections, FTD said that they decided to make an exception in the case of the Greek elections due to their great significance for both the future of Greece but also of Germany and other Europeans.
"Their outcome could have plunged the European continent into an existential crisis and destoryed the social and material prosperity achieved over decades. For this reason, the election recommendation of the paper was nothing more and nothing less than a transparent expression of opinion on shaping public opinion," FTD said.
The paper's Monday issue also covered some of the reactions to Friday's article in Athens, both by the other parties and by the press.
6.40pm The meeting between Venizelos and Samaras has been completed. We await the statement of the Pasokleader.
6.39pm Pasok leader Evangelos Venizelos and New Democracy chief Antonis Samaras meet to discuss the possibility of a coalition government. If Venizelos backs down and decides that a coalition can be formed without the participation of Syriza, then we may have a new government within the week.
6.21pm Former Prime Minister Kostas Simitis has called on the pro-European parties that made it into parliament (Pasok, New Democracy, Democratic Left) to form a coalition government, otherwise "they will lead he country out of the eurozone and back to the drachma".
"Any party trying to gain the upper hand over the others, will be acting irresponsibly. This is a time for courage not fear, for effective co-operation not fakery" he stressed.
6.09pm "There must be a discussion as to who will be prime minister". The words belong to Democratic Leftleader Fotis Kouvelis, who while speaking to Real FM earlier, voiced his view that the leader of the winning party should not be consdiered the only candidate for the PM role. He also noted that extensive discussion needs to made concerning the persons taking on the various ministries.
This will no doubt bring him into direct conflict with Antonis Samaras, who sees himself leading any coalition government that may be formed. According to NET TV, New Democracy sources have confirmed that Samaras does indeed intend to stand as prime minister.
and.....
Another Surprising Conversation With "Athens"
I wrote about a conversation I had with a Greeks shipper living in Athens on May 15. In that article I conveyed the thoughts of my friend who was convinced that the June 17 Greek elections would produce a different result than the May 26 effort to form a government. At the time he said:
When the next election comes, Greeks will not vote in anger and they will not vote for the idiots on the fringes. The centrist parties will rebound. A National Salvation Government will be formed.
He was proven correct and I called him this morning to get his thoughts. It went like this:
BK:Good call on the election. What happens next?Athens:New Democracy (ND) and PASOK (P) will form a new government. Of significance is that another socialist party, The Democratic Left (DL), will join in with ND & P. This makes the coalition more credible as Fotis Kourelis runs DL. Fotis is well liked and respected in Greece. Syriza and the Communist parties will form the opposition. I have no idea what the far right parties will do.BK:Can this work?
Athens:
For a time, maybe. The DL party is in favor of rewriting the deal reached with Germany. I think that talk of this will happen in the coming days.BK:Are you pleased with the voting results?Athens:It's not possible to be pleased with anything that happens in Greece these days. I have taken my family to London for a few months. We will go the Olympics and try not to think about life in Athens. I fear that social unrest is going to spring up again. This is the real reason I took my family out of the country.BK:That is a shocking statement. What will bring back the demonstrations?
Athens:
The country is flat broke. In a few weeks the government will not be able to pay workers. When this happens, the strikes will resume.BK:What are the chances of another bailout package from Brussels?Athens:Screw Brussels. The decision on more aid for Greece comes from Berlin. I think the Germans will say, “No.”BK:So you think that Greece will be forced out of the Euro?Athens: Yes, this is a possibility. Greece is not competitive at all. It is 40% less competitive than even Spain. So ultimately some form of devaluation must happen.
BK:
What’s your sense of timing for Grexit?Athens:Where will the money come from that Greece needs to stay alive? I tell you again that it must come from Germany. We may hear that Germany is willing to renegotiate parts of the bailout, but significant new money from Germany is not in the cards. There will be another crisis in less than three-months.BK:If Greece goes, does Spain follow? What about Italy?Athens:If Greece leaves the Euro there will be tremendous hardships for all of the countries involved. Spain would be very hard hit, Italy as well. The economies and If Greece leaves the Euro there will be tremendous hardships for all of the countries involved. Spain would be very hard hit, Italy as well. The economies and commercial banks of the southern European countries would implode. The costs would be staggering. These facts are understood, so I think they will not let the Euro collapse.BK:But what is Plan B?Athens:Simple. Germany will leave the Euro. It will reestablish the old Deutche Mark (DM). The Euro, without Germany in it, would fall against all currencies. The necessary adjustments to restore competitiveness will have been achieved. The DM will be very strong against the Euro. This will hurt Germany, but not for long. In the end this is the only solution that I can see.BK:What about France?
Athens:
The most important election this weekend for Europe was not in Greece. It was in France. The election results were very clear. France is going in a very different direction than Germany. The cooperation between France and Germany over the past few years is finished.BK: Wow! So what do you do? Do you sell the Euro and buy dollars?Athens:I already own dollars. I don’t like them either. Recently I have been converting Euro holdings into German corporate paper that pays in DM if the Euro is no longer the official currency of Germany.++Notes:The idea that it is Germany that leaves the Euro is not new, but I have always considered it to be far fetched. Not any longer. This fellow has been spot on regarding developments in Greece. He is well connected in Germany. That he is putting money on the table to back up his views is important to me.
The EUR rate against the major crosses this morning does not reflect the views of my friend. The current EURUSD 1.2570 rate reflects the market thinking that there is no immediate crisis. It certainly is not a price that contemplates a Euro without Germany. Should “Athens” thinking on the outcome gain some traction, then the Euro is headed much lower.
The Bonds that have DM protection clauses are new to me. The following link is to a prospective of the securities issued by VW on June 12, 2012. (Link - PDF) The language regarding “Successor Currency” is here:References herein to a "Specified Currency" shall include any successor currency provided for by the laws in force in the jurisdiction where the Specified Currency is issued or pursuant to intergovernmental agreement or treaty (a "Successor Currency") to the extent that payment in the predecessor currency is no longer a legal means of payment by the Issuer on the Notes.
A number of “DM protected” bonds have been issued in the last month. If someone has a full list, I would appreciate it. The timing of this issuance is interesting. I understand the bonds were lapped up by the market.
I’m tempted to short the EURUSD on this information. But FX markets are not at all predictable, and there is no assurance that things go in the way this article suggests. One thing that I am pretty sure of is that volatility in FX markets is going to take a very big leap.Seat belts on. Impact imminent.H/T: K.
and.....
http://hat4uk.wordpress.com/2012/06/18/de-la-rue-the-drachmas-a-likely-story/
( unrelated to Greece or perhaps more related than we presently know ? )
DE LA RUE & THE DRACHMAS: A likely story?
Banknote printer De La Rue’s CEO has cried off from the G20. Did he do so to oversee Drachma deliveries? Or is the company facing an imminent takeover danger?
James Hussey…personal advisor to Oberthur Chairman
There’s been a lot of tweeting, nodding and winking today ever since the Daily Telegraph’s Ben Brogan noted that banknote printer De La Rue’s CEO Tim Cobbold had cried off the Mexico G20 talking shop. “Uh-oh,” Ben tweeted cheekily. The suggestion, obviously, was that Cobbold was staying home to get a rush order from Athens out of the factory door.
I think this is unlikely – but it doesn’t make the story any less intriguing. As Tim has said himself in the past, it usually takes six months between an initial order being placed by a central bank or government, and the notes being delivered. Doing the job in three weeks simply isn’t possible without taking massive quality control risks. This does not, of course, mean that the notes aren’t already printed in Overton, and simply waiting for the word from Athens. Or Berlin. Several times earlier this year, De La Rue refused “to either confirm or deny” they were printing Drachmas; which, to most suspicious hack minds, means they were.
But if that was the case, it seems unlikely they’d think it necessary to have Tim Cobbold cancel working the room in Mexico just to oversee the Despatch Department at the Hampshire plant. Perhaps more relevant is the fact that, just a week ago, former De La Rue CEO James Hussey joined voracious head-to-head competitor Oberthur. And thereto lies one helluva tale.
When in 2010, ‘irregularities’ were found at the De La Rue printing plant, the company was forced to temporarily halt production at its Overton factory on July 21 of that year. The initial corporate line was that ‘concerns about the quality of banknote paper’ had brought things to a halt, and that only one customer was involved. But then De La Rue abruptly announced that it was calling in the Serious Fraud Squad….and that several De La Rue clients were ‘involved’.
The next part of this yarn depends on how one defines the term ‘involved’. The SFO probe focused on clear evidence that De La Rue staff had faked certificates verifying the quality of banknote paper. What was never revealed was preciselywhy they’d been doing this. But what’s abundantly clear is that Chief executive James Hussey quit. He did not get a payoff in any shape or form.
That’s pretty unusual in senior corporate circles. But a Hussey ally denies any wrongdoing on the former CEO’s part.
“James believes with some justification that he was made a scapegoat,” he says, “And, well, just generally shafted for something that was nothing to do with him”.
However one interprets what happened, the SFO investigation petered out with minimal publicity. And now James Hussey has turned up at major competitor Oberthur Technologies. But here the tale takes another twist: for last year, Oberthur was behind a series of failed bids for De La Rue.
Suddenly, this begins to look like something well worthy cancelling a Mexican fiesta for. Here we have a spurned former CEO taking up a senior position at a competitor who has tried to board the De La Rue ship before now. Here we also have – do we? Who knows? – a leader spurned who might have commercially advantageous information – perhaps incriminating secrets? – well capable of damaging De La Rue’s core business…in a sector where sphincter-tight secrecy is 95% of the game.
Tim Cobbold cited ‘personal reasons’ for staying in Britain this week. He’s telling the truth: he clearly regards this situation as very personal indeed. De La Rue’s annual report reveals that Cobbold has a clause in his contract that allowing him to resign at one month’s notice “in the event of certain corporate actions” – specifically, if the company is taken over. He would be entitled to a payment equivalent to one year’s salary of £113,000, as well as benefits, such as a pension and company car, worth £40,000. His finance director Colin Child has a similar deal.
So yes, Benedict Brogan is right to go “Uh-oh” on Twitter. This could well be one to watch very closely indeed.
http://hat4uk.wordpress.com/2012/06/18/greece-jubilation-is-premature-nobody-has-factored-in-the-reality-of-the-morning-after/
GREECE: Jubilation is premature…nobody has factored in the reality of the morning after
PASOK STILL WANTS SYRIZA IN COALITION, OR NO DEAL
“Yo! we goin’ ter Hell in a bucket guys!”
Yesterday I posted to advise folks to ignore the Greek election, and focus instead on the imminence of Greek default. I have more for you on this story already.
“There’s no time to lose or leeway for small party games,” said New Democracy leader Antonis Samaras in Athens last night, “The country must be governed.”While Samaras may choose to suggest that a lack of government is at the root of his country’s problem, the reality is that the stasis of the last two months has if anything allowed Greece to limp on without too many outside observers working out the inevitability of its doomed financial position. Although The Slog has posted extensively about Athens getting deeper in debt under the laughably titled ‘bailout’ terms (and recorded the appalling socio-medical effects of this), the fact is that Alexis Tsipras is right: Greece has barely enough money to last it until mid July.
There is also another element of the current ‘victory’ the MSM have conveniently overlooked: the fact that PASOK leader Evangelo Venizelos has said he would not join in a Coalition without Syriza….whereas Syriza says it has no intention of joining any government that finds the current bailout terms acceptable. Venizelos has lied with smooth aplomb about such things before of course, but it would be hugely embarrassing for Southern Europe’s fattest lump if he now went back on that condition.
Finally, nobody – not the Troika, Brussels, Berlin or the media outsiide Greece – has given much thought to a nation waking up this morning to the reality of tax bills that were held back until the election was over (handy for New Democracy, that one) or that, while Berlin mumbles grudgingly about extended payment periods and ‘relaxation’, the existing Troika assisted suicide note calls for the immediate enactment of more austerity by the incoming government, not less. Even with extended payback periods, the entire idea of Greece pulling out of this nosedive is farcical to the point of surreality: it’s economy is going backwards, vast sums are being withdrawn from the banks by Greek citizens, and the minute any government makes a false move, the plug will be pulled.
The eurozone finance ministers who said yesterday that Greece’s economic recovery requires “continued fiscal and structural reforms” are clearly not of this Earth. In a statement yesterday, they urged the “swift formation of a new Greek government that will take ownership of the adjustment program.” There remains only the small problem of an economy exporting nothing, and a Treasury collecting taxes with less and less efficiency as each month passes. Greece’s economy shrank further in the first three months of 2012, shrivelling at a yearly rate of 6.5%, against a backdrop of painful wage cuts, tax hikes and record unemployment.
Samaras surpassed himself with the euphoric bollocks he spouted at last night’s victory rally, observing: “The Greek people have voted for policies that will create jobs, foster growth, and provide security for Greece…Greece’s position in Europe will not be put in doubt, fear will not prevail.”
Apart from the Greeks voting for policies that have destroyed both jobs and growth, voting on the basis of fear placed there by Berlin-am-Brussels, and voting to keep the whirligig in motion, the ND leader’s remarks were really quite accurate. But as Kathemirini observes this morning, ‘last night’s result still leaves Samaras with plenty to do if he is to form a government’. Former PASOK education minister Anna Diamantopoulou was quick to repeat her leader’s pledge that “my Party would be unlikely to join a coalition without Syriza in it”.
The truth is that, without a big shift on the part of someone here, we are in the position I predicted yesterday – another stalemate – and the potential for a Coalition which, at best, will have a tiny majority. And if you’re keen to remain confused, let me end on this note of double-speak from Antonis Samaras: “We will honour our EU commitment to adhere to the bailout conditions, and our commitment to the electorate to revise the [bailout] memorandum.
and...
http://www.zerohedge.com/news/merkel-just-says-nein
Merkel Just Says "Nein"
Any hopes that Germany may bend and allow Greece a little leeway in its bailout negotiations, buying at least a little goodwill with its people have just been dashed. Not only that, but readers may recall last week's Die Zeit article that a third Greek bailout may be in the workd. Well, forget it. From Reuters:
- GERMANY'S MERKEL SAYS CANNOT ACCEPT ANY LOOSENING OF AGREED REFORM PLEDGES IN GREECE AFTER ELECTION
- MERKEL SAYS DOES NOT SEE ANY REASON TO SPEAK ABOUT A NEW AID PACKAGE FOR GREECE ON TOP OF THE TWO ALREADY AGREED
- GERMANY'S MERKEL EXPECTS QUICK FORMATION OF NEW AND STABLE GOVERNMENT IN GREECE
- Good luck with that, and good luck to everyone whose entire investing strategy is based on the assumption that Germany will blink when it comes to Greece.EURUSD slides to the day's lows in the aftermath of reality once again offsetting speculation of unicorns and magic money growing trees.
To summarize:Q: "Merkel: What is best in life?"A: "To crush the Greeks, see them driven before you, and to hear the lamentation of their women"http://www.zerohedge.com/contributed/2012-06-18/livin-it-hotel-nein( do not view with one's mouth full of coffee while working at keyboard - william banzai7 )
.
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The Kleptocrat torture's proceeding
The Euro debt zombies are bleeding
The core holds the whip
That's guiding this trip
To chaos this system is leadingThe Limerick King
and.....
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_18/06/2012_447638
Greece races as cash dwindles with Europe seeking austerity
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Greece’s two traditional political rivals are in a race to forge an unprecedented coalition as the state’s cash dwindles, bank deposits flee and Europe demands renewed austerity pledges before releasing more emergency aid.
Greece will run out of money in mid-July, the Syriza party, which placed second in Sunday’s election, said on June 13 after being briefed by Acting Finance Minister Giorgios Zanias. Caretaker Labor and Social Security Minister Antonis Roupakiotis refused to offer assurances pensions will be paid in August, Athens News Agency reported the same day.
“There’s no time to lose or leeway for small party games,” Antonis Samaras, leader of New Democracy, said in Athens Sunday after placing first in a rerun vote that leaves him needing the support of third-place Pasok party to rule. “The country must be governed.”
Two months of political limbo threaten to cut off the quarterly disbursement of euro-area and International Monetary Fund loans that have kept the country afloat since 2010. Greece, in its fifth year of recession, would face having to abandon the 17-nation euro and reintroduce the drachma were the flow of rescue funds to stop.
Political leaders in Europe insist Greece enact spending cuts promised in return for 240 billion euros in rescue packages since 2010 while holding out the possibility of granting extra time to meet targets for narrowing the budget deficit.
‘Stand by Greece’“We will continue to stand by Greece,” European Union President Herman Van Rompuy said in a statement following the vote. The Group of Seven industrialized nations said in a statement that it’s in “all our interests for Greece to remain in the euro area while respecting its commitments.”
After an inconclusive May 6 election that led to the June 17 rerun, European and IMF budget experts canceled a mission to review Greece’s eligibility for the next aid installment and now intend to carry out the assessment around the end of June. That plan assumes a new Greek government is in place by then.
“There’s not even a day to lose,” said Evangelos Venizelos, leader of Pasok.
Coalition majority
New Democracy won 129 seats in the 300-seat parliament, according to Interior Ministry projections with 99 percent of the vote counted. Pasok, which has alternated in power with New Democracy over the past four decades, won 33 seats, enough for the two of them to forge a coalition that backs the creditors’ austerity demands.
The euro reached a four-week high before giving up some of the day’s gains, and stocks rallied. The currency advanced 0.6 percent to $1.2711 as of 2:46 p.m. in Tokyo. The MSCI Asia Pacific Index rose 1.4 percent.
Syriza matched its second-place ranking of last month by stepping up demands to abandon the fiscal-tightening program.
Alexis Tsipras, the head of eight-year-old Syriza, had vowed to keep Greece in the euro while winning concessions on the rescue terms from European leaders including German Chancellor Angela Merkel. He said New Democracy and Pasok, which united last year to back further fiscal tightening by a caretaker government, had “lowered the Greek flag and surrendered it to Angela Merkel.”
Syriza opposition
Tsipras signaled&?nbsp;on Sunday&?nbsp;that Syriza won’t join a government with New Democracy and Pasok, saying his faction “will be present in all developments as the main voice of the anti-bailout vote in Greece.”
Euro-area finance ministers said Greece’s economic recovery requires “continued fiscal and structural reforms.” In a statement on Sunday, the European ministers urged the “swift formation of a new Greek government that will take ownership of the adjustment program.”
Greece must pursue budget cuts with “determination” to win the release of further aid, the European Commission said on May 30. The country faces a cumulative fiscal gap in 2013-2014 of 5.5 percent of gross domestic product, according to the commission, the 27-nation EU’s executive arm.
A lack of progress in bolstering tax collection, improving public procurement and selling state-owned assets has left Greece struggling to meet targets for narrowing a budget deficit that in 2009 was more than five times the EU limit.
Rescuer demands
European and IMF demands for an economic overhaul underpin an initial 110 billion-euro rescue in May 2010 and a second 130 billion-euro loan package that, along with the world’s biggest writedown of privately held debt, followed this year. The latest package is due to last through 2014.
The Greek budget-policy shortcomings have increased skepticism in euro nations such as Germany, the Netherlands and Finland about offering aid, while the worst recession in Greece during peacetime has made domestic voters critical of the fiscal-austerity demands. Syriza’s electoral success last month sparked concerns across Europe about a possible Greek exit from the euro area.
Coalition majority
New Democracy won 129 seats in the 300-seat parliament, according to Interior Ministry projections with 99 percent of the vote counted. Pasok, which has alternated in power with New Democracy over the past four decades, won 33 seats, enough for the two of them to forge a coalition that backs the creditors’ austerity demands.
The euro reached a four-week high before giving up some of the day’s gains, and stocks rallied. The currency advanced 0.6 percent to $1.2711 as of 2:46 p.m. in Tokyo. The MSCI Asia Pacific Index rose 1.4 percent.
Syriza matched its second-place ranking of last month by stepping up demands to abandon the fiscal-tightening program.
Alexis Tsipras, the head of eight-year-old Syriza, had vowed to keep Greece in the euro while winning concessions on the rescue terms from European leaders including German Chancellor Angela Merkel. He said New Democracy and Pasok, which united last year to back further fiscal tightening by a caretaker government, had “lowered the Greek flag and surrendered it to Angela Merkel.”
Syriza opposition
Tsipras signaled&?nbsp;on Sunday&?nbsp;that Syriza won’t join a government with New Democracy and Pasok, saying his faction “will be present in all developments as the main voice of the anti-bailout vote in Greece.”
Euro-area finance ministers said Greece’s economic recovery requires “continued fiscal and structural reforms.” In a statement on Sunday, the European ministers urged the “swift formation of a new Greek government that will take ownership of the adjustment program.”
Greece must pursue budget cuts with “determination” to win the release of further aid, the European Commission said on May 30. The country faces a cumulative fiscal gap in 2013-2014 of 5.5 percent of gross domestic product, according to the commission, the 27-nation EU’s executive arm.
A lack of progress in bolstering tax collection, improving public procurement and selling state-owned assets has left Greece struggling to meet targets for narrowing a budget deficit that in 2009 was more than five times the EU limit.
Rescuer demands
European and IMF demands for an economic overhaul underpin an initial 110 billion-euro rescue in May 2010 and a second 130 billion-euro loan package that, along with the world’s biggest writedown of privately held debt, followed this year. The latest package is due to last through 2014.
The Greek budget-policy shortcomings have increased skepticism in euro nations such as Germany, the Netherlands and Finland about offering aid, while the worst recession in Greece during peacetime has made domestic voters critical of the fiscal-austerity demands. Syriza’s electoral success last month sparked concerns across Europe about a possible Greek exit from the euro area.
Greek deposit outflows accelerated before the June 17 election, two bankers familiar with the situation said, on concern the nation may move closer to abandoning the euro. Daily withdrawals had increased to as much as 500 million euros this month, one banker said, asking not to be identified because the figures aren’t public.
Greece narrowed its deficit from more than 15 percent of GDP in 2009 to 9.1 percent in 2011. The country’s spending gap is due to fall to around 7 percent of GDP this year.
With Greece’s financial troubles still festering more than two years after sparking Europe’s debt crisis, Italy at risk of joining the Greek, Irish, Portuguese and Spanish governments in seeking emergency aid and European leaders split over deeper fiscal integration, the onus to calm any renewed volatility on financial markets may fall on central banks.
Central banks “are the only actors who can react swiftly,” Joachim Fels, chief economist at Morgan Stanley (MS) in London, said in a June 17 report.
Greece narrowed its deficit from more than 15 percent of GDP in 2009 to 9.1 percent in 2011. The country’s spending gap is due to fall to around 7 percent of GDP this year.
With Greece’s financial troubles still festering more than two years after sparking Europe’s debt crisis, Italy at risk of joining the Greek, Irish, Portuguese and Spanish governments in seeking emergency aid and European leaders split over deeper fiscal integration, the onus to calm any renewed volatility on financial markets may fall on central banks.
Central banks “are the only actors who can react swiftly,” Joachim Fels, chief economist at Morgan Stanley (MS) in London, said in a June 17 report.
and.....
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_18/06/2012_447698
Germany 'won't overstrain' Greece but reforms set in stone
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Berlin hailed Sunday's election victory for the conservative New Democracy over the radical leftist SYRIZA block as a clear vote by Greeks to remain in the euro zone and respect bailout terms imposed by Europe and the International Monetary Fund.
Germany's deputy finance minister said Greece's creditors in the European Union considered that further loan tranches would hinge on a new Greek government's commitment to reforms, while Foreign Minister Guido Westerwelle made it clear the heavily-indebted euro zone state still had a lot of work to do.
"The substance of the reforms is not negotiable,» the foreign minister told German radio. «Whatever government is formed must stick to what has been agreed with Europe."
But opinion appeared to be divided in Berlin over what concessions, if any, could be made now that Greece has delivered the election result which was urged by Chancellor Angela Merkel herself on the eve of the Greek vote.
"It is clear to us that Greece should not be over-strained,» Deputy Finance Minister Steffen Kampeter told German TV.
Westerwelle went further still, saying time for reforms had been «lost» during the election campaign and the impact of this had to be discussed ."We're ready to talk about the time-frame as we can't ignore the lost weeks and we don't want people to suffer because of that,» said the minister.
But other German officials, speaking on condition of anonymity, said Westerwelle's comments did not represent the broader government line and that the basis of negotiation remained the memorandum of understanding signed with Greece.
Asked about the possibility of extending the time frame for Greece, one of the sources said: «Forget it. That would take us much closer to a third programme for Greece and we're far away from that."
| "Of course we are going to need to talk to the Greek government, but that is not on the table,» the source added. [Reuters] |
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