http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_29244_28/09/2012_463661
Troika perusing package
Foreign envoys due back in Athens Sunday to resume talks on cuts plan
Top-ranking officials of Greece’s so-called troika of international lenders have reportedly been provided with a list of some 13.5 billion euros in proposed spending cuts and revenue-raising measures ahead of fresh negotiations next week with government officials in Athens, which are expected to be tough.
Troika envoys, who are due to return to Athens Sunday ahead of the scheduled resumption of talks on Monday, are expected to question some of the measures set out in the new package though there are hopes that a compromise reached by the three coalition leaders on the basic pillars of the pact may appease them to a certain degree.
The package -- which comprises some 10.5 billion euros in cuts and 2.9 billion in new taxes -- foresees 4.5 billion euros in reductions to pensions. Of the total 10.5 billion euros in cuts, 7.6 billion will be implemented next year and the remainder in 2014.
The measures slated for 2013 are expected to be embodied in next year’s draft budget, which is to be unveiled on Monday.
The draft austerity package also foresees 15,000 layoffs in the civil service through the merging and abolition of state organizations and a process of evaluating public functionaries.
Initial proposals for cutbacks in the health and defense sectors and to local authority funding have been scaled back after troika officials reportedly expressed skepticism about their enforceability. For instance, municipal funding is to be reduced by 298 million euros rather than the original proposal of 736 million, while defense cutbacks are to reach 403 million euros rather than the original 504 million.
The enforceability of these austerity measures is to be discussed during talks between troika envoys who are set to meet with Finance Minister Yannis Stournaras on Monday first before talks with Prime Minister Antonis Samaras and possibly also with the latter’s coalition partners, who have backed down on earlier objections to more onerous aspects of the package.
Once the measures get the green light from the troika they must be voted through Parliament, but this appears unlikely to happen before the next scheduled Eurogroup summit on October 8.
and more strikes........
Power cuts expected as PPC workers go on strike
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Workers at the Public Power Corporation (PPC), the country’s main electricity provider, said Friday that they would launch 48-hour rolling strikes as early as Monday to protest a new austerity package being demanded by the country’s foreign creditors.
A walkout by PPC workers is likely to cause widespread power cuts.
and more bad loans.....
Bad loans climb to record level of 57 bln euros
By Evgenia Tzortzi
Nonperforming loans have reached a record level of 57 billion euros, as they go hand in hand with soaring unemployment that has already hit 25 percent and could grow further if recession forecasts for the next couple of years prove true.
With one in every four loans not being repaid for more than three months, the bank system is feeling the pressure, leading to additional capital requirements that are expected to aggravate the state debt further.
The greatest part of the bad loans derives from business activity, accounting for some 33 billion euros of loans that are not being repaid. Bad mortgage loans come close behind, as they are approaching a record 20 percent of all housing loans, amounting to 15 billion euros. Consumer loans and credit card bills that are not being repaid add up to 30 percent.
Another worrying factor is that nonperforming housing and consumer loans have reached this level despite the fact that banks have proceeded to favorable arrangements for some 665,000 loans totaling 20 billion euros.
The Development Ministry is already working on changing the legislation for overindebted households. The main changes will concern the continuation of loan repayments by borrowers who seek to benefit from the legislation. Currently installment payments are frozen until borrowers’ cases are heard. The amount of the installment will be determined by the loan recipients who apply for protection according to the law. The change in legislation is aimed at borrowers avoiding accumulating more debt until their cases are heard, as well as reducing abuse of the law by borrowers.
Another change planned is for the extension of the repayment period of housing loans concerning main residences, which currently stands at 20 years. This could be stretched to up to 40 years, based also on the age of the borrower.
Furthermore, in cooperation with banks, the Development Ministry is promoting a regulation for a 30 percent reduction in the monthly installment borrowers have to pay. This amendment will reach Parliament along with the withdrawal of the names of borrowers who despite being blacklisted for not having repaid their loans since 2009, have managed to pay their dues since then in spite of the crisis. This will be a form of amnesty, used as an incentive for debt payment.
a privatization deal struck.....note the concessionary nature of the deal
TAIPED’s first privatization deal is sealed
Lamda Domi leases IBC for 90 years
By Vangelis Mandravelis
The first privatization project for 2012 was completed on Friday, as the International Broadcasting Center (IBC) of the 2004 Olympic Games was leased to Lamda Domi, a subsidiary of the Lamda Development construction group, for the next 90 years. The concession agreement will involve an advance payment of 81 million euros, with an additional 32.4 million euros maximum to come in the future.
Lamda was always the favorite to land the contract due to the fact that it is the developer behind the Golden Hall shopping mall which currently occupies the IBC premises in Maroussi, northern Athens. Lamda had signed a contract in 2007 with the Greek state for an annual lease rate of 7.25 million euros, which would be adjusted according to inflation. The lease rate climbed to 8 million euros last year. That contract was for 40 years, with an extension option for another six.
The Hellenic Republic Asset Development Fund (TAIPED) accepted its consultants’ proposal for the IBC building yesterday, thereby securing its first revenues from a state asset. The lease rate will be adjusted upward each time the country’s credit rating is upgraded, according to sources.
“The full utilization of the IBC will not only upgrade the specific area commercially but will also rekindle investment interest in the country’s real estate market,” commented Yiannis Emiris, TAIPED’s chief executive officer.
The deal has brought a degree of relief for the fund, even though it had been clear that the Latsis Group which owns Lamda would be the winning bidder. The amount paid in advance illustrates the Latsis Group’s commitment to the investment, and also signifies a vote of confidence in the Greek economy while improving the mood in the market in general.
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