Is Greece Ready for a Ronald Reagan or Margaret Thatcher?

by Dan Mitchell

International Liberty
December 27, 2017

I’ve written that it’s theoretically possible for Greece to pay its debts and restore prosperity.

After all, it’s simply a matter of obeying fiscal policy’s Golden Rule and reforming a suffocating tax system.

But I’ve always figured none of that will happen because Greek voters would never vote for a government that favors Reagan-style or Thatcher-style economic reforms.

Simply stated, there are too may Greek people living off the state. But that’s just part of the problem. An even bigger obstacle to reform is that the people have decided that it’s morally acceptable to mooch off the government.

As a result, I’ve assumed that Greece has passed a tipping point because the moral foundation of Greek society has been corroded by dependency. And it’s very difficult to put that toothpaste back in the tube.

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Check, please: How much Alexis Tsipras's first months cost Greece

by Yiannis Mouzakis

MacroPolis
December 20, 2017

This time last year, Alexis Tsipras was in the awkward position of having missed his main objectives and found himself at odds with Greece’s creditors over his decision to hand out a 13th pension.

The conflicting interests of key stakeholders in Greece’s programme did not converge and the last Eurogroup of 2016 did not lead to the conclusion of the second review. Instead, it dragged on until June this year. Most critically, the main goal of being included in the European Central Bank’s QE programme was missed as the ECB required assurances about the country’s long-term debt sustainability and Germany was not willing to discuss even the medium-term debt relief measures, which were eventually pushed back to the end of the programme in 2018.

The months that followed were ridden with uncertainty and the economy slowed down. To seal a deal at last June’s Eurogroup, Tsipras agreed to additional fiscal measures worth 2 percent of GDP in the form of pension cuts and tax hikes for 2019 and 2020, mostly to appease the fiscal concerns of the International Monetary Fund.

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The Greek Experiment: Can an Economy Be Wiped Out by Taxation?

by Dan Mitchell

International Liberty
December 16, 2017

Greece has confirmed that a nation can spend itself into a fiscal crisis.

And the Greek experience also has confirmed that bailouts exacerbate a fiscal crisis by enabling more bad policy, while also rewarding spendthrift politicians and reckless lenders (as I predicted when Greece’s finances first began to unravel).

So now let’s look at a third question: Can a country tax itself to death? Greek politicians are doing their best to see if this is possible, with a seemingly endless parade of tax increases (so many that even the tax-loving folks at the IMF have balked).

At the very least, they’ve pushed the private sector into hospice care.

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Greek Bond Yields Fall to Lowest Since 2006

by Christopher Whittall

Wall Street Journal
December 15, 2017

The yield on 10-year Greek government bonds closed Friday below 4% for the time since 2006, the latest sign of investor optimism over the outlook for the formerly troubled economy.

The 10-year yield declined to 3.93% from 4.096% on Thursday, according to Tradeweb. Yields fall as prices rise. That compares to a high of 37% during the eurozone crisis in 2012 when Greece defaulted on its debt, and 7.86% in February.

Earlier this year, the Greek government reached a deal with its international creditors over its bailout package, sparking a sharp rally in the bonds. That enabled the country to return to capital markets in July with its first debt sale in three years. The rally has accelerated in recent sessions, with the yield dipping below 5% for the first time in years on Dec. 5.

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Erdogan wraps up tense Greece visit with trip to Thrace

by Kerin Hope

Financial Times
December 8, 2017

Turkish President Recep Tayyip Erdogan wrapped up a tense visit to Greece on Friday with a brief trip to the northeastern region of Thrace, the home of a Muslim minority of mainly ethnic Turkish descent.

“Erdogan, Erdogan, our leader,” shouted a crowd of several hundred people outside a mosque in Komotini where the Turkish leader attended midday prayers.

Later, Mr Erdogan addressed members of the minority at a Greek state highschool where most lessons are taught in Turkish. He also met with community representatives, including Muslim MPs from the governing left-wing Syriza party and Muslim religious leaders, before flying back to Ankara.

In Athens, Mr Erdogan on Thursday accused Greece of historic discrimination against the minority, asserting that the per capita income of the ethnic Turkish community was more than 80 per cent lower than that of other Greek citizens.

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Outspoken Erdogan shocks hosts on visit to Greece

by Kerin Hope

Financial Times
December 8, 2017

Greece has been left smarting after Recep Tayyip Erdogan used the first visit by a Turkish head of state in 65 years to make outspoken remarks on bilateral disputes between the two neighbours

During a two-day visit Mr Erdogan’s comments on minority rights, Cyprus and the treaty that defines the Greek-Turkish relationship visibly shocked Prokopis Pavlopoulos, his Greek counterpart, and put Alexis Tsipras, the prime minister, on the defensive at a joint news conference.

Mr Erdogan publicly rehearsed a series of bilateral grievances that at their most extreme have brought the two Nato allies and Aegean neighbours to the brink of war.

Athens had billed Mr Erdogan’s visit as an opportunity to consolidate bilateral ties and perhaps make progress towards reducing the continued flow of refugees and migrants from Turkey to the eastern Greek islands. While refugee arrivals have shrunk since last year’s deal between Ankara and the EU, Greek officials are concerned about an rise in numbers over the past six months.

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Greece Just Witnessed Something It Hasn’t Seen Since 2006

by Marcus Bensasson

Bloomberg
December 4, 2017

Greece’s economy expanded for a third straight quarter for the first time in more than a decade, providing a foundation for the country’s attempts to exit its bailout program next year.

Gross domestic product grew 0.3 percent in the three months through September after expanding a revised 0.8 percent in the previous quarter, the Hellenic Statistical Authority said in a statement on Monday. From a year earlier, GDP grew 1.3 percent.

Greece’s government and representatives of the country’s creditor institutions on Saturday agreed on a set of economic overhauls the country must undertake in exchange for fresh loans. The payout, supplemented by more bond market forays next year, will help the government build a cash buffer as it seeks to prepare for its bailout exit when the current program expires in August 2018.

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Greece’s Dangerous Budget Surplus

by Yannis Palaiologos

Wall Street Journal
December 3, 2017

At first glance, Greece’s traumatic 2015 bailout—its third in five years—appears to be working. The government’s budget is back in surplus, excluding debt service, after the years of deficits that contributed to the country’s first crisis in 2010. The radical leftist prime minister, Alexis Tsipras, now touts the “restoration of Greece’s fiscal credibility.” As recently as 2014 he savaged his predecessor, who achieved much lower surpluses, for “austerity.”

The only problem is that the bailout is not in fact working, if you think the goal should be to restore Athens to sound public finances and to offer Greeks economic hope for the future.

The European Commission’s autumn forecast predicts eurozone economic growth of 2.2% this year, the fastest in a decade. But Greece is falling further behind. It was originally projected to grow by as much as 2.7% in 2017. Six months ago, the EU’s number crunchers reduced that forecast to 2.1%. Last month they cut it further, to 1.6%.

This anemic performance is caused both by excessively demanding fiscal targets and by persistent structural impediments to investment. On both fronts, Greece’s creditors are complicit in the country’s continuing woes.

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Greek central bank chief cleared over personal assets statement

by Kerin Hope

Financial Times
December 3, 2017

Greece’s central bank governor has been cleared by a Greek parliamentary audit committee of charges that he made false statements about his personal assets while serving as finance minister between 2012 and 2014.

Yannis Stournaras last month requested a fresh audit of his asset statements made between 2012 and 2014 after Documenta, a pro-government weekly newspaper, revived an earlier accusation in Hot Doc, an investigative magazine, concerning his family’s summer home on the Aegean island of Syros.

Documenta wrote that Mr Stournaras failed in 2012 and 2013 to declare alterations carried out at his property on Syros that increased its value.

“The new audit showed that everything [concerning the Syros property] took place according to the law . . . There is no outstanding legal or political issue,” a person involved in the parliamentary procedure said on Sunday.

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Greece hopes reforms deal will smooth bailout exit

by Kerin Hope

Financial Times
December 3, 2017

Greece has reached agreement with its international creditors on reforms required to release the next loan tranche under its current bailout, boosting the leftwing Syriza government’s hopes of achieving a smooth exit from the €86bn programme next August.

“The [EU and IMF bailout monitors’] visit is completed, we have closed the [technical] agreement,” Euclid Tsakalotos, finance minister, said after the week-long talks ended on Saturday.

An EU statement confirmed that a deal — which includes energy sector reforms and fiscal and structural measures bringing Greece in line with eurozone counterparts — had been reached. It must be approved by eurozone finance ministers, who are due to meet on Monday.

Since the creditors’ third review of progress made by Athens was launched in October, the Syriza government has shown greater willingness than previously to make compromises.

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Europe Needs a Way to Prevent the Next Greek-Style Debt Crisis

by Ferdinando Giugliano

Bloomberg
November 29, 2017

If there was ever a textbook example of how not to handle a sovereign debt crisis, it was Greece. Nearly a decade since Athens first asked for help from its euro zone partners and the International Monetary Fund, the Greek economy is still struggling to recover. Even after a steep restructuring, sovereign debt remains unsustainable. If Greece is not to be crippled by its debt load, European governments will have to accept further debt-reducing measures, on top of the maturity extensions and the cut in interest rates they have already agreed to.

So it's no surprise that one of the key debates on the future of the euro zone relates to how sovereign debt restructuring should be made easier. There is little doubt that forcing losses on creditors at an earlier stage, as some propose, would increase the chance that a program of financial assistance is successful. However, the euro zone should be wary of automatic triggers; they risk bringing on the very crisis they are designed to avert.

The debate on the future of debt restructuring in the euro zone largely involves two positions. The first, which is widely shared in Germany, sees an orderly debt restructuring mechanism as an essential next step for the currency union. When a country applies for financial help from the European Stability Mechanism (ESM), creditors should face some form of debt restructuring immediately. This would ensure a better distribution of risks between debt-holders and the ESM. The threat of a haircut will make investors more discerning in their lending, contributing to fiscal discipline within the euro zone.

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Greece prepares to do away with compulsory sharia in Western Thrace

Economist
November 28, 2017

As part of a passionate campaign to solve an apparently non-existent problem, American state legislatures have been presented, over the past decade, with at least 120 bills that sought to outlaw the practice of sharia, the Islamic legal system, and 15 of them have been enacted. With or without these laws, America’s attachment to its own constitution and judicial and legal system seems pretty robust.

Things are not quite so clear-cut on the other side of the Atlantic. Thanks to a vagary of history, there is one little patch of the European Union where sharia has hitherto held sway, not as a self-imposed code of behaviour but as a system under which Muslim citizens have been pressured to regulate their business, especially involving inheritance. That region is Western Thrace, a part of Greece adjoining the land border with Turkey. Alexis Tsipras, Greece’s leftist prime minister, is about to introduce legislation that will change that odd state of affairs.

The situation has its roots in regional history. Back in 1923, when Greece and Turkey were negotiating a massive, compulsory swap of religious minorities, it was agreed that two communities would have an exceptional right to remain where they lived: the Greek community of Istanbul (defined rather narrowly) and the Muslims of Western Thrace, a majority of whom spoke Turkish. Each community numbered around 110,000. After the vicissitudes of the past century, the Greeks of Istanbul have dwindled to a few thousand, while the Muslim population in Thrace has remained roughly level. (It would be much higher had there not been widespread emigration.)

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Surge in Migrants Creates Abysmal Conditions on Greek Islands

by Nektaria Stamouli

Wall Street Journal
November 26, 2017

Three months ago, Shehab Kabalan, a 20-year-old from Syria, traveled in a small boat from Turkey to Greece in the hope of receiving asylum in Europe and starting a new life.

Instead he is trapped on the island of Samos, living in a flimsy tent among dozens of other migrants and refugees, prevented from traveling to the mainland and now bracing for a hard winter.

Earlier this month, he slashed his wrists. A doctor patched him up and sent him back to the tent camp. “I felt desperate,” Mr. Kabalan said. “We are dying slowly here.”

Greece’s migration crisis has faded somewhat from view since a March 2016 pact between the European Union and Turkey stanched the enormous flows of migrants crossing the Aegean Sea.

But a surge in recent months has created abysmal conditions here, sparking accusations that EU and Greek authorities are leaving thousands of migrants exposed to disease, cold weather and violence as a deterrent to other would-be refugees. Earlier this fall, 200 people were crossing to the Greek islands of Samos, Chios, Lesbos, Leros and Kos daily, a fourfold increase over the spring. Arrivals have declined in recent weeks but remain high despite the worsening weather.

“The EU-Turkey deal incorporates strong elements of deterrence,” said Gabriel Sakellaridis, head of Greek operations for Amnesty International. “No political considerations should tramp upon human rights like that.”

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The Refugee Scandal on the Island of Lesbos

by Giorgos Christides & Katrin Kuntz

Spiegel
November 24, 2017

Those wishing to visit ground zero of European ignominy must simply drive up an olive tree-covered hill on the island of Lesbos until the high cement walls of Camp Moria come into view. "Welcome to prison," someone has spray-painted on the walls. The dreadful stench of urine and garbage greets visitors and the ground is covered with hundreds of plastic bags. It is raining, and filthy water has collected ankle-deep on the road. The migrants who come out of the camp are covered with thin plastic capes and many of them are wearing only flipflops on their feet as they walk through the soup. Children are crying as men jostle their way through the crowd.

Welcome to one of the most shameful sites in all of Europe. Camp Moria was originally built to handle 2,330 refugees. But currently it is home to 6,489.

Omar Sherki crawls out of a tent set up against the outside wall of the camp, a thin, pale man who was studying to become an engineer in Syria and played guitar in a rock band. He lives with hundreds of other men in an orchard outside the walls because Camp Moria has become so dangerous. His mattress lies on a wooden palette, beneath which rainwater has collected.

Omar is waiting for aid workers to distribute food: rotten-smelling meatballs and a bowl of rice. "I left to escape one war and ended up in a new one," he says.

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Greece probes central bank head over alleged leak

by Kerin Hope

Financial Times
November 19, 2017

Greece’s central bank governor is under investigation by an anti-corruption prosecutor over the alleged leaking of an auditor’s report on Piraeus Bank, a troubled Greek lender accused of violating capital controls imposed at the height of the country’s financial crisis.

According to two people with knowledge of the case, Yannis Stournaras, the governor, is accused of “violating his duties” by leaking an internal document produced by the central bank’s audit team detailing irregular practices by former senior executives at Piraeus.

Mr Stournaras strongly denied wrongdoing. He also rebutted an allegation, made last week in Documento, a Greek newspaper, that the central bank “selectively leaked” the Piraeus report as well as an earlier report by the Single Supervisory Mechanism, the European Central Bank’s bank supervisory arm, detailing poor governance at Attica Bank, a small Greek lender.

“I have full confidence in the competence and the conduct of the Bank of Greece staff. There was absolutely no leak of the audit on Piraeus and not a word of the text has appeared in any media,” Mr Stournaras told the Financial Times.

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Struggling Greek businesses cling to recovery hopes

by Kerin Hope

Financial Times
November 19, 2017

Greek carpenter Vassilis Tsigas surveys the cavernous shop floor of his family’s woodworking business where a handful of employees are finishing balcony doors for a boutique hotel on an Aegean island.

His company, which produces high-quality wood fittings for homes and hotels, was once a flourishing business, but annual turnover has dropped from €9m during the building boom a decade ago to just €1.5m last year.

“We just about managed to hold on . . . We got export orders from a few Greek architects working abroad because we could offer cheaper prices,” Mr Tsigas says.

But for the first time since the crisis began almost a decade ago, things have begun to get better. In July, the Tsigas brothers landed a contract to provide fittings for a luxury hotel in Athens being renovated by foreign investors. It will provide enough work for the company to re-hire a dozen employees laid off during the crisis.

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Greece announces €1.4bn ‘social dividend’

by Jessica Dye

Financial Times
November 13, 2017

Greek prime minister Alexis Tsipras made an unscheduled television appearance on Monday night to announce a €1.4bn “social dividend” to be paid next month to more than 3m Greeks who have been hit hardest by the country’s seven-year recession.

The handout was approved by the country’s bailout creditors, the EU and International Monetary Fund, in a teleconference earlier in the day. It amounted to more than double a similar payment of €617m made last year without prior agreement with the creditors, prompting a clash with the left-wing Syriza government.

The premier said this year’s fiscal performance “exceeded our most optimistic forecasts with the primary budget surplus (before payments on the public debt) set to beat the target of 1.75 per cent of gross domestic product by a large margin.”

The primary surplus for 2017 could reach an unprecedented 3 per cent of GDP thanks to higher-than-forecast revenues from social security contributions and tax revenues, according to analysts in Athens.

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Beyond Mamma Mia! Hollywood courted as Greece vies for slice of movie millions

by Helena Smith

Guardian
November 13, 2017

Nikos Giannopoulos still vividly recalls the excitement that swept the people of Amorgos when French film-makers arrived to make The Big Blue three decades ago.

“Everyone wanted to be a part of it,” says Giannopoulos, the movie’s executive producer, as he takes in the remote island’s dramatic landscape.

“It was a game changer that helped put Amorgos on the map.”

Luc Besson’s film about two free divers was a huge commercial success that went on to become a cult classic, and tourist arrivals soared. But more than a decade would elapse before blockbusters were shot again in Greece, with star-studded casts descending on the islands of Cephalonia and Skopelos in 2001 and 2008 for Captain Corelli’s Mandolin and Mamma Mia!

Subsequent pleas by film-makers to exploit the country’s unique natural attributes – its distinctive light, rugged landscape and aquamarine sea – invariably fell on deaf ears. Repulsed by a cumbersome bureaucracy and lack of financial incentives, Hollywood turned elsewhere.

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Greek terrorist’s temporary release sparks fury

by Kerin Hope

Financial Times
November 9, 2017

A convicted terrorist from Greece’s extremist November 17 group released from an Athens prison on Thursday on a two-day furlough prompted a storm of protest from politicians and civil society against the leftwing Syriza government.

Dimitris Koufodinas’s request for parole was approved by the Korydallos prison council, which specified he must report to his local police station twice a day.

A leading member of N17, Koufodinas is serving a series of life sentences for killing 11 prominent Greeks and foreign officials between 1976 and 2000.

The council had rejected several of his previous requests, which were made under a regulation that allows short furloughs for prisoners serving life sentences once they have spent eight years in jail. Mr Koufodinas was sentenced in 2003 alongside 14 other members of N17.

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Greek notaries begin 2-month strike

by Kerin Hope

Financial Times
November 8, 2017

Greece’s notaries have begun a two-month strike aimed at blocking the leftwing Syriza government’s plan to launch electronic auctions of repossessed properties this month, as agreed in the country’s current bailout deal with the EU.

The notaries resorted to industrial action after their requests for protection from attacks by leftwing extremists protesting against foreclosures were ignored by the authorities, according to Giorgos Roskas, president of their union.

The walkout raises concerns that Greek banks will miss this year’s target for reducing non-performing loans, with potential knock-on effects for the outcome of stress tests that the European Central Bank will conduct in Greece early in 2018.

News of the strike prompted Mario Draghi, president of the European Central Bank, to call for a swift solution to the dispute during Monday’s meeting of euro area finance ministers. Mr Draghi also stressed the importance of tackling the issue of non-performing loans, according to a Greek official.

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Man arrested for Papademos parcel bomb faces terrorism charges

by Kerin Hope

Financial Times
October 31, 2017

A 29-year-old man allegedly involved in a letter-bomb attack in May that wounded former Greek prime minister Lucas Papademos appeared on Tuesday before an Athens district attorney on terrorism charges, a judicial official said.

Constantine Giagtzoglou, who was arrested at the weekend at an apartment in central Athens, is also accused of sending a booby-trapped package in March to the Berlin chancellery addressed to finance minister Wolfgang Schauble, report Kerin Hope and Pavlos Papadopoulos.

The package was defused by German security experts before it reached the minister’s office.

Greek anti-terrorist police found a “small” explosive device under construction in the apartment Mr Giagtzoglou rented under a false name, along with explosives, detonators and a handgun, a security official said.

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Greece finally growing, but taxes crushing new businesses

by Derek Gatopoulos

Associated Press
October 31, 2017

If Greek business needed a role model, Stathis Stasinopoulos would make an ideal candidate.

An athlete, engineer, and entrepreneur, he invented an easy-folding bicycle design and began building them himself and created a small company. The project was shortlisted for a national start-up award in 2014 and, the following year, he peddled onto the stage to applause to give a motivational speech.

Today, he has some advice for young Greeks with a good idea: "Get your passport and leave."

In July, Stasinopoulos took his family and dream of a self-made business and moved them from Athens to bicycle-friendly Bremen, a city in northwest Germany. Years of effort had been crushed by high taxes and outdated bureaucracy.

"There are a number of reasons why I made the move. Many of them have to do with taxes," Stasinopoulos said, speaking at the small workshop of his newly-registered German firm, Velo Lab GmbH.

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Greek police make Papademos parcel bomb arrest

by Kerin Hope

Financial Times
October 28, 2017

Greek anti-terrorist police have arrested a man believed to be involved in a parcel bomb attack in May that wounded the former Greek prime minister Lucas Papademos.

The 29-year-old, who was not identified, was arrested early on Saturday at an apartment in central Athens that he rented using a false name, a police official said.

He is suspected of being a member of Conspiracy of the Cells of Fire, a radical anarchist group that claimed responsibility for sending a booby-trapped package in March to the Berlin chancellery addressed to finance minister Wolfgang Schäuble. Members of the group took part in numerous anti-bailout protests during the Greek crisis.

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Why Greece's Fate Helps Make Sense of Catalonia's Gamble: The lessons of economic pain

by Stathis Kalyvas

Atlantic
October 27, 2017

Anticipating the Spanish government’s decision to suspend Catalan autonomy, the Catalan government proceeded today to unilaterally proclaim independence. At about the same time, the Spanish Senate voted to suspend Catalan autonomy, following which Spanish prime minister Mariano Rajoy deposed Catalan premier Carles Puigdemont and other Catalan high officials, and called for elections in Catalonia to be held in December. Jointly, these actions are escalating the Catalan crisis. How are things likely to develop from now on?

Every political crisis is unique, yet sometimes analogies are useful—especially when crises are unfolding and the flow of information can be extremely confusing. Seen from this perspective, the Greek crisis of 2015 offers some useful analogies.

In 2010 Greece found itself unable to refinance its debt. Faced with the prospect of default, it accepted a massive bailout from its eurozone partners along with the IMF, in exchange for which it agreed to implement a large set of fiscally restrictive policies (“austerity”) and structural reforms. In turn, these policies led to an acute economic recession and a parallel political crisis which went through various phases and resulted in a massive political realignment. This process culminated in the January 2015 elections, which produced a victory of an anti-austerity party, Syriza.

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Greek PM to defend $2.4bn spend on US-made fighter jets

by Kerin Hope

Financial Times
October 27, 2017

Alexis Tsipras will defend a controversial decision by his leftwing government to spend up to $2.4bn on upgrading Greece’s elderly fleet of US-made F-16 fighter aircraft.

The Greek prime minister will insist in parliament on Friday that the agreement, while costly for a country struggling to emerge from recession, is critical to enhancing its strategic role in the unstable east Mediterranean, according to one government official.

Greece’s strategic importance for Nato is likely to increase as Turkey’s relationship with the alliance becomes increasingly strained over Ankara growing ties with Russia and other points of tension with its western allies.

The ruling Syriza party has set aside its former anti-American rhetoric since coming to power in 2015 in favour of building what party officials term a “pragmatic” working relationship with Washington based on “mutual interests”.

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Greek lessons for Brexiters

by Tony Barber

Financial Times
October 24, 2017

The Greek word kolotoumba, meaning “somersault”, is enjoying a return to favour — this time, in the context of Brexit.

Kolotoumba became a fashionable term in 2015 in response to the tactics of Alexis Tsipras, Greece’s once radical leftist prime minister. After insisting for months that he would not yield to Greece’s international creditors, Mr Tsipras “somersaulted” and accepted an emergency financial rescue, whose terms were more stringent than those he was offered to begin with.

At a Greek-British symposium held over the weekend at Nafplio, the Peloponnese seaport town that was modern Greece’s first capital, participants found themselves debating whether a kolotoumba might be in the offing with regard to Brexit. Was it plausible that the UK, despite the June 2016 referendum result, might not leave the EU?

Many participants favoured such an outcome, but few thought it probable. One opponent of the UK’s EU membership put the chances of a kolotoumba at zero to 0.1 per cent. By contrast, one supporter suggested a range from 10 to 30 per cent.

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Greek January-September government budget surplus slightly below target on lower revenues

Reuters
October 16, 2017

Greece’s central government attained a primary budget surplus of 4.5 billion euros (£4 billion) in the first nine months of the year, slightly below target due to lower tax revenues, finance ministry data showed on Monday.

The government’s target was for a primary budget surplus - which excludes debt-servicing costs - of 4.556 billion euros for the January-to-September period, meaning the surplus missed the target by 54 million euros.

The central government surplus excludes the budgets of social security organizations and local administration. It is different from the figure monitored by Greece’s EU/IMF lenders but indicates the state of the country’s finances.

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Greek transgender community hopes new law will improve lives

by Elena Becatoros

Associated Press
October 10, 2017

Before she had even reached puberty, Anna Kouroupou knew she wasn’t what her birth certificate said she was: a boy. But having herself officially declared female was a painful process, and one that could only legally be done if it included gender reassignment surgery.

Stigmatized, often abused and rejected, Greece’s transgender community is now hoping a controversial new law passed by parliament Tuesday will improve their daily lives and foster greater acceptance in what is often a deeply conservative society.

The law, passed with 171 votes in favor in the 300-member parliament, allows Greeks over the age of 15 to change the gender listed on their identity cards and other official documents at will, following a simplified procedure in court. Until now, those wanting to change how their gender is officially defined had to prove they had undergone sex-change surgery and psychiatric assessment.

“The legal recognition of gender identity is a huge positive step,” said 53-year-old Kouroupou, who began hormone therapy at the age of 17 and underwent gender reassignment surgery abroad at the age of 24. “The world of a trans person won’t change that easily,” but it will improve the daily problems and humiliations suffered by her community, she said.

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Greece Faces a Rerun of Its Refugee Winter of Discontent

by Daniel Howden & Apostolis Fotiadis

News Deeply
October 10, 2017

The shelter offered to Amira since she got to Europe amounts to a plastic sheet she has slept under for the past ten days. The Syrian mother of three was taken to Vathy, a camp on the Greek island of Samos where nearly 3,000 people are spilling out of a facility built for 700. She struggles to explain to her children, who lost their father in the war, why they must sleep rough being bitten by insects.

“I had protected them until now from the war, but I can no longer protect them here,” said the 32-year-old, who has no diapers for her five-month-old daughter. “It makes me want to scream, but I can’t, not in front of the children.”

October downpours have signaled the coming of winter on Greece’s Aegean Islands and with it the very real prospect of another fiasco to match the frozen misery of last year when six people died. While conditions have improved for asylum seekers on the mainland, the deal between the European Union and Turkey that staunched the flow of refugees and migrants in March 2016 aimed to deter future arrivals by confining them to “hot spot” camps on five Greek islands.

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Why Germany's Shakeup Won't Help Greece

by Leonid Bershidsky

Bloomberg
September 28, 2017

Those cheering the looming departure of Wolfgang Schaeuble from the German Ministry of Finance should hold the champagne. His successor may not be as ornery, but southern Europeans -- and above all Greeks -- shouldn't expect any better treatment.

Schaeuble has held a wide range of positions since he was first elected to the German parliament in 1972; he's been interior minister, chief of staff to the chancellor and the leader of the Christian Democratic Union, the party now headed by Chancellor Angela Merkel; he nearly became president at one point and chancellor at another. Only one of his post-World War II predecessors at the Ministry of Finance has served longer than his eight years, and not by much. But Schaeuble has always served his party in whatever position it could offer, and he'll still be a formidable figure as speaker of the parliament, formally the second most senior office-holder in Germany after the president, just ahead of the chancellor.

Schaeuble's protestant philosophy of political service is important for the understanding of his tenure as finance minister. Of course, it took personal conviction to steer his unwavering course of austerity, balanced budgets and respect for rules. Schaeuble was trained at the University of Freiburg, where ordoliberalism was developed in the 1930s through 1950s. This theory married a liberal, pro-market approach with a strong state, whose role is to maintain a high level of social security. Ordoliberalism has faded somewhat since the 1970s, but it still influences much of German economic thinking, and Schaeuble was close to its origins in his formative years. As finance minister late in his life, he tended to lean toward the "ordo" part. He once confessed to his brother: "The older I get and the more I see as finance minister, the more skeptical I get about capitalism."

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Statement on Greek Banking System

International Monetary Fund
September 28, 2017

Mr. Poul Thomsen, Director of the European Department, made the following statement at the FT Investment Management Summit in London today:

"On the subject of the Greek banking system, let me emphasize that we see no financial stability concerns at all in Greece. The issue is that we need to be sure that there is a strategy to deal with Greece's exceptionally high level of nonperforming loans over the medium term. In this regard, we had suggested to update the 2015 asset quality review (AQR) by next spring. The European Central Bank (ECB) has instead proposed bringing forward the already scheduled stress tests and undertaking targeted asset reviews, suggesting that this will allow us to gather the information necessary to assess whether the current strategy for ensuring the soundness of the banking system is adequate, without having to go through a full asset quality review. We think that this is a constructive proposal that achieves the same broad objectives, and we are now discussing the exact modalities with our colleagues at the ECB."

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Draghi: ECB may frontload 2018 bank stress tests with view to Greece

Reuters
September 25, 2017

The European Central Bank may ‘frontload’ its bank stress test next year, ECB President Mario Draghi said on Monday, when asked if supervisors plan any early checks on the health of Greek lenders.

The International Monetary Fund has been pushing for a fresh asset quality review at Greek banks, possibly as part of an bailout review that is slated to start soon.

The ECB has rejected the call, saying that the next check is the regular 2018 stress test, but Draghi’s words suggest that ECB may be somewhat flexible with its timeline.

“The SSM (Single Supervisory Mechanism) will take its decision with full independence,” Draghi told members of the European Parliament.

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EU ends Greece's deficit procedure in positive signal to markets

Reuters
September 25, 2017

European Union states decided on Monday to close disciplinary procedures against Greece over its excessive deficit after improvements in Greece’s fiscal position, confirming the country’s recovery is on the right track.

The move, although largely symbolic, sends a new signal that Greece’s public finances are again under control, facilitating the country’s plans to tap markets after a successful issue of bonds in July which ended a three-year exile.

EU fiscal rules oblige member states to keep their budget deficits below 3 percent of their economic output or face sanctions that could entail hefty fines, although so far no country has received a financial penalty.

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When Is It Dangerous to Declare a Crisis Over?

by Jeremy Grant

Strategy & Business
September 18, 2017

When is it a good time to declare that a crisis is over? This is not an academic question. For people leading large organizations and governments, crises are part of the new normal. A recent PwC survey of chief executives found that 65 percent of CEOs had experienced at least one crisis in the past three years. About one-third predicted they would face more than one crisis in the next three years compared with just 16 percent who felt they’d face fewer.

There has been no shortage of corporate crises in the headlines recently, from the massive IT outage that hit British Airways in May, to the hack of Equifax data that was made public in early September. And for the past decade, the authorities that oversee the European economy have been grappling with a financial and economic crisis that began in 2007.

There is, of course, a natural tendency to want to see a crisis as being behind us when not all the facts support that view. Among the many cognitive biases humans grapple with is one that leads us to have, as Madan Pillutla, a professor in organizational behavior at London Business School puts it, a “more positive forecast for things than is statistically likely or possible.”

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The eurozone may be back on its feet. But is Greece?

by Helena Smith

Observer
September 16, 2017

Is the eurozone on the mend? Jean-Claude Juncker certainly thinks so. The EU president was upbeat in Brussels last week as he gave his annual state-of-the-union address, proclaiming that “the wind is back in Europe’s sails”.

Juncker’s optimism appeared to match the view from Greece, the currency bloc’s problem child. In Athens only the previous week, the visiting French president, Emmanuel Macron, had been even more enthusiastic, declaring against the backdrop of the Acropolis that Greece’s prolonged crisis was over, and that therefore Europe’s was too.

Macron’s finance minister, Bruno Le Maire, went further, calling the Greek prime minister, Alexis Tsipras, “a real leader [who] works for the common good … a prime minister who works with great courage”.

But if progress on Greece’s privatisation programme is anything to go by, the eurozone’s most troubled economy is still in the foothills of recovery. Despite signs of resurgence – at 0.7%, Greece recorded two consecutive quarters of growth this year for the first time since 2006, and made a successful test return to the markets – foreign sell-offs have been plagued by red tape and political resistance.

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A New Challenge Looms for Greece’s Far Left

by Yannis Palaiologos

Wall Street Journal
September 13, 2017

Among the casualties of Greece’s extended economic crisis has been the country’s establishment left. The near-decimation of the center-left Pasok party has meant that in recent years the political space between the governing Syriza party on the far left and the parties of the center-right has had little effective representation. But now, after many false starts, an effort is under way to re-energize the center-left with a new political party, and Prime Minister Alexis Tsipras is concerned.

Pasok governed Greece for 21 of the 30 years between 1981 and 2011, never dropping below 38% in parliamentary elections. Under the weight of its own mishandling of the country’s fiscal collapse, however, the party’s support nosedived to 12% from 44% in two-and-half years. By the January 2015 election, its support plummeted below 5%. Meanwhile, Syriza won 35% of the vote in 2015, up from less than 5% in the October 2009 election.

Several initiatives since then to regroup and unify the ranks between Syriza and the center-right New Democracy party achieved little. The legacy of fragmentation and conflicting personal strategies that long bedevilled the political center seemed impossible to overcome.

Meanwhile, Mr. Tsipras’s abandonment of his radical agenda and his embrace, however half-hearted, of the reform-and-austerity policies of his predecessors, made him a plausible candidate to take up the leadership of Greek social democracy.

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Forget the Parthenon: how austerity is laying waste to Athens' modern heritage

by Helena Smith

Guardian
September 12, 2017

Not that long ago I received a questionnaire through my door. How had the 1930s Bauhaus building in which I live survived the rigours of time? Who had designed it? Who was its first owner? And, the form went on, what were my memories of it?

Circulated far and wide across Athens, the questionnaire and its findings are part of a vast inventory of 19th- and early 20th-century buildings that now stand at the heart of a burgeoning cultural heritage crisis in Greece. At least 10,600 buildings are on the database and it is growing by the day.

Against a backdrop of economic recession – the price of three gargantuan bailouts to keep the debt-stricken country afloat – home maintenance has become a luxury few can afford. With bank loans frozen and cuts and tax increases straining budgets, many of the buildings have been allowed to fall into disrepair, or have been pulled down altogether.

“In the present climate, people just don’t have the money to restore them,” says Irini Gratsia, co-founder of Monumenta, the association of archaeologists and architects that is collating the database. “There is a great danger that many will be demolished not because their owners want new builds, but because they want to avoid property taxes announced since the crisis began.”

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Greece: Where Literally Sitting on Goldmine Is Not Enough to Make Money

by Sotiris Nikas, Paul Tugwell & Danielle Bochove

Bloomberg
September 11, 2017

Eldorado Gold Corp. has put Greece on the spot.

The Canadian mining company’s decision on Monday to suspend all its operations in Greece, citing delays in acquiring routine permits, puts the Syriza government of Prime Minister Alexis Tsipras in a difficult position. Eldorado Gold is the largest foreign investor in Greece and its decision comes as the country, which is working on creating a sustainable path to exit its bailout program, tries to lure foreign investments.

“Irrespective of what will happen next, the damage for Greece as an investment destination is done and it is very significant,” said Wolfango Piccoli, co-president of Teneo Intelligence in London.

The Greek economy has shrunk by more than 25 percent since Europe’s sovereign debt crisis began in 2008. Since 2010, the country has been under bailout programs with stringent belt-tightening requirements. It has been working on attracting investments like Eldorado’s to end the bailouts and tackle high unemployment.

Eldorado’s decision “is a major blow for the Greek economy,” Mujtaba Rahman, managing director of Eurasia said. “It will make it harder for Syriza to successfully exit the bailout next year.”

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Eldorado Gold threatens to freeze Greek operations

by Kerin Hope

Financial Times
September 11, 2017

Eldorado Gold, the biggest foreign investor in Greece, threatened to suspend its operations in the country in the first test for Alexis Tsipras and his leftwing Syriza government over their new policy of welcoming private investment.

Less than 48 hours after the premier told a business conference that a drive for “Grinvestment” had replaced the fear of a “Grexit” [from the euro], the Vancouver-based miner said it planned to put a $3bn mining investment in north Greece on hold because of delays in securing permits from the development ministry.

George Burns, chief executive, on Monday said Eldorado would shut all its operations in Greece on September 22 if key permits for two gold extraction projects were not issued in the next few days.

“This decision is not one we’ve taken lightly,” Mr Burns said in Athens. ‘We’ve held several meetings with development minister [George] Stathakis and were encouraged [to believe] the permits would be issued. But we’re still waiting.

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No escape from debtors’ prison for Greece

by Hugo Dixon

Reuters
September 11, 2017

Alexis Tsipras is desperate to avoid “suffocating supervision” of Greece’s actions when the country’s third bailout programme ends next August. At the weekend, he promised as much. But the best the Greek prime minister can hope for is that Athens will move from its current high-security prison to an open one – and that will happen only if he behaves.

Tsipras wants a clean exit from the 86 billion euro bailout so he has a good story to tell Greek voters in advance of an election that has to be held no later than September 2019. The socialist leader is currently trailing the conservative opposition in the opinion polls because of a string of broken promises and errors that have damaged the economy.

However, if Greece could escape its debtors’ prison – which involves detailed monitoring of the government’s actions by the euro zone and the International Monetary Fund and is seen as an affront to national pride – Tsipras might conceivably win a future election. Failing that, he might at least avoid an electoral wipeout and live to fight another day.

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Emmanuel Macron to stress EU financial solidarity in Athens

by Anne-Sylvaine Chassany & Kerin Hope

Financial Times
September 7, 2017

Emmanuel Macron will make the case for an overhaul of the eurozone during a two-day state visit to Greece designed to mark the member of the single-currency union’s relative return to normality.

The French president and his wife are flying to Athens with about 40 French executives on Thursday to emphasise the need for more financial solidarity with weaker members of the eurozone, in the form of investment and a common budget to help prevent new existential crises in the bloc, Elysée aides said.

The leader is pushing for the EU to adopt tighter labour rules, more protective trade tools and more stimulus, in exchange for more budget discipline at home and deregulation in the French jobs market — a bargain that Germany is showing signs it might consider.

Mr Macron has said he would like each country’s contribution to the future eurozone budget to amount to “several” gross domestic product percentage points.

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Moscovici: Greek bailout was a ‘scandal’ for democratic procedures

by Sarantis Michalopoulos

EURACTIV.com
September 4, 2017

The Eurogroup’s handling of Greece’s bailout programme was a scandal in terms of democratic processes, Economic Affairs Commissioner Pierre Moscovici insisted in an interview with Corriere della Sera.

After eight years of crisis and tough austerity-driven policies, the French Commissioner admitted that the Eurogroup’s decisions “behind closed doors” on the Greek bailout was a scandal in terms of democratic processes.

In June, the much-awaited second assessment of Greece’s third bailout was successfully concluded. On Tuesday (5 September), Moscovici will meet Greek Finance Minister Euclid Tsakalotos in order to start the negotiations on the third evaluation.

“It is a scandal in terms of democratic processes, not because the decisions were scandalous, but because by deciding in this way the fate of a nation, imposing detailed decisions on pensions, the labor market,” Moscovici told Corriere della Sera.

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Greek economy expands in second quarter, net exports help

by George Georgiopoulos

Reuters
September 1, 2017

Greece’s economy expanded for a second straight quarter between April and June, its statistics service said on Friday, driven by gains in exports and higher government spending.

The seasonally adjusted data showed gross domestic product expanded 0.5 percent in the second quarter from the first, at the same pace as in the previous three months, for which growth was upwardly revised.

Annual growth accelerated to 0.8 percent from 0.4 percent growth.

The economy’s gradual recovery after a deep recession that shrank it by a quarter and drove unemployment to record highs is boosting hopes that Greece will be able to emerge successfully from years of bailouts.

“The reading was in line with our forecasts. Growth was based on an increase in net exports and a continuing strengthening of consumption,” said National Bank economist Nikos Magginas.

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Syriza revives radical policies to placate supporters

by Kerin Hope

Financial Times
August 29, 2017

After the reforms came the backlash.

Greece’s cabinet may be focused on implementing economic reforms agreed in return for an €86bn third international bailout.

But the government has also revived some of its radical policies in an effort to placate its core supporters, fearful that the leftwing party has gone soft under pressure from the bailout monitors.

Measures adopted last month by the Syriza government of Alexis Tsipras, prime minister, take aim at the party’s traditional enemies: high-earning lawyers and doctors, foreign-trained academics and private investors from abroad.

A tax squeeze on Greek professionals is being tightened, new legislation on universities rolls back reforms aimed at boosting academic standards, and the authorities are further delaying a €1.5bn gold extraction project by Canada’s Eldorado Gold, the country’s largest foreign investor.

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Chastised by E.U., a Resentful Greece Embraces China’s Cash and Interests

by Jason Horowitz & Liz Alderman

New York Times
August 26, 2017

After years of struggling under austerity imposed by European partners and a chilly shoulder from the United States, Greece has embraced the advances of China, its most ardent and geopolitically ambitious suitor.

While Europe was busy squeezing Greece, the Chinese swooped in with bucket-loads of investments that have begun to pay off, not only economically but also by apparently giving China a political foothold in Greece, and by extension, in Europe.

Last summer, Greece helped stop the European Union from issuing a unified statement against Chinese aggression in the South China Sea. This June, Athens prevented the bloc from condemning China’s human rights record. Days later it opposed tougher screening of Chinese investments in Europe.

Greece’s diplomatic stance hardly went unnoticed by its European partners or by the United States, all of which had previously worried that the country’s economic vulnerability might make it a ripe target for Russia, always eager to divide the bloc.

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Europe Owes More to a truth-teller in Athens

by Thanos Catsambas

Wall Street Journal
August 22, 2017

Few debacles in recent memory better represent the moral collapse of modern Greek society than the persecution of Andreas Georgiou. This endless ordeal is the culmination of failure at multiple levels of stakeholders, not least of which being the European institutions that have repeatedly bailed the country out over the past seven years.

From 1997 to 2009, a succession of Greek governments provided false data to the European Commission’s bureau of statistics, Eurostat. This led to three years of underreported deficits, which prevented Greece from taking earlier and more effective measures, according to EU rules. Reports from the Commission and the European Parliament have noted that some of these data were outright fraudulent. The term “Greek statistics” began to assume derogatory connotations.

Mr. Georgiou, a former member of the statistics department at the International Monetary Fund, in August 2010 took over the Greek statistics office, known as Elstat, and began to improve the quality of the data. His efforts helped remove the reservations international creditors had about the quality of the information coming out of Elstat.

Mr. Georgiou’s long-overdue truth-telling about the government’s finances revealed that Athens had been spending far beyond its means for many years. Crucially, the new reliability of Greek statistics also enabled the rescues that international creditors have offered Greece since 2010. Other eurozone governments and the IMF wouldn’t have provided these loans to save Greece from bankruptcy had they been unable to trust Elstat.

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Greece in Crisis: The Cultural Politics of Austerity

Edited by Dimitris Tziovas

I.B. Tauris Publishers
July 2017

Since 2010 Greece has been experiencing the longest period of austerity and economic downturn in its recent history. Economic changes may be happening more rapidly and be more visible than the cultural effects of the crisis which are likely to take longer to become visible, however in recent times, both at home and abroad, the Greek arts scene has been discussed mainly in terms of the crisis. While there is no shortage of accounts of Greece’s economic crisis by financial and political analysts, the cultural impact of austerity has yet to be properly addressed. This book analyses hitherto uncharted cultural aspects of the Greek economic crisis by exploring the connections between austerity and culture. Covering literary, artistic and visual representations of the crisis, it includes a range of chapters focusing on different aspects of the cultural politics of austerity such as the uses of history and archaeology, the brain drain and the Greek diaspora, Greek cinema, museums, music festivals, street art and literature as well as manifestations of how the crisis has led Greeks to rethink or question cultural discourses and conceptions of identity.

Dimitris Tziovas is Professor of Modern Greek Studies at the University of Birmingham. He has served as Director of the Centre for Byzantine, Ottoman and Modern Greek Studies at the University of Birmingham and as Secretary of the European Association of Modern Greek Studies. He is the author of The Other Self: Selfhood and Society in Modern Greek Fiction and editor of Re-imagining the Past: Greek Antiquity and Modern Greek Culture.

Minister’s court win intensifies fears for rule of law in Greece

by Kerin Hope

Financial Times
August 9, 2017

Fears for the independence of the Greek judicial system are mounting after the foreign minister won a court order freezing the bank accounts of a leading magazine over a reader’s letter describing him as a former “fanatical” Stalinist.

The ruling in favour of Nikos Kotzias has drawn sharp criticism from academics and public figures, who say it violates EU law on freedom of expression. It also highlights broader concern over perceived interference in the justice system by the leftwing Syriza government.

The concerns widened beyond Greece last week when senior eurozone officials warned the government that the continued prosecution of Andreas Georgiou, its former statistics chief, over claims he inflated the size of the country’s budget deficit in 2009, threatened to drive a wedge between Athens and its euro area creditors.

The affair comes as Brussels is already locked in stand-offs with Poland and Hungary over the rule of law that have raised questions over the EU’s ability to enforce the democratic standards at the core of the European project.

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Lessons for the eurozone from Greece’s painful crisis years

by George Pagoulatos

Financial Times
August 7, 2017

Greece is finally growing again. But it has been arguably the eurozone’s greatest failure. Catapulted into a debt crisis with a 15 per cent government spending deficit in 2009, the country suffered eight years of economic contraction. Unemployment is still 23 per cent, youth unemployment 45 per cent. Greece’s “Great Depression” has been as deep as that of the US in the early 1930s, but twice as long.

Can Europe learn from the country’s painful experience? A first lesson is to reform at the top of the cycle. Greece had to adjust in recession because it failed to do so in its pre-crisis boom. Reforms should always be adopted in times of growth, when people are confident and losers can be compensated. An upswing can buy time to implement reforms, but should not be invoked as evidence that reforms are unnecessary. The eurozone is now in its strongest period of post-crisis recovery. But it should avoid complacency. Reforms are necessary for the long-term viability of the monetary union. We need a stabilisation budget and joint-borrowing capacity; greater risk sharing; and financial union to break the doom loop between banks and government.

After September’s election in Germany, and assuming Emmanuel Macron delivers domestic reforms in France, Europe will be at the top of its political cycle. This is the time to push ahead with eurozone reforms. They will require painful concessions: the Germans refuse joint deposit insurance or a fiscal backstop, the French are not keen to surrender control over the national budget and the Italians reject ceilings on bank exposure to sovereign debt. But something must give.

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Elstat suspends preliminary Greek GDP estimate after discrepancies

by Kerin Hope & Eleftheria Kourtali

Financial Times
August 7, 2017

Greece’s statistical agency will no longer public “flash” estimates of the country’s gross domestic product after delays in data collection have led to frequent revisions of official growth figures.

Elstat said on Monday that its second quarter GDP estimate for 2017, which was due to be announced on August 14, would not be made public. Instead it said the provisional estimate, which is calculated using a bigger range of inputs from the economy, would be published on September 1 as scheduled.

The agency said it decided to suspend the flash estimate “in order to explore the availability of the necessary data sources that would help improve the consistency of the flash estimate.”

An Elstat official said some data used to calculate the flash estimate was incomplete, making revisions necessary when updated figures arrived.

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A legal farce calls Greek reform into question

Financial Times
Editorial
August 6, 2017

After years of punishing austerity, Greece finally has grounds to hope it will regain its financial independence when its bailout programme ends next summer. The economy has returned to modest growth. Against expectations, Athens has hit its fiscal targets and secured a pledge of further debt relief from creditors. Yet despite the huge efforts made to put the public finances on a more sustainable trajectory, there remain serious doubts over the government’s commitment to reform the Greek state, rid institutions of political influence and guarantee the rule of law.

The conviction last week of Andreas Georgiou, the country’s former chief statistician, for “violating” his duties during the sovereign debt crisis, is especially worrying. Mr Georgiou has for six years been fighting accusations that, as head of Elstat, the statistical agency, he inflated Greece’s 2009 budget deficit, forcing the country to undergo deeper austerity.

No matter that he had been acquitted of these charges a few months earlier, only to have the case reopened. No matter that the EU’s statisticians — whose standards he was supposed to be following — have endorsed both the procedures he followed and the figures he produced, describing last week’s trial as a “preset farce”. Mr Georgiou — a former IMF official and thus part of a hated international technocracy — is a convenient scapegoat for the failures of Greece’s political class.

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