http://www.zerohedge.com/news/2012-11-14/why-troikas-forecasts-are-total-joke-one-easy-chart
Submitted by Tyler Durden on 11/14/2012 17:01 -0500
But if you take forecasts from the European Commission seriously, Greece enjoys one formidable advantage over Spain: Its economy is running well below capacity, while the Spanish economy, despite an unemployment rate around 25%, is operating relatively close to full steam.
Why is that an advantage? According to the commission, it means that the Greek unemployment rate should fall sharply if the economy starts to recover again, without causing inflation. Spain faces a much more difficult situation. If the structure of its labor market doesn’t change, the commission’s analysis suggests that a nascent economic recovery in Spain could be hampered by labor shortages that would spark wage inflation.
Greece faces similar problems, but they are less serious, according to the commission’s analysis. Yes, the “government-borrows-money-and funds-consumption” model of growth won’t be available to Greece anymore. But it didn’t endure the same private-sector credit bubble that hit Spain during the previous decade.
The differences between Greece and Spain can be seen in several economic metrics published by the commission. There is the output gap, or the difference between actual GDP and potential GDP (as a percentage of potential GDP). The figure is a whopping 13% for Greece but just 4.6% for Spain.
I do not subscribe to the concept of a "natural rate of unemployment". Nonetheless, if even half of what Dalton writes is true, Spain is in a world of hurt.
I do think Dalton hits the target on structural issues and that puts an unsolvable problem on the Spanish government that is struggling mightily to not subject itself to Troika-imposed austerity measures in return for a bailout.
Eventually Spain, like Greece will see the light. The only way out of this mess is to leave the euro and simultaneously undertake structural reforms.
Mike "Mish" Shedlock
http://www.zerohedge.com/news/2012-11-14/russian-exchange-halts-fx-trading-due-software-glitch
( a glitch in the matrix this morning..... " Whoa. Deja vu." )
Submitted by Tyler Durden on 11/14/2012 08:08 -0500
http://ransquawk.com/headlines/german-government-spokesman-says-complete-troika-report-needed-for-decision-on-greece-14-11-2012
( No decision this week , no decision it would appear next week - maybe the end of November.... date keep slipping folks...... )
http://ransquawk.com/headlines/german-cdu-lawmaker-klaus-peter-willsch-says-sees-imf-quitting-greek-aid-program-14-11-2012
and regardless of what you read , no country is leaving the Eurozone yet..... best signal the can kick continues until after Germany's elections next fall.....
http://www.telegraph.co.uk/finance/financialcrisis/9676707/Debt-crisis-Eurozone-faces-day-of-anti-austerity-strikes.html
Tens of thousands of protesters are now gathering in Madrid to march against austerity. Police vans are lined up in anticipation in Tarragona in the northeastern region of Catalonia, where a 13-year-old boy was hit over the head with a baton by police during a protest. Protesters are already complaining about incidents of police brutality claiming officers are too quick to attack during peaceful demonstrations.
Fiscal consolidation remains on track, broadly in line with the original trajectory of the EU-IMF programme, which envisaged a 120% debt/GDP ratio in 2012, peaking in 2013-14 before declining. So far, Ireland has met all the quarterly fiscal targets of the programme. Fitch expects the 2012 deficit to be close to the target of 8.6% of GDP, implying a primary deficit of 4.5%, despite some expenditure overruns. More fundamentally, fiscal policy has so far successfully managed to meet the fiscal targets without excessive adverse impact on economic growth in 2011-2012. Nevertheless, significant further adjustment is needed to bring the deficit below 3% by 2015 as required under the EU-IMF programme and the Excessive Deficit Procedure.
Well amid violent anti-austerity protests in Madrid that was about cutting Spain some slack but with some steel under the velvet glove.
...there are risks to achieving the nominal targets for next year 2013. They stem partly from an optimistic macroeconomic scenario underlying the 2013 budget and partly from the optimistic projections for social security. There are also risks of more budgetary slippages in the Autonomous Communities.
The city is slowly returning to normal. Roads that were closed are being reopened but riot police remain stationed outside the Senate and other government buildings.
As clashes break out between protesters and police in Rome, Milan and Turin, some remarks on Italy's predicament from Professor Christopher Duggan, the director of the Centre for Modern Italian History at Reading University and the author of several books on Italian history and politics.
It's my view that everything must be done to avoid this reality [of a deepening recession] What is needed instead in my view is to ease the case of fiscal adjustment.
We are fulfilling a very tough adjustment process, not in order to show our obedience, but because this way we make our country recover [...] We have to lower our level of spending in line with our possibilities.
Given the worsening in 3Q, we think the just-revised 2012 Greek growth forecasts (the troika report foresees GDP falling by 6.0%) are likely to look, once again, excessively optimistic. We believe any improvement in 4Q is highly unlikely as the liquidity squeeze in the Greek economy probably worsened in the final months of 2012 due to the fact that the June and Sept bailout tranches were withheld and due to government arrears continuing to accumulate. The increased number of strikes in the past two months has also probably contributed to depress the GDP dynamic in 4Q. We expect Greek GDP to fall by at least 7 ¼% this year.
Given the extremely difficult record of the Greek program it is understandable that Greece’s partners have an interest in a strengthened monitoring of the program and more reliability in its implementation.
Obviously from the IMF's perspective, we expect a real fix, not a quick fix, and that means clearly debt that is sustainable as quickly as possible.
Tens of thousands of protesters are taking part in marches and rallies in Rome, Milan, Turin, Bologna, Florence, Palermo and dozens of other Italian cities.
France’s five main unions are staging 130 marches around the country “for employment, solidarity in Europe and against austerity”, with the leaders of the two main unions, CGT and CFDT joining forces for the first time since Socialist President François Hollande took power in a Paris march this afternoon.
Compared with August, the GDP profile is weaker (Charts 5.2 and 5.3). In the near term, that partly reflects a renewed squeeze on real incomes emanating from the imminent rises in household energy bills. It also reflects recent indications from business surveys of some softening in near-term underlying growth.
In Greece, Spain, Portugal, savings are being carried out in a one-sided way, at the expense of the people.
...a strong sign of discontent and a warning to the European authorities [...] The aim of this strike is to demand answers to the problems of the Portuguese and one of the priorities is a change of policy.
We're on strike to stop these suicidal policies.
One way or another, the governments and other official lenders that have bailed out Greece and now hold its debt are going to lose some or all of that money. They can let it go now, by providing Greece with debt relief, or they can lose it later -- possibly as part of a disorderly Greek default and exit from the euro area.
Their failure to recognize this binary choice was on display again Nov. 12, when finance ministers from the 17-nation euro area put off until later this month a decision to release the next 31.3 billion-euro tranche of bailout funds, leaving Greece to figure out how to roll over a 5 billion-euro debt payment this week.
Instead of confronting Greece’s debt problem head-on, the finance ministers sought to give the government two more years -- until 2022 -- to get its debt burden down to the target of 120 percent of gross domestic product. Once they’ve figured out how to pay for Greece’s extra time, projected to cost 32.6 billion euros, the euro leaders will no doubt declare victory. They’ll pretend that they haven’t just approved yet another bailout, and that a return to solvency is within Greece’s financial and political ability to achieve.
No wonder the International Monetary Fund’s general director Christine Lagarde rolled her eyes at a post-meeting news conference. She insisted on sticking to the current 2020 target date, and she was right: Europe’s leaders must have a more realistic debate now on what a Greek rescue will take, and not just for the sake of the IMF’s integrity. Waiting, if that’s the plan, until after German elections in 2013 would probably be too late for Greece and possibly for the euro.
A leaked draft review of the Greek bailout by the so-called troika of official creditors -- the IMF, the European Commission and the European Central Bank -- underscores the urgent need to stop pretending and give Greeks and investors reason to believe in the program’s eventual success. The assessment warns that “risks to the program remain very large” -- primarily due to the Greek government’s weakness and the threat that continued lack of confidence in its ability to emerge from under its debt pile will make failure self-fulfilling.
Perceptions in northern Europe that make it harder to spend more money on the bailout are also self-reinforcing. Greek governments have been feckless in the extreme, but as the European commissioner for finance, Olli Rehn, said this week, “It is time to debunk the perception that no progress has been made. This perception is damaging, it is unfair, and it is simply wrong.”
Why The Troika's Forecasts Are A Total Joke In One Easy Chart
The remarkable forecasting skills of the Troika and the immense decisions being taken on the back of these 'sacrosanct' projections need to be put into context. We are more than happy to do that (as we did here - with hilarity ensuing), but the chart below shows even more clearly, so far so bad as the Troika has pretty much nailed it on the 'most optimistic mean-reverting model' ever. Not wanting to steal the jam from Europe's donut but the forecasts are - quite evidently - a complete and utter joke. Going forward though, we are sure it's different this time...
(h/t Follow The Money
Wednesday, November 14, 2012 3:18 PM
Looking Ahead, Spain Worse Than Greece; Only One Realistic Solution
Both Greece and Spain are in the midst of huge depressions. The unemployment rate in Spain is 25.8%, in Greece it's 24.4%. Youth unemployment is over 50% in both countries.
Greece is in its 6th year of depression and GDP is down another 7.2%. Expect Spain to follow.
Matthew Dalton, writing for the Wall Street Journal explains Where Spain Is Worse Than Greece
Greece is in its 6th year of depression and GDP is down another 7.2%. Expect Spain to follow.
Matthew Dalton, writing for the Wall Street Journal explains Where Spain Is Worse Than Greece
By most measures, Greece’s economy is in worse shape than Spain’s. Greece has been largely shut off from financial markets for more than two years; yields on its bonds are still sky high. Gross domestic product has fallen nearly 20% over the previous three years. Spain can still borrow from private investors, and its GDP has fallen around 5% during the crisis.
Why is that an advantage? According to the commission, it means that the Greek unemployment rate should fall sharply if the economy starts to recover again, without causing inflation. Spain faces a much more difficult situation. If the structure of its labor market doesn’t change, the commission’s analysis suggests that a nascent economic recovery in Spain could be hampered by labor shortages that would spark wage inflation.
Greece faces similar problems, but they are less serious, according to the commission’s analysis. Yes, the “government-borrows-money-and funds-consumption” model of growth won’t be available to Greece anymore. But it didn’t endure the same private-sector credit bubble that hit Spain during the previous decade.
The differences between Greece and Spain can be seen in several economic metrics published by the commission. There is the output gap, or the difference between actual GDP and potential GDP (as a percentage of potential GDP). The figure is a whopping 13% for Greece but just 4.6% for Spain.
Then take a look at the commission’s estimates of the so-called non-accelerating wage rate of unemployment (NAWRU) in Greece and Spain. This is the unemployment rate below which the commission believes the inflation rate starts to rise. It’s also known as the “natural rate” of unemployment. The natural unemployment rate for Greece is around 14.8%; it is 21.5% for Spain. This despite unemployment rates around 25% in both countries.Only One Realistic Solution
Spain’s structural budget deficit is somewhat smaller than its actual deficit (6.3% of GDP vs. 8%), because of the country’s weak economy. But most of the deficit is still “structural,” according to the commission, a disturbing thought in a country where 25% of the workforce is unemployed.
And because the euro zone’s new “Fiscal Pact” requires countries to bring their structural deficits under 0.5% of GDP, Spain still has a lot of government austerity to endure before the cutting is done.
I do not subscribe to the concept of a "natural rate of unemployment". Nonetheless, if even half of what Dalton writes is true, Spain is in a world of hurt.
I do think Dalton hits the target on structural issues and that puts an unsolvable problem on the Spanish government that is struggling mightily to not subject itself to Troika-imposed austerity measures in return for a bailout.
Eventually Spain, like Greece will see the light. The only way out of this mess is to leave the euro and simultaneously undertake structural reforms.
Mike "Mish" Shedlock
http://www.zerohedge.com/news/2012-11-14/russian-exchange-halts-fx-trading-due-software-glitch
( a glitch in the matrix this morning..... " Whoa. Deja vu." )
Russian Exchange Halts FX Trading Due To "Software Glitch"
BATS, Nasdaq, Knight, NYSE, and now the MICEX Moscow exchange - everyone is following the tried and true principle: Ifcomplete trading halt due to unknown circumstances, then blame software glitch. At 3:58pm local time, FX trading in the Moscow market halted FX trading due to what spokesman Nikita Bekasov said, was a "software error." Unclear if this is the same kind of error that nearly wiped out Knight in a few minutes of trading. What is clear is that it is always the software's fault, never the programmer. Also, no mention of a rogue Stuxnet variant has been ever mentioned here, or anywhere else. Finally, we eagerly await the latest report of weekly equity flows due out later today: one doesn't have to confuse statistics with heuristics and have a political prediction blog to know the number will be negative as usual.
http://ransquawk.com/headlines/german-government-spokesman-says-complete-troika-report-needed-for-decision-on-greece-14-11-2012
( No decision this week , no decision it would appear next week - maybe the end of November.... date keep slipping folks...... )
German government spokesman says complete Troika report needed for decision on Greece
Says:
- Report isn't yet complete.
- Final decision on Greece possibly the end of November.
- Report isn't yet complete.
- Final decision on Greece possibly the end of November.
Update details:
- At the beginning of the week the Greece finance minister said aid disbursement is likely to be finalized on November 26th and have received 2-year fiscal plan extension. He added they Will have Troika report by November 17th.
11:25 - Economic commentary - Source: Newswires
and....
http://ransquawk.com/headlines/german-cdu-lawmaker-klaus-peter-willsch-says-sees-imf-quitting-greek-aid-program-14-11-2012
German CDU lawmaker Klaus-Peter Willsch says sees IMF quitting Greek aid program
Update details:
- In the past, CDU's Klaus-Peter Willsch has been critical of the way that Merkel has dealt with Greece.
- Also, this come after a public spat between the IMF and Eurozone finance ministers. Euro zone finance ministers suggested Greece should be given until 2022 to lower its debt to GDP ratio to 120% but IMF chief Christine Lagarde insisted the existing target of 2020 should remain.
- Also, this come after a public spat between the IMF and Eurozone finance ministers. Euro zone finance ministers suggested Greece should be given until 2022 to lower its debt to GDP ratio to 120% but IMF chief Christine Lagarde insisted the existing target of 2020 should remain.
06:57 - Economic commentary - Source: Handelsblatt
and regardless of what you read , no country is leaving the Eurozone yet..... best signal the can kick continues until after Germany's elections next fall.....
http://www.telegraph.co.uk/finance/markets/9676217/De-La-Rue-warning-sends-the-shares-lower.html
De La Rue may be the rumoured banknote printer of choice should Greece ever require a new currency, but today it was a lack of orders that had traders pushing shares in the FTSE 250 group lower.
The Basingstoke-based company disappointed investors by sounding a profit warning, caused by the postponement of a wad of currency contracts.
“A number of significant orders which had been expected and planned for production in the second half of the current financial year have continued to be delayed,” De La Rue said. “It will now be too late for these orders to benefit the current financial year, and as a result the board expects that the financial results of the group for 2012/13 will be similar to those for 2011/12.”
The company added that the postponed orders, which JPMorgan Cazenove analysts valued at about £70m, would be ready for shipment during the following year. The delays prompted Investec to cut its 2013 full-year earnings-per-share forecast by 23pc, while De La Rue shares lost 58p - 5.5pc - to £10.06 on the news, the second-heaviest fall on the mid-cap index.
http://www.telegraph.co.uk/finance/financialcrisis/9676707/Debt-crisis-Eurozone-faces-day-of-anti-austerity-strikes.html
20.48 Spanish police have charged protesters near Madrid's parliament.
20.09 German newspaper Handelsblatt is claiming that the EU won't take a final decision on Greek aid next week.
19.35 Chanting, whistling and setting off fireworks, those Spanish protesters have swamped the centre of the capital.
19.16 There are reports that the number of protesters in Madrid has swelled to hundreds of thousands.
18.40 In Portugal, police have charged demonstrators who had gathered in front of Lisbon's parliament building.
Police dispersed the protesters with baton blows after demonstrators threw stones and rubbish at them for more than an hour.
18.39 Spanish government has said 118 people have been arrested today. 74 people have been injured, 43 of those are police officers.
18.36 A shocking video reportedly showing Spanish riot police chasing and hitting protesters, including the 13-year-old boy that Fiona Govan mentioned earlier:
18.19 More from Telegraph reporter Fiona Govan in Madrid:
Tens of thousands of protesters are now gathering in Madrid to march against austerity. Police vans are lined up in anticipation in Tarragona in the northeastern region of Catalonia, where a 13-year-old boy was hit over the head with a baton by police during a protest. Protesters are already complaining about incidents of police brutality claiming officers are too quick to attack during peaceful demonstrations.
18.15 The Spanish government has raised the number of arrests in Madrid to 110. Forty people have now been injured, including 18 police officers.
17.46 Ireland's credit outlook has been revised to "stable" from "negative" by rating agency Fitch, meaning that it is unlikely that the country faces a downgrade over the next 18 months.
In a statement, Fitch said:
Fiscal consolidation remains on track, broadly in line with the original trajectory of the EU-IMF programme, which envisaged a 120% debt/GDP ratio in 2012, peaking in 2013-14 before declining. So far, Ireland has met all the quarterly fiscal targets of the programme. Fitch expects the 2012 deficit to be close to the target of 8.6% of GDP, implying a primary deficit of 4.5%, despite some expenditure overruns. More fundamentally, fiscal policy has so far successfully managed to meet the fiscal targets without excessive adverse impact on economic growth in 2011-2012. Nevertheless, significant further adjustment is needed to bring the deficit below 3% by 2015 as required under the EU-IMF programme and the Excessive Deficit Procedure.
Although Fitch forecasts GDP growth at 0% in 2012, down from 1.4% in 2011, this would still be better than the eurozone average, which Fitch forecasts at -0.5%, and significantly better than other so-called peripheral eurozone countries, highlighting Ireland's progress towards returning to economic growth.
17.34 Today's protests have also reached London. Demonstrators have gathered outside Smith Square - the European Commission's outpost in the capital. Charlie Kiss, a Green Party activist, tweets:
17.24 I don't fancy my chances against these chaps:
Riot police march down the street during a 24-hour nationwide general strike at Sants station in Barcelona (Photo: Reuters).
This would probably happen:
Police apprehend a protester in Valencia (Photo: AP).
16.03 Here's Bruno Waterfield's analysis of Mr Rehn's statement:
Well amid violent anti-austerity protests in Madrid that was about cutting Spain some slack but with some steel under the velvet glove.
Rehn praised the effectiveness of Spanish austerity measures and took his foot off Madrid's throat.
But that is only as regards any sanctions against Spain for breaching the nominal 3pc of annual GDP debt rule.
He warned that the EU was watching like a hawk and would assess Spain again in early 2013.
Hinting at toughness ahead he criticised overly optimistic Spanish growth forecasts and said measures for 2014 "fall short".
For any other countries hopeful that the European Commisison has shifted to use longer-term structural deficit measures, rather that the 3pc nominal rule, Rehn offered little comfort.
"It's case by case," he said.
15.53 Mr Rehn repeats that only Spain can decide if it will request a bail-out.
15.52 Mr Rehn says that there are still risks surrounding the country's nominal budget target, and that the country's "optimistic" growth projections mean that there is a risk of "budgetary slippages" in the future.
...there are risks to achieving the nominal targets for next year 2013. They stem partly from an optimistic macroeconomic scenario underlying the 2013 budget and partly from the optimistic projections for social security. There are also risks of more budgetary slippages in the Autonomous Communities.
He also says that the measures announced so far for 2014 fall short of what is required, "therefore we will closely monitor budgetary developments".
However, he adds that the country has been able to restore the sustainability of public finances for the next two years via the action it has taken, and therefore "no further steps are needed at present".
The Commission will reassess the situation next February, "when we will have a better view of the outlook of the Spanish economy."
15.40 Spain has received a big pat on the back from the European Commission for taking "effective action" to reduce its structural deficit.Olli Rehn said:
We know that Spain is undergoing a very difficult re-balancing of its economy after many years of unsustainable policies. The government and the Spanish people are making significant efforts to ensure the sustainability of public finances. This involves hard choices, and sacrifices for many parts of the population. Progress is being made, even if the situation faced by many Spaniards remains very difficult.
Mr Rehn says that in order restore to confidence to public finances,Spain has taken measures that amount to 5.25pc of GDP in 2012, and 2.25pc in 2013.
He says that the EC now estimates that the annual improvement in the structural balance for 2012 and 2013 is in line with requirements.
15.11 More from Nick Squires, who reports that 60 people have been arrested in Rome today:
The city is slowly returning to normal. Roads that were closed are being reopened but riot police remain stationed outside the Senate and other government buildings.
I saw hundreds of young students milling around the streets in the city centre and police helicopters monitoring the situation from above.
Police officers have been injured in clashes in Turin and Milan.
14.59 A few pictures are coming through from today's protests in Athens:
French nationals living in Greece protest outside the Greek parliament in Athens on Wednesday (Photo: Getty).
Protesters move a life-size puppet made of paper symbolizing a Greek citizen (Photo: Reuters).
14.49 Nick Squires sends this update from Rome:
As clashes break out between protesters and police in Rome, Milan and Turin, some remarks on Italy's predicament from Professor Christopher Duggan, the director of the Centre for Modern Italian History at Reading University and the author of several books on Italian history and politics.
He argues that while the attention of the EU is currently on Greece, Spain and Portugal, the problems facing the Italian government are considerable.
And with Italy the eighth largest economy in the world, the risk to the rest of Europe is high.
"The traditions of revolt are arguably stronger in Italy than in any other European country. Given the depth of the economic problems Italy faces, the scale and direction of its public anger merits close attention.
"The government is unlikely to fall imminently - mainly because there is no clear alternative to Prime Minister Mario Monti. At the moment elections are due to be held in the spring, but the great fear is that a weak coalition will emerge which will not give the country the stability the markets will be looking for. So the real concerns - in the absence of any significant growth - are what happens next year."
14.25 Olli Rehn will announce if Spain has done enough to bring its budget gap under control in his statement today, according to Bloomberg.
In July, Spain was was given three months to take “effective action” on its structural deficit (which excludes one-off revenues and expenditures). It needs to reduce the deficit by 2.7 percentage points this year and 2.5 points in 2013.
13.21 Hmmm....Olli Rehn, EU commissioner for economic and monetary affairs, will make a statement on Spain at 3.15pm UK time.
13.12 Mr Dallara sided with colleagues at the EU by suggesting that official sector participation should come via lower interest rates onGreece's loans, not another debt write-off.
He said that the IMF could increase its contribution by charging a lower rate on its share of Greece's bail-out loans - usually reserved for poorer countries.
12.58 Greece needs more lenient targets to reduce its budget deficit if it is to avoid a "protracted era" of recession or low-growth, according to the head of an international banking lobby.
Charles Dallara, managing director of the Institute of International Finance (IIF), which led bank negotiations for Greece's €100bn private sector debt write-off, said that eurozone countries should find a better balance between austerity and policies that promote growth. He told an audience in Athens:
It's my view that everything must be done to avoid this reality [of a deepening recession] What is needed instead in my view is to ease the case of fiscal adjustment.
12.30 If you think things are bad in Portugal now, they're likely to a whole lot get worse.
Pedro Passos Coelho, Portugal's prime minister, told reporters that the country would need to reduce spending further in order to get the economy back on track. He said:
We are fulfilling a very tough adjustment process, not in order to show our obedience, but because this way we make our country recover [...] We have to lower our level of spending in line with our possibilities.
He said that today's GDP figures (see 10.08) were broadly in line with government expectations, and that he expected Portugal's austerity programme to end after three years as planned.
12.09 Citigroup economist Giada Giani comments on the Greek GDP data:
Given the worsening in 3Q, we think the just-revised 2012 Greek growth forecasts (the troika report foresees GDP falling by 6.0%) are likely to look, once again, excessively optimistic. We believe any improvement in 4Q is highly unlikely as the liquidity squeeze in the Greek economy probably worsened in the final months of 2012 due to the fact that the June and Sept bailout tranches were withheld and due to government arrears continuing to accumulate. The increased number of strikes in the past two months has also probably contributed to depress the GDP dynamic in 4Q. We expect Greek GDP to fall by at least 7 ¼% this year.
12.02 Mr Siebert added that no money would be paid to Greece until a completed report by European debt inspectors had been analysed by Berlin.
He said that states needed precise details from the "troika" on howGreece would implement cuts before the next tranche could be disbursed.
11.58 Big Brother could stay in Greece for some time, according toAngela Merkel's spokesman.
Steffen Siebert told reporters that European states including Germanywere seeking improved controls to ensure that Greece played by the EU's rules and complied with the conditions attached to its bail-out. He said:
Given the extremely difficult record of the Greek program it is understandable that Greece’s partners have an interest in a strengthened monitoring of the program and more reliability in its implementation.
11.39 The Greek economy is now 7.2pc smaller than it was a year ago, official data show.
Greece, which is in its fifth year of recession, saw its economy shrink by 7.2pc on an annual basis in the three months to the end of September,according to the Hellenic Statistical authority.
The economy contracted by 6.3pc in Q2.
11.31 Protests in Greece are limited to a three-hour work stoppage across the country from 1pm and a rally in Athens.
Christine Lagarde, managing director of the International Monetary Fund, told reporters today that Greece needed a "real fix" to put its debt back on a sustainable path as quickly as possible.
Speaking to reporters in Malaysia, she said:
Obviously from the IMF's perspective, we expect a real fix, not a quick fix, and that means clearly debt that is sustainable as quickly as possible.
Earlier this week, a conflict between the EU and IMF erupted into the open after Ms Lagarde publicly clashed with eurozone finance ministers over a critical target for reducing Greek debt levels.
11.25 Meanwhile, things are getting heated in Madrid, where baton-wielding riot police continue to clash with protestors.
Hundreds of protesters have tried to block the main Gran Via avenue, according to AFP.
A Spanish interior ministry spokesman said that by late morning police had arrested 62 people and 34 had been injured in "isolated incidents," 18 of them police.
11.19 While Nick Squires updates us from Rome:
Tens of thousands of protesters are taking part in marches and rallies in Rome, Milan, Turin, Bologna, Florence, Palermo and dozens of other Italian cities.
In Turin, demonstrators threw eggs at the office of a tax collection agency. In Rome, three police officers were injured by stone-throwing protesters who tried to force their way through riot police cordons to reach Palazzo Chigi, the official residence of the prime minister.
A general strike is underway, with hospital employees, teachers and transport workers staying away from work.
In Terni in Umbria a large protest was being led by Susanna Camusso, the head of Italy's powerful CGIL labour union.
11.15 Back to Europe, where the protests are in full flow. Henry Samuelsends this update from Paris:
France’s five main unions are staging 130 marches around the country “for employment, solidarity in Europe and against austerity”, with the leaders of the two main unions, CGT and CFDT joining forces for the first time since Socialist President François Hollande took power in a Paris march this afternoon.
François Chérèque, head of the moderate CFDT union, said the protests were “directed against European heads of state to tell them: ‘You cannot impose this type of austerity, it’s too dangerous for the economy, and above all too dangerous in social terms and can create tragedies.”
The more militant leftist CGT said: “Let’s move from resistance to offensive action”.
"We are all Greek, Portugese, Italian and Spanish. We are all European and we must fight for another Europe," said the Solidaires union.
10.50 On the bank's money printing programme, Sir Mervyn King says that the Treasury's decision to transfer proceeds of quantitative easing from one part of the state to another was one of the factors behind its decision last week not to extend QE beyond £375bn.
However, Sir Mervyn stresses that the move does not mean that the Bank has lost faith in asset purchases.
10.48 And here's the chart that shows that the probability of a strong economic recovery in Britain has waned:
The Bank said:
Compared with August, the GDP profile is weaker (Charts 5.2 and 5.3). In the near term, that partly reflects a renewed squeeze on real incomes emanating from the imminent rises in household energy bills. It also reflects recent indications from business surveys of some softening in near-term underlying growth.
Further out, the weaker GDP profile reflects the judgement that the broader causes and repercussions of the financial crisis may bear down more forcefully on demand and productivity than assumed in previous Reports. There seems a greater risk that the UK economy may be in a period of persistently low growth.
10.43 Here are a couple of the Bank of England's famous fan charts (the 50 shades of green and red represent different probabilities - the darker the colour, the higher the probability of the bank's projection):
10.28 Luis de Guindos, Spain's economy minister, has defended Madrid's tough austerity line. He told reporters that the government was following the "only possible road" to tackle the crisis.
10.08 Portugal's economy contracted by 0.8pc in the three months to September, as austerity measures continued to hamper growth, according to the country's statistics institute.
This means that the economy has contracted for eight straight quarters.
Economists surveyed by Bloomberg had predicted a decline of 0.6 percent. On an annual basis, GDP has fallen by 3.4pc.
09.56 As reader 1959lofty highlights, today's strikes and protests aren't just confined to southern Europe. While he's been told to leave his office in Belgium, even German workers are getting in on the act.
While no strikes are taking place in Europe's largest economy, the DGB, Germany's biggest union, is organising demonstrations in several cities across the country.
DGB president Michael Sommer said that workers stood "in solidarity" with their European counterparts. He told German radio:
In Greece, Spain, Portugal, savings are being carried out in a one-sided way, at the expense of the people.
These countries are not only making cutbacks but are being cut back to death. It's for that reason there is this resistance, this revolt.
We want the right measures against the crisis, that means investing against the crisis and not making savings at all costs.
Belgian workers with flares demonstrate on rail tracks and block trains (Photo: Reuters).
09.25 Armenio Carlos, the general secretary of the CGTP union, said the strikes were:
...a strong sign of discontent and a warning to the European authorities [...] The aim of this strike is to demand answers to the problems of the Portuguese and one of the priorities is a change of policy.
09.18 In Portugal, trains and rubbish trucks were left idle as Lisbon's metro and rubbish collection services ground to a halt from midnight on Tuesday.
Hospital staff also joined the action, with participation is as high as 90pc in some places, according to AFP.
TAP, Portugal's national airline, has already cancelled 173 out of 360 flights scheduled today. If you have a flight booked with TAP, check here before heading to the airport.
Rubbish collecting trucks sit idle at a processing plant in Lisbon on Wednesday (Photo: AP).
09.01 Spanish police arrested 32 people this morning, according toReuters, as scuffles broke out at picket lines.
Candido Mendez, head of Spain's General Workers' Union, said:
We're on strike to stop these suicidal policies.
Spanish power consumption also fell by 13pc this morning, as factories shut down production lines, according to data from national grid provider Red Electrica.
08.53 Workers in Madrid began protesting early this morning. Here are some of the images that have come in so far:
Strikers shout on the parking lot of the Madrid Bus Company during a general strike (Photo: AFP).
Policeman clash with picketing strikers who try to prevent the departure of buses on the parking lot of the Madrid Bus Company (Photo: AFP).
Policemen guard a Bankia bank with a graffiti reading ''Assassins" (Photo: AP).
08.48 A busy day for Europe's unions. Workers in Spain, Portugal, Italyand Greece will all hold protests against harsh austerity measures in Europe.
At the same time, Greece and Portugal will report third quarter growth figures.
General strikes in Spain and Portugal will spearhead a "European Day of Action and Solidarity" called by unions in the region.
Unions in Greece and Italy also planned work stoppages and demonstrations against austerity policies, which labour leaders blame for prolonging and worsening the continent's economic crisis.
For Spain, the eurozone's fourth-largest economy where one in four workers is unemployed in a deep recession, it is the second general strike in eight months in protest against draconian budget cuts.
Spain's main CCOO and UGT unions have urged people to rally under slogans such as "They are taking away our future!", deploying pickets during the night at airports, bus and railway stations.
Activists alerted social networks of an evening rally outside the parliament in Madrid.
The action comes as Spain's right-leaning government and Socialist opposition discuss how to combat a surge in home-owner evictions, blamed for two suicides in just 15 days.
Neighbouring Portugal, where protesters booed visiting German Chancellor Angela Merkel on Monday when she came to support Lisbon's austerity policies, will also hold a general strike.
Protests are being called in some 40 towns and cities across the bailed-out nation, including Lisbon and Porto.
The impact of strike may be undermined by legislation requiring a minimum service in both Spain and Portugal, but airlines have nevertheless warned of a large number of cancellations.
Iberia, Iberia Express, Air Nostrum, Vueling, Air Europa and easyJet cut more than 600 flights including some 250 international routes. Ryanair said no flights had been scrapped yet.
Portugal's TAP said it was grounding more than 160 flights, most of them international.
Greece is the epicentre of the eurozone's debt crisis but its unions are focused on the national crisis and it has limited its protest to a three-hour work stoppage and a rally in Athens.
Despite passing a hotly contested €13.5bn package of austerity measures last week, Athens is battling to convince its international rescuers to unlock the next bailout payment to stave off collapse.
Greece's finance minister, Yannis Stournaras, warned Tuesday of a "very high" risk of default.
Italian unions, too, are seeking a four-hour work stoppage.
The European Trade Union Confederation said it was the first time that it had organised a day of industrial action that included simultaneous strikes in four countries.
"By sowing austerity, we are reaping recession, rising poverty and social anxiety," the union confederation's general secretary Bernadette Segol said in an online statement.
"In some countries, people's exasperation is reaching a peak. We need urgent solutions to get the economy back on track, not stifle it with austerity. Europe's leaders are wrong not to listen to the anger of the people who are taking to the streets."
Short of taking full strike action, unions and activists in other European countries say they, too, plan to support the "Day of Action and Solidarity" against austerity and in favour of jobs.
Union-led rallies are being called across France, Belgium and in Poland, where workers decry "social and wage-dumping" in their country.
High-speed Thalys rail services between Belgium and Germany have also been cancelled for the day.
In Germany, viewed by many in southern Europe as the paymaster behind the austerity drive, the union federation DGB has called protests across the country including in Berlin and Frankfurt.
"For now it is mostly people in southern Europe suffering from a crisis they are not responsible for. But the consequences will surely be felt in the rest of Europe," it said.
and while austerity is pushed on the countries , the EU still wants it all.....
MEPs try to hold EU hostage over demand for extra £13.8bn in cash
Crisis talks over the European Union budget collapsed in disarray after MEPs refused to turn up to discuss their demand for an extra £13.8 billion in Brussels spending over the next year.
7:01PM GMT 13 Nov 2012
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Furious Treasury ministers were summoned to Brussels on Tuesday night to continue bad-tempered negotiations after the European Parliament walked out of a meeting on Friday night.
Greg Clark, who flew to Brussels only for the talks to cancelled, attacked MEPs who have threatened to derail the EU to defend their demands for large increases in spending despite the economic crisis and national austerity measures.
"It is senseless that the only budget deal the European Parliament is interested in is one that massively increases EU spending - raiding Europe's taxpayers," he said.
"The UK has been very clear from the outset that the EU should not be demanding billions of euros more from taxpayers when everyone is making economies at home."
David Cameron, the Prime Minister, held talks with Mario Monto, the Italian Prime Minister, over the EU budget increases ahead of a summit on a seven year Brussels spending plan next Thursday.
and as to Greece , reaction to the stall ball game being played....
http://www.independent.co.uk/news/world/europe/panic-and-anger-over-greek-bailout-delay-8313298.html
and.........
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_14/11/2012_469910
On Greece, Lagarde is the grown-up at the table
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Their failure to recognize this binary choice was on display again Nov. 12, when finance ministers from the 17-nation euro area put off until later this month a decision to release the next 31.3 billion-euro tranche of bailout funds, leaving Greece to figure out how to roll over a 5 billion-euro debt payment this week.
Instead of confronting Greece’s debt problem head-on, the finance ministers sought to give the government two more years -- until 2022 -- to get its debt burden down to the target of 120 percent of gross domestic product. Once they’ve figured out how to pay for Greece’s extra time, projected to cost 32.6 billion euros, the euro leaders will no doubt declare victory. They’ll pretend that they haven’t just approved yet another bailout, and that a return to solvency is within Greece’s financial and political ability to achieve.
No wonder the International Monetary Fund’s general director Christine Lagarde rolled her eyes at a post-meeting news conference. She insisted on sticking to the current 2020 target date, and she was right: Europe’s leaders must have a more realistic debate now on what a Greek rescue will take, and not just for the sake of the IMF’s integrity. Waiting, if that’s the plan, until after German elections in 2013 would probably be too late for Greece and possibly for the euro.
A leaked draft review of the Greek bailout by the so-called troika of official creditors -- the IMF, the European Commission and the European Central Bank -- underscores the urgent need to stop pretending and give Greeks and investors reason to believe in the program’s eventual success. The assessment warns that “risks to the program remain very large” -- primarily due to the Greek government’s weakness and the threat that continued lack of confidence in its ability to emerge from under its debt pile will make failure self-fulfilling.
Perceptions in northern Europe that make it harder to spend more money on the bailout are also self-reinforcing. Greek governments have been feckless in the extreme, but as the European commissioner for finance, Olli Rehn, said this week, “It is time to debunk the perception that no progress has been made. This perception is damaging, it is unfair, and it is simply wrong.”
Greek Prime Minister Antonis Samaras, for all his previous sins in blocking early reforms, last week took enormous political risks to satisfy the troika’s demands. The effort nearly collapsed his coalition government and prompted violent protests in the streets.
Consider the scale of the pain that Greece has already suffered. Amid a Depression-scale economic contraction, the government has cut spending and raised taxes by a total of about 13 percent of gross domestic product since 2009. That’s more than the 10 percent target the troika had set for 2010-2014, and roughly twice the size of the feared U.S. fiscal cliff. The new cuts that Greece’s government pushed through last week should amount to a further 5 percent of GDP over the next two years.
Budget cuts have fallen primarily on public-sector salaries, pensions, health care and -- in a country that’s deeply sensitive over territorial disputes with Turkey -- defense. Public expenditure on health, for example, dropped by 25 percent and is now scheduled to fall by a similar amount over the next two years.
There are good reasons for many of the cuts. Greek public- sector wages and pensions rose unsustainably before the crisis and now need to come back to earth. Pharmaceutical prices in Greece were outlandishly high. But the pain is undeniable, and it’s nothing short of amazing that Greece’s government has agreed to more of it. With more than half of all young people unemployed, and the government forecasting that the economy will shrink by a further 4.5 percent next year, it is hard to imagine Greeks carrying through with the cuts and societal transformation demanded unless they can see a believable path to recovery. If Europe’s leaders refuse to consider the only solution likely to work -- a debt writedown -- they will have nobody but themselves to blame if they lose their money to a default.
Consider the scale of the pain that Greece has already suffered. Amid a Depression-scale economic contraction, the government has cut spending and raised taxes by a total of about 13 percent of gross domestic product since 2009. That’s more than the 10 percent target the troika had set for 2010-2014, and roughly twice the size of the feared U.S. fiscal cliff. The new cuts that Greece’s government pushed through last week should amount to a further 5 percent of GDP over the next two years.
Budget cuts have fallen primarily on public-sector salaries, pensions, health care and -- in a country that’s deeply sensitive over territorial disputes with Turkey -- defense. Public expenditure on health, for example, dropped by 25 percent and is now scheduled to fall by a similar amount over the next two years.
There are good reasons for many of the cuts. Greek public- sector wages and pensions rose unsustainably before the crisis and now need to come back to earth. Pharmaceutical prices in Greece were outlandishly high. But the pain is undeniable, and it’s nothing short of amazing that Greece’s government has agreed to more of it. With more than half of all young people unemployed, and the government forecasting that the economy will shrink by a further 4.5 percent next year, it is hard to imagine Greeks carrying through with the cuts and societal transformation demanded unless they can see a believable path to recovery. If Europe’s leaders refuse to consider the only solution likely to work -- a debt writedown -- they will have nobody but themselves to blame if they lose their money to a default.
