Commentary on the economic , geopolitical and simply fascinating things going on. Served occasionally with a side of snark.
Sunday, March 30, 2014
Greece Political Updates March 30 , 2014 --Greek Finance Minister Yiannis Stournaras might soon leave the “electric chair” he has been sitting on since summer 2012 and find a less stressful job at the Bank of Greece. According to Sunday Edition of Proto Thema, Stournaras has allegedly said that his work at the ministry has been concluded........Deputy Agricultural Minister Maximos Charakopoulos resigned from his cabinet position on Saturday evening claiming disagreement with the milk reform. However he would vote in favor of the controversial multi-bill on Sunday in order not to hinder the “proper funding of the country.” .......... Parliament speaker Vangelis Meimarakis on Sunday rejected a censure motion called by SYRIZA against Finance Minister Yannis Stournaras, prompting the leftists to lodge a new censure motion against Meimarakis and to walk out of Parliament.
Eurozone gives green light to next Greek bailout payment, in stages
It's official, Greece will receive its next aid payment, worth over €8bn -- but it will be split into three payments.
Over in Athens, eurozone finance minister have agreed that Athens has done enough to earn the next slice of its bailout.
In a statement just released, the eurogroup said it "reiterates its appreciation for the efforts made by the Greek citizens" , and welcomed the news that the bailout programme is "on track".
However, it is only proposing disbursing €6.3bn right now. The remaining €2bn will be split into two €1bn slices, which will only be handed over if Greece implements further milestones agreed with the Troika.
The reform process will have to continue in order to enhance the growth potential of the Greek economy by creating job opportunities and a healthy investment environment.
In this context, the Eurogroup welcomes the authorities' strong commitment to the implementation of a wide range of product (goods and services) market and institutional reforms. Concrete measures to liberalise transport and rental markets and to open up closed professions are being prepared.
Bold and frontloaded cuts in social security contributions are expected to improve competitiveness and boost growth. In addition, the authorities have committed to far-reaching energy market reforms and to enhancing the privatisation of public corporate and real estate assets, which would provide financing to the government while unlocking private investment.
It is also important that continued progress is made in the area of public administration reforms, in order to improve the quality and efficiency of the services that the public sector provides to its citizens, as well as with labour market reforms.
Greek Pharmacists’ Association decided to suspend their open-end strike that was launched end March. Pharmacies across the country opened their door today on April 1st 2014. However pharmacists in Attica will stage a work stoppage between 2 p.m. and 8 p.m. in order to join the protests in downtown Athens in the afternoon.
Pharmacists went on open-end strike on March 26th 2014 in order to protest the changes in the reform bill but the strike backfired as the already troubled Greek patient had to stand up to three hours to obtain a life-saving medicine.
Two metro stations in downtown Athens will be closed to public today, Tuesday, 1. April 2014. Greek police took this decision, in order to protect the Euro group finance ministers and high level officials moving between Zappeio and the new Acropolis Museum, where they will probably enjoy their dinner.
Metro station <Syntagma> will close as of 5 p.m.
Metro station <Acropolis> will close at 6 p.m.
Metro wagons will pass through but will not halt.
The metro stations will open to public again, once Greek police checks the Eurogroup officials have landed safe in their beds or hotel bars.
Greece’s lenders seem in general satisfied with the outcome of the multi-bill voting on Sunday night. The impact of voting to Greeks’ EU partners was immense. For example, one of the fierce critics of debt-ridden Greece, German Finance Minister Wolfgang Schaeuble immediately declared, he felt …relaxed.
German Finance Minister Wolfgang Schaeuble said today that he’s “relaxed” about the impact of Greece’s problems on the euro. “Financial markets meanwhile understand that the euro can’t go down the drain even if Greece is having problems,” he said in remarks to students in Berlin.
Significant reservation was however expressed by Eurogroup chief Jeroen Dijsselbloem. ““Greece is now working on returning to the capital market; they want to do that this year,” Dijsselbloem told Bloomberg. “This will of course be careful, with limited amounts, but it is important to wait for that and see how it goes.”
Eurogroup finance ministers are to meet in Athens tomorrow Tuesday in order to decide on the amount and pace of Greece’s next aid payments.
“The speed of disbursements will be adjusted to the needs, but we will decide Tuesday,” Dijsselbloem said adding that the next bailout tranche due in May will be “a bit more than 8 billion euro.
Greece needs another infusion of money to avoid default in May, when it has to repay 12.5 billion euros ($17.2 billion) of government debt. The Mediterranean nation has faced repeated delays in accessing a 130 billion-euro bailout package, its second, and hasn’t received a payment since December. (Full story Bloomberg)
The Greeks did it! More or less….
PS and because the country’s lenders are satisfied, Greeks should not spoil their fun, therefore all demonstrations and protest actions are banned from downtown Athens on April 1st and 2nd 2014, when the ministers of Eurogroup and Ecofin will be meeting in Zappeion.
General director of Attica Police banned gatherings and protests in downtown Athens on Tuesday and Wednesday, April 1st and 2nd 2014, due to the informal Eurogroup meeting and Ecofin in Zappeio. Invoking the presence of important political figures and senior officials, Greek police bans any protest and demonstrations
1. April 2014 – Tuesday: from 6 a.m. until 11 p.m
2. April 2014 – Wednesday: from 6 a.m. until 3 p.m.
Greek media report that the ban was imposed because a significant number of citizens was to participate in the scheduled protests and that the safe conduct of the Eurogroup and Ecofin meetings had to be ensured.
“Based on information of prosecuting authorities there is a possibility that people may mingle with protesters and attempt violent act,” notes news website in.gr.
Ban or not ban, several unions and political parties will join their voice and protest in Klafthmonos, Omonoia and Kotzia squares as well as outside the Athens University, starting at 6 p.m. Tuesday. But quite far away from Zappeion, near the National Garden and the Parliament.
New troika deal sets Greece range of targets but no immediate austerity measures
By Sotiris Nikas
A new agreement drawn up by Greece and its lenders foresees that Greece will return to bond markets this year and will not have to take any new austerity measures this year beyond those needed to make up for the reversal of previous cuts ordered by courts.
However, the agreement, which was drafted on March 28 and has been seen by Kathimerini, sets out a range of commitments that the Greek government has to stick to over the months to come.
Here are the 12 key points in the new memorandum:
1. Public expenditure should be frozen at the same level as 2013.
2. No new austerity measures will be needed but the Greek government is obliged to fill any fiscal gaps that emerge as a result of court decisions that reverse previous wage, or other, reductions.
3. The fiscal gap for 2015 is seen at 1.1 percent of GDP (2.1 billion euros) and the government will have to set out this autumn in the budget for next year the measures it plans to take to cover this shortfall. The troika foresees a fiscal gap of 3.9 billion euros in 2016 and 2.2 billion in 2017.
4. If fiscal reforms, such as improvements in the tax administration, fail to deliver the desired results, the government will have to make further spending cuts.
5. The adoption of a new set of reforms along the lines of the liberalization measures recommended by the Organization for Economic Cooperation and Development (OECD). These reforms will focus on the wholesale, telecommunications, e-commerce and processing sectors.
6. If the change to rules on mass dismissals does not have the effects Greece’s lenders are expecting, then the government will have to pass a new law this autumn that will bring regulations in line with the EU norms.
7. The government will have to legislate by January 1, 2015 an exemption from VAT for small businesses. Also, by 2017, the government will have to bring taxable property values in line with market prices. The unified property tax will be paid in six installments, with the first being due in June.
8. The government, which paid off 6 billion euros of state arrears in 2013 rather than the 8 billion it pledged, will have to pay off the 2 billion leftover by the third quarter of 2015. The troika also foresees that another 2.5 billion euros of new state arrears will emerge by the end of this year.
9. The government will have to carry out a new viability study for Greece’s social security system. Greece’s lenders are also demanding the merging of all civil service auxiliary pension funds with the private sector fund ETEA.
10. A new public sector wage structure will be created and will be linked to staff evaluations.
11. Greece will have to maintain large primary surpluses to make its debt more sustainable. According to the troika’s baseline scenario, Greek public debt is expected to fall to 125 percent of GDP by 2020 and 112 percent by 2022.
12. The troika has also asked for privatizations to be speeded up. Revenues from sell-offs this year are seen reaching 1.5 billion euros. The target for 2020 is for Greece to raise a total of 22.6 billion euros from the sale of state-owned assets.
Police bans public gatherings in central Athens during visit of EU finance ministers
The police has banned public gatherings in central Athens from 6 a.m. until 11 p.m. on Tuesday and Wednesday, when the European Union’s finance ministers will be in the Greek capital for an informal Eurogroup meeting.
Marches and rallies will be banned in a large part of the city center around the Zappeion Hall, where the meetings will take place. The police has employed a similar scheme when certain foreign officials, including German Chancellor Angela Merkel, have visited Athens in the past.
Various groups had planned to protest against austerity policies during the visit of EU finance ministers.
SYRIZA issued a statement accusing the government of “extreme autarchism.” Civil servants’ union ADEDY labeled the ban “undemocratic.”
Prime Minister Antonis Samaras and his coalition partner, PASOK leader Evangelos Venizelos, on Monday met to discuss the fallout of a tough vote in Parliament on a new set of reforms agreed with the troika which reduced the government’s majority to two seats in the 300-member House.
The government won the vote with 152 MPs backing the first article, which introduces a raft of measures to boost competition, and 151 backing the second article, which sets out new rules for recapitalizing banks.
But there were defections. New Democracy MP Nikitas Kaklamanis refused to back the measures, prompting Samaras to expel him. Two PASOK MPs also broke ranks – former Socialist Premier George Papandreou, who voted against the second article, and veteran MP Apostolos Kaklamanis, who voted “present” for the same article. Venizelos did not eject the two MPs, as this would have led to the coalition losing its majority, but issued a strongly worded statement against Papandreou.
A few hours before Sunday’s vote, opposition SYRIZA MPs walked out of the debate after Parliament Speaker Evangelos Meimarakis rejected their call for a censure motion against Finance Minister Yannis Stournaras that would have meant the vote on the bill being postponed. In return, SYRIZA lodged a censure motion against Meimarakis.
Greek Finance Minister Yiannis Stournaras might soon leave the “electric chair” he has been sitting on since summer 2012 and find a less stressful job at the Bank of Greece. According to Sunday Edition of Proto Thema, Stournaras has allegedly said that his work at the ministry has been concluded.
“I think my work at the Finance Ministry has concluded,” Yiannis Storunaras reportedly told interlocutors after the completion of the last agreement with the troika, which he considers as crucial for future developments in the country.
“As a country we came out of the grave. We all must realize this. During that time we moved in limbo. But we did it,” Proto Thema cites the Greek Finance Minister.
According to the newspaper, Stournaras is expected to remain at the FinMin post for the next two months, as no government reshuffle is expected before the municipality and EU elections.
Right after the voting of the austerity multi-bill [today Sunday] discussion about the Greek debt is expected to start, the government reshuffle will follow, Proto Thema notes adding “according to information, Stournaras will be named Governor of Bank of Greece, while Prime Minister Antonis Samaras will take over the post of “Finance Minister” assisted by his close aide Stavros Papastavrou.” (via in.gr)
According to unconfirmed information, PM Samaras refuseed to confirm whether Stournaras will stay as FinMin or become Bank of Greece governor, but so far nobody, not even Stournaras himself, dismissed Proto Thema report.
Regrets, I’ve had a few But then again, too few to mention I did what I had to do and saw it through without exemption I planned each charted course, each careful step along the byway And more, much more than this, I did it my way
PS yes, Stournaras’s God-blessed work has been concluded, he will get a better job and we’ll be left behind broke and tightened-up till the end of our days.
Deputy Agricultural Minister Maximos Charakopoulos resigned from his cabinet position on Saturday evening claiming disagreement with the milk reform. However he would vote in favor of the controversial multi-bill on Sunday in order not to hinder the “proper funding of the country.”
The multi-bill containing major reforms of the trading regulations is a precondition for the release of the next bailout 9-billion-euro bailout installment.
Charakopoulos’s resignation 24 hours before the crucial voting almost went unnoticed and media did not make a buzz about it. Why? Most likely in order to avoid a deterioration of an already bad atmosphere within the Greek coalition government as quite a number of lawmakers raise objections against several bill provisions that hurt major sectors of the Greek economy like milk producers, bakers, pharmacists etc.
Greece’s coalition government has a thin majority of 153 seats in a Parliament of 300.
Unionists of public and private sector ADEDY and GESEE and left opposition parties have called protests outside the Parliament on Sunday.
At the same time, technicians at private television networks went on a 24-hour strike on Sunday following a 5-hour work stoppage on Saturday. They oppose the multi-bill provision that opens their profession to unlicensed labor.
At the end of voting, closed professions will be open and the multi-nationals and rich are expected to rush to Greece. If hurdles in taxation and bureaucracy will fall, Greece will finally manage to get the development and growth it has been awaiting since the beginning of the economic crisis.
PS And jobless will finally get jobs earning salaries they do not cover their basic needs
As vote on multi-bill looms, gov't looks to aid
The government is bracing for a crucial week, with eurozone finance ministers expected to discuss the release of further rescue loans to Greece at an informal summit in Athens starting on Tuesday.
But it must first suvive a vote on a multi-bill of reforms demanded by the troika in return for continued rescue funding, due to be held at midnight on Sunday following two days of debate.
On Saturday, government officials were busy seeking to overcome objections by coalition MPs to the bill as critics slated the legislation.
Despite the government's efforts, there was one casualty. Alternate Agriculture Minister Maximos Harakopoulos announced his resignation on Saturday in protest at a controversial provision in the bill extending the shelf life of milk. Harakopoulos, who represents the agricultural constituency of Larissa, said the reform would hurt the domestic dairy sector. He pledged not to vote against the provision however so as not to jeopardize the foreign rescue funding on which Greece relies.
Meanwhile, Finance Minister Yannis Stournaras indicated that, although eurozone finance officials will discuss the question of aid to Greece at the Athens Eurogroup, a final decision on the release of up to 12 billion euros in aid is to be taken at a scheduled summit of European Union leaders on April 15, with the disbursement expected two days later. This would provide Greece with adequate funding to pay down some 10 billion euros in bonds due to expire in May.
According to sources, Athens is hoping to bolster state coffers by tapping capital markets for up to 2 billion euros before Easter, which falls on April 20. Buoyed by indications that Greece is on track to post a primary surplus, government officials have indicated that a return to the market is on the cards. Authorities are also keen for the EU statistics service, Eurostat, to confirm Greek predictions of a primary surplus, which would allow the launch of a discussion on the lightening of the country’s debt burden. The government wants those talks to begin before European and local authority elections in May, though EU officials say they they will not start before summer.
Prime Minister Antonis Samaras called for swift action to reduce Greece’s debt. “I am not so interested in how but that it should be done quickly,” he said in an interview with the Real News weekly on Saturday.
Leftist Tsipras calls censure motion, putting off multi-bill vote until Tuesday
Leftist SYRIZA leader Alexis Tsipras on Sunday called a censure motion against Finance Minister Yannis Stournaras over a new multi-bill of economic reforms demanded by the troika in return for continued rescue loans.
The surprise move by Tsipras, made during a debate in Parliament on Sunday about the multi-bill of structural reforms and other measures, means that a scheduled vote on the legislation on Sunday night has been put off until Tuesday night to allow the debate in Parliament to shift to the call for a censure motion against Stournaras.
It remained unclear what the implication of Tsipras's move would be for the disbursement of Greece's pending loan tranches. Eurozone finance ministers due to meet in Athens on Tuesday and Wednesday were expected to discuss the release of further aid on Greece but cannot approve disbursement until the multi-bill has been voted through Parliament.
Parliament speaker rejects SYRIZA censure motion against Stournaras
Parliament speaker Vangelis Meimarakis on Sunday rejected a censure motion called by SYRIZA against Finance Minister Yannis Stournaras, prompting the leftists to lodge a new censure motion against Meimarakis and to walk out of Parliament.
Meimarakis rejected SYRIZA's move, which came a few hours before MPs were to vote on a multi-bill of reforms that is a prerequisite for the release of further rescue loans. SYRIZA's move was found to violate the Constitution as it has been less than six months since SYRIZA brought a censure motion against the government. That motion, lodged last November, was rejected. Also, Meimarakis noted that a censure motion cannot be brought against a minister for submitting a government bill rather than a personal issue.
The surprise move by SYRIZA leader Alexis Tsipras, made during a debate in Parliament on Sunday about the multi-bill of structural reforms and other measures, fuelled upheaval in the ranks of the government which is hoping to pass the multi-bill into law ahead of an informal summit of eurozone finance ministers due to start in Athens on Tuesday.