Greece and Cyprus updates - april 20 , 2013 - News from the Troika Serf States....

http://hat4uk.wordpress.com/2013/04/20/crisis-athens-how-austerity-is-destroying-those-who-would-compete-with-multinational-power/

(  Troika austerity is a siege of Greece )

CRISIS ATHENS: How austerity is destroying those who would compete with multinational power

These pictures are of a main Athenian thoroughfare, Stadiou. Think ‘Tottenham Court Road’, and then imagine every kiosk, stall, shop and indoor precinct closed down, every small shop empty and impossible to rent, and the once-bustling pavements half empty.

The Greek media that care run endless stories about starving children, lack of medication, old people dying because they cannot afford heating, and huge cuts in welfare relief.

These are all worthy topics for anyone still unclear about the catastrophic social effects of repayment-focused austerity in ClubMed. But if nobody buys in shops, eats in restaurants, sits in cafes or furnishes homes, businesses die in very short order.

In three short years, the banks of the world, the bureaucrats of the EU, and the Central Bank of Mario Draghi have wiped out Stadiou. Like the American South after the Civil War, it is a culture gone with the wind. All that remain are kids shooting up in the darkness of formerly thriving alleyways, and bill posters advertising things nobody has the money to buy.

Behind much of Athens’ attraction as a tourist centre lies another layer of self-sustaining business: the wholesale trade. This above any other is small family business, where honesty, trust and quality are the basis of commerce. It too has been decimated, as both domestic and tourist consumption of goods plummeted after 2010.

Everywhere are grills, graffiti, parked scooters, litter, and locks. Nowhere is any business being done. An entire sector of the City’s economy has been surgically removed. But nobody bothered to stitch up the open wound afterwards.

What you can see in Athens is the death of independent small business competition, the desecration of families that depended on it, and the reassuring certainty for the fat cats that in future, where once there was community liberty and self-reliance, there will before too long be imported global goods produced by multinational companies, cheap property ready to be torn down by developers, and the State enjoying control over a demoralised population totally dependent on it.

Some of the commercially naive bureaucrats and anthropologically ignorant political  ‘leaders’ behind this policy represent yet more examples of what is wrong with European establishments throughout the continent. But for others – the Stateists, the neocon social engineers, the bourses, and the banks – all of this lost human energy is seen as the logical (and desirable) consequence of driving the Great Global God of Growth.

In the vicious circle that is hard-sold debt >> government overspending and embezzlement >> high-tax austerity >> economic collapse >> social misery >> drastic political change, the Far Right is getting 1 vote in 8, and the Radical Left looks like having the largest number of Deputies after the next election. Both have reached these positions from having been tiny (<4%) Parties three years ago.

But now at last, the focus is beginning to move away from corrupt old Parties and polemic ideologues towards a sort of patriotic pragmatism that no longer wants the euro. I spoke to several business people during my stay in Athens; most of them were not politically radical, but they recognised the need for a radical change to the economic model.

“The austerity programme is counter-productive because it destroys economic consumption in order to pay off State debt,” said a middle manager in a larger foreign-owned Greek furniture business, “this is like asking Berlin to pay off French municipal debt. It is resented, but more importantly it is sacrificing recovery to the lenders’ needs. The lenders may get their pound of flesh, but afterwards the patient is paraplegic.”

“The euro is the problem, no doubt,” said the co-owner of a medium-sized hitech business, “but if Greece were to go it alone and quit the euro, our business would be destroyed by a loss of credit confidence internationally. People like us want the euro to fail completely, so everyone will have to start again”.

His partner agreed. “The biggest problem we have right now is liquidity with which to expand, and credit so we can close deals with customers. Every week we work more and more to make less and less”.

“These fantasies of the Troika,” one CEO of a rapidly-growing political lobbying consultancy began, “they are all bullsh*t. The New Democracy and Pasok go along with it because they are weak and corrupt. But now things are far too serious for this to continue. The threats to Greek business and national sovereignty will get worse as the lenders’ demands get more and more crazy. We have to elect commercial people now who will gain public respect, and say “No” to the EU.”

Resentment towards the State sector and powerful bureaucrats is every bit as visceral as the disdain felt about the Troika.

Said one small entrepreneur, “These Troika people, so well dressed, such nice attache cases. They stay in the Hilton at Greece’s expense. None of them has any idea about business – only debt and repayment schedules. Now they insist that 150,000 civil servants be fired. Hah! That’ll be the day. Now they try to retire them off with fat pensions, but still they demand that the empty desks are filled with young recruits. They will cling onto our skin until we are all dead.”

There is a lot for the body politic to change here. The attitude to the euro, the weak resistance of Troika demands, fear of the bureaucrats, and the development of under-appreciated export businesses such as olive oil and wine. Nobody I met thinks the current crop of MPs is ever going to be capable of it. But there are endless scenarios in play as to how drastic change might come.

Of which, more later today.

http://www.keeptalkinggreece.com/2013/04/19/greek-finmin-speaks-of-lower-instincts/

( Greek Fin Min debases support of  SYRIZA ) 

Greek FinMin speaks of “lower instincts”!?

Posted by keeptalkinggreece in Politics

“What is a lower instinct?” The question shot in my brain upon hearing Greek finance minister Yiannis Stournaras telling main-opposition party leader Alexis Tsipras of left-wing SYRIZA:

You are appealing to the lower instincts and tell the people we can stay int the euro without the memorandum. This is populism and lies.”

“What do you mean ‘lower instincts? Have you understood that you have drown into poverty 2/3 of the population, that hunger is spreading in Greece and that children go to school hungry?” Tsipras replied to Stournaras.

The clash between Stournaras and Tsipras in the Greek Parliament on Friday, when the SYRIZA-leader accused the finance minister “being a representative of the Troika.”

Unfortunately neither Tsipras nor we will ever know what exactly are ‘lower instincts’ are when it comes to economy as Stournaras refrained from giving an answer.

PS Did Stournaras mean that “people would get lust to turn into wild animals, with the strongest eating the weak one?” Or did he imply that the 1.3 million Greeks without job, without income and health insurance, those 20,000 without home are hiding some primordial innate behavior inside them that could break out one day?

http://www.keeptalkinggreece.com/2013/04/19/lucky-freezing-greeks-heating-oil-consumption-decreased-68-7-but-revenues-rose/

( " Lower instincts " class  froze their asses off last  winter ) 

Lucky freezing Greeks: heating oil consumption decreased 68.7%, but revenues rose

Posted by keeptalkinggreece in Economy, Society

Why did we freeze all through the winter? Because the Greek finance ministry had raised the special consumption tax in heating oil, while the tax in natural gas was raised a year before. What did the ministry win from having us on cold show? It raised more revenues – more than the previous year where the consumption was higher and tax lower.

What did we win? Running noses, freezing feet and showers once a week. A collection of cozy pictures showing  our seniors wrapped in blankets all day and night. Our merry-go-round kids running in the living room wearing parkas. Our housewives wearing woolen gloves except when standing at the kitchen sink. And husbands trying to make a happy face under the pressure of an icy blow in the wallet.

On the other hand, those blessed with a fireplace, enjoyed fuzzy-warm nights with friends grilling sausages and toasting bread. What if the next day, coach and comfort chairs would transmitting odors resembling to those of  next corner grill diner? We had fun with grilled meat and red wine at a cost much lower than cooking on the stove – then electricity prices are not much better.

No matter how difficult the winter was, we, Greeks, are proud to have come through the winter without major losses. Grannies and grandpa’s survived it without heating and so did the kids. A wonderful training for next winter 

Official: Consumption dropped, revenues rose

Consumption of heating oil dropped 68.7 percent in the period from October 2012 to February 2013 compared with a year earlier, according to data released on Thursday by the Finance Ministry. Nevertheless the state’s revenues from tax on the fuel still rose.

 ”The major increase in the special consumption tax on the commodity that was brought in line with that of diesel in order to combat the illegal trading of heating oil for diesel led many consumers to seek alternative means of heating their homes this winter, which also happened to be among the mildest in living memory in Greece.

Furthermore, the majority of Greeks had bought ample quantities of heating oil last April when plans for the tax hike from October 15, 2012 became known.

In the first five months with the tax on heating oil on a par with that of diesel, consumption amounted to just 739 million liters, against 2,358.6 million liters in the period from October 2011 to February 2012.

However, at the same time the increased consumption tax meant that revenues for the public purse grew from 141.5 million euros in winter 2011-12 to 244 million this year. (full details on heating oil consumption in ekathimerini)

While, the majority of us, did not use heating oil or natural gas due to the tax rise and our income decreases, the sunny-boys from Greek Finance Ministry justified the decreased consumption mainly with the ever-shining-sun in Greek regions: from south to the north, from east to west. Apparently 24 hours a day!

In the document accompanying the data sent to Parliament, Finance Minister Yannis Stournaras and his deputy Giorgos Mavraganis stated that “it is clear that in the current winter season there has been an increase in revenues from the special consumption tax on heating oil compared to the same period last year despite the reduction in consumption of the fuel, which was due to the reduced demand owing to weather conditions, to stocks and to its high retail price, but also due to the containment of smuggling.”

PS I do not need to mention that we are absolutely proud to have combated the illegal fuel trading by …freezing, right?

http://www.keeptalkinggreece.com/2013/04/19/growth-is-here-greek-govt-opens-job-vacancies-for-6-alternate-ministers/

( PM Samaras says " austerity for thee lower instinct class but not for me and my cronies " ) 

Growth is here! Greek Gov’t opens job vacancies for 6 alternate ministers

Posted by keeptalkinggreece in Politics

Growth arrived in Greece. Finally. After five years of recession. Growth is here to stay. To mark this joyful news. Prime minister Antonis Samaras opened seven job vacancies for high state positions. Published at the official government gazette are the positions for

six alternate ministers for Administrative Reform, Justice, Public Order, Tourism, Marine and Macedonia-Thrace.

immediately Greek media started to report that Samaras made the big difference: that is announcing in advance a government reshuffle.

However, Samaras’ aides dismissed “any government reshuffle” and thus before upcoming June. That is “before the Troika-program is implemented as agreed and before the summer assessment.” The country’s “international lenders should continue talking to the same people,” the sources from the prime ministry argued.

“The positions are in order to fill a legal vacuum,” Samaras’ aides told the media, hardly convincing anyone, though.

With the new positions the Greek cabinet will grow to 48 persons from 41 for the time being as there is plan to open a vacancy also for a deputy Education Minister.

Private Skai TV reported citing government sources that the “new positions were in agreement with the Troika, as all ministries had to have a common structure.”

It looks as if Samaras’ coalition government partners were taken by surprise. Sources from  Socialist PASOK told media, “they heard about these vacancies from the press.” Democratic Left is still consulting on a reaction, I suppose.

I read somewhere that an alternate minister directly reports to the prime minister, while a deputy minister directly reports to the minister.

PS Should I put my bet on lack of confidence between the prime minister and some of the cabinet ministers? Or should I better try my luck and place my chip on filled-up state registers that will feed six to seven ministers (alternate or not), their staff as wells as their phone and electricity bills? Or see the whole expansion as a measure to combat unemployment among party friends and supporters?

Cyprus news.............

http://www.cyprus-mail.com/banks/cbc-releases-detailed-pimco-report-banks/20130420

CBC releases detailed PIMCO report on banks

By George PsyllidesPublished on April 20, 2013

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• CBC releases detailed PIMCO report on banks

THE Central Bank of Cyprus (CBC) yesterday released the detailed results of a due diligence of the banks that determined they will need around €8.9 billion in additional capital needs.

The capital needs were the result of a comprehensive analysis of the value of credit portfolios and foreclosed assets, and of the earnings capacity of the banks to absorb losses over the next three years under an adverse scenario.

According to this scenario, domestic banks will need some €8.2 billion while foreign lenders need €149 million.

Cooperative banks need €589 million, the due diligence that was carried out by investment experts PIMCO found.

The due diligence, completed in January, covered 22 institutions representing approximately 73 per cent of the Cypriot banking system’s assets: Bank of Cyprus, Laiki and Hellenic Bank; Cypriot subsidiaries of Foreign Institutions Eurobank and Alpha Bank, and Cooperative credit institutions, the Cooperative Central Bank, Limassol Cooperative Savings Bank and a representative sample of 15 cooperatives affiliated to the Cooperative Central Bank.

Under the adverse scenario, banks were expected to chalk up around 18.3 billion in losses, with most – €15.6 billion -- incurred by domestic lenders.

Foreign banks will lose some €1.3 billion and cooperatives €1.4 billion, PIMCO said.

Pimco’s base scenario predicted that banks’ total recapitalisation needs would reach €5.9 billion: domestic €5.6 billion, cooperatives €364 million and zero for foreign lenders.

The due diligence exercise has established the amount of capital that each bank would require to reach a minimum Core Tier 1 ratio of 9 per cent in the base case scenario and 6 per cent in the adverse case scenario. 

As with any stress test, the adverse case scenario was designed to cover “what-if” situations reflecting even more stressed macro-economic conditions than might reasonably be expected to prevail, the CBC said.

And even though macroeconomic projections have since deteriorated, the use of conservative assumptions by PIMCO, provides a buffer for worse than expected macroeconomic environment. 

The MoU agreed with the troika specifies that the estimation of capital needs is an essential element of the plans laid down for the recapitalization and restructuring of the Cypriot banking system. 

To this end a part of the €10 billion total financial assistance that will be granted to Cyprus will be deposited in a dedicated account with the CBC to be used for recapitalising cooperative credit institutions and commercial banks other than Bank of Cyprus (BoC) and Laiki.

BoC will raise the money it needs by imposing a haircut on uninsured deposits while Laiki will be resolved.

Cooperatives will be given until 31 July 31 2013 to cover their capital shortfalls whereas other commercial banks will be allowed until the end of September 2013.

Any institution that failed to raise the required capital within the set timeframe, thus requiring state assistance, would have to prepare a restructuring plan within two months from the applicable deadline for raising capital from private sources.

http://www.cyprus-mail.com/atomic-bomb/germany-imf-used-atomic-bomb-shoot-pigeon/20130420

Germany, IMF ‘used atomic bomb to shoot pigeon’

Published on April 20, 2013

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ONE OF Cyprus' most senior civil servants yesterday likened his country's treatment by Germany and the IMF to the shooting of a pigeon with an atomic bomb, saying they had destroyed an economic system that worked.

Christos Patsalides, permanent secretary of the Ministry of Finance, was speaking to a committee inquiry which launched a public hearing yesterday into the circumstances that led to the country’s economic meltdown.

He described the international lenders as "forces of occupation" that cared nothing for human rights.

Patsalides took part in the recent bailout negotiations between Cyprus and the European Union and International Monetary Fund.

He told the three-man inquiry that an "unrelenting" team of technocrats had dispensed savage fiscal punishment to cash-starved Cyprus. 

"With the imposition of Germany and the IMF ... they shot a pigeon with an atomic bomb," he said.

But the size of the bailout they were discussing, some €17.5 billion, was equivalent to a mere 0.1 per cent of the European Union’s annual needs, Patsalides said.

Many Cypriots saw their life savings vanish in March when authorities imposed losses on uninsured deposits in two of Cyprus’ banks – Laiki and Bank of Cyprus -- which were badly stung by an EU-sanctioned write-down on Greek sovereign bonds.

The depositor losses, which also hit overseas depositors, many from Russia, were part of Cyprus's contribution ensure it received a €10 billion bailout from the EU and IMF.

With Laiki Bank in resolution, the Bank of Cyprus was forced to take on Laiki’s Emergency Liquidity Assistance (ELA) that the ECB provided to Laiki via the Central Bank of Cyprus (CBC) and was allowed to rise to €6.3 billion, Patsalides said.

ELA is meant to be given to viable banks for a limited period, so why was Laiki financed for “so long and to such a large extend?” Patsalides asked, adding that a question mark hung over the ECB’s actions. 

Asked if the government was wise to acquire in May 2012 an 84 per cent stake in Laiki, bailing it out to the tune of €1.8 billion, Patsalides said the position that prevailed at the time was that letting Laiki collapse would have been catastrophic to the whole banking system.

But it was “no secret” that for years, the then Central Bank governor, the Finance Minister and the President “were not on best of terms,” Patsalides said. This made promoting policy on a technocratic level more difficult, he added. 

And he said that a due diligence test on the banks carried out by investment experts PIMCO with a Central Bank mandate was saddled with “non realistic “ assumptions that raised the banks’ estimated needs. 

But with the benefit of hindsight, it has become clear that Cyprus did not take enough action to curb expenses and strengthen the economy, Patsalides said. There were plenty of warnings on a technocratic level, Patsalides said, but refused to explicitly state that there was inaction on the part of previous political leadership. 

Cyprus, which had modelled itself as an offshore financial services centre for lack of any other resources, now faces a grim future with its reputation in tatters and its economy deep in recession.

"They destroyed an economic system that worked," Patsalides said. "Yes, we have our shortcomings, but the magnitude of the punishment is far greater than the size of the problem."

Asked whether forcing losses on depositors was compatible with their individual rights, Patsalides replied: "When you are dealing with forces of occupation, they don't talk about human rights."

http://famagusta-gazette.com/coupons-instead-of-money-for-cyprus-asylum-seekers-british-bases-to-help-w-p19037-69.htm

Coupons instead of money for Cyprus asylum seekers, British bases to help with permits for building

He said that the subsidy scheme covering the needs of asylum seekers and other foreigners will be modified and the benefits will decrease significantly, whereas for their clothing and food needs they will be given coupons, instead of money.

FAMAGUSTA GAZETTE / AGENCIES • Saturday, 20 April, 2013

PRESIDENT Anastasiades has used his pivotal television address on reviving the economy to announce radical cuts in benefits to the most vulnerable in society.

Anastasiades told viewers the state would cut help to asylum seekers and other foreigners, in what is being perceived as a series of desperate measures.

He has also called on British bases to speed up building applications on British controlled territory, despite the near collapse of the Cyprus construction and estate sector.

He said that the subsidy scheme covering the needs of asylum seekers and other foreigners will be modified and the benefits will decrease significantly, whereas for their clothing and food needs they will be given coupons, instead of money.

From now, asylum seekers and foreigners will be forced to live in accomodation owned or rented by the state, and the rent will be paid directly to the owner of the said premises.

It is unclear how many asylum seekers will now need to be re-homed.

He added asylum seekers will be refused state benefit if they reject a job offer.

Anastasiades announced the shock cuts as part of measures to 'restart the economy' and 'support vulnerable groups'.

The President announced the Government’s decision to build a natural gas liquefaction terminal in Cyprus.

“I know that any attempt to make measures imposed on us look nice would be a sign of weakness of realising the real problems faced by society, but more importantly, any such attempt would indicate lack of vision, courage and determination on the part of the Government and the state to lay the foundations for restarting the economy and reconstructing our country, he said.

The state says that the government’s first package of measures serves key objectives: support vulnerable groups of the population, train unemployed youth and graduates, create new jobs, enhance development and encourage green development.

The President announced that by the end of May the Government will promote legislation for the appointment of a Bank Ombudsman with a mandate to ensure fair restructuring of loans.

He also announced that the Government has decided to establish a Court of Arbitration that will examine the cases of bond holders who have been deceived and are not institutional investors and award compensation.

A relevant bill will be tabled to the Parliament within the next few days so that the Court starts work by the end of June.

At the same time, he said that for the 'vulnerable groups' there will be further reduction in electricity price, totaling 9,5%.

It has also been decided to subsidize by 50% the cost of the installation of solar panels in residential units.

Based on economic and social criteria, the Government expects that 2000 households will benefit during 2013.

On job creation, Anastasiades noted that through extraordinary solidarity measures due to be approved by the Parliament, 800 hourly paid employees will get their jobs back, in addition to contract teachers, 300 graduates of military academies will be employed and 6000 unemployed will get a job in the tourist industry.

This will cost the Government 21 million to subsidize up to 40% of their wages, whereas through a new project the Government will subsidize the wages of unemployed by 65%, to work with flexible terms.

The project is expected to give a job to 1000 unemployed.

He said that Cyprus’ two public universities will increase the number of positions available for new undergraduates by 135, for 2013, and will offer 235 positions to Cypriots to transfer from other universities abroad.

In the same framework the Government has decided for deductions of up to 25% on the taxable corporate income for every new worker hired within 2013 and at the same time encourage the shift toward the primary section of the economy, by allocating to unemployed land owned by the Government, the Church of Cyprus, and the University of Cyprus against a nominal rent.

Anastasiades announced that a pending project on youth entrepreneurship will be implemented to create 1000 new jobs and will cost the Government 10 million euro.

The President spoke of radical changes in government policy on benefits.

He said that benefits will be granted to those who are really in need and that anyone who rejects at least twice a job offered by the Public Employment Service will not be allowed to receive state allowances.

On health policy, Anastasiades noted the Government’s decision to spend 6 million euro for the purchase of services from the private sector, to simultaneously reduce the burden of state hospital and strengthen the private ones.

In addition, free medical care will be terminated for those who have contributions to the Social Insurance Fund for only three years, and those who owe to the taxman, excluding serious emergencies and patients under long-term therapies.

Measures to enhance development include the reduction of the time needed to issue a building permit, an agreement between Cyprus and the British Sovereign Base Areas on the urban development of land within the limits of the British SBA, and raising building factors under certain conditions.

Also the Government will grant licenses for casinos, extend the tourist season by two months and encourage, through incentives, implementation of projects for the construction of golf courts.

President Anastasiades said that an Authority to manage the exploitation of state property will be established.

He also announced that a mechanism to guarantee loans to viable small and medium size enterprises under favorable terms will be established as soon as possible, whereas the rent paid by businesses in industrial areas will be kept at current levels.

A project to reduce the cost of electricity by the use of solar panels, for commercial and industrial consumers, including public buildings, will be implemented.

The Government will accelerate procedures to grant licenses to

24 companies for the installation of photovoltaic parks with a total capacity of 50 MW.

Anastasiades said that by fully implementing projects for electricity production from solar energy Cyprus will save 53 million euro yearly and create 650 new jobs.