Greece news highlights - between ongoing incompetence , bureaucratic redtape , corruption and slip- sliding on meeting agreed goals / targets , the Greek sad song remains the same.....

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_22/02/2013_484274

State failing to channel cash into the market

The much-needed flow of cash into the market has been reduced to a minimum due to ministerial insufficiency, bureaucracy and the personal ambitions of a number of tax officers, despite the system of arrears repayment agreed to. The photograph above is from Agnanta, near Arta in western Greece.

By Prokopis Hatzinikolaou and Sotiris Nikas

Ministers’ inability to respond to the new reality, along with bureaucratic procedures and certain individuals placing their own personal goals above the public interest are the main reasons why the market is still waiting to receive much-needed cash owed to it by the state.

From the end of December, when funds from the bailout package started flowing back into Greece, up to the end of January, the state repaid just 1.003 billion euros of its obligations, while some 4 billion euros remained outstanding. At the end of last year, the state’s disposable cash stood at 5.9 billion euros; it has since dropped to an estimated 4 billion euros.

The public administration is once again proving that it is unable to rise to the occasion and secure the smooth supply of cash to the market. Although specific rules have been set for the repayment of arrears and the General State Accounting Office has signed memorandums with ministries, they are not being followed.
The Finance Ministry argues that the government is keeping to its schedule, which provides for the repayment of 3.5 billion euros in the first quarter of 2013, and 1.5 billion in each of the three remaining quarters. However, that does not mean that the money is reaching those it should. The Accounting Office might be signing the payment orders, but red tape, ministry staff shortages and the ambitions of certain tax office directors to show they are doing an improved job have resulted in the market being deprived of vital liquidity.
For instance, last month tax offices returned a mere 43 million euros to taxpayers, against a target for 311 million. Furthermore, although the Accounting Office had approved the disbursement of 962.03 million euros in state arrears to third parties, only 140 million was repaid. In December the equivalent figures had reached 396 million euros for tax refunds and 467 million for arrears payment.

The main factors in this situation are the political system, bureaucracy and the tax offices. At the Finance Ministry numerous ministerial demands have been submitted for the repayment of debts which are missing key documents required by the memorandums signed with the Accounting Office. The ministry is also very reluctant to increase the budget of ministries, as would happen before the crisis, due to the fact that any divergence would entail additional fiscal measures. Red tape remains a huge barrier, as hardly any ministry has managed to set up the mechanisms that would rapidly channel funds where they should go. Tax offices are also a big problem, as demands for value-added tax refunds are piling up on desks. and....... http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_22/02/2013_484271 Greek coalition wrestles with civil servant numbers ahead of troika visit Prime Minister Antonis Samaras held talks with Administrative Reform Minister Antonis Manitakis on Friday as the government wrestles with the troika-imposed target of placing 25,000 civil servants in a labor mobility scheme this year. Representatives from the European Commission, the European Central Bank and the International Monetary Fund are due in Athens on Monday to check on how Greece is progressing with the implementation of its latest round of austerity measures and structural reforms. Reducing the number of civil servants is one of the key goals Athens has been set for this year but the government is concerned about confirming the number of public sector workers that will be fired after being inducted into the mobility scheme, which only guarantees them a salary for 12 months if they are not transferred to another position within the civil service. The coalition still believes that it can at least meet the demands for downsizing in part by firing up to 7,000 civil servants that are yet to face disciplinary action for a range of alleged offenses. Manitakis told reporters on Friday that his ministry has been given an “extensive” report on the matter by public sector inspectors and that action will be taken soon. He has in the past insisted that civil servants deemed to be corrupt, unproductive or incapable of doing their jobs would be removed. “Everything that we have said so far stands,” Manitakis said yesterday. “We are looking to implement the steps we have described as soon as possible.” However, Kathimerini understands that Samaras is less convinced than Manitakis that the government will be able to avoid sacking some civil servants who haven’t committed any offenses. It is expected that after the latest round of meetings with troika officials, Samaras will finalize plans for a cabinet reshuffle. The prime minister is also waiting for PASOK to conduct its four-day congress, which starts at the end of this month. It is still unclear how extensive the reshuffle will be but sources close to Samaras said the aim would be to remove ministers and deputy ministers unable to keep up with the pace of work needed and to replace staff at ministries where department chiefs have not cooperated effectively. and.... http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_23/02/2013_484335 Civil servants arrested over pensions scam Police have arrested five women, including three former employees of the State General Accounting Office, and one man on suspicion of diverting money destined for pensions into their own bank accounts. According to officers, the three public servants identified pensioners who had died or whose monthly retirement pay had been suspended and then arranged for this money to be transferred to their own accounts or ones opened by their accomplices. In the case of pensioners who had died, they changed the addresses recorded on the accounting office’s computer system so that the families of the deceased would not be aware the pensions were still being paid. Police said that the six suspects operated in two teams. One had been active since October 2004 and the other began its activities in October 2011. They allegedly stole almost 550,000 euros of taxpayers’ money. and..... http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_23/02/2013_484332 SDOE broadens bogus invoices investigation The Financial Crimes Squad (SDOE) is widening an investigation into the use of bogus invoices by farmers in Thebes, north of Attica, because of suspicion that agriculturalists in other parts of the country were also engaging in the practice to reclaim value-added tax they had not paid. Kathimerini understands that SDOE officials believe that between 300 and 400 farmers in Thebes issued invoices worth about 100 million euros between 2005 and 2008 for products they had not produced or sold in order to claim back the VAT, worth 11 percent of the total. In one case a Thebes farmer invoiced a trader in Preveza for 1.4 million euros’ worth of onions. Inspectors said this was enough produce to feed the whole of Epirus. and.... http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_22/02/2013_484275 Bank recap extension hopes dashed By Yiannis Papadoyiannis Greek banks have been told to speed up procedures for their recapitalization in order to meet the deadlines of the timetable set in the bailout agreement the government has signed with its international creditors. The Hellenic Financial Stability Fund (HFSF) sent letters to all four systemic banks last week asking them to complete their share capital increases in time, as everything will need to have finished by end-April. The letters stirred things up among bank chiefs as they have arrived just ahead of a visit by the creditors’ representatives to Athens next week. Sources say that the Hellenic Bank Association has had significant contacts over the last few weeks with European institutions in order to inform all involved about the state of the local credit system and the significance of the recapitalization. The banks’ central argument has been that the country’s economic conditions have changed considerably since the drafting of the procedure’s timetable, so the planning will need to factor in these changes. The bank chiefs’ talk of the need for a change in the recap terms has reportedly disturbed both the government and its creditors. Two weeks ago, following press reports on the subject of an extension to the recap process, Finance Minister Yannis Stournaras intervened to note that it would not be easy to change the law concerning the banks’ recapitalization. He stressed that all advantages of the existing agreement should be used. The letters sent by the HFSF only served to remind banks of their obligations, fund sources said. Turning to Cyprus , would Russia and some unnamed European country give Cyprus a bridge loan - Germany going to play private banker for Cyprus ? Cyprus has three weeks to get their bridge loans - assuming they're not lying about when their money runs out..... Anastasiades has talked to two countries about a loan By George Georgakopoulos Leading presidential candidate in the Cypriot election, Nicos Anastasiades, revealed on Friday night that he has been in talks with two countries for the supply of a short-term emergency loan as bridge funding until the eurozone lends Nicosia some much-needed cash. Speaking in the televised debate ahead of Sunday's run-off, conservative Anastasiades said he has been negotiating with one country within the European Union and one outside, it, obviously Russia, for the issuing of a three-month loan that would cover the basic cash needs of the island state. The current government in Cyprus has already admitted its available cash will last only up to mid-March. The eurozone has postponed any decisions about signing a bailout deal with Nicosia until next month at least. Sixty-six-year-old Anastasiades is poised to win by a big margin in Sunday's second round, given his 16.5-point lead over leftist Stavros Malas in the first round, and the decision by independent candidate Yorgos Lillikas against asking his voters to support either candidate, as he confirmed on Friday. Cypriot banks need up to 9 bln in aid The Greek-exposed banking system of Cyprus needs up to 9 billion euros as part of an EU bailout to save the island from bankruptcy, a report said on Friday. The official CNA news agency said a due diligence review by US consultancy Pimco put the amount for bank recapitalisation at 8.86 billion euros, based on an adverse scenario. The government argues international lenders should adopt Pimco's baseline scenario -- reported to be 5.98 billion euros -- as it would ease the terms of the loan. But a Pimco document leaked in the Cypriot media this week showed the US firm expects the island's economy to worsen as it slides deeper into recession. Its adverse scenario predicts higher unemployment, bigger wage cuts and falling property prices -- which all have a knock-on effect on people's ability to pay bank loans. "We do believe it reasonable to expect significant wage reductions for public sector workers which could have a material impact on borrowers' ability to meet debt service payments,» Pimco said in a leaked letter to the Central Bank. The bank said it «strongly disagreed» with the methodology Pimco used to discount future bank revenue inflows. «The central bank supports the speedy signing of a draft memorandum as agreed with the troika as prolonged uncertainty harms the economy, especially the financial system,» it said. Pimco submitted its report this month but the Central Bank said the amount would not be made public until it signs a bailout with the European Commission, the European Central Bank and the International Monetary Fund. Its review covered Bank of Cyprus, Cyprus Popular Bank, Hellenic Bank and a sample representing about 63 percent of the cooperative credit institutions, as well as Alpha Bank Cyprus and Eurobank Cyprus. In a draft agreement with the troika of lenders, the amount for the banks had been set at up to 10 billion euros as part of a total package which could reach 17 billion euros -- matching the island's GDP. The degree of bank recapitalization determines whether Cyprus needs to adopt harsher austerity measures, and to pay back such a loan, it would have to start privatising utilities which it is loath to do. Eurogroup finance ministers are expected to agree on a rescue deal for Cyprus in March. Nicosia applied for EU financial aid in June when its two largest banks -- Bank of Cyprus and Popular Bank -- asked for financial assistance, but talks have dragged on. Cyprus has pushed through harsh austerity measures of around 1.2 billion euros in tax hikes and savings, but fellow EU partners have called for more reforms. Concerns have been raised -- mainly by Germany -- about the island's enforcement of anti-money laundering laws. Nicosia says it has done everything asked of it under the preliminary agreement with the troika. [AFP]