http://www.zerohedge.com/news/2012-11-11/austerity-farm-where-cuts-some-are-more-equal-cuts-others
Submitted by Tyler Durden on 11/11/2012 15:43 -0500
and.....
http://www.ekathimerini.com/4dcgi/_w_articles_wsite3_1_11/11/2012_469469
( an epic can kick coming - stall ball led by Germany pertaining to Greece until Germany has its Fall 2013 Elections out of the way ? ? I guess we are seeing a trial balloon to see if markets will bear this level of shamocracy from the EU .... )
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_10/11/2012_469481
http://ftalphaville.ft.com/2012/11/09/1254681/a-e5bn-greek-bond-imminently-falling-due-did-we-mention-we-have-deckchairs-by-this-abyss/
( Let's see if Greek Banks buy the bonds offered to rollover the Greek bonds that come due November 16th ... )
Austerity Farm: Where Cuts For Some Are More Equal Than Cuts For Others
As the Greek government voted on their austerity plans (and prepare to vote on the budget), most of the media is focused on the molotov-cocktail-throwing malarkey that is occurring outside of the parliament. However, as Reuters reports, it was theband-of-brothers inside the building that may just have sparked the largest anger among the public. The government workers, who have enjoyed the "kind of lavish pay and benefits that have become emblematic of the public sector excess at the heart of Greece's debt crisis", suddenly discovered that in the 500-page draft of cost cuts and tax hikes that they themselves were expected to share in that sacrifice. This was entirely not acceptable and thus - they walked off the job, with police having to be called to prevent the shut off of power to the parliament building. Dubbed "The Princes of Parliament", these 'unsackable' staff who have enjoyed 16-month-per-year salaries, seem happy to draft the cuts for others but when it is their own..."we will stop it... Maybe forcefully this time" is response.
Via Reuters:
When Greece's government pushed through a law last week aimed at slashing public wages and raising taxes, its biggest threat was not the firebrand opposition or the 100,000 protesters thronged at the gates of parliament.It was the assembly's workers themselves, a well-connected group that has long evoked disdain for enjoying the kind of lavish pay and benefits that have become emblematic of the public sector excess at the heart of Greece's debt crisis.The staff dispute that image. But, having discovered that a 500-odd page draft law of cost cuts and tax hikes included a last minute amendment giving the finance ministry oversight over parliamentary pay, dozens of clerks walked off the job.
"Thieves!" they shouted at parliamentarians as they blocked the doors to the chamber, according to a witness, who saw some workers try to hit journalists who were filming them.
Police rushed to lock the door to the basement after a group threatened to shut off the power main.
The walk out briefly halted debate on the bill required for Greece to avoid bankruptcy and forced Finance Minister Yannis Stounaras to back down, a feat thousands of furious demonstrators in the rain outside had failed to achieve.
It triggered outrage among lawmakers and media, who ran headlines reading "Shame!" and complained most of the staff,unsackable under the constitution, were friends or family of politicians benefiting from an anachronistic patronage system.
Greek liberal daily Ta Nea dubbed them "The Princes of Parliament" and called for widespread dismissals among the almost 1,300 staffers.
"The party is over. The politicians have the responsibility to clean the Augean Stables they have created," the newspaper wrote in a front-page editorial, referring to the dirtiest of Hercules's 12 legendary labors in which he diverted a river to wash the manure from the stalls of 1,000 divine cattle.
In August, Conservative New Democracy MP Byron Polydoras struck a nerve when, appointed parliament speaker for just one day after an inconclusive May election, he made his daughter a permanent employee in his office, a position immune to firing.
The chamber's workers outnumber Greece's 300 deputies by more than four to one. By comparison, Britain's House of Commons has around 1,830 for its 646 lawmakers, a ratio of 2.8 to one.
PERKS
Newspapers cataloged perksenjoyed by the clerks, lawyers, legal experts, messengers, and others in parliament's halls.
Besides public sector pensions, the lists included benefits such as 16-monthly salaries and huge one-off bonuses upon retirement.
The legislature's staff, however, tells a different story. According to Panagiotis Politis, president of the parliament workers' association, his salary has been cut by 50 percent, in line with cuts seen across Greece's public sector.
"We used to get the 16 monthly salaries, election bonuses and so on. But all this has been cut... I have 25 years experience and I get 1,040 euros a month, net," he said.
"What's happening with the media is absurd. By attacking us they are targeting the political system... We can't go out with our children and our spouses in society."
A finance ministry official said Stounaras would resubmit the amendment in an effort to eliminate all bonus schemes within the state system. Politis said the assembly's workers would it block again.
He fears it could threaten the last uncut benefits - overtime payments worth up to 500 euros a month and a 60-salary retirement bonus that could amount to 150,000 euros or more for workers with 30 years experience.
"Of course we don't agree with cutting our retirement bonuses.This is our money," he said, explaining they were partially funded by monthly contributions from workers."If they bring it back in the same way, we will stop it...Maybe more forcefully this time."
and.....
http://www.ekathimerini.com/4dcgi/_w_articles_wsite3_1_11/11/2012_469469
( an epic can kick coming - stall ball led by Germany pertaining to Greece until Germany has its Fall 2013 Elections out of the way ? ? I guess we are seeing a trial balloon to see if markets will bear this level of shamocracy from the EU .... )
Waiting for a German move
The US elections are over and the Greece situation did not blow up just as it wasn’t supposed to before the polls there. Now we may have a new milestone to wait for, as sources in Europe suggest that German Chancellor Angela Merkel will not be looking for a comprehensive solution for Greece before the elections in her country, which will take place some time in the fall of 2013. By “comprehensive solution,” we mean whether Greece will exit the eurozone or a long-term answer will be found to its debt problem. The leadership of the International Monetary Fund and the Americans convinced Berlin that a Greek exit might seem cheap in terms of absolute numbers, but the repercussions may be unpredictable, and Merkel seems to have decided that she does not want to take such a risk before federal elections. On the other hand, she cannot offer a definitive solution to the problem of Greek debt sustainability, as she is being pressured to do by IMF Managing Director Christine Lagarde and the US government. For this to happen, Greece must be granted a haircut on debt held by the official sector. German Finance Minister Wolfgang Schaeuble, meanwhile, has said that if this were to happen, Germany would not give Greece any more assistance. Merkel is afraid that such a move would either be blocked by the German parliament or would come at a high political cost. And so the German chancellor has stuck to the middle ground and Berlin will do everything in its power to put off a solution to the Greek problem until after fall 2013. The troika, for its part, will be convinced to draft reports that are not so openly negative in order not to put Berlin on the spot and so that the Greek debt can be sorted out temporarily using various tricks and half-measures. In politics, though, and especially at times of crisis, you can rarely plan strategy with German precision. Greece may still blow up at the worst possible time for Merkel if the problem of liquidity in the real economy is not solved or if Schaueble insists once more on a supervisory mechanism for Greece that is deemed unacceptable by the IMF and other European leaders. For Greece, Germany’s stance means that it will continue to exist in a state of uncertainty. If the threat of a euro exit is not completely dispelled, there will be no foreign investment and the mood in the domestic market will never change. The disbursement of the bailout loan will certainly provide some breathing space, but no spectacular changes, while there is also a danger that Greece itself will upset the cart in one way or another as it is wont to do. In Greek political time, 11 months is a very long time, especially given the situation right now. |
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_10/11/2012_469481
Bundesbank president questions troika report
Eurozone finance ministers are expected to receive the troika’s report on the state of Greece’s finances and the progress of its consolidation program on Monday but the head of Germany’s central bank, Jens Weidmann, has questioned how impartial the survey might be given that politicians had already decided to continue funding Athens.
“How can you objectively assess the completion of the program if you are too afraid of the consequences of a negative conclusion?” Weidmann said to the Rheinische Post newspaper on Saturday. “I am relying on the fact the troika will deliver both an unembellished and honest assessment of the situation in Greece before payments are delivered.”
Weidmann’s comments came as a former International Monetary Fund official Arvind Virmani insisted that Greece’s debt problem could not be solved without a restructuring. “It has been my view since early 2010 that Greek debt cannot be made sustainable without a drastic debt write-off,” he said.
“The greater the delay, the more the cost to remaining creditors... and the Greek public.”
Virmani, who represented India at the IMF for three years until October, added, “The stronger euro countries have refused to acknowledge this fact, even after the IMF started, perhaps a little reluctantly, to recognize it.”
Meanwhile, in an exclusive message to Sunday’s Kathimerini, the German Ambassador to Greece, Wolfgang Dold, said the reform measures passed by the Greek Parliament on Wednesday were “part of a necessary strategy toward consolidation.”
“Germany has great respect for what has been achieved so far,” he said. “Germany also has great respect and compassion for the hardship for many people which goes along with the reforms taking place now.”
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_10/11/2012_469463
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http://ftalphaville.ft.com/2012/11/09/1254681/a-e5bn-greek-bond-imminently-falling-due-did-we-mention-we-have-deckchairs-by-this-abyss/
( Let's see if Greek Banks buy the bonds offered to rollover the Greek bonds that come due November 16th ... )
So, we’re going to the wire once again in the now traditional dance between Greece and the troika. As the FT reported on Thursday:
Eurozone leaders face a new round of brinkmanship over Greece’s €174bn bailout after international lenders failed to bridge differences on how to reduce Athens’ burgeoning debt levels, pushing the country perilously close to defaulting on a €5bn debt payment due next week.Officials had hoped to finalise the new programme, which extends Greece’s rescue two years to 2016, at a meeting of eurozone finance ministers in Brussels on Monday. That would free up a long-delayed €31.3bn aid payment desperately sought by Athens.But according to officials involved in negotiations, international lenders remain far apart on how much debt relief for Greece is needed and who will bear the losses from lower debt repayments.
That €5bn is due on a 3-month T-bill on Friday November 16. But the ECB which said it “is by and large done” with helping Greece is now resisting allowing the T-bills in question to be rolled over.
The ECB could raise the ceiling on the amount of T-bills the Bank of Greece can accept as collateral in exchange for emergency loans, thereby allowing Greek banks to stock up. This, at least indirectly, allows the ECB to still sorta kinda get its way.
In the meantime, as Citi said, the ECB can “create pressure to find a quick agreement by threatening to limit the use of Greek T-Bills under the Greek Central Bank’s ELA [Emergency Liquidity Assistance].”
And according to the FT’s Peter Spiegel an EU official said “there will not be any default on the 16th of November”. Heck, this particular T-bill was itself issued so that another piece of ECB debt could be payed off… and the T-bill ceiling was raised that time, so this is hardly new.
(There is an argument that lifting the ceiling might be seen as monetary financing within the ECB. But the last roof-lift obviously wasn’t. Okaaay.)
Pertinently, the IMF is still insisting that Greek debt levels are reduced to 120 per cent of gross domestic product by 2020 — which would involve eurozone governments having to take losses on their existing bailout loans. Not everyone is cool with that. For its part, the European Commission is urging an easing of the target to about 125 per cent by 2022.
The hope had been that debt relief measures could be limited to a cut in interest rates on bailout loans plus giving Greece the profits earned by the ECB on their €55bn in Greek debt holdings, estimated to be between €12bn-€15bn.
All-in, we’ll add November 16 to our ever-growing chimeric deadline list
on the calendar that we keep in the bathroom.
and......
http://www.athensnews.gr/portal/1/58740
| News bites @ 6 | |||||
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1. STOURNARAS REASSURING There is no cause for concern over the disbursement of the next loan tranche, Finance Minister Yannis Stournaras said on Friday, following recent statements by European officials that spoke of a delay in the disbursement. Commenting on the disagreement that has broken out between the EU and the IMF over the Greek debt, Stournaras clarified that there is indeed a discussion on the sustainability of the Greek debt, but added that "they are not asking something from us". Stournaras statements came just a few days before Monday’s Eurogroup meeting, during which the Greek side is expecting a “political statement”, Stournaras said.
2. ND AGAINST SYRIZA Government spokesman Simos Kedikoglou on Friday accused Syriza that with its insults and attacks against Prime Minister Antonis Samaras it reveals its secret wish that Greece will not receive the outstanding instalment of the EU/IMF bailout loan. "Greece did what it had to do and Europe, on its part, will also do what it should. The drachma lobby, inside and outside Greece, is still fighting rear-guard battles, but it will lose this battle as well," concluded Kedikoglou.
3. VROUTSIS’ FEAT The labour ministry is in a race against time, with a series of measures that must be carried out over the next six weeks, Labour Minister Yiannis Vroutsis said on Friday. Vroutsis was speaking after a first meeting at the labour ministry to coordinate government action on implementing labour and social insurance reforms passed in the omnibus Medium-Term Fiscal Strategy bill. "Essentially, this will be a feat since these are issues that have been outstanding for decades," the minister added.
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http://www.zerohedge.com/news/2012-11-09/reading-between-lines
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Reading Between the Lines
One of the great faults with paying attention to Europe is to take what they tell you as factual. The media trumpets what they are given by the various sources of information in Europe but a quite skeptical eye is what is needed. They claim that they do not have the “Final Troika Report” on Greece because they have not stamped it “Final” yet and so they blame their indecision on the magic trick that they are performing. Everyone on the Continent has the report but since they can agree on almost nothing they have blamed the lack of the rubber stamp as the culprit. They should just come out and say that, “It is the rubber stamp’s fault” and be done with it.
Red Lines
Every easy trick has now been exhausted when it comes to Greece. You may feel worn out and tired by the length of time this process has taken but that is a remarkably short-sighted viewpoint. You should be happy that you have had the time to carefully consider and plan for what is about to take place because ugly is about to get uglier and you will see retching in the streets; not just in Athens but in Berlin and Madrid. I would say that the odds are about 60/40 that what is happening is that the European Union is trying to force Greece out of the EU by having Greece refuse any more of the austerity measures and not get funded. It is a “Game of Houses” because Germany does not want to take the blame and they want Greece to throw up their hands and leave so Berlin can say, “What can we do?” To actually force Greece out would be a violation of principles that Germany cannot politically afford and so a quite complicated ruse is underway. The severity of the situation is indicated now by the Red Lines that have been drawn by all of the major constituencies so that there is no compromise to be found. As I have stated before we are at the Crossroads, at Breakpoint, because every proposal is met with a hard line drawn in concrete by someone in some corner of the deliberations.
The IMF will not provide any more funds without a 120% debt to GDP ratio by 2020 they claim but what this really means, and what they have come closer to saying recently, is that they will not dish out any more money unless they feel that they will get paid back (Red Line). The IMF has suggested that perhaps the ECB could take the loss and Mr. Draghi has said while they might forego the profits on their Greek Bonds, estimated at about $16 billion, that they will not take a loss as it would violate their charter of not financing individual nations (Red Line). The IMF has suggested that the Stabilization Funds could take a hit which Germany and several other countries have said is impossible because it would probably cause several governments to fall in Europe (Red Line). The Greeks have asked for a two year extension in payments which would require another $40 billion to be handed to Greece as Austria, the Netherlands and Finland have all publically stated “No more money for Greece” and another wall (Red Line). The markets all think that it is just another moment to muddle through but I am telling you, having examined the evidence and considered all of the possibilities, that this is not the case and that my conclusion will very soon prove to be correct. The length of time this process has taken may have numbed some people’s sensitivity to the danger but with $1.5 trillion in total debts that could go into default; the danger is quite real and the shock will be systemic.The ticking time bomb has been loaded and it is about to explode whether you realize it or not.
It is going to be either “debt forgiveness” or “more money” or “brute force” and there are quite serious consequences for many nations and many governments whichever path is chosen. “Debt forgiveness” is a sacred promise broken and “more money” is politically impossible in some countries at this point. Europe may have concluded that it is far better to force Greece out by continual demands and ever increasing austerity measures and that the losses from a Greek Exit, which would be borne by all, are a better alternative to the other two roads as the Germans and others could blame the Greeks and not take the responsibility. Three roads, all ugly, which is why the length of the delay and the hesitation to engage. Any of these three paths will lead to extensive pain and a lot of contagion and so I conclude that the Greeks will get forced out by increasing European demands as that is the least politically damaging alternative for many of the nations in Europe. “Blame it on the Greeks” will be the secret password while the Greeks will call Berlin every name in the book.
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Of course we know that all of the numbers for Greece are just lies anyway - let's look once again at their debt to GDP number , as reviewed by Mark Grant ..... http://www.zerohedge.com/news/2012-11-08/we-arent-kansas-anymore We Aren't In Kansas Anymore
Via Mark J. Grant, author of Out of the Box,
While the citizens of Athens rioted and threw Molotov Cocktails outside of their Parliament the elected officials narrowly passed the new austerity measures demanded by the Troika last night. They have a budget vote left, likely to be passed, and then the focus will shift to the IMF and the European Union and whether they will fund and how it will be done. The Greek government says it will run out of money on November 16 and the country has debt payments to be made on November 21. Last night’s vote in Athens was only the first page in the current chapter and there are a number of open questions left. Prepare for the European 'fiscal cliff'...
Will the IMF fund?
The International Monetary Fund has said that they will not unless it appears that the Greeks can pay back their debt. With an actual debt to GDP ratio now around 800% I think it can be said with certainty that the task is impossible even as the Troika says the same ratio is 190%. The difference between my number and their number is just what is counted. I count in exactly the same fashion as IBM or GE tallies up their balance sheet. I include all of the liabilities of the nation and then divide by them by their steeply declining GDP or revenues. I include the direct sovereign debt, bank debt guaranteed by Greece which is mostly used as collateral at the ECB. I count their $90 billion in guaranteed derivatives and I include the corporate debt in Greece that is guaranteed by the country along with their regional debt that is Federally backed. When all is said and done you arrive at my number by simple arithmetic and then division. The IMF has suggested that the ECB and the EU should take losses on their holdings, which both have refused to do to date, and so the IMF may refuse to fund either their part of the next tranche or provide any new money for the two year extension that has been asked for by Greece.Will the European Union Fund? Several countries such as Austria, Finland and the Netherlands have stated publically that they will not use any more of their country’s money for Greece. We shall see. Then there is the two year extension of payments asked for by Athens which would require another $40-50 billion in additional money and who is going to pick up this bill remains an open question. We may have reached the point in the road where new debt to pay off old debt coupled with a total increase in the debt burden is no longer politically acceptable to some nations and so gets quashed as Freya and Athena are locked in mortal combat. The tranche payments plus the extension payment total $78-88 billion and I expect a significant pushback from a number of nations. The PSI card has been played, the shove it under the rug card has been played, the hide the bacon card has been played, the band of brother’s card has been waved around and now, like at the end of a long drawn out dinner; who is going to pick up the tab?
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