http://hat4uk.wordpress.com/2012/09/11/euroblown-troika-rejects-45-of-athens-coalition-savings/
http://www.businessinsider.com/german-court-decision-andreas-vosskuhle-2012-9
We tend to like getting up early, but Wednesday is a special day.
Germany FM says no new Greek negotiations...
but Greece has a surprise in store for Germany .....
and......
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_11/09/2012_460819
After meeting with Draghi, Samaras to reconvene with coalition partners
Prime Minister Antonis Samaras is due to meet his coalition partners on Wednesday night in a bid to move closer to an agreement on a new round of spending cuts, which he discussed on Tuesday with European Central Bank President Mario Draghi.
Samaras, PASOK’s Evangelos Venizelos and Democratic Left’s Fotis Kouvelis are due to sit down at 7.30 p.m. to discuss the 11.5-billion-euro austerity package. The troika has rejected about 2.2 billion euros of the cuts and raised doubts about another 3 billion. Sources said that in the wake of meeting Draghi in Frankfurt, Samaras is determined to seal a deal on the reductions as quickly as possible and secure Greece’s next bailout tranche of 31.5 billion euros.
The prime minister said he informed the ECB president that the government is “determined to meet its commitments and to speed up the recovery of the economy.”
“Both parties agreed that Greece has already taken significant steps towards budgetary consolidation and economic modernization but that major challenges remain,” the ECB said.
Wednesday's meeting was an opportunity for Samaras to discuss with Draghi ways that the ECB could play a significant part in easing the financial pressure on Athens and reducing Greece’s debt burden, although there was no confirmation that this subject was raised.
The Greek Finance Ministry estimates that if Athens is granted a two-year extension to its fiscal adjustment period, to the end of 2016, there would be a funding shortfall of 20 billion euros. It is thought that the German Finance Ministry estimates this figure to be between 30 and 40 billion euros, while Nomura puts it at 43 billion. Athens has a proposal regarding how the ECB could help cover this shortfall without making it necessary for Greece to receive more funding.
It involves the central bank accepting an extension to the Greek government bonds it holds that are due to mature between next year and 2016. This paper is worth 20.6 billion euros and the plan would be to put back their repayment date until 2020 or later.
http://www.telegraph.co.uk/finance/debt-crisis-live/9534139/Debt-crisis-Live.html
In a sprawling yard in Athens, a yellow Porsche rusts among dusty motorcycles, police cars with bullet holes and wrecked city buses - a telling image of one Greek government agency's slide into bureaucratic quagmire.
EUROBLOWN: Troika rejects 45% of Athens Coalition ‘savings’
As The Slog predicted, the Troika is about to accuse the Greeks of holding out on so-called savings. Is Pandora’s box about to be jemmied open?
Only around 6 billion of the €11.5 billion in spending cuts calculatedby the Greek government has been deemed realistic by the Troika. The triad of bondholders, ECB and IMF is now rumoured to be demanding immediate public sector sackings to enable Athens to make up the shortfall.
This is going to set an ambush of tigers loose among the European pigeons. On the one hand we have Merkel fessing up to the potential disaster of Grexit (and thus she won’t allow it) in the context of a German electorate already pissed off with what it sees as Greek perfidy. And on the other we have Bankfurt plus Lens Weidmann predicting that exactly this sort of thing was bound to happen…and will one day bankrupt the Bundesrepublik.
Representatives of the European Central Bank, the European Commission
and the International Monetary Fund met with Prime Minister Antonis
Samaras on Monday and ‘informed him of their scepticism about some of the
coalition’s measures’, although Samaras had known for some time of the suspicions. For those who are awake, The Slog reported some time ago how, at the root of this, there is a strong suspicion within the Troika that the Greek negotiators are holding back secret funds against what increasingly look like many upcoming rainy days.
and the International Monetary Fund met with Prime Minister Antonis
Samaras on Monday and ‘informed him of their scepticism about some of the
coalition’s measures’, although Samaras had known for some time of the suspicions. For those who are awake, The Slog reported some time ago how, at the root of this, there is a strong suspicion within the Troika that the Greek negotiators are holding back secret funds against what increasingly look like many upcoming rainy days.
Some €2.2 billion worth of cuts (including about 1.2 billion in savings from reductions in operating costs in the public sector and 500 million euros in savings from financing for local authorities) have been rejected outright by Greece’s lenders as being unrealistic. The inspectors also asked for more details about some €3.5 billion worth of cuts. “We are trying to convince them about our position. The effort continues,” said Finance Minister Yannis Stournaras.
Whatever happens here, we are back at the old sticking point: Finance Ministry sources say the troika insists that some savings should come from immediate sackings in the public sector. The inspectors argue (silly them) that employees at public organisations already closed down should
be fired, but the politicians still hope to avoid direct sackings. And of course, we all know why: fired civil servants sing like canaries.
be fired, but the politicians still hope to avoid direct sackings. And of course, we all know why: fired civil servants sing like canaries.
Stay tuned: this can only get worse.
GREEK CRISIS: Merkel’s ‘unexpected’ U-turn – Spiegel
The German Chancellor has decided to do the only thing she was ever going to do.
It will come as no surprise to committed Sloggers that Spiegel today carries a story saying that Angela Merkel will not be allowing Greece to exit the eurozone.
On May 28th this year, I posted this:
‘Finally – and this is the last time I’ll say it – Greece isn’t going to leave the eurozone: Draghi won’t let them, the Greeks themselves are wrongly terrified by the idea, and anyway a more pro-bailout Party line-up will emerge after the June 17th elections. Somehow in some way, there will be a compromise at the end of a long stand-off.’
Aside from the bollocks about that being the last time I’d say it, the prediction above has proved pretty spot on. This is a briefly extracted summary of the Spiegel stuff:
‘Merkel has already made up her mind. She has sided with French President François Hollande and the European Commission. The report from the troika will undoubtedly conclude that Greece can remain in the euro zone. Merkel’s newfound determination to rescue Greece is a remarkable U-turn for the chancellor. Until recently, Merkel was prepared to drop the country if it failed to meet its commitments. But she now regards a Greek departure from the euro zone as entailing too many risks.’
The ‘only just decided’ stuff I think is almost certainly tosh. On August 12th, I posted ‘Deal has been done to forgive residue of debt’:
‘Now a close French diplomatic contact has told The Slog:
“Brussels or Berlin…or both…or others…have given Samaras a big reassurance that if he sticks with the [austerity] programme, Greece will not be thrown out of the euro. Those same people have given similar assurances to the key players in the IMF and bondholder groups…that if they take another haircut, the EU will pay off the balance and give them their money back. The secrecy is to do with Merkel being flayed alive at home if they thought she was doing this, and Draghi ensuring that his central bank doesn’t become an open door for insolvent States and panicky bondholders.”’
Today, Spiegel asserts, ‘If the Greeks need more money in the fall, the payment tranche will be increased accordingly. Later transfers would be reduced in return.’
Sounds like debt forgiveness to me. On August 28th, The Slog had this to say:
‘I have said from the start of this ridiculous tableau that there would be a Schäuble of bombast followed by a slither of softening-up of spin, followed by the deal which was scoped out a fortnight ago. This is just the beginning. The fact is that there is no real anxiety in Washington about a possible Greek exit. As I’ve maintained from Day One, there isn’t going to be one. Samaras has alternative fish to fry, and the EU knows it. It also doesn’t want Greek instability at the same time as Spanish banking collapses.’
Spiegel today:
‘If Greece withdrew from the euro zone, her advisers fear that this could mean that it would eventually be necessary to create a common “debt union” to stabilize problem countries like Italy and Spain.’
To be fair to Spiegel’s correspondent, he obviously thinks the Chancellery ‘changed her mind’ line is guff too. He writes, ‘Attentive observers already noticed the chancellor’s apparent change of heart two weeks ago. Merkel has suddenly discovered a deep affection for the downtrodden people of Greece. She compassionately expressed empathy for “what many in Greece have to suffer,” and said that “it does make one’s heart bleed.”
Whether you think Frau Doktor Merkel has feelings or not, the assumption of the Spiegel piece overall is that she is still in the European driving seat, which of course isn’t true at all….as recent events have shown. Mario Draghi stuck two fingers up her nose on the bond-buying bonanza, and the Greek prime minister Antonis Samaras has failed to deliver the approval of his two coalition partners for the €11.5bn of cuts – both of whom think the Germans will negotiate in the end.
What’s more, the Karlsruhe Court is stalling on the ESM decision, and the troika has not accepted that the measures being proposed by the Athens coalition will cut the mustard.
So while Slog de Big’ead is very happy to be proved right, Spiegel is – for my money – vastly overestimating the degree to which Geli is still The Supreme Being.
And so it goes on. George Soros today piped up (as George always does when minded to directionalise something) and told Berlin it was “time to lead or to leave”. You read it here last May: Germany will leave the eurozone before Greece does.
and.....
At 4:00 AM On Wednesday, Andreas Voßkuhle Will Help Decide The Future Of Europe
AP
That's because Germany's Supreme Court -- the Bundesverfassungsgericht -- is going to decide on the legality of the ESM, Europe's main bailout fund.
"Experts" roundly predict that the court will give the greenlight to Germany's participation, ensuring that the fund comes into existence.
While it seems as though the ECB will be doing the heavy lifting in regards to backstopping governments, the ECB anticipates doing so in conjunction with the ESM, in the sense that any country that got this backstop would have to have outside supervision.
The 8 person court is lead by Andreas Voßkuhle, who was recently profiled by Der Spiegel as being the man who would decide Europe's fate.
Spectators in the courtroom in Karlsruhe on Wednesday will see Vosskuhle in his scarlet robe and matching hat. He will rise from his seat on the judges' bench -- the fourth chair from the right -- and in his usual tone, firm yet not loud, he will read out the judges' verdict. There is no question it will be a historic one.
The judges of the Second Senate, which makes up one half of the Constitutional Court, are deliberating, in expedited proceedings, whether or not to impose a temporary injunction against Germany ratifying the European Stability Mechanism (ESM) and the so-called fiscal pact. If the judges block Germany's participation in the ESM, even if just temporarily, it could send the euro into a tailspin. A new program to buy sovereign bonds, announced by the European Central Bank (ECB) last week, would also suddenly be of less value, since the program is supposed to be coupled with the ESM.
Far more likely is that the Constitutional Court will rule in the other direction, but this too comes with its own consequences. By approving the stability mechanism, even under strict conditions, the judges could be spelling the end of the Federal Republic of Germany as a self-determined state. If these treaties are ratified, Germany will be bound to them, caught in a system of liability that could sooner or later lead to a Europe-wide political union.
Seen from this point of view, nothing less than the future of Europe and the continued existence of Germany are riding on the words which Vosskuhle will utter on Wednesday. The Federal Constitutional Court runs according to the "power of eight," in the words of Jutta Limbach, one of Vosskuhle's predecessors, describing the eight judges who sit on each of the court's two senates. The president's vote on a verdict carries no more weight than those of a senate's other seven members. Still, the president has an elevated role, both externally and internally. And Vosskuhle is aware of that power, as unpretentious as he may often appear.
As noted, the ESM is likely to pass constitutional muster ("They would have to incompetent to have got this far without behind the scenes conversations that make them 99pct sure it passes", said one analyst to Business Insider) but the conditions imposed on Germany's participation could still be interesting.
The ruling is at 10 AM German time, which means 4 AM Eastern Time.
Should be a fun morning!
http://ftalphaville.ft.com/blog/2012/09/11/1154081/no-delay-from-karlsruhe/
No delay from Karlsruhe
From Reuters earlier on Tuesday:
Germany’s constitutional court said on Tuesday it would not postpone its long-awaited ruling on the legality of the euro zone’s bailout fund despite a new legal challenge by a eurosceptic lawmaker.Germany’s constitutional court holds the fate of the euro in its hands when it rules on Wednesday whether the European Stability Mechanism (ESM) can go ahead, after already holding it up for several months.
Eurointelligence have put together a press wrap ahead of the actual decision, including a consensus that the much favoured ‘Yes-But’ option is a lot trickier than is generally assumed:
Suddeutsche Zeitung writes that the otherwise much favoured option of a Yes-But is tricky because there is not much the Constitutional Court can demand that the German government has not already conceded. The German government has already strengthened the rights of parliament. What it could, the paper writes, is insist on an exit clause for the fiscal pact. While Germany’s own constitutional debt brake is reversible, that is not currently the case with the fiscal pact. However, the Germans believe that the credibility of the ESM would be greatly weakened if countries can simply opt of the fiscal pact, so the Court would hardly strengthen the German position if it insisted on an exit clause, as some of the plaintiffs had demanded. The paper also made the point that this would be a devastating defeat for Merkel.
Frankfurter Allgemeine writes that hardly anybody believes the court will block the fiscal pact and the ESM, or demand a re-negotiation because the court always emphasised the need for a room for manoeuvre by elected politicians and because the pre-amble of Germany’s constitution has a pro-European bias. The article said that it is hardly possible to give the Bundestag even more competences. The members are already weighed down by the workload. What is imaginable is the setting of a maximum liability. (This would cast in stone that Germany cannot conceivably rescue Italy, or Spain beyond an initial limited programme.)In another article Suddeutsche writes that Mario Draghi’s OMT can proceed even if the court votes No, because it initially relies on the EFSF. The ESM is ultimately bigger, but the EFSF is allowed to undertake primary market purchases – a condition for the activation of the OMT. If the court votes No, the ECB would ultimately end up with a higher risk.
But shouldn’t everyone just chill anyway? There’s “a good feeling” about this one…
Until tomorrow then.
| |||
|
but Greece has a surprise in store for Germany .....
Oh, no. Greece mentioned the war…
Surely only a matter of time?
From the Kathimerini:
Greece has set up a «working group» to scour historical archives and tally how much Germany might owe in outstanding reparations for Nazi war crimes during World War II, the finance ministry announced Monday.“The matter remains pending,» said Deputy Finance Minister Christos Staikouras. «Greece has never resigned its rights.”Nonetheless, he called for a «realistic and cool-headed» approach to the prickly issue, which could further sour relations between Germany and Greece.
This working group is supposed to have a report ready by the end of the year.
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_11/09/2012_460830
Coastal shipping companies are asking banks restructuring of their loans as all of them, whether listed or not, have posted fresh losses after the first half of the year that added up to more than 110 million euros.
The four listed coastal shippers -- Attica Group, Minoan Lines, Maritime of Lesvos (NEL) and ANEK -- registered losses of 93.29 million euros, down from 102.8 million in the same period last year.
The reduction of losses comes mostly as a result of efforts to contain operating expenses through merging or stopping services, reducing the speed of sailing and selling vessels. Three out of the four Athens-listed firms posted smaller losses year-on-year, while ANEK saw an increase. In the first half of the year total revenues amounted to 283.6 million, against 343.8 million in the January-June 2011 period.
Faced with the prospect of uncertainty in the coming months, coastal shipping firms are now turning to banks, hoping to have their loan obligations restructured in order to secure the cash flow that would cover their everyday payment needs, such as salaries, suppliers and fuel.
“Greek banks that are aware of the peculiarities of the Greek coastal shipping market and so can facilitate their client companies,” says Giorgos Xiradakis, chief executive at XRTC consultants. “As far as foreign lenders are concerned, the biggest incentive they have to agree to a restructuring is the risk that if they don’t they may lose up to 80 percent of their money,” he adds.
Attica Group, which presented its results on August 29, posted losses of 29.80 million euros in the year’s first half, against 33.98 million a year earlier, while its turnover shrank from 111.45 million last year to 102.66 million this year. The group slashed its Adriatic services by 15 percent and those within Greece by 14 percent. At the end of June it had 8.14 million euros in cash and is still in talks with banks aiming to restructure its loan obligations.
Coastal shippers ask banks for loan restructuring
Coastal shipping companies are asking banks restructuring of their loans as all of them, whether listed or not, have posted fresh losses after the first half of the year that added up to more than 110 million euros.
The four listed coastal shippers -- Attica Group, Minoan Lines, Maritime of Lesvos (NEL) and ANEK -- registered losses of 93.29 million euros, down from 102.8 million in the same period last year.
The reduction of losses comes mostly as a result of efforts to contain operating expenses through merging or stopping services, reducing the speed of sailing and selling vessels. Three out of the four Athens-listed firms posted smaller losses year-on-year, while ANEK saw an increase. In the first half of the year total revenues amounted to 283.6 million, against 343.8 million in the January-June 2011 period.
Faced with the prospect of uncertainty in the coming months, coastal shipping firms are now turning to banks, hoping to have their loan obligations restructured in order to secure the cash flow that would cover their everyday payment needs, such as salaries, suppliers and fuel.
“Greek banks that are aware of the peculiarities of the Greek coastal shipping market and so can facilitate their client companies,” says Giorgos Xiradakis, chief executive at XRTC consultants. “As far as foreign lenders are concerned, the biggest incentive they have to agree to a restructuring is the risk that if they don’t they may lose up to 80 percent of their money,” he adds.
Attica Group, which presented its results on August 29, posted losses of 29.80 million euros in the year’s first half, against 33.98 million a year earlier, while its turnover shrank from 111.45 million last year to 102.66 million this year. The group slashed its Adriatic services by 15 percent and those within Greece by 14 percent. At the end of June it had 8.14 million euros in cash and is still in talks with banks aiming to restructure its loan obligations.
ANEK had group losses of 24.3 million euros against 17 million in 2011, while revenues declined from 117 million to 83.2 million. The company states that its main problem is the lack of liquidity, which in many cases means it and other companies are unable to meet their obligations.
Minoan Lines registered losses of 20.99 million euros in the year to June, from 24.8 million in the same period last year. The group’s turnover came to 67.5 million against 79.3 million in H1 of 2011. It states that in the last few years it has contained its operating expenses and stopped services such as that linking Patra with Venice, and has had two of its vessels chartered to improve its net position.
NEL showed losses of 18.2 million euros from 27.1 million in 2011. Its short-term obligations amount to 87.8 million and it has a negative net cash flow.
and....
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_11/09/2012_460829
|
and......
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_11/09/2012_460819
PM forced to rethink cuts
After meeting with Draghi, Samaras to reconvene with coalition partners
 |
Samaras, PASOK’s Evangelos Venizelos and Democratic Left’s Fotis Kouvelis are due to sit down at 7.30 p.m. to discuss the 11.5-billion-euro austerity package. The troika has rejected about 2.2 billion euros of the cuts and raised doubts about another 3 billion. Sources said that in the wake of meeting Draghi in Frankfurt, Samaras is determined to seal a deal on the reductions as quickly as possible and secure Greece’s next bailout tranche of 31.5 billion euros.
The prime minister said he informed the ECB president that the government is “determined to meet its commitments and to speed up the recovery of the economy.”
“Both parties agreed that Greece has already taken significant steps towards budgetary consolidation and economic modernization but that major challenges remain,” the ECB said.
Wednesday's meeting was an opportunity for Samaras to discuss with Draghi ways that the ECB could play a significant part in easing the financial pressure on Athens and reducing Greece’s debt burden, although there was no confirmation that this subject was raised.
The Greek Finance Ministry estimates that if Athens is granted a two-year extension to its fiscal adjustment period, to the end of 2016, there would be a funding shortfall of 20 billion euros. It is thought that the German Finance Ministry estimates this figure to be between 30 and 40 billion euros, while Nomura puts it at 43 billion. Athens has a proposal regarding how the ECB could help cover this shortfall without making it necessary for Greece to receive more funding.
It involves the central bank accepting an extension to the Greek government bonds it holds that are due to mature between next year and 2016. This paper is worth 20.6 billion euros and the plan would be to put back their repayment date until 2020 or later.
| In terms of reducing Greece’s debt, the ECB is expected to make a profit of some 10 billion euros from the Greek bonds it bought on the secondary market. The central banks of eurozone member states are also in line for a 3.4-billion-euro windfall from the purchase of Greek bonds. It is yet to be decided if this will be passed on to Greece.
and....
|
http://www.telegraph.co.uk/finance/debt-crisis-live/9534139/Debt-crisis-Live.html
09.32 Britain's goods trade deficit narrowed more than expected in July, data out just now shows. Once again, that's thanks in no small part to exports heading outside the EU.
The Office for National Statistics says the deficit shrank to £7.149bn in July, down from £10.068bn in June - the narrowest since February 2011. Economists had predicted that it would fall to £9bn.
The overall trade deficit narrowed to £1.517bn, down from £4.333bn in June.
09.25 The euro has risen against the US dollar this morning, climbing near to a four-month high after the German Constitutional Court said it would make a ruling on the ESM tomorrow: it's climbed as high as €1.2819 this morning.
09.11 Finnish PM Jyrki Katainen has said that, given the hard work it has put in to reduce its deficit, Spain deserves to be paying lower interest rates. Katainen is in Madrid today to meet with Mariano Rajoy. He added that he'd like to avoid further eurozone bail-outs.
08.48 There's trouble in Greece as PM Antonis Samaras fails to deliver the approval of his two coalition partners for €11.5bn of fresh cuts needed to secure the next bail-out payment. Meanwhile, there's an interesting report from Reuters this morning on a previous casualty of austerity which has done little to improve Greece's balance sheet:
In a sprawling yard in Athens, a yellow Porsche rusts among dusty motorcycles, police cars with bullet holes and wrecked city buses - a telling image of one Greek government agency's slide into bureaucratic quagmire.
Known by its Greek acronym ODDY, the Organisation for Public Property Management ran warehouses nationwide that auctioned off anything from old sofas discarded from city hall waiting rooms to luxury cars confiscated from drug dealers.
A ministerial decree in November announced ODDY no longer existed, and the European Union and International Monetary Fund, which are keeping Greece afloat on condition it slashes costs, duly noted in March that the required cuts had been legislated for.
But that is all on paper. Employees and government officials who spoke to Reuters have revealed that ODDY still exists in all but name, for as DDDY - no longer an Organisation, but now a Directorate - it has simply become an office of the Greek Finance Ministry. And while staffing has been cut, many costs have simply transferred from wages to pensions, and the shake-up has all but paralysed its ability to run auctions to make money.
and.....
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_4441_10/09/2012_460611
Coalition looking for new savings after troika rejects some cuts
Representatives of the European Central Bank, the European Commission and the International Monetary Fund met with Prime Minister Antonis Samaras on Monday and informed him of their skepticism about some of the coalition’s measures. Some 2.2 billion euros worth of cuts, which include about 1.2 billion euros in savings from reductions in operating costs in the public sector and 500 million euros in savings from financing for local authorities, has been rejected outright by Greece’s lenders. The cuts also included 437 million euros from arms programs but the troika was not convinced this would lead to permanent savings. According to sources, the troika’s refusal to accept these savings surprised the government as it had designed the savings to be of a permanent nature. The inspectors also asked for more details about some 3.5 billion euros’ worth of cuts. “We are trying to convince them about our position. The effort continues,” said Finance Minister Yannis Stournaras. The minister will accompany Premier Antonis Samaras on his visit to Frankfurt on Tuesday to meet ECB President Mario Draghi. Samaras will return for talks with his coalition partners in Athens on Wednesday. The three party leaders will discuss other ways to meet the troika’s target. Samaras met on Monday with the ministers of defense, administrative reform, health and interior and asked them to come up with new suggestions for savings. A Finance Ministry source said that the troika insists that some savings should come from immediate sackings in the public sector. The inspectors argue that employees at public organizations that are closed down should be fired. The government had been hoping to avoid direct sackings through a process of voluntary redundancies and a labor reserve scheme. Sources said that the troika has also suggested cuts to low-level pensions claimed by farmers and a further rise in the retirement age by a year or two. Stournaras is to present the updated measures to fellow finance ministers at a Eurogroup meeting in Cyprus on Friday. The eurozone ministers were expected to take a decision on the disbursement of Greece’s next loan tranche when they meet on October 8 but a European official in Brussels told Kathimerini that this would only happen if the troika has completed its progress report on the Greek program by the end of September.
and.....
|
No comments:
Post a Comment