Greece Will Not Sell Stake of Natural-Gas Operator to Azeri Firm Socar

by Nektaria Stamouli

Wall Street Journal
November 30, 2016

Greece said Wednesday it had failed to reach an agreement with Azerbaijan’s state energy company, Socar, to sell a 66% stake in Greek natural-gas operator Desfa, creating another obstacle in the country’s efforts to reach the privatization targets dictated by its bailout agreement.

The Azeri company proposed reducing the price of its investment, whose initial amount was €400 million. The proposal “was legally unfeasible and would cancel the tender,” a statement from Greece’s Energy Ministry said.

“The Greek government will decide on how it will re-launch the tender next week after consultation with its international creditors,” an energy ministry official said.

Greece must raise some €6 billion through the sale of state-controlled assets by 2018, according to the terms of its third bailout agreement with creditors, reached in 2015. The Azeri company first agreed in 2013 to buy a 66% stake in Desfa, per the privatization plans laid out in the second bailout, which was agreed to in 2012.

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Short-Term Debt Plan for Greece: All You Need to Know

by Viktoria Dendrinou

Wall Street Journal
November 30, 2016

A set of proposed short-term measures to ease Greece’s debt burden could reduce the country’s debt load by around a fifth in 2060, according to a paper drawn up by the the European Stability Mechanism, the eurozone’s bailout fund, and seen by The Wall Street Journal.

We wrote about the proposals here, but thought we should offer some more detail on what they would entail.

These are the proposed “short-term measures,” part of a framework agreed by Greece’s creditors in May which aims to make Greek debt more sustainable. The more controversial medium- and long-term measures are set to be discussed at the end of the bailout in mid-2018.

A spokesman for the ESM said the paper was “a working document that has not yet been endorsed by the euro area finance ministers.” He said ESM Managing Director Klaus Regling would present the proposals to eurozone finance ministers at their next meeting on Dec. 5.

The ESM paper outlines three such short-term measures.

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Eurozone Bailout Fund Proposes Short-Term Debt Relief for Greece

by Viktoria Dendrinou

Wall Street Journal
November 30, 2016

Confidential proposals drawn up by the eurozone’s bailout fund could reduce Greece’s debt load by about a fifth in 2060.

A six-page document, dated Nov. 25 and seen by The Wall Street Journal, was produced by the European Stability Mechanism, the Luxembourg-based eurozone bailout fund. It outlines measures that could be taken in the near future to reduce Greece’s large debt load.

The paper proposes to ease Greece’s debt load by extending some maturities and locking in the interest on some of Greece’s loans to shield it from future interest-rate increases.

The cumulative impact of these measures in 2060 would cut the ratio of debt to gross domestic product by 21.8 percentage points.

An official eurozone analysis in May projected debt-to-GDP of 104.9% in 2060, under a baseline scenario in which Greece fully implements its bailout program.

“This is an ESM working document that has not yet been endorsed by the euro area finance ministers. The document comes in response to the mandate the ESM was given by [euro area finance ministers] on May 25 to work for the short-term on a first set of measures to improve the debt sustainability for Greece,” an ESM spokesman said.

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Clock ticks for EU to reach IMF deal on Greece

by Jim Brunsden & Kerin Hope

Financial Times
November 23, 2016

The eurozone is running out of time to secure an agreement this year on International Monetary Fund participation in Greece’s €86bn bailout amid splits over the country’s economic reforms, budget targets and debt relief.

The fund still wants reluctant eurozone capitals to provide more detail about how far they will go to ease Greece’s mountainous debt burden.

Getting the IMF to take part in the Greek rescue has been a key objective for eurozone governments, notably Germany and the Netherlands, since the bailout was agreed last year. Berlin sees the fund’s participation as critical to convince sceptical German lawmakers of the rigour and robustness of the programme — but is also one of the governments most reluctant to grant Greece major debt relief.

People familiar with the talks also say a decision on IMF participation in the bailout is on hold until the latest progress review of the Greek programme, which began last month, is completed.

Officials are racing to make headway ahead of December 5, the last scheduled meeting this year of eurozone finance ministers. The IMF has indicated it will seek to decide by the end of 2016 on its participation.

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Greek Finance Minister Urges Quick Deal on Debt Relief

by Nektaria Stamouli & Marcus Walker

Wall Street Journal
November 17, 2016

Greece’s finance minister warned Germany and other creditors to agree on a debt restructuring in coming weeks, or miss the best chance to bring the struggling country’s seven-year crisis to an end.

Finance Minister Euclid Tsakalotos’s comments, in an interview with The Wall Street Journal, came a day after U.S. President Barack Obama visited Athens, where he backed calls for Greek debt relief. Mr. Obama continued his European trip in Berlin on Thursday.

German leaders including finance chief Wolfgang Schäuble have said Greece’s debt can be addressed at a later date. Mr. Tsakalotos, however, warned that procrastination could undermine the country’s hopes of recovery in 2017, and that the coming weeks offer an important opportunity for the eurozone to show it can fix, rather than avoid, its problems.

“If we kick the can down the road and say ‘we will decide in two years’” about how to make Greece’s debt sustainable, then investors will also postpone decisions about investing in Greece, said Mr. Tsakalotos, a leading figure in Greece’s ruling left-wing Syriza party.

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The time is up! A realistic proposal to end Greece’s debt overhang

by Chris Marsh, Dominik Nagly, George Pagoulatos & Elias Papaioannou

Vox
November 17, 2016

It is now seven years since the Greek crisis began. As well as reflecting the chronic deficiencies of its own institutions, the failings in Greece also reflect substantial shortcomings in international institutions. This column argues that it is time for all sides to move on, and proposes a simple debt operation for Greece that can deliver debt sustainability with minimal adjustments to the ESM operating procedures.

It is now seven years since the Greek crisis began. Since 2008, real output has been reduced by one-quarter; unemployment has been above 23% for over five years, and youth unemployment around 50%. Meanwhile, Greek public debt-to-GDP remains above 175% – despite a huge debt write-down. The banking system has long since stopped intermediating savings and investment; the welfare state is in dire straits. Non-performing loans clog the banking system. An exodus of the most talented and vibrant young Greeks has begun, eroding the tax base. Trust in democratic institutions has plummeted. For many Greeks, hope has long since given way to hopelessness.

The Greek crisis reflects chronic deficiencies of its institutions, structural shortcomings, indecisiveness, and unwillingness of its political system to address long-lasting problems, among perhaps deeper societal issues. Yet, the failings in Greece also reflect substantial shortcomings in international institutions. The IMF failed to fulfil the promise of Bretton Woods to provide temporary financial support to facilitate external adjustment “without resorting to measures destructive of national or international prosperity.” EU institutions – those intended to foster peace through cooperation and shared prosperity – have turned upon each other.

It’s time for all sides to move on.

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Tsipras Expects Trump to Govern Differently Than He Campaigned. Tsipras Would Know.

by Emily Tamkin

Foreign Policy
November 15, 2016

At a joint Tuesday press conference in Athens, U.S. President Barack Obama and Greek Prime Minister Alexis Tsipras spoke about — what else? — the implications of Donald Trump’s election.

Obama noted America is not alone in the popularity of its populists. In Europe and America alike, “people are less certain of their national identities or their place in the world,” he said. “It starts looking different and disorienting. And there is no doubt that has produced populist movements, both from the left and the right.”

And Tsipras noted, as Obama did at his press conference Monday, that though Trump had an “aggressive manner” during the campaign, the U.S. president-elect is likely to act differently once in office.

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Obama Arrives in Greece to Reassure Europe on Continuity of U.S. Alliance

by Carol E. Lee & Nektaria Stamouli

Wall Street Journal
November 15, 2016

President Barack Obama arrived in Greece Tuesday for the start of a weeklong trip overseas that will be dominated by efforts to assure nervous world leaders of continuity in U.S. alliances and key policies in the wake of Donald Trump’s election victory.

With just two months left in office, Mr. Obama isn’t expected to make major policy strides during stops in Greece, Germany and Peru. He chose to visit Europe during the last foreign trip of his presidency to underscore his concerns about the economic and security future of the continent, White House officials said.

While in Greece, his first visit to the country as president, Mr. Obama will meet with Prime Minister Alexis Tsipras. He will also attend a state dinner Tuesday evening.

On Wednesday Mr. Obama will tour the Acropolis before delivering a speech that will “focus on the important work that’s been done to try to address the economic challenges in Greece and Europe and around the world,” said Ben Rhodes, one of the president’s deputy national security advisers.

Greece’s government hopes Mr. Obama’s visit will raise pressure on its international creditors, especially Germany, Europe’s dominant lender, to offer substantial debt relief. Mr. Obama is due to meet German Chancellor Angela Merkel, as well as other major European leaders, in Berlin later this week.

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Greece, Seeking Dose of Stability, Is Rattled by Trump’s Win

by Liz Alderman & Niki Kitsantonis

New York Times
November 14, 2016

Before last week, Greece expected that it might benefit from what was supposed to be a triumphal valedictory lap by President Obama as he lands in Athens on Tuesday to kick off his final world tour.

Mr. Obama has been supportive of Greece’s efforts to get its finances in order, and of Europe’s bid to keep Greece stable. Prime Minister Alexis Tsipras hoped that Mr. Obama, who travels to Berlin on Thursday, might even persuade the German chancellor, Angela Merkel, to offer Greece some debt relief by the end of the year.

But that possibility has all but evaporated with the victory of Donald J. Trump.

Instead, Mr. Obama will arrive in Athens with his legacy threatened and his leverage sorely reduced. His visit has turned into yet another reminder of the ways in which Mr. Trump’s ascendancy is changing the calculations of leaders across Europe. Mr. Tsipras is among the most vulnerable of them.

“The expectation was that Obama would relay a message about how impressed he was with Greece’s progress,” said Jens Bastian, an economics consultant based in Athens and a former member of the European Commission’s task force on Greece. “But given that Trump will assume the presidency, all bets are off.”

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Barack Obama calls for 'meaningful debt relief' for Greece

by Helena Smith

Guardian
November 13, 2016

The US president, Barack Obama, has signalled he will use a critical two-day visit to Athens this week to step up calls for the country to be given “meaningful debt relief”.

Weighing in on the potentially explosive issue of how best to revive the European Union’s most financially strained member state, the outgoing president said debt forgiveness would play a pivotal role in giving people hope. “I am a strong believer that to make reforms sustainable, people need hope,” he told the Greek newspaper Kathimerini before the trip, which will be his final state visit before leaving office. “The International Monetary Fund has said that debt relief is crucial to put Greece’s economy on a sustainable path and set the stage for a return to prosperity.”

Obama, who has blamed the excoriating effects of austerity on Europe’s slowing growth, said while Athens needed to implement reforms, a nominal write-down would help reignite an economy that has lost over 25% of its output since the nation’s financial woes first surfaced seven years ago. At around €330bn (£284bn), or 180% of gross domestic product, Greece’s staggering debt is by far the biggest in the EU.

“That is why I will continue to urge Greece’s creditors to take the steps needed to ensure the country is well placed to return to robust economic growth, including by providing meaningful debt relief,” he said in the interview. “Getting that done would not only fuel the Greek economic recovery, it would show that Europe can make its economy work for everyone.”

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Obama: Greeks 'need hope'

by Alexis Papachelas

Kathimerini
November 12, 2016

In a wide-ranging interview with Kathimerini, US President Barack Obama insisted that he will continue to urge the country's creditors to take the necessary steps that will ensure Greece returns to growth, including “meaningful debt relief.”

Speaking ahead of his two-day visit starting on Tuesday, the outgoing US president said that Greece must continue on the path of necessary reforms, which he said can only be sustainable if people are given hope.

Obama praised bilateral ties, lauding Greece's contribution to the NATO alliance despite its “economic hardships,” and the close cooperation on counterterrorism. He also commended the “inspiring” generosity the Greek people have shown to the refugees.

Has Greece become a “front-line state” in terms of security, energy and dealing with international terrorism? What does this mean for the US-Greek relationship? What is the message you want to convey to the citizens of Greece?

First, I want to say how much I appreciate the opportunity to visit Greece, and I thank Prime Minister [Alexis] Tsipras and President [Prokopis] Pavlopoulos for the invitation. My visit comes at a time when Greece is at the forefront of pressing challenges to our shared security and prosperity. The threat of terrorism from groups like ISIL endangers us all. The barbarity of the Assad regime in Syria and ISIL has contributed to the waves of migrants and refugees that have sought refuge in Europe, especially Greece. And on both sides of the Atlantic, we face the task of ensuring that our political institutions and economic policies are responsive to our people, many of whom feel that they have been hurt by globalization and trade.

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In Greece, Property Is Debt

by Nikos Konstandaras

New York Times
November 1, 2016

At law courts throughout Greece, people are lining up to file papers renouncing their inheritance. Not necessarily because some feckless uncle left them with a pile of debt at the end of his revels; they are turning their backs on what used to be a pillar of Greece’s economy and society: real estate. Growing personal debt, declining incomes and ever higher taxes as Greece’s depression grinds on have turned property and the dream of easy money into dread of a catastrophic burden.

The figures are clear. In 2013, two years after a property tax was introduced (previously, real estate tax revenue came mainly from transfers or conveyance taxes), 29,200 people declined to accept their inheritance, according to the Justice Ministry. In 2015, the number had climbed to 45,627, an increase of 56 percent in two years. Reports from across the country suggest that this year, too, large numbers of people are refusing to inherit.

“This can be very painful,” said Giorgos Voukelatos, a lawyer. “People may lose their family home. Because if the father or mother had debts, the child might be unemployed and unable to carry this weight as well.”

The growing aversion to property is evident in the drop in business at notaries public. The national statistics service, Elstat, reported in July that in 2014 there were 23,221 deeds in which living parents transferred property to their children, down from 90,718 in 2008. The number of wills drawn up or notarized has been steady through the crisis, at around 30,000 annually, suggesting that many inheritances being rejected were not part of formal wills. (More than 120,000 people die each year.)

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Tsipras Caught Between EU and Voter Demands

by Giorgos Christides & Katrin Kuntz

Spiegel
November 1, 2016

When he got elected nearly two years ago, Greek Prime Minister Alexis Tsipras promised to stand up to the EU's austerity demands and restore his country's dignity. His failure to deliver risks plunging the country into a new political crisis.

The neighborhood around Villa Maximos could be out of a fairy tale: There's an avenue lined with bitter orange trees in front of Alexis Tsipras' official residence, and the National Garden, with benches for couples, is located just next door. It has been reported that the Greek prime minister and his cabinet used to take calm strolls here. After his victory in early 2015, Tsipras had ordered that security barriers in front of parliament be torn down. "We don't need a police state," he announced. In other words: the 11 million Greeks who love us will take care of our security.

Today, 21 months later, the neighborhood has changed. Two riot police buses now seal the avenue leading to Villa Maximos. Officers stand watch in front of it around the clock.

The people's love of Tsipras has turned into anger. Because of their diminishing salaries, air-traffic controllers, doctors and teachers are standing up to the government. About four weeks ago, retirees tried to topple the police buses, their faces full of anger and disappointment. When police officers drove the seniors back with tear gas, an outcry swept across the country: Hadn't Tsipras promised that things like this would never happen again, they asked?

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