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| Evangelia Platanioti and Despoina Solomou perform in the synchronised swimming duets final during the Olympic Games on Tuesday |
1. DISAPPOINTING MEETING The country’s coalition leaders did not come to a clear agreement over debt measures during their latest meeting on Tuesday. Democratic Left leader Kouvelis opposes PM Samaras’ plan to revive a labor reserve scheme to reduce the public sector wage bill. Pasok leader Venizelos expressed his doubts about the scheme, but said he was also against the idea of mass layoffs in the public sector. Finance Minister Stournaras said “We will look at the labor reserve because the numbers just don’t add up easily,” he said. “11.5 billion euros is a significant number and we haven’t reached it yet. We still need to find 3.5 to 4 billion euros.”
2. OPPOSITION BACKLASH The Radical Left Coalition party Syriza and Independent Greeks parties condemned the coalition government meetings on Monday and Tuesday, stating that they are just following the demands of the troika. The Independent Greeks party said in a statement that "the storm of economic measures has been decided and (the coalition) is simply looking for ways to serve them."
3. NO LAYOFFS Finance Minister Yannis Stournaras ruled out the option of layoffs in the public sector on Tuesday. Responding to information that has come to light suggesting that layoffs and the labour reserve measure will be implemented in the public sector, Stournaras said that the option of layoffs is not being considered adding, however, that the labour reserve measure will be examined “because the numbers do not add up easily. 11.5 billion euros is a large number and we are not quite there yet; we are 3.5-4 billion euros short.”
4. FOREIGN MINISTER MEETING Foreign Minister Dimitris Avramopoulos and his Italian counterpart Giulio Terzi met in Rome on Tuesday and agreed to support the Trans-Adriatic Pipeline (TAP) to transport natural gas from the Caspian Sea and Middle East through Greece, Albania and Italy to the rest Europe. “This will make Greece, Italy and neighboring countries strategic partners in the distribution of natural gas in Europe,” said Avramopoulos.
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http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_23051_07/08/2012_455956
More pension cuts in the pipeline
By Prokopis Hatzinikolaou
The government appeared set to announce on Tuesday further cuts to all pensions as part of the effort to finalize an 11.5-billion-euro package of savings over the next two years, as demanded by the country’s international creditors -- known as the troika.
“There are no easy solutions. Our efforts are focused on avoiding any cuts for the lowest-paid pensioners but, unfortunately, this is the most populous segment. Spending on pensions has been severely restricted but it must be restricted even further,” Labor Minister Yiannis Vroutsis told a radio station.
Vroutsis is expected to submit to the three government coalition partners by Monday the alternative scenarios for saving more than 5 billion euros in spending on pensions. According to sources, the pension cuts will be staggered, from 2-3 percent for the lowest to 15 percent for the highest. There will also be cuts in supplementary pensions, retirement lump sums and welfare benefits.
A top-level source argued on Tuesday that if the leaders of the three coalition partners -- New Democracy, PASOK and Democratic Left -- do not abandon their previously stated “red lines” for no further pay cuts, the 11.5 billion euros’ worth of cuts will not be finalized.
A previously mulled idea of raising the retirement age, meanwhile, seems to be losing favor because it would hamper efforts to reduce the overall number of civil servants.
The government is also considering placing some 45,000 public sector workers in a labor reserve scheme over the next three years and will not renew 25,000 short-term contracts, as part of efforts to reduce the total number by 150,000 by 2015.
“We shall have to look into the labor reserve scheme because the numbers do not easily add up. The sum of 11.5 billion is a high figure. We are not there yet; we are still around 3.5-4 billion euros off target,” Finance Minister Yiannis Stournaras told reporters after a meeting with President Karolos Papoulias on Tuesday.
Deputy Finance Minister Christos Staikouras said in a radio interview on Tuesday that the troika is currently assessing the government’s labor reserve proposal. He said the previous scheme did not work last year because it was not properly implemented.
Ministers are also considering abolishing what little is left of Christmas and holiday bonuses.
and......
S&P lowers outlook on Greeece to negative
Greece’s credit rating may be cut again by Standard & Poor’s on concern a worsening economy raises the likelihood the troubled nation will need more support from European Union lenders.
The outlook on Greece’s CCC rating, already eight levels below investment grade, was revised to negative from stable, S&P said yesterday in a statement. The change reflects the risk of a downgrade if Greece is unable to obtain the next disbursement from the European Union and International Monetary Fund rescue package, the rating company said.
Greece’s economy has been squeezed by the fiscal tightening needed to qualify for rescue-loan disbursements, with gross domestic product shrinking for five straight years and unemployment rising to 22.5 percent from 7.9 percent. Finance Minister Yannis Stournaras said yesterday the government is still working on identifying almost a third of the cuts required by international creditors to resume the flow of bailout funds.
Greece may need as much as 7 billion euros ($8.7 billion) in loans this year as gross domestic product shrinks as much as 11 percent in 2012 and 2013, S&P said.
Bond-market history indicates that the utility of sovereign ratings may be limited. Almost half the time, yields on government bonds fall when a rating action by S&P and Moody’s Investors Service suggests they should climb, according to data compiled by Bloomberg on 314 upgrades, downgrades and outlook changes going back as far as the 1970s.
“We see the likelihood of shortfalls, owing to election- related delays in the implementation of budgetary consolidation measures for the current year, as well as the worsening trajectory of the Greek economy,” S&P said in the statement. “As a result of this economic weakness, and due to an absence of progress on tax administration reforms, collection of personal, corporate and indirect taxes is well below target for 2012.”
and.....
Consumer spending back to 2004 levels
Greek consumer spending is expected to fall to 2004 levels if the government’s plan for budget savings of 11.5 billion over the next two years is implemented, according to the Commerce and Services Institute of the National Confederation of Greek Commerce (INEMY-ESEE).
According to Eurostat calculations which do not take into account the planned savings, final consumption spending is projected to fall to 206,465 million units of the Purchasing Power Standard (PPS) in 2013 from 207,914 million PPS units this year. INEMY-ESEE has calculated that if the savings are implemented, final consumption will fall to 196,565 million PPS units -- which is slightly above the 2004 level -- if not more. The fall will amount to 16.6 percent in PPS terms since 2008. In no other country of the eurozone is consumer spending projected to fall in 2013, including those of the so-called periphery hit by the economic crisis.
“We all feel exhausted and every new measure imposed on a society that has no more to give is truly painful. The spending cut measures will be wrong,” said ESEE Chairman Vassilis Korkidis. |
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ekathimerini.com , Tuesday August 7, 2012 (22:33)
and around the horn in Europe.....
http://www.telegraph.co.uk/finance/debt-crisis-live/9460910/Debt-crisis-live.html
11.44 Seemingly in direct contrast to the post at 11.20, Spain has not as yet formally submitted a request to activate an EU emergency aid programme for its banks, the European Commission has said.
11.20 Bankia and other bailed-out Spanish lenders may receive theirEuropean rescue funds sooner than the September date previously planned, a government source told AFP.
 We are working on the demand for funds for Bankia. The deadlines are open. There is an installment of €30bn and a possibility of an earlier injection. We are working on that for Bankia and the rest of the nationalised banks.
11.00 BREAKING NEWS...
German industrial production falls 0.9pc in June from previous month.
09.36 Spanish industrial output fell by 6.9pc in June, biggest declines in consumer durables and capital goods.
09.21 Last night, S&P cut Greece's outlook to negative from stable. The ratings agency said the economy in the crisis hit nation was worsening and it was likely to need yet more funding. It also stated that political challenges could soon force another downgrade. S&P said in a statement
The negative outlook reflects the potential for a downgrade if shortfalls in Greece's 2012 deficit and arrears targets established under the current EU/International Monetary Fund program are not met by new funding or other relief. We see the likelihood of shortfalls, owing to election-related delays in the implementation of budgetary consolidation measures for the current year, as well as the worsening trajectory of the Greek economy.
09.12 France's central bank is expecting the country to slip into recession during the third quarter.
The Banque de France said that its preliminary figures show that gross domestic product will be down 0.1pc in the third quarter, which ends on September 30. The bank had already predicted that GDP would fall the same amount in the second quarter.
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08.55 German exports slowed by 1.5pc in June - analysts expected a 1.3pc fall. Imports dropped 3pc, against a 2pc prediction.
08.53 In the bond markets, Spain's 10-year yields have risen to 6.816pc,Italy's up to 5.958pc.
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Submitted by Tyler Durden on 08/08/2012 06:57 -0400
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