http://www.zerohedge.com/news/2012-12-19/ecb-again-accepting-greek-bonds-eligible-collateral
ECB Again Accepting Greek Bonds As Eligible Collateral
Those curious why the EUR is back to highs not seen since April, it appears the reason is because Europe's currency is once again directly collateralized by such money good assets as Greek Sovereign bonds. At least the farce that is the "temporary" indirect bailout of Greece via the ELA can finally end.
From the ECB:
19 December 2012 - ECB announces change in eligibility of debt instruments issued or guaranteed by the Greek government
Marketable debt instruments issued or fully guaranteed by the Hellenic Republic and fulfilling all other eligibility criteria shall again constitute eligible collateral for the purposes of Eurosystem credit operations, subject to special haircuts. This is the consequence of the decision of the Governing Council of the European Central Bank (ECB) to suspend the application of the minimum credit rating threshold in the collateral eligibility requirements for the purposes of the Eurosystem’s credit operations in the case of marketable debt instruments issued or guaranteed by the Greek government. This suspension will be maintained until further notice.
In this decision the Governing Council has taken into consideration the positive assessment by the European Commission, the ECB and the International Monetary Fund of the policy package for the first review under the Second Economic Adjustment Programme for Greece and the wide range of measures already implemented by the Greek government in the areas of fiscal consolidation, structural reforms, privatisation and financial sector stabilisation.
The suspension applies to all outstanding and new marketable debt instruments issued or guaranteed by the Greek government and will come into force with the relevant legal act on ?21 December 2012. The haircuts applied to these assets will be specified in the legal act.
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_18/12/2012_475065
Shopkeepers react to transport strike
The Athens Traders Association on Tuesday asked public transport employees to suspend industrial action planned for Wednesday and Thursday as an expression of solidarity with the hard-hit private sector in view of the upcoming holiday season.
Commuters in Athens are set to face fresh public transport disruptions on Wednesday and Thursday as workers’ unions have called for industrial action to protest their inclusion in the unified pay structure for civil servants.
Services on the city’s metro and Piraeus-Kifissia electric railway (ISAP) won’t start until 9 a.m. on Wednesday, while fixed-track transport – the metro, ISAP and tram – will not operate on Thursday due to a 24-hour strike called by urban rail transport workers.
TrainOSE is also suspending national and suburban (Proastiakos) railway services on Wednesday and Thursday in protest at the sell-off of its carriage maintainance department, which will disrupt services to Athens International Airport.
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_19/12/2012_475115
Greeks can’t find euros to buy heating oil with winter economy
By Oliver Staley
In the Greek mountain town of Kastoria, less than an hour from the Albanian border, Kostas Tsitskos, 88, can’t afford fuel to heat his home against the winter’s cold. So he and his son live in a single bedroom, warmed by a small electric heater.
“One room is enough,” said Tsitskos, who lives on a 734 euro-a-month ($971) pension and doesn’t have the 1,000 euros a month he needs to buy heating oil.
Greece is facing a heating-oil crisis. With an economy that has contracted for five years and an unemployment rate at a record 25 percent, residents in northern Greece can’t heat their homes. Kastoria hasn’t received funds from the central government to warm schools and the mayor said he will close all 53 of them rather than let children freeze, a step already taken in a nearby town. Truckloads of wood are arriving from Bulgaria as families search for alternative fuels.
“This is the coldest place in Greece,” said Emmanouil Hatzisimeonidis, Kastoria’s mayor, in an interview in his office. “It’s winter from October to April. This year we are very lucky. Last year, it was snowing for four months.”
When temperatures fall below freezing, Tsitskos spends most of his time in his bedroom and rarely leaves the house, he said. For meals, he and his son move the electrical heater to the kitchen. Other older residents in the town spend their days at a senior center and cafes to save on heating costs, returning home only to sleep, he said.
Austerity cuts
Austerity measures have cut government salaries and benefits, raised the retirement age and reduced services. The household price for heating oil in Greece reached 1,266 euros per 1,000 liters (264 gallons) in the second quarter of 2012, surging 48 percent from a year earlier, according to the International Energy Agency, a Paris-based organization. The same quantity cost 700 pounds (861 euros) in the U.K., according to the IEA, and $1,045 (790 euros) in New York, according to a state agency. Greeks pay both excise and value-added taxes on heating oil that can make up 42 percent of the total cost. The mayors of the region are petitioning the government to be exempted from the tax. Greece’s oil prices are high because of laws that protect the country’s two refining companies and prevent competition, said Pavlos Eleftheriadis, a lecturer in law at the University of Oxford in England, who studies monopolies. “The Greek political system works for the insiders,” said Eleftheriadis, a native of Greece. “If you’re an insider, there will be an attempt to protect you. If you’re a poor person in Kastoria, you are on your own.” Frozen lake Kastoria, a town of about 36,000, is on a peninsula jutting into a lake 625 meters (2,050) feet above sea level. Restaurants and taverns sit by the water, where rowers scull year round. On winter days, the sky is a clear blue and the air is crisp. In some years, the lake freezes over and residents from neighboring villages walk across. At night in December, the temperature can fall to -10 degrees Celsius. Kastoria is the center of Greece’s fur industry and mink is raised in the area. Many of the area’s furriers cater to a Russian clientele, and signs with Cyrillic letters hang from their stores. Nick Sersemis, 32, said he would need 3,500 euros to heat his home with oil this winter. Instead, he’s bought 15 tons of wood for 1,500 euros and his family is sleeping in one room around the wood stove, he said. He worries about the schools his two boys attend. “I know this winter they won’t have heat at their school,” Sersemis said. “I’ll keep them home if I have to.” Bread money Sersemis runs his family’s 15-year-old bakery in a residential neighborhood and worries that he will have to close it next year. Over the past two years, his sales have fallen 35 percent while ingredients cost 30 to 40 percent more. He takes home about 500 euros a month, down from 1,200 two years ago. “People don’t have money to buy even bread,” he said. Sales of wood for heating have soared 40 percent from last year, according to Alexis Tsekouras, a Kastoria wood seller. Because of limits imposed by the forestry service on the amount of timber that can be harvested, wood is imported from Bulgaria, he said.
Greece’s central government has cut the funding for heating schools by 60 percent, said Hatzisimeonidis, Kastoria’s mayor.
On Oct. 31, residents of Florina, an hour north of Kastoria, traveled to Athens to protest the lack of funds for heating oil, emptying buckets of ice in front of the parliament building. Senior center At a Kastoria senior center in a small building next to the lake, several dozen grey-haired men play cards and pay 80 cents for coffee. Among them is Kostas Tsitskos, who said the suffering he sees now reminds him of the devastation caused by the German occupation in World War II. “People were looking in the garbage for food then and they are now,” Tsitskos said. “In World War II, people were selling furniture for food. If the situation continues now, we will be selling our furniture.” This winter, Tsitskos bought an electric heater for his 100 square-meter (1,076 square-foot) home and he turns it down at night. He has two thermometers and on a recent December day, the temperature was 17 degrees inside and 6 degrees outside. If the weather is good, Tsitskos uses a walking stick to travel the few blocks to the senior center. The center is usually heated, although not well and not every day, he said. “Sometimes we are heated with the heat from our own bodies,” he said. No buyers Christos Tsitskos, his 43-year-old son, lives with his father. Christos owned a small fur business before closing it in the crisis. He now works at another company manufacturing pelts, earning 5 euros an hour. There are no buyers, he said. “We’ll make 100 pelts and sell two or three,” he said. “We don’t sell anything.” A veteran of the Greek Civil War, which was fought from 1947 to 1949, the elder Tsitskos worked in the fur industry in Montreal and New York before opening his own business manufacturing coats in Kastoria, retiring at 65. His wife died 15 years ago. Tsitskos has relatives in Astoria, New York, who have considered returning to Greece to retire and he cautions them to stay in the U.S. He would leave if he could afford it, he said. “I was expecting a different type of life,” he said. “There’s nothing that makes me happy. I’m living just to live.” Even after 40 years in the trade, Tsitskos doesn’t have any furs to keep warm. The one fur coat he owned was sold years ago.
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_18/12/2012_475088
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http://www.guardian.co.uk/business/2012/dec/19/eurozone-crisis-greece-strike-credit-rating
Monti postpones announcement on his next move
Important developments in Italy this lunchtime... the eagerly awaited announcement on Mario Monti's plans has been delayed.
Monti had been planning to get Italy’s 2013 budget passed this week, allowing him to stand down and reveal on Friday whether he will stand for office. However, the plan has come off the rails, thanks to Silvio Berlusconi.
From Rome, Tom Kington reports:
The former prime minister, who has already pulled his parliamentary support for Monti – prompting Monti’s decision to step down – had previously guaranteed his support for the budget law.But now Berlusconi has u-turned on both positions, surprisingly offering to back a Monti coalition government, while his MPs hold up the budget. As a result of the delay Monti has postponed his long awaited conference on Friday, possibly until after parliament can be dissolved next week, which depends on the budget passing.Berlusconi has stated he would like to see the coming election – currently scheduled for the second half of February – pushed back a week or two, with critics alleging he wants more time to dominate the airwaves through his TV channels before pre-election rules kick in limiting air time for politicians.Berlusconi has admitted he needs to be beamed into Italian homes to boost his standing in the polls and has given long TV interviews each of the last three nights, stressing the painful property tax Italians have just paid.He may be well behind the centre-left Democratic Party in the polls, but his trickery this week and ability to dictate the political agenda shows that he cannot be ignored.
Analysis: Frantic political activity in Greece
Today's strike comes amid a backdrop of frantic government activity in Athens.
Helena Smith reports:
With less than a week to go before Christmas, prime minister Antonis Samaras appears to be in little holiday mood. Until late into the night, the conservative leader held roundtable talks with his junior partners in a bid to improve the coordination of his often fragile coalition as it braces itself for 2013 and what is widely believed will be the toughest year yet since debt-stricken Greece descended into crisis in late 2009.After almost six months of tortuous negotiations to get to this point [of appeasing lenders enough to unlock the funds the country so needs to keep itself afloat], Samaras, says aides, is now determined not to lose the momentum that the bumper cash injection will bring. “We have to be in continuous coordination. Whatever we vote we must enact and we [must] proceed with determination,” he said, emerging from talks that the finance minister Yiannis Stournaras described as “crucial.”
Greece’s tripartite government will remember December 18 as a good day, and not just because of S&P's six-notch upgrade (see 8.41am)
Lloyds also announced that 15 Greek shipowners were among the 100 most important shipowners in the world – and in so doing placed the Greek maritime fleet as the second most important globally. On the agricultural front Samaras declared that some €1.4bn would be injected during the course of 2013 into promoting new agricultural produce – investments that the government hopes will translate into more exports in the organic food industry.
But with record levels of poverty and unemployment on course to only get worse (as a result of the belt-tightening measures the government must apply) the challenges are immense. “The road ahead is difficult and steep,” said Stournaras as he also emerged from last night’s talks. If the government is to avoid the pitfalls that enforcement of more cuts and increased taxes and higher bills will inevitably bring - and fears of social upheaval have not abated --it knows it has to somehow soften the impact of recession-inducing measures on Greeks.
Evangelos Venizelos, the socialist Pasok leader could not have put it better. “We are organizing a new start for the country following the conclusion of the very difficult negotiations with our creditors and partners. The issue now is to recover from recession, limit the threat of unemployment and regain a positive feeling … [so that] the Greek citizen feels secure and consciously believes that these very difficult and heavy measures are really the last [measures],” he said.It will need work. “It requires social consensus and the belief in a national strategy,” insisted the politician.
Walkout details
Thousands of teachers, doctors and municipal workers are expected to take to the streets and rally in central Athens around midday local time (10am GMT), Reuters reckons.
In an official statement, ADEDY said the strike had been called because:
The serious problems that workers in the public sector face, because of thousands of firings and understaffing, underfunding and the abandonment of public services, as well as the whole of Greek society... requires that we continue with and escalate our struggle and mobilisations.
The main private sector union, GSEE, has called a three-hour walkout, from noon till 3pm local time (10am-1pm GMT).
Living in Greece lags up that domestic flights will be disrupted by a walkout by ADEDY members, with Olympic Air cancelling seven flights and rescheduling another five (details here). International fights are not expected to be affected, though.
It also appears that suburban railway services are disrupted today.
Living in Greece's dedicated strike page remains the best source of info.
France unveils banking reforms
Pierre Moscovici, the French finance minister, has been outlining hislong-awaited reforms to the banking industry and they fall short of the radical shake-up long promised by the Hollande government.
• The ringfence around banks' riskier operations will affect only 10% of a bank's capital, Moscovivi says, which is a long way short of the 25% envisioned by the Liikanen report - the European Commission's version of the Vickers report into banks in the UK.
• He says only "some" bondholders will be made to carry the can for rescuing banks in future. That means that senior creditors will be off the hook.
• He adds that the plan will "stand as a model for the rest of Europe" and that Germany was considering a similar overhaul.
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