Re: New EC Thread

[Lioned]

I doubt that any member states would be allowed to go bust, that would signal the start of a collapse of all those luvvly freebies for Officials and their partners and much egg wiping would also have to be done.

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I doubt that any member states would be allowed to go bust, that would signal the start of a collapse of all those luvvly freebies for Officials and their partners and much egg wiping would also have to be done.

I don't know Lioned, Analysts and Investment Managers think there is no way Greece can sustain the austerity for 8 years, Portugal, Spain and Italy too
are suspect. It would be the EURO which would collapse, not the EU. Apparently without a Central Bank and a Eurobond it cannot survive . Of course
the World world suffer for a while , but China defaulted years ago , as did Argentina and they are doing well now.

Maybe we need an age of austerity to improve the way we live.

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Life at 27











Eurozone crisis

The great European fire sale





21 February 2012

The Independent
London

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Grosse
Kinigat (Austria), Irish forest, Caprera Beach (Italy), the royal
hunting lodge at La Muette (France), Greek sun, MoD helicopters (UK).









All over Europe, nations are looking for a quick way to
raise cash. All of them seem to have the same idea - to sell off state
assets.



Tom Bawden | Charlie Cooper



What do Rome's 2020 Olympic bid, Portugal's Shrove Tuesday
carnival, Greece's sunlight, Ireland's National Stud, Spain's national
lottery and Britain's national air traffic control service have in
common? Answer: they are all being either sold or cancelled by European
governments desperate to whip their public finances back into shape
after a decade of living beyond their means.

Such measures would once have suggested incomprehensible panic. Now
everyone's at it. It would have been more surprising if Mario Monti
hadn't called off an Olympic bid that could have swallowed up €9.5bn
(£8bn) that his near-bankrupt nation didn't have.

But it's not just radical belt-tightening that we're seeing. A
remarkable number of nations are also doing the equivalent of selling
the family silver, in a Europe-wide fire sale of state assets with no
obvious precedent.

Greece is probably the Continent's biggest auctioneer, with an
estimated €50bn of assets up for sale (see far right). But others have
had the same idea. Ireland, for example, is considering the sale of
billions of euros of assets, from Dublin's historic port to the Irish
National Stud horsebreeding operation.

Spain is looking to raise cash by offloading, among other things, two
major airports and a large chunk of its most famous lottery ("El
Gordo", or "The Fat One").

Britain is hoping to convert the Government's 49 per cent stake in
National Air Traffic Services into ready cash, along with the BBC's
"doughnut" Television Centre, in West London, and the iconic Admiralty
Arch. The latter, on the edge of Trafalgar Square, is expected to fetch
£75m and be turned into a hotel. The Ministry of Defence and the Foreign
Office are also planning spectacular disposals of assets to plug holes
in their finances. (And that's without mentioning the sales that have
already taken place, such as that of the high-speed rail link from
London St Pancras station to the Channel Tunnel, which went to a pair of
Canadian pension funds for £2.1bn in November 2010.) Read full article in The Independent...

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Greece

No room for error





21 February 2012

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Employees at an aluminium smelting plant in Agios Nikolaos, Viotia, Central Greece, February 2012.



Bloomberg /Getty Images






In a meeting that lasted into the small hours of Tuesday,
February 21, the Eurogroup finally adopted a second bailout plan for
Greece of €130 billion with an additional €107 billion in cancelled
debt. But failing a genuine economic development plan, this sum will not
be sufficient to put the country back on its feet, warns Greek daily To
Ethnos.





The negotiation to finalise the agreement was neither a foregone
conclusion nor one easily arrived at and Finance ministers of the
Eurogroup kept at it until late into the night. The obstacles to be
overcome were many and difficult. Of course the price to pay for this
second chance, accorded yesterday, will be high. In a sense, the ball
is now in our camp.

The unattained goals of the past two years and the tasks left in
order to clear the backlog are so significant that, in the end, the
weight which we have been asked to lift is even greater than what we
had accepted when parliament adopted last Sunday's austerity plan. [The
plan cuts €3.3 billion from the state budget including a reduction to
the minimum wage and a cap on old-age pensions.]

It is not enough to stop the haemorrhage


This time we have no room for manoeuvre, nor error. This is the main
concern of our partners and creditors, who have imposed on us a
stricter control of the reforms that we are obliged to implement. The
way in which these negotiations were undertaken is a sign that they
will be more severe in case of default on our part.

Nonetheless, our partners should realise that if they want to help
us, it is not enough to stop the haemorrhage caused by the debt and the
deficit, but it is also necessary to rein in the recession. It is
obvious that cuts in revenues are hardly the only solution for getting
out of the crisis.

This time around, we have in fact been asked to behave with greater
seriousness and responsibility than in these past two years. We must
emphasise the need for development. If we do not do so, we will soon be
asked to make more efforts at austerity.

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[Lioned]

I think we should all get a free holiday in Skiathos with a couple of water mellons thrown in !

[Panda]

I think we should all get a free holiday in Skiathos with a couple of water mellons thrown in !

Iv"e been wondering whose money the ECB is using to lend to Banks and buy Bonds, is it the money every Country puts in and then gets a rebate?

For several years the Accounts for the EU could not be signed off by the Auditors because they couldn"t "balance the Books", Britain was conned, thought we were signing up for a "Common Market, yet successive Governments will not let us have a Referendum....that"s Democracy for you.!!!!

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Greek crisis

Troika admits bailout can’t work





21 February 2012


Presseurop
Financial Times

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Financial Times, 21 February 2012






“Greek debt nightmare laid bare,” headlines the Financial Times, following the leak of a “strictly confidential” report
prepared and distributed last week to eurozone leaders by troika
(EU/ECB/IMF) analysts. The 10-page “debt sustainability analysis”,
obtained by the Financial Times, found that –

… even under the most optimistic scenario, the austerity measures
being imposed on Athens risk a recession so deep that Greece will not
be able to climb out of the debt hole over the course of a new
three-year, €170bn bailout [€136bn in addition to the €34bn left over from Greece’s first €110bn bailout].

The report also warns that that two of the new bailout’s main principles might be self-defeating –

Forcing austerity on Greece could cause debt levels to rise by
severely weakening the economy while its €200bn debt restructuring
could prevent Greece from ever returning to the financial markets by
scaring off future private investors.

The report suggests Greek debt is likely to fall far more slowly than hoped –


… to only 160 per cent of economic output by 2020 – well below the
target of 120 per cent set by the International Monetary Fund. Under
such a scenario, Greece would need about €245bn in bailout aid, far
more than the €170bn under the “baseline” projections eurozone
ministers were using in all-night negotiations in Brussels on Monday

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Ed Conway.......Sky News



21.2.12


There are known knowns; there are things we know we know. We
also know there are known unknowns; that is to say we know there are
some things we do not know. But there are also unknown unknowns – there
are things we do not know we don't know.
Donald Rumsfeld, February 2002
Last
night, thirteen hours of coffee-fuelled negotiations finally paid off
and Brussels signed off on the second bail-out for Greece, worth a
combined €130bn over the next couple of years.
Bear in mind,
before we start, that this second bail-out was actually first “cemented”
back last summer, was then revised again in October, and has now been
“agreed” once more in the early hours of this morning. So excuse the
following analysis if it occasionally sounds rather sceptical.
Perhaps
the best way to tackle such a complex issue, where so much is unknown,
is to follow Donald Rumsfeld’s method and divide the Greek situation
today along the lines he mapped out so eloquently when discussing Iraq
almost exactly a decade ago.
The known knowns
-
Some 53.5% of the Greek debt owned by private sector investors is now
to be written off through a bond exchange programme which by most
peoples’ standards represents a default, but which Brussels hopes will
be less messy than the one that followed the collapse of Lehman Brothers
in 2008. The write-off is clearly greater than the 50% previously
mooted, or indeed the 21% reduction planned for last July. This was a
smaller haircut than the 70% which had been considered behind-the-scenes
in recent months. Though when one examines the deal on a
net-present-value basis (eg what investors are really sacrificing in
missed opportunities), it’s equivalent to just under a 75% write-off. It
will supposedly reduce the Greek national debt to 120.5% (but see
below).
- The private sector will also be joined – kind of – by
some public sector investors. The European Central Bank will effectively
forego some of the profits it would otherwise have received, which will
then be returned to Greece to help ease its economic burden. This goes
further than the previous deal, but is broadly in line with what had
been expected.
- Greece’s days as a fully-sovereign nation state
are now over – at least for the time being. There will be a permanent
presence of the so-called Troika (European Commission, ECB and
International Monetary Fund) in Athens to oversee the government’s
budgeting. Rather than trusting Greece to pay its debt interest as and
when it’s necessary, the authorities will also set up an escrow account,
or as the Commission’s statement terms
it, a “segregated account of Greece's paying agent” into which it has
to pre-pay interest. It’s a highly humiliating move – the kind usually
reserved for banana state economies where donors such as the IMF or
World Bank believe corruption is so endemic that they need constantly to
check their money isn’t being misused.
- But Greece will get its
latest bail-out cash, worth €130bn, which will help it avoid the
prospect of a messy default. However, the Greek economy and its
government’s performance in cutting its debt will be scrutinised ever
more closely with each disbursement of the cash.
The known unknowns
-
Perhaps the most obvious is the question of whether any of the
spuriously precise targets which have now been set for the Greek economy
will be reached. The country is facing the deepest recession seen in a
developed or indeed emerging economy in living memory. That target of
getting the country’s total national debt down to 120.5% relies on some
extremely optimistic projections for the country’s growth. You can see
the problem from this graph, from IMF’s own analysis, circulated in
Brussels ahead of the meeting.

So
under the IMF’s own projections, the national debt could still be up at
today’s level, 160% of gross domestic product, in 2020 if the economy
is weaker than it projects (the red dotted “tailored downside
scenario”). Now consider what “tailored downside” actually means:

Now
bear in mind the accuracy of the bail-out authorities’ previous
economic forecasts: they thought only a couple of weeks ago that the
year-on-year contraction in the final quarter of 2011 would be 5%. In
fact, it turned out to be 7%. One more misjudgement of that kind and the
entire basis of this second bail-out will be thrown into question.
-
The deal with creditors is far from complete. It is reliant on
convincing 95% of all private sector bondholders to actually submit
their investments to be ritually stripped of more than half their value.
There is a palpable chance that this target is missed, particularly
given there are some hedge funds heavily invested in the deal who may
see this as an opportunity to leverage their influence on the situation
(or at the very least minimise their losses).
- Even if the deal
goes ahead, it may nonetheless constitute a so-called “credit event”,
triggering billions of dollars of credit default swaps across the
financial system. It was this eventuality that caused such panic after
the collapse of Lehman Brothers in 2008. The decision on whether this is
just such an event is taken not by anyone in government but by a
committee of bankers convened by an independent agency called ISDA.
Unknown unknowns
-
Yes, yes I know: “unknown unknowns” are by their very definition
difficult to predict. But there is nonetheless a serious question mark
over Greece’s ability to maintain social and political cohesion in the
wake of this deal. It looks likely to provoke further unrest in Athens.
The economy is still in deep trouble, and there is very little light at
the end of the tunnel. Moreover, the decision to dilute the country’s
fiscal sovereignty is likely to be a major political handgrenade at the
elections which are still slated for early April.
- What are the
implications for the capital markets? It used to be the case that, save
for loans from the International Monetary Fund, there was no real
hierarchy when it came to owners of Government debt. But in order to
crowbar a debt reduction without nominally reducing the holdings of
Eurozone authorities who own Greek bonds, the Commission has ridden
roughshod over this principle. In the wake of this deal, apparently
identical government bonds can be of vastly different worth depending on
a) who they’re owned by and b) when they were bought (as the agreement
says that if Greece issues new bonds now they will be lower down the
pecking order than the existing ones). This may seem slightly arcane,
but capitalism is built on such concepts; messing around with them is
rather like Marty McFly trying to fiddle with fate in Back to The Future
– small actions can have enormous unintended consequences over time.











Posted by: sunagor10 on February 22, 2012 2:47 AM

"Greece: Known Knowns, Known Unknowns And Unknown Unknowns"
_______________________________

I think one of the "unknown unknowns" is whether Greece will be kicked
out of the EU if they have to come back for yet another bailout in
another few months time.

Governments spending more money than they take in taxes etc, cannot go
on forever just as ordinary working families have to try to live within
their weekly means in order to stop debt spiralling out of control.

Colloquially it is known as "cutting your cloth to the measure"

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Posted by: Oxonian on February 21, 2012 10:06 PM

Greece
has been 'rogered' by its own greed and desire to do nothing and take
everything. I have tried and failed to think of anything ever
successfully produced by the greek nation since the 1970s, except
corruption and confusion and these seem to be spread throughout society.
Incidentalyy, weren't many of the greek governments socialist?

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Posted by: fatbob5 from cardiff on February 21, 2012 9:07 PM

Greece has been 'Rogered' by Capitalism

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Ireland's PM is to meet in Germany with Merkel and later Monti in Italy. He is expected to discuss the vision fpr the EU future and ask for a Bail Out .

Charles Delarra, spokesman for the Private Bondholders will accept the write-down and suggests there could be a rebound in growth .

Greylock Capital, a Bondholder says although it is a tough pill to swallow the offer will be accepted.

There is worry now though that those Countries in trouble selling Bonds will face higher yields or not sell as well.

The former Governor of Argentine Central Bank has just been interviewed says Greece has defaulted which ever way you look at it , but because the ECB
bought Bonds it cannot be a private default . He believes Greece will never be able to repay the debt and will leave the EURO, but not the EU .

He also said Argentina went through the same turmoil, civil unrest, terrible anger by the Population, setting fires everywhere, and it took 4 or 5 years
to turn things around. Now Argentina is prospering , but he foresees Portugal defaulting and the EURO countries will have to bring in new measures to
make for more prompt decision making or risk the collapse of the EURO.

[Panda]

Expel Greece – a cure worse than the disease





22 February 2012

La Repubblica
Rome








Beppe Giacobbe






Drive Greece out of the euro, and build a federal Europe
behind a protective firewall? Italian columnist Barbara Spinelli warns
that this idea, which appears to be gaining ground with a number of
European leaders, would not only fail to resolve the crisis but would
also put an end to Europe’s common culture.



Barbara Spinelli



We have become inured to the assertion that Greek bankruptcy
would not be the long dreaded catastrophe it was supposed to be. In
substance, the argument states that the response to Greece’s incurable
financial illness should be surgical, and Athens should be excised from
the eurozone like an inflamed appendix.

The priority should be to avoid contagion, and the use of the term
“firewall” with regard to new European stability funds is significant:
firewalls protect computer systems from intruders, and Europe’s firewall
will protect those on the inside from association with those who have
been disgraced and denied access.

Welter of short-term measures


Like the Maginot Line, built by France in the 1920s and 1930s to
protect against German attacks, the firewall will be a fortification as
well as a clinical barrier: we are expected to take comfort in the
illusion of an inviolable wall, even though we know what eventually
became of Maginot’s defences, which were rapidly outflanked. In Strange
Defeat historian Marc Bloch wrote of the war being lost in hearts and
minds well before the fall of the Maginot Line, "in the rear guard of
civil and political society" before the front.

The truth is no one really believes in this illusory firewall which
sacrifices intellect on the altar of imagination. If they did, the
European Union would not have decided to grant yet another colossal loan
to Greece on 21 February, and there would be no talk of a new federal
EU architecture, with nation states handing over more sovereignty to a
European government. Progress has been slow, no one has tackled the
crux of the problem (the issue of the EU resources required to conduct
an effective investment programme).

At times you could be forgiven for thinking that the governments of
"major" countries are waiting for Greece to go bankrupt before building
the Union they want to construct. This is the thesis advanced by
economist Kenneth Rogoff, in an interview with Spiegel:
once Athens has been expelled from the union, the impetus of the
crisis can be used to accelerate the construction of a United States of
Europe. But can a new union be built on the ashes of Greece? And what
kind of union would we have had without the pressure of the Greek
crisis?

As it stands, the welter of short-term measures to counter the
turmoil in Athens have undermined the eurozone and the idea of European
solidarity in the face of adversity. Europe will have difficulty
forming a federation if its first action is to jettison countries that
are unable to make ends meet. Clearly Operation Firewall will not only
be painful for Greece, but also for Europe.

A great leap backwards


This is the argument put forward in The Economist
by the former central-bank governors of Argentina and Mexico, Mario
Blejer and Guillermo Ortiz, who want to remind Europeans of the cost of
Argentina’s default in 2002, and the differences between the economic
collapse of Argentina and the dreaded credit event in Greece.

Admittedly, Argentina benefited from six years of growth when the
peso was devalued and unpegged from the dollar, but the world was not
in the grip of a recession like the one we are experiencing now.
Recovery was spread over a decade, and the peso still exists. The
drachma, however, no longer exists and its reintroduction would be a
terrible blow for Greece (how can we expect the country to reimburse
debts denominated in euros with a devalued drachma?). Finally, the
former central bank governors point out that the IMF was ill-equipped
for long-term engagements required to avoid a crash that was a terrible
trauma for the Argentinian population.

What is the cause of the malaise in Europe? Is it the vacillating
economy, our enfeebled political class, or is it a cultural problem?
The reality is all of these factors are to some extent to blame, and
the Europe that will emerge from this ordeal will be reinforced or
further weakened by the remedies used to treat the three ailments of
its economy, its culture and its politics.

At the cultural level, we have made a great leap backwards of 90
years in inter-European relations. Listening to the people, one gets
the impression of a return to the nationalistic patterns of the 1920s
and 30s. An aggressive rancour is taking root. For months, Greek
newspapers have depicted German leaders as Nazis. At the same time,
Athens has unearthed the question of war reparations that Berlin still
owes to the European countries occupied by Hitler.

Europe needs enlightened citizens, not scapegoats


That is giving short shrift to the episode of 1945 in which we
reasserted our confidence in the German nation and undertook to unify
Europe. That confidence had a specific meaning, including a financial
one. War reparations, Germany's curse after the First World War and
which plunged it into dictatorship, should never exist again (Israel
being an exception).

What we accorded to Germany in 1945, we are not able to accord today
to Greece for strategic reasons and because the political culture has
changed. The errors committed by Athens are not crimes; yet Greece must
atone on top of paying for them. Even Greek elections are looked at
askance. The reparations demanded of Greece are severe and they
engender anger and resentment. Obviously, there are no strategic reasons
that would motivate maintaining Greece in Europe. That requires a
world view and today's outlook is no longer the same as in 1945 – 1950.

This time-warp mentality has disastrous consequences on politics.
How can a federal Europe emerge if a culture so disconnected from the
lessons learned by Europeans from the two World Wars is imposed? The
choice of a president such as Joachim Gauck in Germany is good news
because the German people contributed to this climate of suspicion,
even if their concerns were sometimes justified.

Europe needs enlightened citizens, not scapegoats. It requires
common growth of a different type rather than years of recession,
internal squabbles and wobbly democracy. Otherwise, it is doomed to
live through a "strange defeat" of its own, born in the rear-guard of
civil society before breaking out in the line of defence established to
keep contagion at bay.












From Ireland
Greek bailout an “illusion”





Leading Irish economist David McWilliams is not convinced by
the February 21 €130 billion bailout agreement for Greece. In the Irish Independent he writes –

Sigmund Freud once noted that: ‘Illusions commend themselves to us
because they save us pain and allow us to enjoy pleasure instead. We
must therefore accept it without complaint when they sometimes collide
with a bit of reality against which they are dashed to pieces.’

Europe and the EU are soon to go through one of those 'collisions
with reality'. The reality of the latest deal in Greece is that it
drives the Greeks deeper into the mire and as the economy there
contracts yet more, the wheels of this deal will fall off.

• Original article in La Repubblica
  

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Letter against Merkozy





21 February 2012


Presseurop
Corriere della Sera, El Mundo
















Corriere della Sera, 21 February 2012






On February 20, Prime Ministers David Cameron, Mario Monti and
Mark Rutte sent a letter to EU Council President, Herman Van Rompuy,
asking him to help “restore confidence in Europe’s capacity to generate
strong and sustainable economic growth.” For Italian daily Corriere della Sera, this is “a new tack taken by Rome, London and The Hague”.

Co-signed by their counterparts from nine countries (Estonia,
Latvia, Finland, Ireland, Czech Republic, Slovakia, Poland, Sweden, and
Spain), the document outlines the broad outlines of a plan to ward off
a recession caused by austerity: opening up the internal market for
services, establishing a common energy market in 2014 and a digital
market in 2015, beefing up research and development, opening up to
global markets such as India, easing rules for small and medium
enterprises, including more women and youth in the labour market,
opening closed professions and creating a “robust and dynamic”
financial sector.

The signatures of two leaders are missing: Angela Merkel and Nicolas
Sarkozy. “The part of Europe seeking stimulus is standing up to be
counted,” confirms El Mundo, which considers this letter to be –

... the most coordinated response in the EU to the policy of keeping
deficits in check as defended by Angela Merkel…. The letter comes at a
key moment, when the EU economy is nearly in recession and
unemployment is rising. This initiative must be taken under
consideration, provided of course that the EU ascertains that
governments are doing their homework on controlling the deficit and
lowering their debts. Merkel should heed this coordinated rebellion.

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Euro











Greek Crisis

“A good deal for the banks, and a very bad one for Europe”





















Die Tageszeitung, 22 February 2012






“Greeks save European banks,” reads the provocative headline in Die Tageszeitung. The Berlin alternative daily reports
that European aid will be of no benefit to Greeks, who “will have to
live with lower wages, less job security, inferior health care and a
massive sell-out of their state.” And in spite of all of this, the
country’s debt may still be at the same level in 2020.

For journalist Eric Bonse, the bailout is a “ruthless diktat” mainly
of benefit to the banking system, which will escape collapse thanks to
the interest generated by loans to the Greek state –


Schäuble & Co. have saved the creditors, not the Greek people.
Banks, insurers and investment funds in Germany, France and Great
Britain will gain from the deal. In the event of [Greek state]
bankruptcy, They would have lost everything. [...] Private creditors,
who should have, according to Schäuble, accepted joint liability, have
been heavily favoured. It is nice deal for the creditors, and a very
bad one for Europ

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Eurozone

EU strengthens control over national budgets





22 February 2012




Financial Times











Aside from approving a second €130 billion bailout for Greece,
the EU’s finance ministers also agreed February 20/21 on rules that
will give “the EU more powers to scrutinise eurozone countries’
budgets, even before they are approved by national parliaments,” reveals the Financial Times –

The European Commission will be able to deploy its experts
unilaterally to countries in need of bail-outs to give technical
assistance, along the lines of the “task force” assisting the Greek
government by overseeing the implementation of its EU-imposed reforms.

The FT adds that under the new rules -

… the Commission will have wider discretion to issue recommendations
about national tax and spending policies, something it usually avoids
for countries that are not in breach of existing deficit rules.

The presence of EU teams arriving in countries “experiencing severe
difficulties” constitutes a “potentially humbling episode for national
governments,” the daily notes.

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Some private Greek Bondholders won't participate in a Bond swap they want to finish the term and accept the writedown.

Concern persists among bondholders on what happens to the interest earned by the ECB and more importantly whether the money the ECB is injecting into the crisis , not only the Bonds, but loans to the banks is part of the EU 27 Nation Bank Account.

Harvard University Economist does not believe Greece is out of the Woods. He says Draghi has done the most to try to resolve the crisis but the EU Leaders are playing brinkmanship . He says the crisis will continue for some time and is a slow painful process for Greece.

The German Economy has slowed and living on proir orders.

Pimco says there is a 50-50 chance Greece will default this year.

Constantin Gurdgiev of Trinity College Dublin says this latest deal with Greece is a last ditch offer and the EU has already spent E360 billion .

Portugal and Spain have similar unemployment and also trade outside of Europe.

Ireland has to stick to its plan , which is a E 3 billion sell off of assets. The country has been trying to gain new business but in the process took its foot off the pedal with regard to refoirm.

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Member States











Greece

Manolis Glezos, eternal resistance





22 February 2012

El Mundo
Madrid





Manolis Glezos at the Greek parliament in Athens. February 12 2012.



AFP






At 89 years of age, he is a fixture at anti-austerity
demonstrations. A member of the Greek communist party for 70 years, he
has also been a national icon since the day in 1941 when he climbed the
Acropolis at night to tear down the Nazi flag.



Thodoris Georgakopoulos



All of the Greek protests have a few things in common. All of
them take place in Syntagma Square. Most of the demonstrators are
peaceful citizens, shocked by austerity and lack of political leadership
in one of the worst financial disasters in history.

There’s one other thing all the protests have in common: a fierce old
man always shows up, pressing forward, in the centre. He’s not a
leader, though. For sure, he is a prominent figure, but in the protests
he’s just one of the crowd. Old and fragile, indeed, but as passionate
as the others. And he’s always getting into trouble.

In March 2010 a policeman tear-gassed him at the gates of Parliament, and he had to be dragged to safety. This month
he got gassed again at the same spot, fainted and had to be carried to
the infirmary inside the parliament building. To the police, he’s an
agitator. His name is Manolis Glezos and he has been fighting like this
for 70 years. He is 89 now.

Four major events stamp the modern history of Greece: the Nazi
occupation, the civil war, the military dictatorship and the financial
collapse. Glezos has been in all four.

The event that made him famous in Greece occurred at the beginning of
his life. On the night of May 30, 1941, when the Nazis had totally
occupied the country, he crept to the top of the Acropolis through a
cave with Lakis Santas, a friend and comrade. Together they managed to
take the Nazi flag down from its pole and slip away without being
noticed by the guards.

The symbolic value of his gesture was enormous. That simple act of
defiance in one of the darkest days of the war became a beacon of hope
for besieged nations around the world.

“Glezos is the symbol for the collective Greek consciousness”


The end of World War II did not bring an end to the suffering in
Greece. A civil war between the army of the new republic and Greek
communist guerrillas, who had been the most effective in the resistance
against the Nazis, raged for four years and left the country even more
divided and crushed.

Manolis Glezos was a prominent member of the Communist Party and
director of its official newspaper. Those roles very often landed him in
prison. Two death sentences were passed on him, and while in jail he
was elected to parliament. In total, nearly 16 years of his life have
been spent in prison or in exile.

“Glezos is the symbol for the collective Greek consciousness,” says
Niles Marantzidis, professor of political science at the University of
Macedonia in Thessaloniki. “His revolutionary act during the war was the
critical point of his career. But his politics have changed over the
years. Glezos in the 1950’s was very different from Glezos in the
1980’s. If there is a constant in his career, though, it is the idea
that Greece is a unified nation in constant struggle with foreign
enemies.”

As a member of the leftist movement EDA, Glezos participated in three
elections in the 1980s as a candidate of PASOK, the socialist party led
by Andreas Papandreou that led Greece for most of the 80's and laid the
foundations of the uncontrolled accumulation of debt by a corrupt
state.

“The only solution is the general election”


“During the 80's the country developed a new narrative to explain how
it saw itself and came to grips with its past,” says Marantzidis.
“Glezos was in a good position to become the focus of this narrative.”

This may be one explanation for the unprecedented longevity of Glezos
as a political figure. Few indeed have managed to be present at every
crucial moment in the life of modern Greece. And though his ideology has
changed along the way, Glezos always kept one thing clearly in mind.
For him, it was never a case of fighting different battles. The battle
was always the same one. And he wages it relentlessly.

The Greek financial crisis has reached a critical point. The last two
years have seen a torrent of austerity measures that have worn down the
economy almost as much as they have the patience of the citizens.
Inevitably, the people have come out onto the streets. And Manolis
Glezos is always there with them, together with his partner in anger,
Mikis Theodorakis, the legendary composer who is now 87.

Though Glezos is an old man, nothing indicates he is about to turn 90
in September. We talk about what all the Greeks are talking about: the
financial crisis. “Today, the only solution is the general election,” he
says. “Our electoral system is a mess. The government is totally
distanced from what the people want. We need elections and we need the
leftist parties to unite, to leave their differences aside and get the
chance to govern.”

“I lost 118 of my comrades”


Glezos has very clear ideas about the future of the country and he is
good at explaining them. He believes that Greece should refuse to pay a
single euro of the “odious” debt. To reform the economy he has a
five-point plan. He knows exactly what must be done to revive heavy
industry, and he has proposals for restructuring Greece’s energy
infrastructure... And he thinks Greece should demand reparations that
Germany has owed it since the war.

Another constant in his career is his unshakeable belief in
democracy, in the right of people to self-government. As mayor of his
native village of Apiranthos, in Naxos, he developed a brief system of
self-government in 1986.

One can dismiss some of his ideas as the delusions of an old man
(some do), but no one can deny the power of what he represents, or how
he has used (and honestly) his own symbolism for 70 long years.

I ask him what inspires him, what fuels his passion after all these
decades of struggle. “One hundred and eighteen friends,” he says. “I
lost 118 of my comrades. They were executed during the civil war. At
that time, before each battle we would say what we wanted to achieve,
our dreams and goals, because we knew that not all of us would survive.
We wanted the survivors to make some of those dreams come true.

[Panda]

Morgan Stanley says Greece is a different matter . It has succeeded in bringing down it's debt but hampered by low growth.

He says there was a time when several Euro Countries wanted Greece out but Germany has E500 Billion tied up in Euro Countries including Greece so would
not wanta Greek default.

The EU Forecasts Italy's economy to fall 1.3% this year and Spain to contfact 1%

Fitch says PSI is "distressed" and Greek default is likely.

5 yr Greek Bond yield 55%

10 yr Bond yield 220%

Fitch has cut Greek credit rating to CCC

Fitch expects Portugal's economy for 2012 to be -3%

Ollie Rhen cuts Europe GDP for 2012 to -3% but sees no sign of a Credit Crunch

Germany is doing well but doesn't want the Euro to appreciate because it would affect Exports.

[Panda]

Finance Watch – a lobby to break the lobbies





23 February 2012

Der Tagesspiegel
Berlin








Ajubel






The Brussels financial lobby seems all powerful. Since
the Lehman crash of 2008, it has stalled all attempts to reform the
financial market in Europe. But things should be changing now: Europe
has hired an anti-lobby.



Harald Schumann



Joost Mulder knows all the tricks. For five years this clever
Dutchman worked the Brussels legislative machine on behalf of financial
institutions. Playing a political game in a network made up of the
European Commission, the European Parliament and the Council of
Ministers of the 27 governments was his profession. Speaking four
languages and knowing everyone, the 31-year-old glided smoothly through
the bazaar of Brussels policymakers – he was a model lobbyist.

Sometimes he and his colleagues choked off legislative initiatives.
Or else, using his contacts among officials at EU headquarters, he got
hold of controversial regulations still at the first-draft stage just
in time to organise a stream of objections from many seemingly
independent sources. If there was merely an undesirable paragraph to be
blocked at the Commission or in the European Parliament, it was simply a
matter of putting together a blocking minority in the Council.
“‘Lobbyists gladly promise their clients, ‘Give me a 10,000 euro fee
and I’ll make sure your position becomes an issue in the Council,’” he
says.

But things are different now. Mulder has turned a page. When last
year financial lobbyists went so far as to “blackmail individual
governments by threatening to withdraw capital and jobs, it was the
final straw,” he says. “Making finance serve society” is now on his
business card as head of the Public Affairs department of an
organisation called Finance Watch.

Charlie McCreevy – a captive Commissioner



There too he has been hired as a lobbyist – only now he lobbies for a
firm that is unique in the world of Brussels politics. At Finance
Watch, experienced financial professionals aim to take on the might of
the financial lobbyists and steer that power back to their own
purposes: mobilising financial services for productive ends.

It is a brand-new, never-done-before experiment. This new lobby
group to curb the financial markets has been ordered duly and properly –
by the legislators themselves.

What started it off was a phenomenon seen only after the financial
crisis broke in autumn 2008. To tackle the root causes of the crisis,
some experienced professionals were needed. But there were none present
who were truly independent of the financial industry. At every level,
the debate was set by bankers, fund managers and other financial
experts.

At the same time, it emerged that the European Commission and its
Internal Market Directorate General had been thoroughly infiltrated by
the financial industry. How far this went was uncovered by the Alliance
for Lobbying Transparency and Ethics Regulation (ALTER EU), whose
autumn 2009 report entitled A Captive Commission, described how then Acting Commissioner Charlie McCreevy had de facto
outsourced law-making to vested interests. Half of Europe was outraged
at the EU authorities relying on such one-sided information. In
practice, though, no consequences flowed from that outrage.

The MEPs paid him out of their own pockets


Enter French Green MEP Pascal Canfin and his German colleague Sven
Giegold. In June 2010 they got an unusual initiative off the ground,
formulating a “Call for Finance Watch”. Within days they had won the
support of 22 members of the Economic Committee, cutting across all the
internal factions. Doers and shakers with financial expertise were
wanted. One Thierry Philipponnat fit the bill.

With 20 years of experience as a banker and exchange manager,
Philipponnat had left his well-paid job in 2006 and started all over
again. At first he worked in providing microcredit in poor countries,
and then at Amnesty.

The MEPs paid him out of their own pockets for six months of
ground-laying work, and Philipponnat was able to deliver. In a
month-long slog through seven European countries he persuaded 38
organisations, from Oxfam to the European Trade Union Confederation, to
sign on as founding members and raised around half a million euros in
start-up capital from private foundations. At the same time Parliament
pushed for funding from the EU budget. This year, 1.25 million euros
have been earmarked, and the new Internal Market Commissioner Michel
Barnier has signalled that Finance Watch will get most of it.

And so Philipponnat, six months after the inaugural meeting, is
today “Secretary General” of an expert and advocacy agency, appointed
by the European Parliament, funded by the taxpayer and supported by
organisations whose membership totals 100 million.

But is it worth the effort? Can this small band bring anything at
all to bear against the brute force of the organised financial lobby?
About 700 professionals have been sent to Brussels alone by banks and
other financial corporations to nudge EU legislation in the desired
direction, and their influence spreads far and wide.

“It’s the same work I did before”


How tricky the task is was revealed last year in the dispute over
the trade in unsecured credit default swaps on government bonds, the
so-called “naked credit default swaps” (CDS). These swaps allows funds
to speculate on decline in states’ creditworthiness, without spending a
lot of their own money. Because the CDS rates are regarded as a
measure of default risk, they can thus drastically exacerbate a
potential debt crisis or even bring one on.

That explains why in March 2011 the European Parliament called for
this trade to be banned altogether. Hedge fund and banking associations
promptly protested, rolling out a strategy that Philipponnat calls the
“details trap”. The story put about by the lobby via the Financial
Times newspaper was that MEPs failed to grasp the mechanisms of the
trade. If the ban were to be enforced, “the market for government bonds
would become less liquid and the end costs for borrowers would
increase” – an argument that could hardly be refuted by laymen.

Market expert Philipponnat, however, had no trouble in seeing the
deception. His report explained the actual context, and it was well
received – so well that the Commissioner himself even made
Philipponnat’s argument his own, and the European Parliamentary plenary
upheld the ban. As it was put to a vote in October at the Council of
Finance Ministers, however, some ministers suddenly insisted on
regulatory exceptions. “Clearly, that was a result of good lobbying,”
says Mulder, with a respectful nod at his former colleagues. The law
has “a gigantic loophole.”

Chief lobbyist Mulder is still full of confidence. “Actually it’s
the same work I did before,” he says. “But now I sleep better.”












Interview
Pascal Canfin, foe of finance







"To end the arrogance of finance." Such is, according to French weekly Télérama,
the goal of Finance Watch, a non-governmental organisation. To find out
more, the magazine interviewed MEP Pascal Canfin, who created Finance
Watch.

"I'm proud to have created Finance Watch," says French environmentalist Pascal Canfin, explaining that -

... a counter-lobby to the unbelievable financial lobby was
absolutely necessary. But the NGO had to be 'trans-partisan', because
civil society does not respond to the call of a party, especially a
minority party like The Greens. You have to remember that the European
Parliament, unlike the French National Assembly, is elected using
proportional representation, there is no automatic majority or minority.
Each bill finds its own majority. For my part, I negotiate like crazy,
then, if it is globally positive, I vote for it.

Canfin thinks that the Member States wasted an opportunity in 2008
and 2009 to reform the banking sector, when "the banks were on their
knees". Now he thinks that "change in Europe depends on a double change
of power, in 2012 in France and in Germany in 2013".

[Panda]

Greek bailout
Surprise! Athens discovers new hole


Only one day after agreement on a second
bailout for the country, the Greek government has announced a deficit of
6.7% of GDP. Higher than expected, it is due to a decline in tax
revenues and increased social spending in the context of recession.
Original article in Die Welt
de



Die Welt Berlin















Italy
Liberalization, lobbies win


Under pressure from professional
organisations, the Italian government has backed down on plans to
liberalise the gas market, and the taxi and pharmacy sectors. The idea
of ​​property tax on church assets could also be abandoned.
Original article in La Repubblica
it



La Repubblica Rome















Portugal
Troika "prohibits" government from paying health sector debts


Experts from the EU, the ECB and the IMF are
in Lisbon assessing Portuguese national debt. The government is
forbidden from using pension funds held by banks to pay off arrears to
the public health system. It will be forced borrow from them.



Diário de Notícias Lisbon

[Panda]

The G20 are meeting today in Mexico to discuss the Euro crisis and hopefully raise more money , especially from China. China is angry because the last
time they helped out during the Lehmann crisisto the tune iof $500 billion they were promised more seats at the G20. However, it would mean Europe giving up some seats which they are reluctant to do.

(You would think the EU would be only too happy to comply after all the help they have received from other Countries!!!)

Greeks are crossing the Border to shop in Bulgaria because it is much cheaper than shopping in their own Country , obviously affecting the economy even more.

Banks around Europe, including Britain have taken a 74% loss on loans to Greece. Concern is felt about their exposure to Spain ,Italy and Portugal.

[Panda]

Apparently Greece has reduced it's deficit from E24 Billion to 5.2 billion and a groundswell of opinion that "Give Greece a Chance" should be adopted.
There also appears to be a split in the EU on what to do, with Germany, Austria and Finland adopting the hard line and Germany reluctant to raise the bail-out limit.

Exports declined less in Germany and Imports more.

The IMF is being criticised by emerging economies for the amount of money they are using to bail out Greece, and feels the EC should do more. The
concept of the IMF was to lend money to poorer Countries to help improve their economies , not bail out Greece when the EU is rich.

It is expected that this issue will be raised in the G20 meeting because of the fear that other EURO countries will need bailing out.

The ECB does not want to do any more but may be forced to act as Guarantor.

In Italy, a vast amount of Euros is being spent on repair and restoration in Venice and a structure to stop the water level rising Monti has signalled
that the work will continue. In the meantime, his efforts to open up business to force competition is being opposed, especially by Pharmacists who say
their sales are being badly affected.

[Panda]

Eurozone crisis

Europe says goodbye to solidarity





24 February 2012

Financial Times
London

• 
  


• 
  

Italian
PM Mario Monti, Greek PM Lucas Papademos, German chancellor Angela
Merkel, French president Nicolas Sarkozy and European Central Bank chief
Mario Draghi.



Ingram Pinn






The solidarity that has always been at the heart of the
European project is based upon hard-headed self interest. For the union
to survive the current crisis, it needs to relearn this simple
principle.



Philip Stephens



Some words are the property of continental Europeans. You do not
hear many Brits or Americans talking about “solidarity”. The
expression belongs to the soggy (to Anglo-Saxon minds) consensualism of
social market capitalism and to prophets of European unity. What’s
happened lately is that solidarity has dissolved. This explains why the
euro, and the European Union, are in so much trouble.

Another week, another sticking plaster. The deal to prop up Greece
has bought some more time. The important thing – or so we are led to
believe – is that the wound has been cauterised. Again. Yet, it should
be blindingly obvious to all that, in the great scheme of things, the
latest bail-out is a sideshow.

Two things are needed if Greece is to avoid catastrophic economic
and social collapse. They apply whether it stays in or leaves the euro.
The first is sufficient political resolve within Greece to reform
radically the state and economy; the second is a reciprocal willingness
among other Europeans to foot a sizeable bill for the failures and
fraud of past Greek governments.

The pertinent question is whether such a bargain is available. The
omens are not encouraging. Behind the name-calling that marks out
Greece’s relationship with its eurozone partners lies a complete
breakdown of trust. Many Europeans – and I am not talking only about
Germans – do not believe that politicians in Athens will keep their
promises; many Greeks think that the draconian austerity demanded as
the price of debt relief is calculated to punish rather than
rehabilitate. A fair observer would probably say that both sides have a
point.





Read article in full at Financial Times en

[Badboy]

THINGS ARE SO BAD IN GREECE,SOME GREEKS ARE CROSSING THE BORDER INTO BULGARIA TO SHOP.
GREEKS BUDGET DEFICIT,I THINK I READ HAS LOWERED.

[Panda]

THINGS ARE SO BAD IN GREECE,SOME GREEKS ARE CROSSING THE BORDER INTO BULGARIA TO SHOP.
GREEKS BUDGET DEFICIT,I THINK I READ HAS LOWERED.

Yes Badboy, I posted on both these comments earlier, you can read if you scroll up.

[Panda]

recession raises second bailout fears





24 February 2012

• 
  

, 24 February 2012






"Portuguese GDP forecast reinforces new bailout scenario", warns Público,
the day after the European Commission predicted that Portugal will
experience the second worst economic performance in the EU in 2012 –
only surpassed by Greece. While the Portuguese government forecasts a
3% decline in GDP, Brussels goes further with 3.3%, in a macroeconomic
climate full of "uncertainties".

Economists speaking to the Lisbon daily believe that unemployment,
currently at 14%, will continue to rise, and "with a growing recession,
a new bailout will be inevitable. It’s just a matter of time,” said
one. Another gloomily adds that forecasts are -

... confirmation that austerity measures are not working, that they
are destructive and that recession will be inevitable and long. [...] A
bailout programme wrapped in recession creates itself the
impossibility of a solution. I fear that the need for outside help will
become a cumulative and recurrent problem.

The Brussels forecast comes as experts from the ECB/EU/IMF are in
Portugal studying its compliance with the €78 billion bailout package
of May 2011. In an angry editorial, Público warns that -

In the absence of a different European approach to the Portuguese
problem (and the Spanish, Italian, or Greek one), this sharp fall in
gross domestic product is a sentence without appeal. And as we can see
no significant change in the priorities of the Merkozy axis towards the
debt crisis, the country must be prepared to gnash its teeth even
more, to watch ever faster destruction of jobs and further deep
degradation of the economy. (...) As Brussels revealed yesterday, the
troika`s solution threatens to lead the country to the abyss even
before the reforms take place.

[Panda]

Juncker says Eurogroup is to meet in Greece before the Summit.

Ireland's economy is hamstrung by the Greek Bail-out and possible Portugal bail out.

The G20 says Europe must use its own money to build a higher firewall around Italy, Spain and Portugal, the existing firewall is not high enough.

Greece is to make a statement on Bond swaps.

Banks borrowing from the ECB is 470 billion Euros and another loan to Banks by the ECB is scheduled for 29th February.

The ECB loan overhang is E 779 Billion and there is no evidence that the tide is turning. The increase in Oil prices is affecting the World, not just Europe.

Banks in Europe are to have a fire sale and will be selling to Hedge Funds and Investors . Baanks must meet target later in the year.

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