http://www.zerohedge.com/news/troika-finds-greece-already-likely-miss-bailout-budget-targets
Submitted by Tyler Durden on 03/13/2012 19:30 -0400
and.....
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_21742_13/03/2012_432826
New bailout approved but EU wants 11.7 bln euros of savings in 2013/14
Greece’s relief at having its new bailout approved by eurozone finance ministers was tempered on Tuesday by the publication of a confidential European Commission report on the Greek economy, which foresees Athens having to adopt almost 12 billion euros of austerity measures in 2013 and 2014.
The Compliance Report, which was published by Reuters, said that further drastic reductions, equivalent to 5.5 percent of gross domestic product, would be have to be agreed by the end of May to fill “fiscal gaps” in the next two years. Elections are likely to be held in early May so one of the next government’s first tasks will be to find 7.6 billion euros of savings in 2013 and another 4.1 billion in 2014 to stay on track with the fiscal program agreed with the Commission, the European Central Bank and the International Monetary Fund, collectively known as the troika. The savings are likely to come from fresh cuts to pensions, new reductions in social transfers, the further slashing of pharmaceutical and healthcare spending, another round of cuts to defense spending and a restructuring of central and local administration.
“The determination of the Greek authorities to stick to the agreed policies will be tested already in the coming months when the deficit-reducing measures to close the large gap for 2013-14 need to be identified,” it said.
Greece has to achieve a primary surplus of 1.8 percent in 2013 and 4.5 percent in 2014 to continue to qualify for the loans the Eurogroup approved late on Monday. A new debt sustainability analysis by the troika that was presented to the finance ministers suggested that after the bond swap last Friday, Greek debt could fall to 116.5 percent of GDP in 2020 and below 90 percent in 2030.
Finance Minister Evangelos Venizelos revealed in a statement that Greece would receive a total of 172.7 billion euros from the eurozone and IMF until the end of 2015. Of this, 130 billion euros will be from the second bailout, 34.5 billion euros that was left over from the first package and 8.2 billion euros that will be part of the 28 billion in total that the IMF will provide.
Troika Finds Greece Already Likely To Miss Bailout Budget Targets
- Bond
- default
- European Central Bank
- European Union
- Fitch
- fixed
- Greece
- Gross Domestic Product
- International Monetary Fund
- Rating Agency
- recovery
The money for Greece has not yet been wired, and already a deeper dive into the previously released Troika report shows what is glaringly obvious to anyone who follows the actual collapse of the Greek economy: that the country is already on course to miss its budget targets for the immediate future (for insane EU assumptions on what the Greek economy should look like through the lens of a Eurocrat, see our chart of the day). The Telegraph reports: "Athens has probably cut spending enough to bring its primary deficit down to 1.5pc this year as agreed. But "current projections reveal large fiscal gaps in 2013-14" according to a leaked draft report by the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF). In its report, the troika said Athens will have to impose further fiscal cuts of as much as 5.5pc of GDP to meet next year's targets." And while it Europe may be terminally fixed, translated this means that the aborigines of the southern colony of Bavaria Sachs will see their wages cut even more, and even more people will be unemployed soon just to appears the first lien debt holders. This in a country of 10.8 million where just 36% of the population works. So Greece, which today received a rare bit of highly irrelevant but good news, when Fitch became the first rating agency to upgrade the country's credit rating from Default to B- (even as its new bonds saw their yield surge to 19% on the second day of trading), will in a few short months be forced to once again deal with even more consequences of being the proud recipient of the inverted European bailout, whereby the country's gold is used to fund Eurobank capital shortfalls.
More:
The report says that "substantial additional expenditure cuts will have to be announced and adopted by Greece in the coming months, in particular when Greece updates its medium-term budget in May 2012".
"The recovery previously announced for next year will be further delayed with, at best, a stagnation of activity in 2013," the report said.
Even so, the report, which is called "The Second Economic Adjustment Programme for Greece", paves the way for Greece to receive the first tranche of its new bail-out in the next few days. Athens needs the cash injection to repay a €14.5bn bond due on March 20.
However the troika report threatens a repeat of the lurches markets have suffered in the run-up to each disbursement of Greece's €110bn first bail-out.
So... does that mean that the Troika's worst case scenario of flat GDP in 2013 can be used as kindling? Or will the Greeks be forced to pay the carbon tax credits for that particular combustion as well ?
and.....
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_21742_13/03/2012_432826
Greece will need more austerity, EC report says
New bailout approved but EU wants 11.7 bln euros of savings in 2013/14
 Finance Minister Evangelos Venizelos speaks to ltaly's State Secretary for Economy Vittorio Grilli in Brussels on Tuesday |
The Compliance Report, which was published by Reuters, said that further drastic reductions, equivalent to 5.5 percent of gross domestic product, would be have to be agreed by the end of May to fill “fiscal gaps” in the next two years. Elections are likely to be held in early May so one of the next government’s first tasks will be to find 7.6 billion euros of savings in 2013 and another 4.1 billion in 2014 to stay on track with the fiscal program agreed with the Commission, the European Central Bank and the International Monetary Fund, collectively known as the troika. The savings are likely to come from fresh cuts to pensions, new reductions in social transfers, the further slashing of pharmaceutical and healthcare spending, another round of cuts to defense spending and a restructuring of central and local administration.
“The determination of the Greek authorities to stick to the agreed policies will be tested already in the coming months when the deficit-reducing measures to close the large gap for 2013-14 need to be identified,” it said.
Greece has to achieve a primary surplus of 1.8 percent in 2013 and 4.5 percent in 2014 to continue to qualify for the loans the Eurogroup approved late on Monday. A new debt sustainability analysis by the troika that was presented to the finance ministers suggested that after the bond swap last Friday, Greek debt could fall to 116.5 percent of GDP in 2020 and below 90 percent in 2030.
Finance Minister Evangelos Venizelos revealed in a statement that Greece would receive a total of 172.7 billion euros from the eurozone and IMF until the end of 2015. Of this, 130 billion euros will be from the second bailout, 34.5 billion euros that was left over from the first package and 8.2 billion euros that will be part of the 28 billion in total that the IMF will provide.
| In contrast with the first bailout, Greece will receive the loans in small, monthly installments. The IMF will provide 1.65 billion a month until the end of 2014 and the eurozone will supply the rest. In total, Athens will receive 5.9 billion euros this month, 3.3 billion euros in April and 5.3 billion in May. |
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