Greece considers confiscation of private assets - to obtain social security contributions and avoid slashing pensions and benefits ! 14 billion seems to be the gap the Greek Government needs to close - how they do that without further crushing the economy and sending more folks to the poor house is anyone's guess ! And maybe the reason Greece is trying to avoid a third / fourth bailout from the Troika is there desire to obtain reparations from Germany - 220 billion by the calculation of the Greeks !

http://www.zerohedge.com/news/2013-10-06/greece-considering-confiscation-private-assets

Greece Considering Confiscation Of Private Assets

Submitted by Tyler Durden on 10/06/2013 15:50 -0400

• Corruption
 
• Eurozone
 
• Greece
 
• Gross Domestic Product
• John Paulson
 
• None
 
• Real estate

inShare4

The last time we opined on the possibility of a Cyprus-style "bail-in" in Greece, which is essentially a legally-mandated confiscation of private sector assets held hostage by the local financial system, until such time as the balance sheet of said financial system is viable, we were joking. Well, not really joking.

But not even we thought that a banking sector "bail in", in which unsecured bank liabilities, which include bonds and of course deposits, are used as a matched source of extinguishment of non-performing bad debt "assets" could spread to the broader economy, and specifically to unencumbered private sector assets. Alas, this is precisely what Greece, which is desperately to delay the inevitable and announce it needs not only a third but fourth bailout, appears keen on doing.

As Kathimerini reports, the Greek Labor and Social Insurance Ministry is "seriously considering drastic measures in order to obtain the social security contributions owed by enterprises and to avoid having to slash pensions and benefits." What drastic measures? "The ministry is planning to force companies to pay up or face having their assets seized, so that the 14 billion euros of contributions due can be recouped."

After all, it's only "fair."

Kathimerini is kind enough to layout the clear-cut problems with this plan which will further crush any potential rebound in the Greek economy:

While this amount – equal to 8 percent of the country’s gross domestic product – may be easy to calculate on paper, it is virtually impossible to collect even if the state attempts to confiscate all the real estate properties of debtors and the debts of third parties to them.

The ministry has been forced to consider asset repossessions as a result of the very poor state of social security funds. The fiscal gap expected at the end of the year from social security will at best be equal to 1.06 billion euros. This also constitutes a bad start for next year, too, when the budget will also provide for a reduction in state subsidies to social security funds by 1.8 billion euros.

Aside from the obvious, namely that this "plan" will be merely the latest disaster to hit the long-suffering Greek economy, now caught in the worst depression in history, and where greedy and corrupt politicians will promptly "confiscate" whatever benefits there are to have been made from this confiscation plan (however instead of accusing corruption all blame will be once again fall on (f)austerity), the greater problem is that any entrepreneurial confidence that Greece just may be a sound place to do business, has just gone out of the window as nobody will know if they are safe from arbitrary persecution, and subject to a wholesale asset confiscation at any moment in time.

However, none of the above gives us more confidence that things in Greece are about to go from horrifying to nightmarish, than the following FT story: "John Paulson and a clutch of bullish US hedge funds are leading a charge into Greek banks, confident that Greece, long seen as the weakest economy of the eurozone periphery, is on the turn."

Right. A 360-degree turn.

The good news: at least the Greek government will have a lot of "greater fool" assets to pick and choose from when the confiscation hammer hits.

More glad tidings from Greece.....


http://www.breitbart.com/system/wire/upiUPI-20131006-180252-3914

GREEK LAWMAKERS SAY GERMANY OWES REPARATIONS

UPI 10/6/2013 10:14:58 PM

ATHENS, Greece, Oct. 6 (UPI) --
Some Greek lawmakers say they want Germany, Greece's main banker, to pay reparations for Greeks killed during World War II.



Greek Prime Minister Antonis Samaras' government has created an 80-page report on reparations it believes it is owed by Germany, which includes a huge, never-repaid loan Greece was forced to give Germany under Nazi occupation from 1941 to 1945, The New York Times reported Saturday.



Although the government has not given an official total owed, the figure most often discussed is $220 billion, which is about half of Greece's total debt.



Samaras said he has given the report over to Greece's Legal Council of State, which will decide whether to put together a legal case or handle settlement negotiations.



"I can see a situation where it is politically difficult for the Germans to ease the terms for us," said a high-ranking Greek official, who wished to remain anonymous because he was not authorized to speak on the issue. "So instead, they agree to pay back the occupation loan. Maybe it is easier to sell that to the German public."



Germany, which has been the biggest contributor to Greece's bailout package, has given little indication as to whether or not it is willing to discuss reparations.



"We must examine exactly what happened in Greece," German Finance Minister Wolfgang Schaubl said while in Athens in July, but added that Greece had waived its rights on the issue long ago.



Meanwhile, some Greeks say Germany still owes victims such as Giannis Syngelakis, whose father was killed by Nazis during a raid in 1943.



"Maybe some of us have not paid our taxes," Syngelakis said, standing at the site where his father was killed 70 years ago. "But that is nothing compared to what they did."

Bad bank model gains ground in Greece  Management of national project will be important since some borrowers may seek special treatment By Dimitris Kontogiannis Greek banks will have to isolate their troubled assets from the rest to help build the trust of investors and depositors, put an end to doubts and make a fresh start. The top executives of two large banks said last week they intend to do this in the next few months, while a national asset management company may assume the troubled assets of existing bad banks. These are steps in the right direction for banks to provide credit to the economy and avoid a short-lived creditless recovery. In both cases, the management pricing and servicing of troubled loans will be important. We stressed last week the need for local banks to get rid of their portfolios of troubled loans so as to make a fresh start and provide credit to creditworthy households and private companies in the future. The “bad bank” model, first introduced in the 1980s, provides a structural solution to the problem in a country where direct sales of bank loan portfolios to distressed funds are viewed negatively by the public and the political elite whose ability to mess things up should not be underestimated. Although direct sales of loans to funds specializing in distressed investments could take place, it would likely be tiny compared to the stock of nonperforming loans (NPLs), which exceeds 65 billion euros at present. By creating a bad bank either as an external institution that is legally and operationally separate from the original bank or an internal entity responsible for winding down ring-fenced portfolios of troubled assets, Greek banks can do more to regain the trust of investors and depositors. Two top bankers at Piraeus and National told Reuters on Thursday their banks intend to segregate weak assets from the rest. So, it looks as if Greece will proceed with a two-tier scheme. First, there will likely be a “national” bad bank, which will assume the troubled assets of all existing bad banks, such as the bad ATEbank, the bad Hellenic Postbank bank and smaller ones. Second, all or some of the four systemic banks will likely set up their own bad banks and try to convince investors, including foreign distressed funds, to become shareholders in the bad banks joining future share capital increases. Developed countries have put in place major national bad bank programs with different structure, scope and shareholding composition in the last few years and before. Ireland set up a government fund, the National Asset Management Agency (NAMA), in which participating institutions such as AIB, Bank of Ireland and Irish Nationwide transferred assets comprising land and development loans. NAMA acquired the assets at a heavy discount of about 60 percent below book value and paid for them with Irish government bonds carrying a floating rate coupon. Each participating institution was required to manage the transferred loans within separate units. The state injected tens of billions into NAMA to make it operational, raising the country’s public debt-to-GDP ratio. In the US, the structure of the national bad bank program was quite different. Individual special purpose vehicles (SPVs) were created, namely investment funds (PPIFs), which invested in real estate-backed securities originally issued prior to 2009 (legacy securities). The PPIFs invested on behalf of the US Treasury and private investors and were managed by private sector asset managers who raised equity capital and got matching equity funds from the Treasury and debt financing from the Federal Reserve via the TALF and Treasury. The program helped restart the market for these legacy securities and freed up capital from the balance sheet of troubled Citigroup, enabling it to extend new credit. Moreover, the price discovery process reduced uncertainty about the state of US banks holding these securities, helping them to raise new private capital. In Spain, the Asset Management Company for Assets Arising from Bank Restructuring (Sareb) was set up in Q4 of 2012 aimed at reducing uncertainty over the viability of banks recapitalized with state aid. This was in line with the MoU between Spain and the EU in July, 2012 calling for problematic real estate-related assets of banks requiring state funds to be transferred to an asset management company. The maximum life span of Sareb, which is not part of the general government, was set at 15 years. Certain Spanish banks transferred specific categories of assets to Sareb in December 2012, including foreclosed assets with a net amount above 100,000 euros and loans/credits to real estate developers with a net carrying amount in excess of 250,000 euros calculated at borrower rather than transaction level. More importantly, the transfer value of the assets was set by taking into account two factors. First, the economic value of the assets. Second, a discount applied to the estimated economic value based on the characteristics inherent to the transfer of the asset to Sareb such as the timing of the divesture of the assets and asset management and administration costs. By adjusting the economic value of the assets, the authorities made sure the prices could not be used to value bank assets that have not been transferred to Sareb. If the pundits are right, Greece is leaning toward a Sareb-type asset management company for its “national” bad bank for all assets of existing bad banks. The management of these bad loans will be extremely important since it is possible some influential borrowers may seek special treatment, bankers warn. Placing foreign experts in some key positions in the asset management company may be one of the safeguards, they say. Also, the transfer value of troubled assets from the systemic banks to their bad banks should be established with transparency and ensure a satisfactory return of capital for the project to help attract private investors in bad banks. That way, the Greek bad bank project will likely be successful.

ekathimerini.com , Sunday October 6, 2013 (21:13)

TAIPED is planning to securitize future revenues to boost coffers  The police headquarters building in Athens is among the 28 state properties for which TAIPED has sale and leaseback plans. By Vangelis Mandravelis The shortfall in revenues from privatizations in 2013 raises the target for next year to 4 billion euros, almost four times the amount expected to be collected by the end of this year. It appears obvious this target cannot be achieved by using the procedures followed to date and state sell-off fund TAIPED will need to resort to other measures to bring in more revenues. The government and its creditors have already discussed the idea of securitizing future revenues from real estate properties. The question now is the number and form of those securities to be introduced into the market. TAIPED officials are hoping to present the first securities by early 2014. It is quite encouraging that in the next few days the TAIPED coffers will be boosted by the collection of 622 million euros from the sale of a 33 percent stake in gaming company OPAP. The target of 1 billion euros will therefore be met, as 190 million euros for the 12-year lottery operation license has already been collected, plus some other smaller revenues. TAIPED is now focusing on the sale and leaseback of the 28 state properties, a project that will effectively be second only to OPAP’s privatization. The sell-off fund originally anticipated revenues of 300 million euros, but has now lowered its expectations to 200-250 million. It has also reduced the properties’ monthly lease rate from 30 million euros to 25 million in total. Sources say that TAIPED has offered candidate buyers returns of 10 percent from this privatization, but investors appear reluctant to agree to such a transaction and are seeking a higher yield. The main candidates for this project are Pangaia – a National Bank of Greece subsidiary – and Eurobank Properties. Market experts argue that it is the sale of the 28 state properties that will determine the final amount of revenues for TAIPED this year. The submission of binding offers is scheduled for this Friday, provided there is no further extension. The outcome of this procedure will also play a role in determining the revenues target for 2014, too, as anything that has not been completed in 2013 will be transferred to next year.

ekathimerini.com , Sunday October 6, 2013 (21:01)