Confused why despite numerous rounds of bailouts, a sovereign debt restructuring, an imminent bail-in, and years of so-called austerity, Greek debt is once again "
Rising At Its Fastest Rate Since March 2010"? Maybe anecdotes such as the following will put the big picture in context: as
reported by the BBC, Greek civil servants will no longer have
an additional six days of extra holidays each year. What was the reason for the nearly full week of vacation time? Why, using a computer.
"The privilege was granted in 1989 to all who worked on a computer for more than five hours a day. However, Reform Minister Kyriakos Mitsotakis, speaking on Greek TV, said the custom "belonged to another era." What is shocking is that nearly four years after the first Greek bailout of May 2010, this custom from "another era" was still active and public workers were happy to partake in its generosity. Ironically, since now the perks from using a computer are no longer there, watch the Greek economy flounder even faster as instead of playing solitaire, Greek finmin workers migrate to playing tic-tac-toe on paper, not to mention using an Abacus to calculate just how much better than the IMF expectations, Greek 2022 debt/GDP will end up being.
The decision comes as part of the government's reform of the public sector in a bid to meet bailout terms.
Greece received two bailouts from the eurozone and the International Monetary Fund (IMF) totalling about 240bn euros (£200bn; $318bn) on the condition that the government imposes cuts and implements restructuring.
The working hours saved by scrapping the computer leave would be the equivalent of an extra 5,000 employees, Mr Mitsotakis told Skai TV on Thursday.
He described it as "small, yet symbolic" step in modernising an outdated civil service. Mr Mitsotakis is the man in charge of overhauling public institutions.
In July, the Greek parliament approved plans to reform the public sector, placing up to 25,000 public sector workers into a mobility pool by the end of the year, when they will either face redeployment or redundancy.
But if using a computer as a reason for extra vacation time is ludicrous if somewhat understandable, the following two pretexts for doing less work just leave one speechless:
Other perks that have already been scrapped include a bonus for showing
up to work...
That's right: accrued vacation time for, well, showing up to work. So in conclusion:
The Greek economy has shrunk further than any other in Europe, with an unemployment rate of 27%.
And with every passing day it becomes clearer why.
Healthcare in crisis-hit Greece under threat
By Katerina Voussoura
A new round of cuts in debt-hit Greece's troubled health sector could cause irreversible damage to the country's already struggling public healthcare, insiders warn.
Under its EU-IMF deal, which is keeping its economy alive with bailout loans, Greece has pledged to redeploy 25,000 civil servants and axe 4,000 state jobs by the end of the year.
As part of this process, eight hospitals in Athens and Thessaloniki are currently being downsized and turned into health centers, with 1,618 of their staff transferred elsewhere.
Public healthcare is free in Greece but the system has been mismanaged for decades, leading to chronic corruption and overspending on drugs and hospital supplies that is only gradually coming to light.
After the economic crisis erupted, authorities sought to get a better control over health spending.
Last year, the government introduced an online prescription system to control the costly malpractice of bogus handwritten prescriptions, which had enabled corrupt doctors and pharmacists to make money at the expense of healthcare funds for years.
Now, the health ministry says it wants to boost bigger hospitals that suffer from shortages by moving staff from smaller ones where demand did not justify the operational cost.
"We are carrying out a major restructuring of the health sector to provide better health services to the Greek people," Health Minister Adonis Georgiadis said at a press conference in August.
Georgiadis, a former far-right politician appointed to the post in June, promised there would be no job cuts.
But many healthcare staff still fear the overhaul will drastically reduce hospital beds and downgrade public healthcare in general.
Hospital doctors will join a two-day strike by civil servants this week in protest at the cuts.
"We already had staff shortages and the new employees we are supposed to receive are just a drop in the ocean compared to our needs," said Ilias Sioras, a cardiologist at Evangelismos hospital in Athens, one of Greece's biggest.
"How can they say health services will improve when people can't get treated?" asked Maria Ikonomaki, a lab worker in the Amalia Fleming hospital in northern Athens that is slated to become a rehabilitation center instead.
"We treat one million people every year and last year another hospital in our area shut down," she said.
"The way (these changes) are carried out shows (the government) is more concerned about redeploying staff than improving services," another Amalia Fleming hospital doctor who preferred anonymity told AFP.
Public health spending dropped by 25 percent between 2009 and 2012, after having increased by nearly 6 percent per year in real terms the previous decade.
Outlays on medicine alone were cut by one-third between 2010 and 2011 to 3.75 billion euros.
That pushed Greece to slightly below the average of 9.3 percent of gross domestic product spent on health care in the 34 advanced economies in the OECD in 2011, coming in at 9.1 percent.
The cost-cutting effort has increased out of pocket healthcare expenses for many Greeks, as certain drugs are no longer subsidized by state-run health insurance funds.
And if the state is indeed scaling back health services, the vacuum will be inevitably filled by private clinics at a much higher cost, doctors warn.
"There are needs to be covered and much demand for health services -- when the state just leaves, what are we supposed to think?" said Haralambos Farantos, a surgeon at Patissia hospital, situated in a densely-populated central Athens neighborhood.
"If you are to create one big hospital, you should at least place it in the same area where the small one used to be," he argued.
Kyriakos Souliotis, an assistant professor of health policy at the University of the Peloponnese, warned that the cuts could destabilize Greece's health system altogether at a time of high unemployment and rising poverty.
"Nobody can deny the past excesses in public health expenditure," Souliotis told AFP.
"But the current management is the extreme, exaggerated opposite -- fiscal targets in the health sector are so tight now, that we are in danger of not being able to sufficiently meet certain expenses," he said.
Greece is in its sixth year of continuous recession and has a staggering 27-percent unemployment rate.
With so many people out of work, the monthly insurance contributions that are the lifeblood of the public healthcare funds are also drying up.
"Structural reforms were necessary, but an economic crisis is a bad time for change," Souliotis added.
Under pressure from its creditors, Greece has had to carry out reforms that other European countries implemented over a decade in just two years, he noted.
"According to the targets, pharmaceutical expenses, for instance, have to be covered by one percent of Greece's GDP. Now that the GDP has shrunk by 25 percent, this is not enough," Souliotis said. [AFP] |
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ekathimerini.com , Sunday September 15, 2013 (16:34)
Week of strikes to start with rolling teacher walkouts
Secondary school teachers are to walk off the job Monday in what promises to be the first in a series of five-day rolling strikes called by their union, OLME, to protest forced transfers and dismissals in the civil service that the government has pledged to the troika.
Staff at social security funds and universities are to join the action.
OLME failed to convince primary school teachers to join the rolling strikes but the latter are expected to join a 48-hour walkout by the civil servants’ union ADEDY starting Wednesday. Teachers remain divided over OLME’s call to action but sources said the union would be satisfied with a 30 to 40 percent rate of participation. This is expected to rise on Wednesday as teachers on both the primary and secondary level are to join ADEDY’s strike.
In comments to Kathimerini, Education Minister Constantinos Arvanitopoulos said the government had done everything possible to ensure that teachers inducted into a troika-imposed mobility scheme were transferred to other jobs in the civil service. The key goal is for schools to remain open, he said.
OLME President Themis Kotsyfakis denied that the main opposition SYRIZA is behind the teachers’ action though the union’s leadership is known to be allied with the leftists. SYRIZA leader Alexis Tsipras fueled sharp criticism last week after suggesting that schoolchildren show their support to protesting teachers. |
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ekathimerini.com , Sunday September 15, 2013 (16:27)
It comes as expected: high unemployment rates ruin Greece’s social security funds. Yesterday I read that the 1,403,698 people without work (stand: June 2013) deprive the social security funds of 500 million euro in social security contributions on a monthly basis. Now the country’s biggest social security fund IKA - the fund for employees mainly in private sector - will allegedly have to borrow 150 million euro in order to be able to pay pensions in October.
According to an exclusive story by daily Kathimerini, “IKA will accept a five-day loan from the State General Accounting Office” to tide it over but the indications are that its cashflow problems run much deeper and that the fund is facing further shortfalls.
“The organization had hoped that a 48-month payment plan for companies who had social security contribution arrears would help IKA’s predicament. The scheme was introduced earlier this year following lengthy discussions with the troika but has had limited impact. Fewer than 6,900 of tens of thousands of firms that owe money to the fund have come forward to agree a payment plan to pay off their debts.
Despite the greater influx of tourists this summer and the option of a payment plan for trouble companies, IKA only saw its revenues increase by 0.1 percent from July to August.
In July, the fund only brought in 22 million euros from companies with which it had reached a settlement. Twelve months earlier, IKA collected 132 million euros from firms that were late payers.”
At the same time, uninsured work flourishes as employees -many of them part-timers – prefer to work without insurance and spend every cent of salaries between 250-300 euro for themselves and their families than to go home with peanuts due to high social security contributions and taxes. Not that this system does not meet the expectations’ of employers…
Just kidding! The technical delegates of Greece’s lenders arrived in Athens on Thursday. But took position in several ministries today. They will start reviewing the execution and progress of the Greek fiscal adjustment program. Their aim is to check whether Greece has applied and implemented the lenders’ demands so that the next bailout disbursement of one billion euro will be released for the debt-ridden country and immediately being forwarded to pay interests for the ‘rescue’ bailouts.
The heads of the Troika representatives Thomsen & Co are expected to arrive here on September 20th.
Prior actions for the next disbursement of Eur1.0 bn in October are:
a) completion of the first tranche of public employee exits and transfers;
b) the restructuring of state-run companies Hellenic Defence Systems, Hellenic Defence Vehicle Systems and Larco Mining and Metallurgical;
c) repayment of govt arrears to the ATHEX-listed Athens Water and Thessaloniki Water utilities.
According to the existing financing programme, Greece is still to receive a total of cEur12.0 bn from EU by Q2 ΄14 and a total of cEur20bn from the IMF by Q1 ΄16 (largely covering bond and IMF loan maturities). The latest EU review (July 2013) identified a financing gap of Eur3.8 bn in 2014.
The IMF΄s latest review (July 2013) estimated the financing gap at Eur4.4 bn in 2014 and Eur6.5 bn in 2015. In other news, IMF said that the next review of Greece is scheduled for September 17th. (Capital.gr)
I read yesterday somewhere that Greece has to pay 7.5 billion euro interests alone for the year 2013.
PS Now I know why they call the Greek debt a ‘bottomless pit”.
“German Chancellor Angela Merkel toyed with the idea of forcing Greece out of the euro until the autumn of 2012.” These claims are raised by Lorenzo Bini Smaghi, until recently one of the six-man executive council at the European Central Bank and for many years Italy’s man in Frankfurt”
In his Morire di Austerita (Dying of Austerity), Bini Smaghi reveals that Merkel continued to think that Greece could be thrown out of the euro safely as late as the early autumn of 2012. She was finally convinced that a Grexit would cause “all hell to break lose, with chain reactions engulfing the whole system. She then switched tack abruptly, rushing to Athens to praise the new government for its heroic efforts.
Bini Smaghi states that any EMU state leaving the euro would face likely default on external obligations. “The national central bank would not be able to repay liabilities accumulated in relation to other members of the euro system, which are registered in the internal payments system of the Union (known as Target2). The insolvency would provoke substantial losses for counter-parties in other eurozone countries, including central banks and states.”
I did not read Bini Smaghi’s book – it’s in Italian anyway. All information I have about Merkel’s Grexit idea comes from two sources in English and one in Greek. It seems as if Bini Smaghi does not reveal who convinced Angela Merkel that a Greek euro exit was a bad idea for Germany and the eurozone.
However some Greeks internet users recalled the official visit of German Chancellor Angela Merkel to China end of August 2012. Merkel had meetings with Chinese President Wen Jintao and Vice President Xi Jinping.
Reading through the news of this time, both Jintao and Jinping expressed their interest that Greece remains in the euro zone and indirectly threatened Merkel with future European bond purchases. The Chinese had (and still have) a vivid and direct interest in euro-Greece, not least due to their Cosco investment in Piraeus Port – the EU port for China.
“Chinese Premier Wen Jiabao told his German counterpart that Spain, Italy and Greece must take steps to prevent a worsening of the euro region’s sovereign-debt crisis as he pledged to consider further European bond purchases.
“The main worries are two-fold: First is whether Greece will leave the euro zone,” Wen said after meeting Chancellor Angela Merkel in Beijing, a pool report showed. “The second is whether Italy and Spain will take comprehensive rescue measures. Resolving these two problems rests with whether Greece, Spain, Italy and other countries have the determination for reform.” (Bloomberg)
The Chinese had a vivid and direct interest in euro-Greece, not least due to their Cosco investment in Piraeus Port – the EU port for China.
Nevertheless, Bini Smaghi revealed also in his book that Italian PM Silvio Berlusconi seriously floated plans to pull Italy out of the euro in October/November 2011.
In his book Bini Smaghi confirmed as well that Germany is on the hook for €574bn of credits from the Bundesbank to the central banks of Greece, Portugal, Ireland, Italy, Cyprus, and Slovenia.
The Economist: One woman to rule them all – German voters should re-elect Angela Merkel as their chancellor—and Europe’s leader (full article here)
KTG proposal: More precise the Economist-title would be: One woman to ruin them all 
In his book Bini Smaghi confirmed as well that Germany is on the hook for €574bn of credits from the Bundesbank to the central banks of Greece, Portugal, Ireland, Italy, Cyprus, and Slovenia.
Sources on Lorenzo Bini Smaghi book Telegraph, capital.gr and ekathimerini
finally we know why the European and especially Germany do not want Greece outside the euro zone. Allegedly because through Greek soil the European Union can manage to free itself from the Russian dominance of main natural gas supplier Gazprom. The EU dream can be materialized through the Trans Adriatic Pipeline (TAP) that will bring natural gas from Azerbaijan to Europe.
The interesting approach is to read in economic website Deutsche Wirtschaftsnachrichten
Greece’s rescue is not a political project. It’s a matter of natural gas and the energy sector. The EU wants to free itself from dependence on Russian gas, therefore it builds a pipeline running from Turkey through Greece to Italy. In order not to jeopardize the project through a collapse in Greece, Greece must remain in the euro zone. Bitter truth for the Greeks: it is about their country, not the people.
Again and again, one wonders: Why is the EU is pumping billion of European taxpayers’ money to Greece? In Greece, there is no oil, no industry – nothing that the Europeans really need. On vacation, Europeans could pay with drachmas, when in Greece.
So why this unquestioning loyalty?
The answer can be found where you can always find answers when much money is involved: In energy policy.Europe has maneuvered itself into a predicament: the EU completely dependents on Russia. The Gazprom Group – advised by former German Chancellor [Gerhard Schroeder SPD] has the license to print money – because Russia is the largest supplier of gas for industry and prosperity in the EU.
This dependence is a problem for the EU: the Russians can do what they want – they dominate the European market through the Gazprom.
Full article in German in Deutsche Wirtschaftsnachrichten,
TAP pipeline project
Trans Adriatic Pipeline AG is a joint venture company registered in Baar, canton Zug, Switzerland, with a purpose of planning, developing and building the TAP pipeline. Managing Director of the company is Kjetil Tungland.
Shareholders of the Trans Adriatic Pipeline are:
- Axpo (Switzerland, 42.5%)
- E.ON Ruhrgas (Germany, 15%), Shah Deniz partners BP, SOCAR and Total S.A. have an option for 50% shares in the company. If implemented, BP and SOCAR will have 20% of shares both while Total will have 10%. Fluxys has an option on an unspecified stake.
More on TAP pipeline project here and here
“Bitter truth for the Greeks”? After three years of austerity ‘rescue’ packages, finally the Germans seem to understand what the Greek knew six months after the first bailout of 2010: that it is about the country and not the money-drained people.
Also an article about more German revelations like “We want Greece to be a pool of cheap labor craft in the EU for German & Co investments” would be appreciated, as well
PS is this the reason that prime minister Costas Karamanlis had to go in 2009? Because he had so good relations to Russia?
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Submitted by Tyler Durden on 09/15/2013 11:18 -0400
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