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Re: New EC Thread

Post  Panda on Tue 21 Aug - 17:25

The last sum Greece received from the Fund, about E3 Billion was to repay the ECB for the Bonds bought. Greece has a 2 yr Bond with interest of 225% how is it ever going to repay that , or pay the interest. ???? It is due another tranche from the IMF in September and La Garde et al are descending on Greece to see if they are sticking to the rules. My guess is they are not so they will be forced to default because there is not enough in the kitty to bail out Spain , Italy and possibly Finland.

Spain has held out against accepting a bail-out because the Government does not want to be forced to take more stringent austerity measures and lose sovereignty. The Spanish have shown their anger with their marches and Rajoy knows there will be anarchy if more stringent measures are imposed for accepting a bail-out. The Bundesbank is adamant that Germany should not contribute any more money to Greece and Merkel is aware she faces an election next year.

Had Greece been alllowed to default 3 years ago they would never have had the debt they have now and the contagion would not have spread.

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Re: New EC Thread

Post  Panda on Tue 21 Aug - 19:18

Eurozone crisis threatens liberal reform



20 August 2012The Guardian London




Peter Schrank

Not only is the eurozone crisis shaking the world to its financial foundations, it is also having unforseen political consequences in the former communist states, helping unpick progress made towards democracy in eastern Europe, argues lawyer Andrea Capussela.


How does the eurozone crisis look from eastern Europe? Not good, is the short answer. Hungarian laws and Romanian decrees have recently attracted the ire of Brussels. Many commentators have ascribed this to the political effects of the recession: faced with popular distrust, rising populism and acute political strife, those governments sought to entrench themselves in ways which Brussels judged illiberal or undemocratic.

But this interpretation neglects one important effect of the eurozone crisis: a change in the incentives under which these governments operate.

It is well known that the crisis directly threatens the survival of the EU, and that it can only be overcome by pooling more sovereignty into a form of political union. And it is clear that not all EU member states shall be part of such political union. The alternative is stark: either no EU or a two-tier EU. The core – the current eurozone, presumably – will remain open to the others, but moving from a union of 27 to one of 17+10 will alter its politics because the outliers will lose influence and status.

The problem is not confined to Hungary and Romania, therefore, and in fact a recent authoritative report by Freedom House finds that "stagnation and backsliding is evident in key governance indicators across the new EU member states and countries of the Balkans"; this phenomenon is observed even in the EU's own quasi protectorate, Kosovo, which stubbornly remains a "semi-consolidated authoritarian regime". For these countries the alternative is either second-tier membership or no EU at all.

The Hungarian and the Romanian cases differ – Romania's actions are reversible, and it responded positively to the EU – but the charge is the same: Brussels complains that these governments are dismantling or threatening the rule of law and the constitutional checks and balances that they adopted before entering the EU. Which has alarmed many commentators, because the transition to liberal democracy was thought to be irreversible once the eastern countries had acceded to the EU.



Last edited by Panda on Wed 22 Aug - 7:26; edited 1 time in total

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Re: New EC Thread

Post  Panda on Wed 22 Aug - 7:25

Greek PM: 'Please Give Us Air To Breathe'


The Greek leader tells a German newspaper his indebted country needs extra time to meet spending demands from creditors.


5:57am UK, Wednesday 22 August 2012

Antonis Samaras will meet Francois Hollande and Angela Merkel this week








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Greek PM Antonis Samaras has asked for "air to breathe" so he can complete reforms that have been demanded as a condition for financial aid.

Mr Samaras said extra time would help Greece - in its fifth year of recession - return to growth.

He meets Eurogroup chief Jean-Claude Juncker on Wednesday and French President Francois Hollande and German Chancellor Angela Merkel later this week.

Mr Samaras is keen to soften the impact of budget cuts on a society where social and political discontent are rising.

"Let me be very explicit: we demand no additional money," he told Germany's daily Bild newspaper.

"We stand by our commitments and by fulfilling all our requirements. We have to crank up growth because that decreases the financial gaps," he said.

"All we want is a bit of 'air to breathe' to get the economy running and to increase state income. More time does not automatically mean more money."

Mr Samaras had been expected to lobby for Greece to be given two more years to get its budget deficit below 3% of GDP - currently scheduled for the end of 2014.

But he did not say how much more time he wanted. The deficit was 9.3% of GDP in 2011.

Mr Samaras said Greece, which has been bailed out twice, was making progress on the tough reforms that creditors have demanded.

"We will soon have a smaller, healthier and significantly more efficient public service," he said.

"We are making progress, we are reducing the overall number of public servants and I have decided to hire only one person for every 10 retired civil servants."

The bulk of the cuts are expected to come from reductions in spending on pensions, social benefits, public sector wages and health system costs.

The cuts include the axeing of up to 40,000 civil servants.

A Greek exit from the eurozone, which many politicians in Germany and elsewhere have talked about recently, would be a nightmare for Greece.

It would reduce the standard of living by a further 70%, Mr Samaras said.




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Re: New EC Thread

Post  Panda on Wed 22 Aug - 7:43

Eurozone crisis
Time to make the rich pay



17 August 2012Der Tagesspiegel Berlin




Kazanevski

In their bid to cope with debts, governments are taxing the middle classes, and overlooking the fact that bad investments — banks, property, public debt — made by the wealthy, are the cause of the current crisis. Taking up this idea, the liberal Der Tagesspiegel argues that the well-off should dig deeper.

Harald Schumann

Once again this year, Sigmar Gabriel joined with the unions in demanding an increase in taxes paid by the wealthy to ensure a fairer distribution of the burden of the crisis. For the social-democrat leader, the imposition of further demands on the rich is a matter of “social patriotism”. However, at the other end of the political spectrum the Christian-Democrats and the liberals were quick to step up to the plate to defend the better off, and to accuse Gabriel of wheeling out a well-worn socialist routine. As a result, debate on this issue has now assumed the wearisome air of an electoral squabble.

But we should not be beguiled by this impression. Over the years, the issue of growing disparities in wealth and incomes has evolved to the point where it is no longer a simple matter of equality. The reality is that these disparities are one of the main causes of the current crisis.

The increase in wealth that is concentrated in the hands of a small minority has meant that a considerable proportion of national income is now feeding a demand for financial products, and reducing the level of investment in goods and services.

Foolhardy investments


The well-off in Europe invest in bonds issued by banks, property companies and states, like Ireland, Portugal, Greece and Spain, which offer attractive rates of interest. In so doing, they have financed ill-judged investment on an enormous scale – the construction of housing and motorways that remain unused and other foolhardy infrastructure projects – that these countries would never have been able to undertake on their own.

As it stands, the sole purpose of the bridging loans provided by eurozone bailout funds is to aid states and their banks to remain solvent so that they can continue to pay their debts to misguided investors. As a result, we now have a situation in which it is not a matter of Germans, or the Dutch or the Finns etc, being obliged to bail out the Greeks, the Irish and the Spanish, but rather of middle class European taxpayers being forced to provide the funds required to save the fortunes of Europe’s wealthiest citizens.

Making the wealthy pay


In passing, we should note that Europe’s wealthy contribute very little to national budgets. The countries of the eurozone have created a monetary union, but instead of introducing a common fiscal policy, they have competed with each other in a bid to cut taxes and attract capital. As a result, taxes on income generated by capital are at a record low, while private fortunes throughout Europe have grown to the point where they have reached a level that is equivalent to two or even three times the sovereign debt of European states.

So we are now asking Europe’s wealthiest citizens to cover a larger share of the bill for bad investments. But this question is too important to be confined to the framework of national elections. We will also have to call for changes to the current bailout policy, which is ill-conceived.

As it stands, the EU debt collectors are urging crisis stricken countries to cut social services and increase taxes on the middle classes, while Greek shipping tycoons, Irish property barons and the Spanish super-rich pay hardly any income tax and invest their money in tax havens.

The priority for those who wish to save the euro should be to fight against such dysfunctions. If they do, the representatives of the unpopular European troika might still be perceived as heroes.





The backlash against the rich has gone global


"It is never a great sign when politicians start appealing to taxpayers’ patriotism,” began Gideon Rachman in the Financial Times, following the announcement by French government minister Pierre Moscovici to raise the top rate of income tax to 75 per cent.


It is a mistake to portray the Hollande administration as Socialist dinosaurs. The truth is that the new French government is at the extreme end of a new global trend: an international backlash against the wealthy that is reshaping politics from Europe to the US to China. […]

US President Barack Obama has been making political capital ahead of the November election with his pledges to tax “millionaires and billionaires”, while branding his Republican rival Mitt Romney as representing of the tax-dodging elite. […] Eventually that kind of shift is liable to spark a political backlash. Western politicians, from Barack Obama to François Hollande are seeking to capture and channel this new mood... If this new mood hardens, it could mark the end of an era of lower taxes, deregulation and rising inequality that began in the late 1970s, with the rise of Margaret Thatcher and Ronald Reagan in the west and of Deng Xiaoping in China...

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Re: New EC Thread

Post  Panda on Wed 22 Aug - 10:07

Last Man Standing Means Europe Investment Banks Resist Shrinking


By Ambereen Choudhury, Elisa Martinuzzi and Elena Logutenkova - Aug 22, 2012 12:01 AM GMT+0100






Valentin Flauraud/Bloomberg
A logo hangs above the entrance to a UBS AG bank branch in Lausanne, Switzerland.
Europe’s failure to resolve its sovereign-debt crisis will force investment-banking chiefs in the region to consider shuttering entire businesses rather than rely on piecemeal job reductions to revive profit.





Enlarge image

Last Man Standing Means Europe Investment Banks Resist Shrinking




Gianluca Colla/Bloomberg

UBS AG, Switzerland’s largest lender, is reducing its fixed-income operations to focus on wealth management because of stricter capital requirements imposed by regulators and a weak revenue outlook linked to the continuing debt crisis.

UBS AG, Switzerland’s largest lender, is reducing its fixed-income operations to focus on wealth management because of stricter capital requirements imposed by regulators and a weak revenue outlook linked to the continuing debt crisis. Photographer: Gianluca Colla/Bloomberg

Dealmaking fees may drop 25 percent this year from 2009, when the crisis began in Greece, research firm Freeman & Co. estimates. European banks have cut about 172,000 positions since then, according to data compiled by Bloomberg, the same strategy they used after Lehman Brothers Holdings Inc. collapsed in 2008.

The game plan won’t work again as rising capital requirements and declining business alter the investment-banking landscape, investors and analysts say. New rules will reduce return on equity by 6 percentage points from about 14 percent in the first half of 2011, according to consulting firm Bain & Co. Banks that relied on record low interest rates and a flood of cheap funding from the European Central Bank to delay deciding which units to close will be compelled to make choices.

“Investment banks have to shrink and do more than cut a little bit here and there,” said Lutz Roehmeyer, who helps oversee 10 billion euros ($12.5 billion) at Landesbank Berlin Investment in Berlin. “There’s too much politics and too little economics going on. They want to keep certain businesses for as long as possible.”

UBS Cuts


Some firms are cutting deeper. UBS AG (UBSN), Switzerland’s largest lender, is reducing its fixed-income operations to focus on wealth management because of stricter capital requirements imposed by regulators and a weak revenue outlook linked to the continuing debt crisis. Still, even for all the job cuts, most European investment banks haven’t made significant changes since the upheaval that accompanied the collapse of Lehman Brothers, said Joao Soares, a partner at Bain in London.

“Banks often play the last-man-standing strategy of maintaining capabilities until others are forced to leave,”Soares said. “They need to reinvent their core.”

The Bloomberg Industries European Investment Banks Index (BIIBNKE), which tracks UBS, Barclays Plc (BARC), Deutsche Bank AG (DBK), and Credit Suisse Group AG, has dropped 5.3 percent this year compared with a 14 percent gain in the 329-member MSCI World Financials Index. (MXWOOFN)European banks that have investment-banking businesses trade at an average of 62 percent of book value, while European financial firms trade at about 90 percent.

The five U.S. lenders with investment-banking and trading units -- Bank of America Corp., Citigroup Inc. (C), Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and Morgan Stanley (MS) -- reported their lowest first-half revenue since 2008 and have stock prices that value the firms at a lower percentage of book value than banks without capital-markets units.

‘Inflection Point’


“We’re at an inflection point,” said Steve Hussey, a London-based financial-institutions analyst at AllianceBernstein Ltd., which oversees about $400 billion. “Some banks need to come out and say we need 30 percent to 50 percent fewer people. The hit has to be more severe than 1,000 people here and there. Second- or third-tier players have to get out of certain businesses and focus on niches -- either products or geographies.”

Deutsche Bank, Germany’s largest lender, and Barclays, Britain’s second-biggest by assets, are among those best-placed to benefit because they can exploit their dominant fixed-income, currencies and commodities operations, traditionally the heftiest revenue generators for firms, said Kian Abouhossein, a bank analyst at JPMorgan in London.

The U.S. investment-banking industry is “more consolidated,” resulting in higher fee levels for the top firms, Abouhossein wrote in a March report. Those companies that have a presence in the region, including Citigroup, stand to gain if European banks exit or shrink businesses, he said.

Gaining Share


Deutsche Bank has the biggest share of the U.S. fixed-income trading market this year, taking the top spot from JPMorgan, consulting firm Greenwich Associates said last month. Fixed-income revenue at the 10 largest global investment banks dropped at least 25 percent in each of the past two years to $73 billion in 2011, according to Coalition Ltd., a London analytics firm. Deutsche Bank also boosted its share of a shrinking European equity-underwriting market to about 12 percent this year from 9.3 percent in 2011, data compiled by Bloomberg show.

Still, even the Frankfurt-based lender is shrinking its investment bank. The company said July 31 it will cut about 1,500 jobs at the unit and at related infrastructure functions by the end of the year after reporting a 63 percent drop in second-quarter investment-bank profit. It will announce further details about changes to its business model, including scaling back in some regions, at a presentation next month, co-Chief Executive Officer Anshu Jain, 49, said on a call with investors.

‘Grim Scenario’


“The European crisis has developed closer toward our more grim scenario than our better-case scenario over the course of the past two years,” Jain said. “Our prospects and our future view on profitability is different today than it was in 2010.”

While revenue at Barclays’s fixed-income, currencies and commodities unit rose 11 percent in the first half to 4.4 billion pounds ($6.9 billion), making it the biggest source of income for the investment bank, the lender is under pressure from regulators and politicians to shrink its securities unit.

The government-backed Independent Commission on Banking recommended in September that lenders partially separate their consumer and investment banks. Barclays has come under greater pressure to curtail its securities unit after being fined a record 290 million pounds in June for manipulating the London interbank offered rate, or Libor, the benchmark interest rate for about $300 trillion of securities worldwide.

Barclays Strategy


CEO Robert Diamond resigned following the fine, as did Chairman Marcus Agius. Diamond had overseen Barclays’s purchase of Lehman’s U.S. business and subsequent expansion beyond fixed-income into equities and merger advisory. The securities unit employed about 24,000 people at the end of December, more than three times as many as when Diamond took over.

“We expect Barclays to adopt a more conservative strategy than it has in the past, which could see the aggressive expansion story that has been pursued by the investment bank being de-emphasized,” Gary Greenwood, an analyst at Shore Capital in Liverpool with a hold rating on the shares, said in a Aug. 10 note. “Investment banking is likely to be a low-return industry over the long run, given planned regulatory change.”

Swiss Squeeze


UBS and Credit Suisse (CSGN), the country’s second-biggest bank, may have to shrink their investment banks more than competitors because Swiss regulators set capital requirements higher than international levels. The two lenders will have to hold total capital, including common equity and contingent capital, equal to about 19 percent of risk-weighted assets starting in 2019.

Under Basel III rules, banks worldwide must have capital ratios of 10.5 percent, while stricter rules can be imposed by national regulators, and firms deemed systemically important will need more.

Both Swiss banks will have to reconsider their positions in sub-scale or money-losing businesses, where costs can be reduced and capital released, according to Huw Van Steenis, a banking analyst at Morgan Stanley in London.

UBS’s investment-banking business posted a pretax loss of 130 million Swiss francs ($134.9 million) in the three months ended June 30 compared with a pretax profit of 383 million francs in the same period a year earlier as revenue fell 32 percent on reduced client business and a loss related toFacebook Inc. (FB)’s initial public offering.

The bank, based in Zurich, said in November it would exit macro-directional trading, asset securitization and complex structured products within its fixed-income business, as well as proprietary trading in stocks. It is cutting risk-weighted assets at its securities unit by more than half under Basel III rules from the level at the end of September. The division already has reached its 2013 headcount-reduction target.

‘Pessimistic Outlook’


“If you remember back in November of last year, I don’t think that even a pessimistic outlook for the next 12 months would tell you what we are living in right now,” CEO Sergio Ermotti, 52, said July 31. “The environment has completely changed. We have been very proactive in accelerating taking down cost as we saw the new environment developing, and we will not be shy to continue to do so as we see the market changing, as I do believe that many of our competitors will have to do.”

Investment banking will look more like it did in the mid-1990s than in the past decade, Ermotti said.

“The people who have succeeded in this business are the ones who took risks at the right time,” said Peter Hahn, a finance professor at London’s Cass Business School and a former managing director at Citigroup. “The growth lasted too long. Now the biggest business segment for investment banks, the financial industry, is under pressure to shrink. The realization that the biggest client has gone probably hasn’t hit some.”

Dougan Downsizing


Credit Suisse said in November it will cut risk-weighted assets at its investment bank by 37 percent from levels at the end of September to boost returns. The bank said it would end origination of commercial mortgage-backed securities and downscale or exit long-dated unsecured trades in rates, emerging markets and commodities and less capital-efficient businesses in securitized products. The company also has reduced headcount at the unit by 1,500.

The Zurich-based lender, led by CEO Brady Dougan, 52, said last month it plans to cut costs at the investment bank by an additional 550 million francs, declining to specify whether that would result in job cuts. It said it would “rationalize” the securities unit’s advisory and underwriting businesses to bring them “in line with market environment,” get rid of duplications between country, product and industry teams, and consolidate execution into hubs in the U.K. and Hong Kong.

‘Shrink Further’


The bank, which last month also announced plans to boost capital by 15.3 billion francs to appease regulators, should have made bigger cuts in fixed-income instead of raising capital, JPMorgan’s Abouhossein said in a July 18 note. “We see potential for Credit Suisse to shrink further,” he wrote.

Spokesmen for Credit Suisse, UBS, Deutsche Bank and Barclays declined to comment.

“There is more to come as regulators make it a more capital-intensive business, including in fixed income,” said Philippe Bodereau, the London-based head of research for financial firms at Pacific Investment Management Co., the world’s largest bond investor. “For the smaller guys, some of these businesses are becoming very debatable.”

UniCredit SpA (UCG), which employs about 8,900 people in corporate and investment banking, exited the European equity-brokerage business. The bank, the largest in Italy by assets, is now studying a partnership with Credit Agricole SA (ACA), France’s third-largest by market value, for managing stock offerings.

Credit Agricole is in talks to sell its European equity-brokerage business to Kepler Capital Markets SA and sold Hong Kong-based CLSA last month to China’s Citic Securities Co.

RBS, BNP


Royal Bank of Scotland Group Plc, Britain’s biggest taxpayer-assisted lender, said in January it would eliminate about 3,500 jobs at its investment-banking division and sell or close the unprofitable cash-equities, mergers-advisory and equity-capital-markets divisions. BNP Paribas SA (BNP), France’s largest bank, is cutting 79 billion euros of risk-weighted assets, mostly within the corporate and investment bank.

“As investment banks strip their businesses in the face of a poor economy, poor revenue and higher regulatory capital, it’s the survival of the very, very fittest,” said Kevin Burrowes, U.K. head of financial services at PricewaterhouseCoopers LLP.“We could see just three to five global investment banks.”

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Re: New EC Thread

Post  Panda on Wed 22 Aug - 16:51

22 August 2012 Last updated at 16:07
Greece needs more time for cuts, says PM Samaras
Comments (5)
Prime Minister Antonis Samaras is under pressure to convince the eurozone leaders of Greece's efforts
Continue reading the main story

Eurozone crisis


Greece's Prime Minister, Antonis Samaras, is preparing for the first of a series of meetings in which he will ask the country's lenders for more time to implement spending cuts and reforms.

Mr Samaras is set to tell Eurogroup finance chief Jean-Claude Juncker that the country needs "breathing space".

German Chancellor Angela Merkel said no decision would be made this week.

She is due to meet Mr Samaras on Friday, while French President Francois Hollande will meet him on Saturday.

"We wait for the report of the troika," Chancellor Merkel said, referring to Greece's lenders, the European Union, the International Monetary Fund (IMF) and the European Central Bank, who will assess next month whether the country is doing enough to meeting the conditions of its bailout.

At issue is whether Greece has done enough to receive its next instalment of loans worth 31.5bn euros ($39.3bn; £24.7bn) that it needs to avoid defaulting on its vast public debts, and possibly even leaving the euro.

Under the terms of the bailout agreement, Greece needs to demonstrate it can find 11.5bn euros in public spending cuts within two years in order to qualify for the money.

At the talks with Mr Juncker, Mr Samaras is expected to float the idea of Greece being given a two-year extension to the deadline.
'Growth needed'
Continue reading the main story
Analysis


Jonty Bloom Business correspondent, BBC News



The eurozone crisis can feel like watching a road crash in slow motion, very slow motion.

The Greeks are still lobbying hard for more time to find the cuts that are necessary if it is to win the next tranche of international aid that it desperately needs.

And as the traditional torpor of the balmy Mediterranean summer holidays begins to draw to a close politicians are returning to their desks in the continents' capitals and enquiring about the health of the eurozone.

As the poet said: "Across the wires the electric message came: 'He is no better. He is much the same.'"

And that is the problem the crisis in the eurozone has been pretty constant for years now, no treatment seems to make it better, but the illness doesn't seem capable of killing the patient either.

But quietly things may be coming to a head.

The Greek government will be desperate for a positive report from the troika as it knows full well that the willingness of northern Europeans to give it more time and more money is wearing thinner and thinner, and the longer the crisis continues the more time they have had to prepare for a Greek exit.

The real danger for the Greek government is that the rest of the eurozone decides that, upon reflection, they could survive without Greece after all.


  • Greek debt crisis: Your views

He will argue that Greece has lost time because of elections this year, and that it should be allowed to move more gradually in order to ease the economic pain felt by the Greek people, the BBC's Mark Lowen reports from Athens.

"Let me be very explicit: we demand no additional money. We stand by our commitments," Mr Samaras told German tabloid Bild in an interview published on Wednesday.

"But we have to kick-start growth in order to cut our deficit. All that we want is a little 'breathing space' to revive the economy quickly and raise state income."

There are also reports that due to the worsening state of the economy, which affects tax receipts and welfare spending levels, Greece may now need to find savings of up to 13.5bn euros, 2bn more than thought.

A government source told our correspondent that Mr Samaras would not press the issue of an extension too hard, fearing it might cause bad blood with the group of lenders that monitors Greece's bailout.

Speaking to the BBC, Yannis Varoufakis, professor of economics at the University of Athens, said Mr Samaras was "profoundly, deeply and sadly wrong".

"Greece does not need more breathing space. It is not breathing at all," he said.

He added that the solution Europe had implemented to tackle Greece's insolvency crisis was a "very silly one" - providing gigantic loans "on condition of austerity measures that would shrink the national income from which that huge loan would have to be repaid", requiring yet more loans and more austerity.
Worsening situation
Continue reading the main story
“Start Quote



If I had saved all those payments in a bank account I would be rich by now; where has it all gone?”
End Quote 'Leo' Greek pensioner

  • Greece's pensioners face looming poverty

According to Constantine Michalos, president of the Athens Chamber of Commerce, the breathing space Mr Samaras wants is political rather than economic, as having extra time to repay may make the country's problems worse.

"Whether it is two or three-year extension, that would mean that there is an additional bill in terms of interest," he told the BBC.

"What is the point of extending the total bill in terms of the total debt, when you haven't got in place the right mechanisms to stimulate the economy, to return to the path of growth that you in need to in order to be able to finance the debt that you are trying to service?" he asked.

He said it would be "extremely difficult, if not impossible", to find savings of 11.5bn euros in time, as Athens was starting to implement the measures too late.

"Lay-offs [in the public sector] should have started gradually two years ago.

"Now we need to have 150,000 lay-offs by the end of next year. In terms of social cohesion it is going to be an extremely difficult September coming up," Mr Michalos said.
Europe presses ahead
Continue reading the main story
Greece discussions timetable



  • 22 August: Greek PM Antonis Samaras meets Eurogroup chief Jean-Claude Juncker
  • 23 August: Angela Merkel and Francois Hollande meet
  • 24 August: Chancellor Merkel and PM Samaras meet
  • 25 August: President Hollande and PM Samaras meet
  • Early September: Troika staff go back to Greece
  • 14-15 September: Gathering of European finance ministers in Cyprus
  • Troika's review of progress to be published by the end of September
  • 8-9 October: Finance ministers attend two days of meetings in Luxembourg

Eurozone leaders have so far resisted any move to soften the bailout conditions, especially in Germany, where the government is under pressure not to make any more concessions.

"We have clear agreements between the troika and Greece, and Greece has to fulfil these agreements," Michael Fuchs, deputy chairman of the parliamentary group of Germany's governing CDU party, told the BBC.

He said it looked as though Greece had not been able to fulfil its promises, such as privatising 50bn-euros worth of state assets.

"If the troika tells us they did what they have to do then of course we will [continue with] the programmes. If not it is very difficult," he said.

But BBC Berlin correspondent Stephen Evans says Germany did have some room for manoeuvre.

Publicly, Germany is saying it cannot put money into a bottomless barrel, which is not quite saying that if there is any slippage there will not be any more money, our correspondent says.

The heavily-indebted country has received two massive EU and IMF bailouts - one for 130bn euros this March and one for 100bn euros in May 2010 - to allow it to continue payments on its vast public debt and stay in the eurozone.

++++++++++++++++++++++++++++++

It was only 2 months ago the Troika went to Greece and confirmed that the Government was making every effort in it's austerity measures . The problem with Greece is successive Governments have never been able to tax the rich and make sure they pay. Greek Shipping is massive but the shipowners don't pay a penny tax and have said they will move elsewhere if pressed to pay tax. If they did, unemployment in Greece would be even worse. The rich are taking their money out of the Banks and buying expensive properties in London. Add to this a 2 yr Bond Market with a 225% yield and the E3 billion recent loan from the IMF was paid to the ECB and you can understand why it would be better for Greece to default , which they should have done in the beginning IMO








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Re: New EC Thread

Post  Panda on Wed 22 Aug - 18:29

Storming Barcelona’s banks



9 August 2012Der Spiegel Hamburg

Spanish mortgage holders struggling to meet repayments after the bursting of the housing bubble, protest outside a bank in Barcelona on June 6.

AFP

What is going on in Spain? In the second part of his journey in his parents’ country, Der Spiegel reporter Juan Moreno discovers ruined people’s anger against the banks.

Juan Moreno

Barcelona is full of tourists. The number of overnight stays increased last year. The cafes around Plaça Catalunya still serve overpriced coffee, while the police chase away beggars. To find the crisis, you have to walk a few blocks away.

At an intersection on Avinguda Diagonal, I encounter Pedro Panlador, a slight man who has positioned himself in front of a Bankia branch. He wants to storm the bank. A few like-minded people have joined him. They called the offices of newspapers so that they would report on their protest, but the papers declined. Banks are being stormed all over Spain at the moment.

Bankia, a Madrid bank created in 2010 by the merging of seven regional saving banks, evicted Panlador from his condominium because he could no longer make his loan payments. In the first three months of this year, the occupants of 200 apartments and houses were evicted every day throughout Spain.

Panlador, born in Colombia, has lived in Barcelona for 12 years. He currently has €242,000 in debt. He was a chauffeur before the crisis. Now he's been unemployed for over two years.

Pedestrians walk by, some encouraging him and some applauding. No one thinks it's wrong to be standing in front of a bank and calling the employees "criminals." Panlador says that he intends to remain "peaceful" and that he only wants to "speak with the director."

Bankia lost €3 billion in 2011, and now the bank needs more than €20 billion to avoid going into bankruptcy and bringing down the Spanish financial system with it.

The last CEO was Rodrigo Rato, who served as finance minister under former Prime Minister José María Aznar. Rato was also managing director of the International Monetary Fund (IMF) until 2007. It's possible that the IMF will soon have to rescue Spain. It sounds like a joke.

Panlador and his boys are ready to begin storming the bank. They're doing this for the first time. Panlador has already camped out in front of a Bankia branch before, but he feels that storming a bank makes a greater impression. He musters up courage and walks up to the entrance, where he sees that the branch has a security door and a doorbell.



To read the full article go to the Spiegel Online International website...




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Re: New EC Thread

Post  Panda on Thu 23 Aug - 7:44

'Last Chance' For Greece To Cut Its Spending


The Greek government has been urged to slash its public spending if it wants creditors to release a 31bn euro rescue package.


3:14am UK, Thursday 23 August 2012




Video: 'Last Chance' For Greece To Cut Its Spending




By Anthee Carassava, in Athens

The Greek government has a "last chance" to deliver spending cuts that could secure its future, a senior finance minister has said.

The country's public spending must be slashed before its creditors will release a 31bn euro (£27.3bn) rescue package to keep it afloat.

But while Luxembourg's Prime Minister Jean Claude Juncker said a Greek exit from the euro would be a "disaster", he warned: "The ball is in the Greek court.

"In fact, this is the last chance and Greek citizens have to know it."

Mr Juncker chairs high-powered meetings of the eurozone finance ministers, which gives him significant influence.

Greece has already failed to comply with the tough terms of two multi-billion euro bailouts that its European partners and the International Monetary Fund (IMF) have financed since 2010.
The Greek Prime Minister will pitch his plan to Angela Merkel
But Athens is now proposing something different: two years of added leeway to meet its deficit targets without a fresh injection of funds from sovereign creditors.

Greek Prime Minister Antonis Samaras outlined the plan to Mr Juncker during a two-hour meeting on Wednesday.

He will pitch the proposal to German Chancellor Angela Merkel on Friday, and French President Francois Hollande on Saturday.

Over the weekend, German officials, including finance minister Wolfgang Schaeuble, said Athens was left with limited options.

"Greece cannot be helped - we can't make yet another new bailout programme. There are limits," he said.

The Dutch and the Finns, fearful of throwing good money after bad, also appear concerned.

Since the eurozone crisis erupted, multiple rounds of budget cuts have left the tiny country with undercurrents of anger and growing threats of social upheaval.

It is now in its fifth year of acute recession, and unemployment has surged to over 23% while the private sector is reluctant to invest.

"The only thing that Greece's government, its people and common sense is asking for, is to return to growth," Mr Samaras said.

"Greece is asphyxiating."

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Re: New EC Thread

Post  Panda on Thu 23 Aug - 8:19

Hosts Hollande
By Mark Deen and Tony Czuczka - Aug 22, 2012 11:00 PM GMT+0100


Chancellor Angela Merkel hosts President Francois Hollande today as officials look for ways to stave off an immediate crisis after a report due next month from Greece’s international creditors on the health of its finances.

Options raised in Germany in recent days include front-loading aid payments to Greece to help it over liquidity hurdles; lowering the interest rate or extending maturities on loans; and pushing for a second debt writedown, this time focusing on bonds held by public institutions, notably the European Central Bank.





Enlarge image

German Chancellor Merkel and French President Hollande




Patrick Aventurier/Getty Images

Angela Merkel, Germany's chancellor and Francois Hollande, France's president.

Angela Merkel, Germany's chancellor and Francois Hollande, France's president. Photographer: Patrick Aventurier/Getty Images

With the leaders of Europe’s two biggest economies still at the confidence-building stage, Merkel and Hollande are seeking common ground on Greece and the wider euro-area debt crisis almost three years after its inception. While Merkel publicly stresses meeting targets, France sees them as too harsh given the state of the Greek economy, a French government official said on condition of anonymity because the talks are private. Merkel and Hollande will give statements at 7 p.m. in Berlin.

“On balance we still take the view that they’ll keep Greece ticking over,” David Owen, chief European financial economist at Jefferies International Ltd. in London, said by phone. “If that does require giving it more time, so be it.”

Samaras Tour


Greek Prime Minister Antonis Samaras is due to follow Hollande to Berlin tomorrow then travel on to Paris on Aug. 25, after he used an interview published yesterday in Germany’s best-selling Bild newspaper to call for more time to carry out policy changes to address his country’s debt woes.

Granting an extension “doesn’t necessarily mean more money,” he told Bild. “All we want is a little more air to breathe to get the economy going and increase government revenue.”

Greek 10-year borrowing costs dropped to the lowest in more than three months yesterday as Merkel signaled she was willing to discuss his request, leaving the door open to concessions.

“We won’t find solutions on Friday,” Merkel said in the Moldovan capital Chisinau, reiterating that leaders must await a report on Greek progress being drawn up by the so-called troika of the European Central Bank, the European Commission and theInternational Monetary Fund. “We will wait for the troika’s report and then we’ll take decisions,” she told reporters.

Powerful Women


Merkel’s comments, made on the same day she topped Forbes magazine’s list of the world’s most powerful women for the second year running, suggest a thaw in relations between Germany and Greece after Greek publications drew Nazi-era comparisons with its treatment during the debt crisis and Bild called for Greece to be expelled from the euro.

Her remarks also point to common ground with Hollande, who defeated Nicolas Sarkozy in May elections on a platform of curbing Merkel’s austerity-first drive to combat the crisis.

German officials said in recent days that concessions are possible for Greece so long as Samaras shows a willingness to meet the main targets set out in his country’s bailout program. French government spokeswoman Najat Vallaud-Belkacem said yesterday that “Greece must respect its engagements” while“at the same time, we must give it prospects for growth.”

‘Same Page’


“For once Hollande and Merkel are on the same page in swapping ideas how to keep Greece afloat even if they look at the problem differently,” Carsten Brzeski, an economist at ING Group in Brussels, said by phone. “The key to unlocking what Greece wants is Greece itself. Greece needs to help Merkel to help Greece, finally giving a credible signal that it means business with its problems.”

Greece’s governing coalition, grappling with a fifth year of recession and youth unemployment of about 50 percent, has said it favors an extension of its fiscal adjustment program by two years to 2016.

“Greece is turning the page, politically, economically and socially,” Samaras said yesterday at a joint press conference in Athens with Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of euro-area finance ministers.

Juncker said that any lengthening of the adjustment period would depend on the findings of the troika mission. Speaking earlier on RTL Television Luxembourg, he said that no decisions would be made before October.

“The truth is that Greece, given the experiences of the last two years mainly, is suffering a kind of credibility crisis,” he said in the Greek capital.

Merkel said that credibility can be gained by Germany, France and Greece holding to their commitments, helping Europe“to be taken seriously as a partner in the world.”

In the European Union, “it’s not just about economic questions, but about deeply political questions and thus also about the future of Europe as a whole,” Merkel said in Moldova.“That’s the spirit with which I approach talks with the French president as well.”

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Re: New EC Thread

Post  Panda on Thu 23 Aug - 9:14

Eurozone crisis: Greek hopes for leniency over austerity set back


Eurogroup leader Jean-Claude Juncker insists Greece must further cut spending and enforce meaningful structural reforms







  • Graeme Wearden
  • guardian.co.uk, Wednesday 22 August 2012 19.29 BST



Jean-Claude Juncker (centre) and the Greek prime minister Antonis Samaras (centre right) meet in Athens. Photograph: Louisa Gouliamaki/AFP/Getty Images

Greece's hopes of being granted more time to hit the targets imposed by its international creditors have received a setback when EU leaders refused to make a decision until next month.

German chancellor Angela Merkel and Luxembourg prime minister Jean-Claude Juncker both warned that Greece's future depended on the verdict of its troika of lenders, who will announce in September whether Athens is meeting the terms of its existing bailout programme.

Juncker warned that Greece must cut spending and enforce meaningful structural reforms in return for ongoing aid.

"The ball is in the Greek court – in fact this is the last chance and Greek citizens have to know this," said Juncker, after discussing the crisis with Greek prime minister Antonis Samaras in Athens.

Samaras had earlier ratcheted up the pressure on eurozone leaders by warning that the country was "bleeding".

He used an interview with Bild, the German tabloid, to plead for Greece to be given two more years to bring its borrowings under control.

"We have to crank up growth because that decreases the financial gaps. All we want is a bit of 'air to breathe' to get the economy running and to increase state income," Samaras told Bild.

Merkel, who will host Samaras in Berlin later this week, also refused to be bounced into a quick decision. "We won't find solutions on Friday," she said during a trip to Moldova.

Greek officials say that a two-year extension would not require a formal third bailout. The estimated €20bn cost could be funded by tapping an International Monetary Fund loan facility, more short-term debt, and by postponing debt repayments, they say.

Economists, though, warn that such a delay would not resolve Greece's woes.

"Greece remains trapped in a self-defeating cycle of ongoing austerity and economic depression that make it unlikely that it will be able to repay its debt unless there is major further debt relief from its international lenders," said Martin Koehring of the Economist Intelligence Unit.

The eurocrisis was also blamed for a slump in Japanese exports last month, pushing Japan into its biggest July trade deficit ever. That data, and fears that the eurocrisis could worsen, hit shares across Europe with the FTSE 100 falling 1.4%, or 83 points, to 5774.

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Re: New EC Thread

Post  Panda on Thu 23 Aug - 10:14

Germany sold Bonds yesterday with 0% yield , the first time for months that there was not a negative yield. Its economy is slowing down.

Schaeuble says enough is enough, no more bail-outs to Greece, Europe has gone to the limit.

It is thought Merkel will wait until the Brussels summit on 18th October before making any decision. ( another example

of the way the EU operates at a snails pace......why not call for an emergency meeting?)

Greece could be given an exit package , if the Country defaults what would be the risk of contagion to other Euro Countries., these are the topics to be discussed.

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Re: New EC Thread

Post  Panda on Thu 23 Aug - 13:00

19 June 2012 Last updated at 14:10
Eurozone crisis explained


$render("hypertabs","hypertab");

World leaders probably spend more time worrying about the eurozone crisis than anything else nowadays.

But as eurozone governments struggle to agree the best way out of the crisis, are they missing what caused it?
Continue reading the main story


  • The eurozone has agreed a new "fiscal compact"
  • Eurozone parliaments are in the process of ratifying a tough set of rules - insisted on by Germany - that will limit their governments' "structural" borrowing (that is, excluding any extra borrowing due to a recession) to just 0.5% of their economies' output each year. The pact, which will come into force once 12 out of the 17 eurozone member states have ratified it, will also limit their total borrowing to 3%. These rules are supposed to stop them accumulating too much debt, and make sure there won't be another financial crisis.
  • But didn't they already agree to this back in the '90s?
  • Hang on a minute. They agreed to exactly the same 3% borrowing limit back in 1997, when the euro was being set up. The "stability and growth pact" was insisted on by German finance minister Theo Waigel (centre of image). What happened?
  • So who kept to the rules?
  • Italy was the worst offender. It regularly broke the 3% annual borrowing limit. But actually Germany - along with Italy - was the first big country to break the 3% rule. After that, France followed. Of the big economies, only Spain kept its nose clean until the 2008 financial crisis; the Madrid government stayed within the 3% limit every year from the euro's creation in 1999 until 2007. Not only that - of the four, Spain's government also has the smallest debts relative to the size of its economy. Greece, by the way, is in a class of its own. It never stuck to the 3% target, but manipulated its borrowing statistics to look good, which allowed it to get into the euro in the first place. Its waywardness was uncovered two years ago.
  • 3/9 Italy
    Worst offender
  • 5/9 Germany
    First to break rules
  • 6/9 France
    Offender
  • 9/9 Spain
    Top of the Class
  • But the markets have other ideas
  • So surely Germany, France and Italy should be in trouble with all that reckless borrowing, while Spain should be reaping the rewards of its virtue? Well, no. Actually Germany is the "safe haven" - markets have been willing to lend to it at historically low interest rates since the crisis began. Spain on the other hand is seen by markets as almost as risky as Italy. So what gives?
  • So what really caused the crisis?
  • There was a big build-up of debts in Spain and Italy before 2008, but it had nothing to do with governments. Instead it was the private sector - companies and mortgage borrowers - who were taking out loans. Interest rates had fallen to unprecedented lows in southern European countries when they joined the euro. And that encouraged a debt-fuelled boom.
  • Good news for Germany...
  • All that debt helped finance more and more imports by Spain, Italy and even France. Meanwhile, Germany became an export power-house after the eurozone was set up in 1999, selling far more to the rest of the world (including southern Europeans) than it was buying as imports. That meant Germany was earning a lot of surplus cash on its exports. And guess what - most of that cash ended up being lent to southern Europe.
  • ...bad news for southern Europe
  • But debts are only part of the problem in Italy and Spain. During the boom years, wages rose and rose in the south (and in France). But German unions agreed to hold their wages steady. So Italian and Spanish workers now face a huge competitive price disadvantage. Indeed, this loss of competitiveness is the main reason why southern Europeans have been finding it so much harder to export than Germany.
  • ...and a nasty dilemma
  • So to recap, government borrowing - which has ballooned since the 2008 global financial crisis - had very little to do with creating the current eurozone crisis in the first place, especially in Spain (Greece's government is the big exception here). So even if governments don't break the borrowing rules this time, that won't necessarily stop a similar crisis from happening all over again.



    Spain and Italy are now facing nasty recessions, because no-one wants to spend. Companies and mortgage borrowers are too busy repaying their debts to spend more. Exports are uncompetitive. And now governments - whose borrowing has exploded since the 2008 financial crisis savaged their economies - have agreed to drastically cut their spending back as well. But...
  • Cut spending...
  • ...and you are pretty sure to deepen the recession. That probably means even more unemployment (already over 20% in Spain), which may push wages down to more competitive levels - though history suggests this is very hard to do. Even so, lower wages will just make people's debts even harder to repay, meaning they are likely to cut their own spending even more, or stop repaying their debts. And lower wages may not even lead to a quick rise in exports, if all of your European export markets are in recession too. In any case, you can probably expect more strikes and protests, and more nervousness in financial markets about whether you really will stay in the euro.
  • Don't cut spending...
  • ...and you risk a financial collapse. The amount you borrow each year has exploded since 2008 due to economic stagnation and high unemployment. But your economy looks to be chronically uncompetitive within the euro. So markets are liable to lose confidence in you - they may fear your economy is simply too weak to support your ballooning debtload. Meanwhile, other European governments may not have enough money to bail you out, and the European Central Bank says its mandate doesn't allow it to. And if they won't lend to you, why would anyone else?




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Re: New EC Thread

Post  Panda on Thu 23 Aug - 18:39

Poll prayer: Europe must vote



23 August 2012De Morgen Brussels




Mayk

An essential corollary of monetary and fiscal union, the political union discussed by European leaders and the Constitution that goes with it, cannot be legitimate unless it can be achieved democratically. To achieve this, it must be put to pan-European consultation, according to a Flemish writer.

Paul Huybrechts

Europe is struggling with three massive problems that we can summarise as liquidity, solvency and legitimacy. Liquidity concerns the manner in which we keep Greece, Spain, Italy, Portugal and Ireland afloat. The challenge is to avert a situation in which the governments of those countries wake up one morning unable to fulfil their financial obligations.

That was also the message of ECB Chairman Mario Draghi during his press conference earlier this month, in which he explicitly stated that the ECB has the necessary firepower and the will to use it. But if the truth be said, creating extra hundreds of billions of euros to temporarily save countries from bankruptcy was never the main stumbling block.

The complication is that the problem countries have become hopeless debtors to which no-one is prepared to lend money under acceptable conditions. That lost solvency is the second problem. Fact is that some €2,500 billion of excess debt has to be removed from the euro system. Until we find a solution, our financial sector is virtually bankrupt. German banks still have claims on southern Europe to the tune of €500 billion! French banks are even more exposed. And the claims of those banks are in part also the claims of the individuals who have put their savings into those banks.

Returning confidence


However the situation develops, the debt crisis will impose much hardship on European citizens in the years ahead. Firstly through the effect of balancing measures, as there is no point in pursuing debt reduction if one allows countries to continue to run a deficit. Add to this the pain resulting from the gradual lowering of the current excessive debt.

This arduous process would obviously be made easier by sustained economic growth, backed by some inflation, but growth requires confidence. Confidence in the future, as we enjoyed during most of the years following World War II. Restoring that confidence and creating willingness among citizens to work significantly harder for less income is only possible with a high level of political legitimacy. Our politicians require a democratic mandate, subject to renewal every five years.

They must receive that mandate from and for the entire eurozone. In other words, the European Union, or at least the eurozone, must become a political union. That union will then have the final say on all budgets of the lower governments. Within that strict framework, countries and regions would still have the freedom to levy taxes or increase payments. Indeed, no less than a true state reform is being called for!

"Post-democratic bureaucracy”


The German constitution, however, explicitly prohibits the transfer of such powers. Various German politicians have recently launched a call for a referendum, albeit with various degrees of enthusiasm. By doing so, they are backing the ideas expressed by the 83-year old philosopher Jürgen Habermas, whose booklet La Constitution de l'Europe (Gallimard) is now also available in French bookstores.

A constitution, in the interpretation of Habermas, stands both for construction and charter. According to Habermas, we must avoid seeing the hopeful European project being changed into its exact reverse, namely a “post-democratic bureaucracy”, which is judged oppressive and hostile by the people of Europe.

We must once again make Europe a positive project. Habermas regards Europe as an indispensable component of a world that we as ethically aware citizens must continue to improve. If we fail to save Europe, what then remains of the other cosmopolitan ambitions such as universal human rights?

A referendum in Germany appears to be on the cards. It could, according to Der Spiegel, take three forms: a vote on the changing of the German constitution, a vote on the latest European decisions (fiscal compact and ESM, the European Stability Mechanism) or a referendum throughout Europe on far-reaching Treaty amendments.

In short, a referendum on the new democratic constitution of our continent. Who here is prepared to lead the way? Let us start with a petition.

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Re: New EC Thread

Post  Panda on Fri 24 Aug - 6:58

Berlin restores realpolitik



23 August 2012Il Sole-24 Ore Milan




Shared 42 times in 10 languages

Dieter Hanitzsch

In the wake of a jittery summer, the eurozone can look forward to a more tranquil autumn, with northern European countries, and in particular Germany, adopting a more pragmatic approach. The richer EU states have finally come to the realisation that the end of the euro would have catastrophic consequences both for the EU and the world at large. However, that does not mean they are ready to cut their partners some slack, or that the crisis will be resolved anytime soon.

Adriana Cerretelli

There is no knowing how long we will have to wait for the calm after the storm, but in the wake of a searing summer which finally proved to be less of an ordeal than expected, we can look forward to an autumn that will continue to be hot for the euro, but one that promises to be more manageable and better managed.

After two years of agitation, European leaders have regained their composure and are ready to adopt a rational and more balanced approach to the crisis.

Having said that, extremism, dogmatism and populism are unlikely to disappear while the economic recession and the high rates of unemployment which sustain such viewpoints continue to prevail.

In Germany, the Bundesbank and part of the Bundestag are still aggressively holding out for an absolute orthodoxy, a position that that they are willing to defend against against all comers including the European Central Bank (ECB). However, debate in the country will likely be more nuanced now that Angela Merkel appears to be convinced that she will have a better chance of obtaining another term as chancellor if the euro is still here when she is up for re-election in September 2013 – not surprising when you consider the massive shock and highly unpredictable consequences for Europe and the world that could result from the collapse of the euro

Pragmatism rules


And the German chancellor is not the only convert to the cause of pragmatism. Even Finnish Prime Minister Jyrki Katainen, who previously demanded additional guarantees from Greece before releasing financial aid, has now taken to talking about “deeper integration and not the opposite”, which will be needed to reinforce the euro.

In the discipline oriented Netherlands, the socialist leader and probable winner of elections slated for September 12, Emile Roemer, who is outspoken in his criticism of austerity, has pledged that he will not reduce the country’s budget deficit to less than 3 per cent of GDP before 2015, which will effectively postpone the country’s commitment to do just that by two years.

Does this mean that the club of countries in favour of austerity, budget cuts and recession are about to back away from their position? No. Neither Berlin, nor its northern allies, nor Mario Draghi’s ECB intend to reduce the pressure that they believe to be necessary for the restoration of the stability, cohesion and credibility of the eurozone.

Greek charm tour


Nonetheless, they all appear to be ready to acknowledge the reality of the unfair cost of the crisis for certain countries like Italy, which has yet to weigh on Germany, the Netherlands and France.

Taking advantage of the shift towards a more realistic and constructive climate, on August 22 Eurogroup President Jean-Claude Juncker travelled to Athens to meet with Greek Prime Minister Antonis Samaras, who will be visiting Berlin on August 24, before going on to Paris on August 25.

In the meantime, François Hollande and Angela Merkel are to meet for a tête-à-tête in Berlin on August 23. Once it has been established, as appears to be the case, that there will be no question of a Grexit, which would undermine the integrity of the single currency, sooner or later a solution will be found – in the context of the one that was agreed for Spain, and at a time when tensions over the fate of Italy appear to have abated.

On guard


Having said that, the eurozone will have to remain on guard. The situation of the single currency is far from healthy. On the contrary, until now favourable circumstances, and in particular political circumstances, have allowed France to escape contagion from the Mediterranean. However, the country suffers from the same symptoms as its southern neighbours, and it urgently needs to embark on a credible course of therapy before the markets decide to call its bluff.

For the moment, we have seen little of François Hollande. However, his weakness and the weakness of his country could disqualify him from playing a more dominant role in any argument over the surrender of budgetary sovereignty – or fiscal union as it is termed in Brussels – which Germany has made a condition for its continued solidarity with the rest of the eurozone, which will be necessary for the survival of the single currency.

Be that as it may, the return to a more reasonable approach virtually everywhere in Europe should allow for cautious optimism. But not to the extent that we will no longer have to worry about a number of potential hazards, chief among them the French Achilles’ heel, which may still have a major impact on the destiny of the euro.

On the web



  • Original article at Il Sole-24 Ore it
  • The To Vima article el
  • "Des sacrifices pour rien" (Sacrifices for nothing) an article in Ta Nea, published in Courrier international fr


View from Athens
Samaras on a tightrope


German Chancellor Angela Merkel’s statement to the effect that the August 24 discussions with Greek Prime Minister Antonis Samaras will not result in any decision before the troika delivers its report on Greek reforms in September, plus the remarks made by Dutch Minister of Finance Jan Kees de Jager that he opposes Samaras's request for more time to implement reforms, have put paid to any optimism. “Any hope of a result during Samaras’s visit to Berlin has been nipped in the bud,” writes To Vima. According to the Athens daily in its report on “The three-day battle” of Samaras’s diplomatic marathon –


The position of Berlin and other aligned governments is clear: the Germans have decided to up the pressure for two reasons. First and foremost, they believe that greater pressure will force the Greek government to honour its commitments, and that any gesture of understanding will be an encouragement for Athens to abandon its efforts – it is on this basis that an aggressive approach is to be preferred. The second more profound reason has to do with Greece’s waning credibility, which has been damaged by so many unkept promises in recent years. For the Germans, Greece has now had a succession of four governments that have failed to meet their obligations.

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Re: New EC Thread

Post  Panda on Fri 24 Aug - 7:28

23 August 2012 Last updated at 20:12
Greece bailout: Athens urged to stick with reforms
Greece's long recession has led to soaring unemployment and poverty levels
Continue reading the main story

Eurozone crisis



  • Crisis in graphics
  • How eurozone crisis affects you
  • What really caused the euro crisis?
  • Q&A: Bonds and eurobonds

The leaders of Germany and France have told Athens it should not expect leeway on its bailout agreement unless it sticks to tough reform targets.

German Chancellor Angela Merkel and French President Francois Hollande have met to discuss whether Greece should have more time to make spending cuts.

The pair are both meeting Greek Prime Minister Antonis Samaras this week.

He wants more time for Greece to complete reforms that are a condition of continuing to receive bailout loans.

The "troika" of donor bodies monitoring the bailout - the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission - are due in Athens next month.

Greece's continued access to the bailout packages depends on a favourable report from the trio.

"For me, it's important that we all stand by our commitments, and in particular await the [publication of] the troika report, to then see what the result is," Mrs Merkel said.

"But I will encourage Greece to follow the path of reform, which demands a lot of the Greek people."

And Mr Hollande said he hoped Greece would remain within the eurozone, but added that "of course Greece must make the necessary efforts for this to happen".

Continue reading the main story
“Start Quote



The high priests of the eurozone in Brussels are determined that Greece stay in the eurozone”
End Quote
Gavin Hewitt Europe editor




  • Read more from Gavin

On Wednesday, eurozone chief Jean-Claude Juncker kept the door open for a change to the bailout terms after meeting Mr Samaras.

The economy of heavily-indebted Greece remains stuck in recession.

The country is currently trying to finalise a package of 11.5bn euros (£9.1bn: $14.4bn) of spending cuts over the next two years.

It is also being asked to put in place economic and structural reforms, including changes to the labour market and a renewed privatisation drive.

The measures are needed to qualify for the next 33.5bn-euro instalment of its second 130bn-euro bailout.

Greece needs the funds to make repayments on its debt burden. A default could result in the country leaving the euro.
'Tremendous efforts'
Mr Samaras is seeking an extension of up to two years for the painful steps, in order to provide Greece with the growth needed to improve its public finances.

In an interview published on Wednesday, he told Germany's biggest daily, Bild, that his country needed "a little breathing space" in order to kick-start growth and reduce its deficit.

Continue reading the main story
Greece discussions timetable



  • 22 August: Greek PM Antonis Samaras meets Eurogroup chief Jean-Claude Juncker
  • 23 August: Angela Merkel and Francois Hollande meet
  • 24 August: Chancellor Merkel and PM Samaras meet
  • 25 August: President Hollande and PM Samaras meet
  • Early September: Troika staff go back to Greece
  • 14-15 September: Gathering of European finance ministers in Cyprus
  • Troika's review of progress to be published by the end of September
  • 8-9 October: Finance ministers attend two days of meetings in Luxembourg

After meeting Mr Samaras on Wednesday, Eurogroup head Jean-Claude Juncker said a decision on an extension would depend on the troika's report.

"We have to discuss the length of the period and other dimensions," Mr Juncker told a news conference, while sitting alongside Mr Samaras.

He said Greece was facing its "last chance" to make the necessary changes, but praised the "tremendous efforts" it has made so far to cut its deficit. He also stressed he was "totally opposed" to Greece leaving the euro.

Mr Samaras called the discussions "fruitful".

At least publicly, many EU leaders remain resolutely opposed to any moves to change the terms of Greece's bailout.

But Mr Juncker's remarks suggest there is room for manoeuvre and that an extension has not been ruled out, says the BBC's Stephen Evans in Berlin.

Mrs Merkel has said that she and Mr Samaras will not make any decisions on the issue in their talks on Friday. Mr Samaras goes on to meet Mr Hollande on Saturday.

On Wednesday, Mr Hollande also discussed Greece with British Prime Minister David Cameron in a telephone call.



=====================


The Finance Ministers are not to meet until October????? No wonder the Financial World is fed up with Europe and

sees a break-up of the Euro.!!!!

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Re: New EC Thread

Post  Panda on Fri 24 Aug - 10:19

24 August 2012 Last updated at 07:41






Greek PM Antonis Samaras to meet Angela Merkel


Antonis Samaras travels to Berlin on Friday and Paris on Saturday


Greek Prime Minister Antonis Samaras will meet German Chancellor Angela Merkel later as he seeks more time for Greece to make spending cuts.

He will then travel to France on Saturday for talks with President Francois Hollande.

Mrs Merkel and Mr Hollande met on Thursday to discuss Greece and urged Athens to stick with the tough reforms.

The reform targets are a condition of Greece continuing to receive bailout loans.

The "troika" of donor bodies monitoring the bailout - the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission - are due in Athens next month.

Greece's continued access to the bailout packages depends on a favourable report from the trio.
'Breathing space'
The country is currently trying to finalise a package of 11.5bn euros ($14.4bn; £9.1bn) of spending cuts over the next two years.

It is also being asked to put in place economic and structural reforms, including changes to the labour market and a renewed privatisation drive.

Continue reading the main story
Greece discussions timetable



  • 22 August: Greek PM Antonis Samaras met Eurogroup chief Jean-Claude Juncker
  • 23 August: Angela Merkel and Francois Hollande met to discuss Greece
  • 24 August: Chancellor Merkel and PM Samaras meet
  • 25 August: President Hollande and PM Samaras meet
  • Early September: Troika staff go back to Greece
  • 14-15 September: Gathering of European finance ministers in Cyprus
  • Troika's review of progress to be published by the end of September
  • 8-9 October: Finance ministers attend two days of meetings in Luxembourg

The measures are needed to qualify for the next 33.5bn-euro instalment of its second 130bn-euro bailout.

Greece needs the funds to make repayments on its debt burden. A default could result in the country leaving the euro.

In an interview published on Wednesday, Mr Samaras told Germany's biggest daily newspaper, Bild, that his country needed "a little breathing space" in order to kick-start growth and reduce its deficit.

He is seeking an extension of up to two years for the painful steps, in order to provide Greece with the growth needed to improve its public finances.

Mrs Merkel has previously said that she and Mr Samaras will not make any decisions on the issue in their talks on Friday.
'Necessary efforts'
Although eurozone chief Jean-Claude Juncker has kept the door open for a change to the bailout terms, Germany and France have warned Athens that it should not expect any leeway unless it sticks to the reform targets.

On Thursday, Mrs Merkel said: "For me, it's important that we all stand by our commitments, and in particular await the [publication of] the troika report, to then see what the result is.

"But I will encourage Greece to follow the path of reform, which demands a lot of the Greek people."

Volker Kauder, the leader of Mrs Merkel's conservative parliamentary group, told German television on Friday that neither the terms nor the content of Greece's rescue deal could be renegotiated and that a Greek exit would be no problem for the euro.

France's Mr Hollande has said he hopes Greece will remain within the eurozone, but added that "of course Greece must make the necessary efforts for this to happen".

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Re: New EC Thread

Post  Panda on Fri 24 Aug - 18:04

Germany
Literary offensive against the “Merkel System”



24 August 2012
Der Spiegel






Controversy has flared over the launch of Die Patin (The Godmother), a book about Angela Merkel’s rise to power by journalist and literature professor Gertrud Höhler, which went on sale on August 23, backed by a major advertising campaign. In its report on the literary offensive penned by the former advisor to Chancellor Helmut Kohl, Der Spiegel takes the view that the author has given free rein to her personal hatred of the German Chancellor –


In this exercise in score settling, which features a fervent critique of the “M System", the 71-year-old, who is reputed to be the most prominent and ardent critic of the Chancellor, has attracted the attention of dozens of journalists.

The book claims that Germany is sliding towards a dictatorship while Merkel is discreetly establishing an autocratic regime and orchestrating the “decline of democracy”. Gertrud Höhler’s main thesis is that the Chancellor, who was formed by her experience of GDR socialism, is intent on sidelining Christian-democratic values.

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Re: New EC Thread

Post  Panda on Sat 25 Aug - 10:12

Greek PM Samaras to hold key Paris talks on bailout


Antonis Samaras is under pressure from the Greek public to win concessions from Europe
Continue reading the main story

Eurozone crisis



  • Crisis in graphics
  • How eurozone crisis affects you
  • What really caused the euro crisis?
  • Q&A: Bonds and eurobonds

Greek Prime Minister Antonis Samaras is expected to repeat his plea for more time to implement reforms when he meets French President Francois Hollande.

The talks in Paris come a day after Mr Samaras asked for his country to be given "breathing space" during talks with German Chancellor Angela Merkel.

Mrs Merkel said she wanted Athens to remain in the eurozone but expected it to stick to the tough bailout terms.

The French leader is now likely to echo that message, correspondents say.

Mrs Merkel and Mr Hollande met on Thursday to discuss Greece and urged Athens to stick with the tough reforms.

On Greece, the two leaders seem to be on the same page, the BBC's Mark Lowen in Athens reports.
Troika report
In Paris, Mr Samaras is expected to call for more time to reduce the deficit, given the worse-than-expected recession and months lost this year due to elections, our correspondent says.

Continue reading the main story
Greece discussions timetable



  • 22 August: Greek PM Antonis Samaras met Eurogroup chief Jean-Claude Juncker
  • 23 August: Angela Merkel and Francois Hollande met to discuss Greece
  • 24 August: Chancellor Merkel and PM Samaras meet
  • 25 August: President Hollande and PM Samaras meet
  • Early September: Troika staff go back to Greece
  • 14-15 September: Gathering of European finance ministers in Cyprus
  • Troika's review of progress to be published by the end of September
  • 8-9 October: Finance ministers attend two days of meetings in Luxembourg

He adds that the Greek government is under pressure to win a concession from Europe so as to placate this tired nation and lessen the likelihood of a destabilising period of social unrest.

After Friday's talks with Mrs Merkel in Berlin, Mr Samaras said: "Greece will stick to its commitments and fulfil its obligations. In fact, this is already happening.

"We're not asking for more money," he said, adding that Greece needed "time to breathe".

The International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission - the group of donor bodies known collectively as the "troika" - are examining whether Greece is making sufficient progress towards reforming its public finances.

Greece's continued access to the bailout packages depends on a favourable report from the trio, and an official report is due to be released next month.
Euro bailout
Greece is currently trying to finalise a package of 11.5bn euros ($14.4bn; £9.1bn) of spending cuts over the next two years.

It is also being asked to put in place economic and structural reforms, including changes to the labour market and a renewed privatisation drive.

The measures are needed to qualify for the next 33.5bn-euro instalment of its second 130bn-euro bailout.

Greece needs the funds to make repayments on its debt burden. A default could result in the country leaving the euro.

Mr Samaras is seeking an extension of up to two years for the necessary reforms, in order to provide Greece with the growth needed to improve its public finances.

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Re: New EC Thread

Post  Panda on Sat 25 Aug - 10:21

Opinion is divided on what will happen, on the one hand Merkel says she wants Greece to remain in the Euro but is adamant that no more money will be available and the Troika report can only suggest that Greece is on the right path but unless the austerity measures are lifted it will be unable to create revenue.....it's a catch 22 situation.

Germany too is starting to feel the pinch economically and France, Italy, Portugal, Ireland and most importantly Spain are caught in a worldwide recession and a low Euro which only benefits Germany's exports.


Last edited by Panda on Sat 25 Aug - 13:41; edited 1 time in total

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Re: New EC Thread

Post  Panda on Sat 25 Aug - 20:20





  • 25 August 2012 Last updated at 12:28
    Francois Hollande piles pressure on Greek PM Samaras
    Comments (410)



    Francois Hollande: "Greece must demonstrate once again that its actions are credible"

    Continue reading the main story

    Eurozone crisis


    French President Francois Hollande has urged Greece to prove it can pass reforms demanded by international creditors, after talks with Greek leader Antonis Samaras.

    Mr Samaras has been appealing for more time to introduce the reforms.

    But Mr Hollande said no further decision could be taken until European ministers consider a major report on Greece's finances, due in September.

    Donors including the EU insist Greece has to make major spending cuts.

    These are needed if Greece is to secure the next tranche of its bailout.

    The BBC's Mark Lowen in Athens says the Greek government is under pressure to win concessions from Europe to placate the tired nation and lessen the likelihood of a destabilising period of social unrest.

    Mr Samaras is seeking an extension of up to two years for the necessary reforms, in order to provide Greece with the growth needed to improve its public finances.

    In talks with German Chancellor Angela Merkel earlier this week, he was told that the decision would depend on a report from the so-called troika - the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission.

    Mr Hollande also said Europe needed to consider the report before it could make any further decisions on Greece.

    He said decisions on whether to grant Greece more time should be taken when European finance ministers meet in early October.

    Continue reading the main story
    Greece discussions timetable




    • 22 August: Greek PM Antonis Samaras met Eurogroup chief Jean-Claude Juncker
    • 23 August: Angela Merkel and Francois Hollande met to discuss Greece
    • 24 August: Chancellor Merkel and PM Samaras meet
    • 25 August: President Hollande and PM Samaras meet
    • Early September: Troika staff go back to Greece
    • 14-15 September: Gathering of European finance ministers in Cyprus
    • Troika's review of progress to be published by the end of September
    • 8-9 October: Finance ministers attend two days of meetings in Luxembourg

    "We've been facing this question for two and a half years, there's no time to lose, there are commitments to reaffirm on both sides, decisions to take, and the sooner the better," he said.

    Greece's continued access to the bailout packages depends on a favourable report from the troika.

    Athens is trying to finalise a package of 11.5bn euros ($14.4bn; £9.1bn) of spending cuts over the next two years.

    It is also being asked to put in place economic and structural reforms, including changes to the labour market and a renewed privatisation drive.

    The measures are needed to qualify for the next 33.5bn-euro instalment of its second 130bn-euro bailout.

    Greece needs the funds to make repayments on its debt burden. A default could result in the country leaving the euro

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    Re: New EC Thread

    Post  Panda on Sun 26 Aug - 9:49

    Europeans — too different to get along



    22 August 2012Dagens Nyheter Stockholm



    Beppe Giacobbe

    Above and beyond the diverging economic performance of EU countries, cultural differences between the people of Europe constitute the main obstacle to the creation of a homogeneous European society. Given the extent of these divisions, it is not surprising that the European project has run into difficulty.

    Richard Swartz

    Many leaders have tried to unite Europe – Attila, Charlemagne, Napoleon, and Hitler among others – and all of them have come a cropper in the process. Of course, force of arms has not figured large in the European Union’s ongoing drive to achieve this goal, which is now characterised by goodwill, common laws and institutions, and other means that are more appropriate for a continent where pacifism has been the order of the day since the demise of Hitler. And the euro is without a doubt the most daring of the EU initiatives in favour of a united Europe.

    The origins of the modern project are political, even if from its inception the emphasis has been on the economy. The European Coal and Steel Community was devised to prevent future conflicts by ensuring that industries that were necessary to war would no longer be developed within the framework of the nation state. National economies were to participate in a large single market that transcended borders, which was to be the starting point for their progressive convergence.

    The project was not only based on the notion of the pre-eminence of the economy but also on the idea that economic rationality would facilitate the emergence of common views in other domains, which would lead to the creation of an entity resembling a United States of Europe.

    The world’s most complex region


    There is no denying that the economy played a decisive role in protecting Europe from the possibility of war, and, in this sense, post-1945 European cooperation has been a remarkable success. However, economic cooperation is no longer sufficient for the entity we need to build today; the euro crisis has demonstrated that such cooperation has its limits, particularly when we take into account the reality of cultural and historical differences on a continent that is the world’s most complex region.

    More than 300 million people are expected to form a union in a relatively small area where we do not need to travel very far before we are unable to understand what the locals are saying, where we encounter populations who dine on unfamiliar foods and beverages and sing other songs and revere other heroes, where behaviour is regulated by a variety of relationships to time and a diversity of dreams and demons.

    These underlying differences are hardly ever, or only rarely, mentioned. They are masked by discourse which assumes that Europeans should be natural allies in their approach to the rest of the world, when the fact of the matter is that Swedes are likely to share more common ground with Canadians and New Zealanders than they do with Greeks and Ukrainians. It is also probable that cultural differences – and not political and economic ones – have been the main cause of the many violent conflicts that have marked the history of Europe, chief among them the two most terrible wars that humanity has ever known, which to all extents and purposes were European civil wars.

    Nonetheless, all of this appears to be forgotten or suppressed to the point where the workaday European discourse – the flag, Beethoven, and Eurovision etc – has hardly anything to do with the our current European reality: rather it is pure propaganda for a project that wilfully ignores cultural and psychological differences that are much more pronounced than our material and financial ones.

    The Europe we would rather ignore


    Only with the onset of the European crisis did we open our eyes to the divergence between this discourse and the reality it purports to describe. Much to our amazement, the crisis suddenly brought to light people who have never paid income tax, who take the view that others should pay their debts in their stead, and who accuse those who offer them a helping hand of despotism. We were completely unaware of such Europeans and we would rather believe they do not exist. However, the reality is that they do, and they have been there for quite a while.

    A lot can change in a year. Who, apart from a few specialists, could have told you 12 months ago what clientelism meant?

    I have a Croatian friend who became a minister at the beginning of this year. She is not a high-profile member of the cabinet, but nonetheless she is a government minister. When I asked her how many permanent civil servants were employed by her ministry, she told me there were 500, which seemed like a lot for a country like Croatia.

    And when I asked how many colleagues she actually needed to develop the policy she intends to implement, I was dumbstruck by her response: only 30. "And are you planning to lay off the 470 others?" I wondered. The minister looked at me with an empathetic and mocking air she reserves for gullible creatures like myself – though I should point out that I am not blond – who hail from the lands to the north of the Alps. No. She had no desire to put her life at risk.

    She added that she also has a son who goes to school on foot, and accidents do happen. When my friend has completed her term in office, close to 500 civil servants will continue to turn up at offices to do jobs that do not exist. And the cheques that they cash at the end of the month will remain the only aspect of their employment that exists in the real world.

    This is the reality of our Europe. And make no mistake, the North is as strange as the South, and the East is as odd as the West, and vice versa. It is simply a matter of point of view.

    Europe is like an extremely fragile honeycomb, composed of cultural, historical and mental idiosyncrasies in which no two Europeans are really alike. And yet we persist in viewing this Europe, not as a honeycomb, but as a pot of honey that is ready to eat.








    Last edited by Panda on Sun 26 Aug - 13:53; edited 1 time in total

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    Re: New EC Thread

    Post  Panda on Sun 26 Aug - 13:52

    Greece is back on a knife edge. In a timely and far-reaching series, the FT looks at the potential consequences of it leaving the eurozone











    The impact of a eurozone member leaving the bloc would certainly hit Britain’s economy and affect banks largely through indirect exposure to Europe





    Martin Wolf: A permanent precedent


    If Greece goes: An exit is likely to shatter faith in the eurozone’s integrity for ever, leaving the bloc with a choice between stronger union or disintegration. By Martin Wolf
    ,
    Businesses brace for Greek exit


    Some Asian and US groups say they will feel little impact from Greece leaving the euro while their European counterparts prepare for the worst




    Lawyers weigh legal implications


    As contingency planning intensifies, advisers warn companies should consider measures such as defining ‘euro’ in contracts as the currency Germany uses




    Multinationals mitigate euro risk


    Although most companies say the chances of a euro collapse are slim, many have been sweeping the single currency out of their accounts daily
    If Greece goes ...: Little country threatens big impact


    While some see a Greek euro exit as a chance to heal a wound and push on with integration, as many fear Greece could be just the first domino to fall


    Portugal steels itself for Greek exit


    Investors see Lisbon as next in line if Greece exits the euro bloc, despite its efforts to emphasise ‘political stability’ on reforms



    Greek fire could singe rest of euro


    Concern for many in the market is less the immediate impact and more the example it would set for other struggling eurozone countries



    Greek bank-run threat splits analysts


    Amid fears of a rush to withdraw money, analysts are split over just how serious the threat would be of bank runs in economies such as Italy and Spain
    Arvind Subramanian: Greek exit may be the envy of the eurozone


    The historical record – from Korea, Indonesia and Russia – shows clearly that there is life after financial crises, writes Arvind Subramanian




    Related content and features




    Eurozone: If Greece goes ...


    With an exit looking possible, policymakers and investors are shifting focus to the consequences, write Chris Giles, Peter Spiegel and Kerin Hope

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    Re: New EC Thread

    Post  Panda on Mon 27 Aug - 16:17

    EconomyEuro

    Greece
    Berlin and Paris give Athens a last chance



    27 August 2012
    PresseuropTo Vima, To Ethnos

    Shared 16 times in 10 languages

    • Greek Prime Minister Antonis Samaras will have to wait until late September to find out if his diplomatic offensive to obtain a two year respite (from 2014 to 2016) for the return to a balanced budget has borne fruit. Neither German Chancellor Angela Merkel nor French President François Hollande, with whom Samaras met on August 24-25, made any commitment on the matter. Both said they wanted to wait for the publication of the progress report on structural reforms in Greece by the troika of creditors – the European Union, the International Monetary Fund and the European Central Bank.



    "The precise outcome of the Merkel-Samaras meeting will become concretely clear in the coming weeks," says commentator Polimilis Sifis in Greek daily To Vima


    it seems, however, that the Cold War climate which has been building lately in the German capital – and not only there, in fact – has died down. Samaras and his coalition partners seem to have a last chance to put the country on the path of exiting the crisis by ensuring the postponement of painful but necessary, fiscal adjustments while regaining their lost credibility.
    Writing in another daily, To Ethnos, Giorgios Delastik is much less optimistic and notes that –


    in German public opinion, the feeling towards Greece remaining in the eurozone is more and more hostile. A total of 61 per cent of those polled by German television ZDF said they hoped that Greece would be forced to leave the euro and only 31 per cent were favorable to its remaining in the eurozone.

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    Re: New EC Thread

    Post  Panda on Mon 27 Aug - 16:30

    Angela Merkel reigning in Greek exit talks in the German Parliament and suggests everyone should weigh their words carefully.

    TROIKA may delay publication of its findings on how much Greece is doing to adhere to the austerity programme until

    October . Samares has said Greece is to sell some of it's assets .

    German business confidence has fallen for the 4th consecutive month , exports to weaken . Many people in Germany want to end the Greek crisis.

    Analysts are saying yet more dithering from the EU is making the situation worse and many investors are now selling the Euro and investing in the Swedish and Swiss currencies.

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    Re: New EC Thread

    Post  Panda on Mon 27 Aug - 16:52

    Dutch Premier Defends Austerity, Says No to More Greek Aid


    By Fred Pals - Aug 27, 2012 11:04 AM GMT+0100





    Dutch caretaker Prime Minister Mark Rutte, seeking a return to power after Sept. 12 elections, said he would block a third aid package for Greece and defended austerity as the only way out of Europe’s debt crisis.

    “We’ve helped twice and now it’s up to the Greeks to show that they want to stay within the euro,” Liberal leader Rutte, 45, said in a debate between the four main party leaders in Amsterdam last night broadcast on RTL television. “The Netherlands has been severely hit by the debt crisis and the solution is to lower taxes, get government finances in order and make room for investment.”

    The Socialists, led by Emile Roemer, have a three-seat lead over Rutte’s party, known in Dutch as the VVD, with enough support for 35 of the 150 seats in parliament, according to a Maurice de Hond poll published yesterday. The survey gave both the Freedom Party and the Labor Party 18 seats. In an Ipsos Synovate poll, published Aug. 24, Rutte’s party led with 34 seats, four more than Roemer’s.

    It means a third of Dutch voters back the Socialists, who oppose more spending cuts and refuse to hand over more sovereignty to Europe, or the Freedom Party, which seeks an exit from the European Union and the euro. That will make it tough for Rutte, an ally of German Chancellor Angela Merkel in her efforts to stem the crisis, to find support from perhaps three or four parties for a majority in parliament and keep cutting the deficit.

    ‘Too Drastic’


    “The budget cuts are too drastic and over too short a period of time,” said Roemer, who like Rutte was taking part for the first time last night in a pre-election debate. “People who have less are paying the bill,” the Socialist leader, who turned 50 on Aug. 24, said in a direct response to Rutte.

    An assessment of each party’s platform by the independent Dutch planning agency CPB found that Roemer’s program for the next four years would give citizens the most purchasing power while creating half a million fewer jobs than the VVD, Coen Teulings, the CPB’s director, said today at a press conference. The Liberals would produce the lowest budget deficit at the end of a four-year government, at 1.1 percent of gross domestic product by 2017, while under Wilders the economy would grow the most, with 0.7 percent in 2017, according to the CPB analysis.

    Elections Triggered


    Elections were called after Rutte’s Cabinet resigned on April 23, when Freedom Party leader Geert Wilders, who’d been backing a minority government of Liberals and Christian Democrats, withdrew support for spending cuts and tax increases.

    Rutte’s administration and three opposition parties struck a deal three days later on an austerity package to make sure that the budget deficit next year stays within 3 percent of gross domestic product. The 2013 deficit is now forecast at 2.7 percent, the government’s planning agency said Aug. 22.

    The five parties that signed the austerity deal don’t have enough backing for a majority, according to polls.

    Wilders, 48, has made Europe the key issue of his election program under the slogan “Their Brussels, our Netherlands.”He’s demanding a return to the guilder, after a report commissioned by the party said in March that the Netherlandswould eventually profit from abandoning the euro. “We need to become boss in our own country again,” he said in the debate.

    More Time


    Diederik Samsom, 41, a former Greenpeace activist who took over leadership of the Labor Party from Job Cohen in March, also wants more time for the Netherlands to meet the budget-deficit limits from Brussels. “We have two principles: share the burden and make progress possible,” Samsom said.

    Rutte has stood by Merkel as she staves off calls to provide more help to cash-strapped southern European countries. A new Dutch government less willing to pursue austerity or readier to see the euro break up might make the chancellor’s task more complex at a time when she is striving to find common ground with French Socialist President Francois Hollande.

    Merkel warned her German coalition partners advocating a Greek exit from the euro to “weigh their words” yesterday, signaling a renewed determination to keep the single currency intact. She told ARD television that the fight against the debt crisis has reached a “decisive phase.”

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    Re: New EC Thread

    Post  Sponsored content Today at 17:50


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