Greek Democracy: Withering on the vine

Via @BrunoBrussels I come across this latest piece of news about Greece, and it makes depressing reading.

Greece should not hold early elections and Prime Minister Lucas Papademos should remain in office until 2013, Greek Economy Minister Michalis Chryssohoidis said in comments released on Thursday.

Speaking to foreign journalists in Frankfurt late Wednesday, Chryssohoidis said: "We believe the elections should be held in 2013, at the end of the current legislature."

That was the view of his whole party, the Socialist PASOK party, the minister claimed.

What is most worrying is that though this would mean that the unelected Government headed by Papademos would therefore last for another year, and this would speed the bailout, at what price to democracy.

Worse still for the Greeks it would mean that there would be no democratic outlet for the Greek people, who are already revolting. Mr Chryssohoidis may think that under his plans the current Government will last another year to force through the EU's debilitating plans, but the Athenian mob may think differently. If his plans come about, that the April election be postponed, I would lay evens that they will be overthrown by the street.

Eu suggests outrageous interference in national democracy

Nick Malkoutzis, the Deputy Editor of Kathimerini's English Edition has just reported on a Reuters story that has hit the wires. As he says,

If #eurozone makes this demand, it's unprecedented interference in another country's democratic process. This is all leaving v bad taste.

EU officials are now briefing thusly,

"There are proposals to delay the Greek package or to split it, so that an immediate default is avoided, but not everything is committed to,» one official briefed on preparations for a euro zone finance ministers call later in the day told Reuters.

"They'll discuss the options,» he said, adding: «There is pressure from several countries to hold off until there is a concrete commitment from Greece, which may not come until after they've held elections."

Or essentially we are thinking of delaying the full payment, despite the assurances and the vast cuts being made that has driven Greece into a 7% contraction of GDP in the last quarter until after the elections.
IE. Vote for whom we approve, or you can be damned. Looking at my last post, Van Rompuy's

European leaders, when in difficulty, will do whatever it takes to maintain the euro and the financial stability of the eurozone

begins to make sense.

"the Greeks have to leave the euro zone"

According to Die Welt this week, the only way that Greece can be saved is that it be uncoupled from the Euro. It makes it clear that trying to impose discipline from without will fail,

 Whatever the euro summit agreed and whatever the next one will agree -- we won't get a European austerity commissioner equipped with authoritative powers."
"Countries in crisis can't be transformed into protectorates. An EU fiscal commissioner wouldn't be able to achieve much unless he had the powers of an occupying statute."
"The conclusion almost sounds paradoxical: In order to rescue their state and their sovereignty, the Greeks have to leave the euro zone. They owe it to themselves. They have to go their own way with the freedom afforded by exchange rate movements and with a strong stimulus of economic growth."

Well you can't say fairer than that.

Farewell then Greece

The FT has an extraordinary leak of German plans for the future of Greece. Essentially if they come to pass we will no longer be able to describe Greece as a country. A nation yes, a culture most definitely, but a country.

No longer.

The strictures are devastating,

1. Absolute priority to debt service Greece has to legally commit itself to giving absolute priority to future debt service. This commitment has to be legally enshrined by the Greek Parliament. State revenues are to be used first and foremost for debt service, only any remaining revenue may be used to finance primary expenditure. This will reassure public and private creditors that the Hellenic Republic will honour its comittments after PSI and will positively influence market access. De facto elimination of the possibility of a default would make the threat of a non-disbursement of a GRC II tranche much more credible. If a future tranche is not disbursed, Greece can not threaten its lenders with a default, but will instead have to accept further cuts in primary expenditures as the only possible consequence of any non-disbursement.

You will pay off your debts to us before anything. Before teachers, nurses, police essential services, the lot. Nothing less than a Teutonic Jyrza.

To cap that this regime will be enforced by a Pasha from Brussels,

2. Transfer of national budgetary sovereignty Budget consolidation has to be put under a strict steering and control system. Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time. A budget commissioner has to be appointed by the Eurogroup with the task of ensuring budgetary control. He must have the power a) to implement a centralized reporting and surveillance system covering all major blocks of expenditure in the Greek budget, b) to veto decisions not in line with the budgetary targets set by the Troika and c) will be tasked to ensure compliance with the above mentioned rule to prioritize debt service.

Farewell then Greece. Is it not time to resurrect the shade of Kostas Georgakis or even Demetrius Ypsilantis?

Καλλιῶναι μίας ὥρας ἐλεύθερη ζωή,
παρὰ σαράντα χρόνοι, σκλαβιὰ καὶ φυλακή.

Why the Greeks are unhappy

I recieved this from one of the Greek MEP's explaining why Greece is unhappy at the austerity package.


You might think it is partial, but it goes some way to illustrate the depth of feeling Greece about what many see as a German inspired take over of their country,

German indebtedness to Greece from the 2nd World War

I would like to inform you on the Greek financial demands from Germany, as an aftermath to what happened during the 2nd World War.

In April 1941, Germany attacked and occupied Greece. During the German occupation, the conquerors executed the residents of 89 Greek cities and villages. In addition to that, they burnt more than 1800 villages and settlements.

During the war Greece lost 13% of her population. That was not only in the war fields but also due to the famine and the atrocities as well as the plundering of their troops.

On the parallel Germany forced the vicarious Greek government to give a loan of 3,5 billion dollars and they signed the relative contract. After the end of war, the Conference of Paris adjudicated the amount of 7,1 billion dollars to Greece as war reparations. Germany did not pay neither the reparations nor the loan that was owes to Greece.

Italy paid back to Greece a part of the total amount of the loan that was forcefully agreed during the occupation. Italy and Bulgaria paid back war reparations to Greece.

While Germany paid war reparations to Poland (1956) and Yugoslavia (1971), Greece had to demand the paying off of the forced loan on 1945, 1946, 1947, 1964, 1965, 1966, 1974, 1987 and 1995. Nevertheless, Germany denies paying off what owes to my country as an obligation that arise from the "occupation loan" and the war reparations. At 1964, the German Chancellor Erhard promised paying the off the loan after the unification of Germany, which was realized in 1990.

The following is an indication of the actual value of the German reparations towards Greece: Taking as indicative the average rate of the USA bonds between 1944 till 2010, that is about 6%, the actual value of the "occupation loan" is up to 163,8 billion dollars and that of war recuperations is estimated in 332 billion dollars. On the 2nd of July 2011, the French economist and advisor of the French government Jacques Delpla declared that the German indebtedness to Greece because of all that happened during the 2nd World War is up to 575 billion dollars (Les Echos, Saturday, July 2, 2011). The German historian Dr. Albrecht Ritschl advised Germany to follow a more moderate policy during the euro crisis of 2008-2011, because she might have to face justified demands for war recuperations of the 2nd World War (Der Siegel, June 21, 2011, guardian. co.uk).

It has to be mentioned that Germany has profited to the tune of 9 billion euro from the euro zone crisis over the past few years, while the German bonds yields close to zero since the European sovereign debt crisis began some two years ago. Berlin's two-year bond yields currently stand at just 0.3 percent and its 10-year bonds at 1.7 percent. Six-month papers - usually giving the lowest return to investors - stand at just 0.08 percent, down from 0.3 percent just one month ago.

According to Carsten Brzeski a senior economist with the ING bank in Belgium, "Interestingly, this is already more than the recently announced [German] tax relief of around €8 billion for 2013 and 2014. It almost looks as if the Greeks financed the little German tax reform," he added (Valentina Pop, "Germany estimated to have 9 bn euro profit out of crisis", www.euobserver.com).

The old statement of Mussolini is indicative: "Germans have even stolen from Greeks their shoelaces"
I would like to thank you for your attention and to ask for your help and your understanding so to demand what is rightful for my country.

Memories are short, andthe hurt is near the surface.

Greek military sackings highten fears

In an extraordinary developement the heads of all three of Greece's armed services have been sacked and replaced with figures seen to be more sympathetic with George Papendreou's regime.

General Ioannis Giagkos, chief of the Greek National Defence General Staff, to be replaced by Lieutenant General Michalis Kostarakos

Lieutenant General Fragkos Fragkoulis, chief of the Greek Army General Staff, to be replaced by lieutenant general Konstantinos Zazias

Lieutenant General Vasilios Klokozas, chief of the Greek Air Force, to be replaced by air marshal Antonis Tsantirakis

Vice-Admiral Dimitrios Elefsiniotis, chief of the Greek Navy General Staff, to be replaced by Rear-Admiral Kosmas Christidis

Like the anouncement of the referendum yesterday this seems to have been done with the utmost of speed and secrecy.

The opposition are furious and point out, not without reason that with a vote of confidence to be passed next week this is a rather precipitous act.

“Under no circumstances will these changes be accepted, at a time when the government is collapsing and has not even secured a vote of confidence,”

Is it just me or has the tyemperature round here just dropped a couple of degrees?

Junker: I was wrong to be honest about being a liar

In a rather shambolic exchange between UKIP's Nigel Farage and Jean-Claude Junker, President of the Eurozone, Junker comes up with an interesting point.

"Yes I lied, but I was wrong to have be so honest about it."



Worse he refuses to answer the important question, which is whether Greece can default and remain in the Eurozone.

Legally it can be done of course. It would take one hell of a lot of rewriting of contracts and would be a bureacratic nightmare, but it can be done.

However politically it is very interesting.

What will the EU say to Ireland for example? After all why should the Irish pay back 100% of their bailouts while the Greeks get a 50% cut.

Or what will he say to Italy who will read the lesson that it doesn't matter about too much austerity as the Eurozone will allow a default on its debts?

Neither of these key issues is addressed, and leaves the whole issue of Greek default is still a Gordian knot.

You pays your money

The IMF crowd are down Athens way, and the EU is looking at their books again. Meanwhile they are loking at Ireland.

Here, for example is the Greek situation,

The EU and IMF left a critical audit of Greek finances unfinished on Friday saying more budget work was needed, and the government admitted its deficit target is in trouble.
Finance Minister Evangelos Venizelos conceded that Greece would have to revise its public deficit target for this year, a key condition for continued funding from the 110-billion-euro ($158-billion) EU-IMF-ECB bailout loan agreed last year.

The Greek vacuum is still operating. Slightly better news however comes from Ireland,

The EU has agreed to provide Ireland with the next installment of its bailout package.


Ireland will receive €7.5bn over the next two months from the €85bn package granted by the EU and IMF last year.

The EU said the decision to release funds to Ireland followed "positive" quarterly reviews by the troika.

In a statement released this afternoon, the EU praised Ireland for making progress in the recovery programme and addressing weaknesses in the financial sector.

This isn't good news remember, it is merely not worse news. The bailouts are still necessary, and the crisis is far from over, but the shadow over Greece grows deeper and deeper. Meanwhile, what do they have that could act as collateral?

A plea for (Greek) clemency

The meme is that the Greeks are a feckless lot. Sitting around, lathered in phantom olive oil and glugging back pints of retsina whilst working one hour in 15 and collecting a vast gold plated pension from the state.

Here is a classic example of the type,

Retirement packages are guaranteed and generous.
About one in every four working people is believed to work for the state in one form or another. No-one is quite sure about the exact figure.
Yet the Greek public sector ranks as one of the world's most inefficient.
Pay is generous in some departments.
As one Greek businessman pointed out - a cleaner at the Ministry of Finance earns as much as a manager in other ministries.
Greece's brightest young graduates all want to work for the civil service.

However a Greek friend who wishes to remain anon sent me this, a call for comprehension and understanding if not support,

It reflects my own experience earlier this year when I was in Istanbul. I met a Greek academic who told me that he preferred to be working in a private University in Istanbul on a contract, rather than his previous tenured position in a Greek state university. It reflects also the fact that you used to be able to opinion-poll Greek mothers who would overwhelmingly respond to the question 'what future do you want for your child?' with 'a permanent position in the public sector'.

The Greek experience has similarities to both the Portuguese and also the Spanish experience ... especially the Gonzales Spain. What we saw in these countries was a vast post-dictatorship expansion of the public sector / welfare state so that those marginalised by the dictators could also benefit.

But Portugal had a relatively efficient public administration and trade (legacies of its being a colonial power) and Spain - in addition to Portugal - had some industrial weight. Greece had neither. In fact, because Greek industrialists knew that the government was sensitive on unemployment, they would just abandon unprofitable enterprises (having sold off anything valuable), in the safe knowledge that the state would come in and take them over to prevent job losses. So between 1974 and 1989 Greece ended up with a vast amount of unprofitable, inefficient, industrial units on its hands - "the problematics" as they were known then - which few people knew what to do with, and even fewer dared suggest that they should be closed down.

We need to be careful not to attach too much importance to particular individuals or social theories. The Greek disease goes much beyond Andreas Papandreou or socialism. Greece's experience of the 20th Century was an involvement in WWI which almost led to civil war, defeat in Asia Minor in the early 20s which led to massive population shifts and dictatorship, through to the depression of the 30s, and another dictatorship, WWII, occupation and mass starvation, post WWII civil war and finally yet another dictatorship which ended with military defeat in Cyprus in 1974. Mass emigration throughout this period was a drain on society and on families.

That's pretty much 60 straight years of suffering for the ordinary people. Little wonder that the safety net of a feather-bedded public sector is attractive to Greeks.

And before that of course the centuries of Ottoman rule and dhimmitude.

First they send over 'technical assistance'

It is one of those well worn tracks of international affairs. When one big powerful country wants to take over a smaller less powerful country. But wants to do it subtlety.

It starts with the offer of technical assistance. It is how the East India Company operated in India. It was what Kennedy described the first involvement in Vietnam. It now appears to be what is happening in Greece.

It is the provision of 'technical assistance'.

Here are some comments of Barroso quoted on Monday,

The Commission president said he had "no doubt" of the Greek government's determination to push through the necessary structural reforms. "But there are problems in terms of administrative capacity," he said.

This was quoted elsewhere on Agence Europe,

In Brussels on Monday evening the Greek prime minister, George Papandreou, is believed to have expressed his interest in this initiative. Technical assistance may also be forthcoming to help Greece to resolve a deficit in its "administrative capacity", said Barroso.

So what we are seeing here is the Commission will be sending over 'experts' to provide technical assistance and 'help' the Greek authorities carry out measures that the Greek people do not want, against their will.

The policies are those demanded by the suzerain overlords of Brussels.

UKIP predict Greek bailouts in Feb 2009

Here is John Whittaker, one of UKIP's former MEPs predicting the Greek bailouts in 2009, and predicting that they would fail.



You saw it here first

Thems that own your debt owns you

Which is a leetle bit concerning when you look at the provenance of those in the mix when it comes to Europe.

Earlier in the year we saw that China was helping out, out of the kindness of their own hearts no less.

China has been increasing its holdings of European Union countries' debt, including Spanish government debt, since the outbreak of the European sovereign debt crisis,

Today their Foreign Minister made clear that they were a leetle bit concerned,

We have supported other countries, especially European countries, in their efforts to surmount the financial crisis," Fu said. "We have, for example, increased holdings of euro debt and promoted China-European Union trade."

Beijing has said in the past that it has bought Greek debt, but has never revealed the size of its investment.

Since euro zone debt worries first rippled through markets last year, China has repeatedly said that it has confidence in the single-currency region.

"We have hoped to help euro zone countries in overcoming the crisis, and this is also a measure that is beneficial to China's own economic development,"

Tpoday we learn that it isn't just kind Mr Wen Jiabao, who along with European debt is making Mr An Wei Wei disappear that is there for us. It is that nice man Mr Putin.

Pravda is crowing today,

Europe continues to drown in the swamp of the world financial crisis. The countries of the eurozone have taken tough measures to cut budget deficits, but the southern part of the continent faces a serious danger of bankruptcy. Russia appears to be an island of stability amid major wars between currencies. The IMF asked Russia for $15 billion to stabilize global markets - this is an outstanding event in the world of finance indeed. It seems that the fate of the joint European currency now depends on the Kremlin.

I mean seriously wouldn't it be better to just let Greece default and spare us the inevitable concerns of those two as best friends?

When in debt, best get onto the starting grid

Gloriously inappropriate stuff from the Greeks. There they are in the midst of the crisis. Pensioners are having their taxes sent to SAthens to prop up their welfare state and lo and behold the Greek government decide to spend some of Germany's hard earned cash, on a, Formula 1 track.

Yehay,
The project has an estimated cost of 94 million euros ($135 million) and will be partly subsidised by the Greek state.

The track, designed to accommodate Formula One races as well as motorbike and cart events, will be built near the town of Farres, some 20 kilometres (12 miles) southeast of Patras.

Austerity all round.

I am sure Hockenheim and Nuremburg will be delighted

The last thing Athens needs

It would take a dark dark comedian to come up with this one. Greece's bond spread vis-a-vis with Germany at record highs, nobody trusts its restructuring plans, members of its socialist government muttering about default, German Ministers muttering louder, and others suggesting that Greece is only a heartbeat away from civil unrest or public revolt.

So now would be a really good time for this to happen,

The European Commission ordered Greece Friday to repay almost 260 million euros ($375 million) in misused farm payments.

The European Union executive hit Athens with a bill for 137.33 million euros for "ineligible expenditure and major shortcomings" in an olive cultivation programme and weak "on-the-spot controls."

Now repeat after me, nobody could haver known that Greece was cooking the books before joining teh Euro.

It would as Mr Wilde once said, take a heart of stone not to laugh.

Greece is flamable: Enter Moody’s with a match.

A splendid line in the WSJ's reporting of the EU financial crisis today.

The favored Brussels buzzword these days is “relative calm.”

As in, “there is relative calm in financial markets, so let’s just take a few deep breaths on all this sovereign-debt-crisis stuff.” In this context, “relative calm” means “no one is, at this precise moment, engulfed in flames.”

And yes nobody is currently engulfed, but the act of the credit ratings agency Moody's of downgrading Greece to B1 may well put paid to the sanguinity of the EU's financial gnomes.
Charels Forelle points out that the Greek huffing and pufing about this downgrade can be countered quite simply by a reading of the EU's own paper on the subject, Occasional Paper No. 77.
He pulls out some details, such as.

Once Greece is weaned off the EU-IMF bailout in 2013, it will be walloped with a big “hump” of repayments; it’ll need to borrow a staggering €81 billion in 2014, the commission calculates. Last year, the EU agreed–at least in principle–to give Greece more time to repay the loans. That, if it’s adopted, will help. But only some: Greece will still need to borrow about €55 billion in 2014, the commission figures show.

Ouch. No doubt there will be even greater calls for the EU to set up its own ratings agency, in an attempt to stop their ears against the cries of reality.

Greeks propose a way forward for smokers

In the frst four months of teh Greek blanket smoking ban pover 450 penalty notices have been handed out to bars in the Athens area alone. It is obviously not running as smoothly as it has done in the UK with widespread disobiedience.

So the Greek government, which is cash strapped remember, has had a  collective head-scratching about this and has come up with a nice idea. After all they are pretty well hated amongst the population, and this EU driven legislation is just pissing off the populace. So they are proposing this,

The Greek government is planning to introduce smoking licences for wet-led venues so that customers can smoke.


The cost will be decided based on the size of the establishments and any venue that allows smoking without the licence will be closed.

There is of course the fiscal incentive...

The government believes it could bring in “at least” €50m (around £42m) from issuing the smoking licences.

So Mr Cameron. You can be liberal, big society, and raise cash for the exchequer? What do you think?

If China is acting in its own interests, why is it helping out Greece?

Trichet, makes the rather obvious point that China is acting in its own interests. He didn't think they would act out of charity did he?

But that leaves open the question, flagged up here and mentioned very briefly in one of the Sunday papers that China is backing up Greece.

Chinese Premier Wen Jiabao said on Sunday during a visit to Athens. "It is with joy that we see Greece emerging from the shadow of its debt crisis," Wen told the Greek parliament.

"The financial market has started to stabilise, the budget deficit is coming down, investor confidence is increasing and a growth prospect is emerging on the horizon."

As they said of Metternich when he died, "Why did he do that"?

Particularly when it was followed by this,

"With its foreign exchange reserves, China has already bought and intends to buy new Greek bonds ... China will undertake a great effort to support euro zone countries and Greece to overcome the crisis." And here's another from yet another story: "When Greece is in trouble, China is prepared to provide all the help it can." And Wen was also reported telling the same news conference that was "China's best friend in the European Union."

So there you have it, dear reader. China has a new best friend. (Bet that's news to struggling peasants spreading night soil on parched fields.) We don't know what all this fulsome talk portends, but we're going to keep our big ears to the ground. It seems obvious to us that someone has leaned on China(and Wen) to say some very nice things about Greece – and to indicate at the same time that China intends to ensure Greece's solvency.

Now I have no idea what is going on here, maybe China has taken a fancy to Pireaus harbour, I have no idea, but it is a little odd don't you think?

And do we really want China to be supporting us, in a sort of global realpolitik sort of way?

Chaos and confusion in Greece hits Euro still further

At the last European Council of Ministers meeting, with the German's and French to the fore the Eurocrats thought they had finagled a way through the Greek Euro morass.

Seems like they forgot to tell Athens. Bloomberg report that,

The euro declined for a third day against the dollar amid speculation that a plan for Greece to obtain European Union and International Monetary Fund help in cutting its budget deficit may falter.

Meanwhile in a desperate action to steady the ship Reuters are reporting,

Greece is not seeking to renegotiate an EU-IMF safety net agreement, a senior finance ministry official told Reuters on Tuesday after media reports that the debt-laden country had wanted to amend the deal. "There is no request from Greece to renegotiate the agreement. There is a deal on the support mechanism and we are sticking to it," said the official, who requested anonymity.

If that is the case why demand anonymity? Why indeed. The bottom line is that the markets don't seem to believe it.

Greece still in all sorts of trouble

The deal seems to be, we, the EU, don't want to bail you out because of the precedent that it will set. But you really need to do soemthing or we will surely fall together.

With the riots already happening and the austerity measures beggining to cause panic it is interesting that the EU is making it clear that the barricades are not tall enough on Athenian streets.

What is at present pretty localised trouble in that unhappy country is set to get far far worse if this is anything to go by.

"They [the EU] are telling us the current measures will only cut two percentage points. They are pushing very hard for another package of around €4 billion," the official, who asked not to be identified. "Greece thinks a package of €2 billion to €2.5 billion will be enough to achieve the targets," he said.

The imperial accountants have swung in, and swung out and are to deliver their instructions to the provincial Greecian Government next week.

In order to meet those goals, the government has announced a series of spending cuts and tax increases that it believes will produce a combined €8 billion to €10 million in savings and additional revenue.

So far, those measures include a freeze on civil service wages, cutting public-sector entitlements by 10% on average, a fuel tax increase, and closing dozens of tax loopholes for certain professions—including some civil servants—who now pay less than their fair share in taxes.

But Greece's European partners remain unconvinced. Since the EU issued its rhetorical support for Greece on Feb. 12, EU members including Germany and France have demanded that Greece take further steps to close its budget gap before they commit to any specific financial support for the country. The new measures are likely to include an increase in the current value-added tax rate of 19%, more cuts in civil service entitlements, and higher duties on luxury items, like boats and expensive cars.

It is going to be a difficult spring.

Ask a stupid question.

Greece has shocked the European Union by adjusting its expected budget deficit for this year to 12.5 % of GDP, twice what was originally predicted. The announcement was made at the finance ministers meeting in Brussels yesterday by Greek Finance Minister, Papaconstantinou.

He 'fessed up about how the former government manipulated statistics and accidentally forgot to imclude include government debts in its figures.

Commissioner Almunia said the EU must investigate why and how Greece adjusted its statistical data.

He asked what?

As if we don't know. They did so in order to fraudulently join the Euro. We all know this, and the approach was more than tacitly supported by the European elite. Why? Simple. Because it was a political imperative.

I wonder how much the investigation is going to cost? And I am prepared to bet that the Commission's investigation will discover that nothing wrong happened at all desîte the Greeks admitting that it did.

Aside
Interestingly this story was brought to my attention by the Parliament's Czech press cuttings service, whereas the Greek service fails to mention it. I wonder why?