Under Chinese, a Greek Port Thrives

New York Times
October 10, 2012

The captain gazed from his elegant office overlooking this port on the Aegean Sea and smiled as towering cranes plucked container after container from a giant ship while robotic transport vehicles fanned out to transfer the cargo to smaller vessels bound for the Mediterranean.

The cargo volume here is three times the level it was two years ago, before the captain, Fu Cheng Qiu, was put in charge by his employer, Cosco, a global shipping giant owned by the Chinese government.

In a 2010 deal that put 500 million euros ($647 million) into the coffers of Greece’s cash-starved government, Cosco leased half of the port of Piraeus and quickly converted a business that had languished as a Greek state-run enterprise into a hotbed of productivity.

The other half of the port is still run by Greece. And the fact that its business lags behind Cosco’s is emblematic of the entrenched labor rules and relatively high wages — for those lucky enough to still have jobs — that have stifled the country’s economic growth.

“Everyone here knows that you must be hard-working,” said Captain Fu, under whose watch the Chinese-run side of the port has lured new clients, high-volume traffic and bigger ships.

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Greece Used to Be an Economic Miracle, Then the Socialists Got in

by Matthew Feeney

Reason
October 10, 2012

I am lucky enough to be writing from the Cato Institute, which is holding a conference on the euro-crisis and the European welfare state today. One of the speakers, Aristides Hatzis, is a Greek lawyer who helps run the greekcrisis.net blog, which is well worth a visit. During his time to speak Hatzis laid out how extraordinary Greece’s economic achievements were in the years up to and following the brutal Nazi occupation. A copy of the arguments made can be found here.

From 1929 to 1980 the Greek economy’s average growth rate was 5.2 percent. In that time period Greece experienced dictatorships, occupation, civil war, and a military junta. It was only in 1974 that Greece began to resemble something like a liberal democracy. Some years later Greece was accepted into the European Community, as Hatzis explains:

Seven years after embracing constitutional democracy the nine (then) members of the European Community (EC) accepted Greece as its tenth member (even before Spain and Portugal). Why? It was mostly a political decision but it was also based on decades of economic growth, despite all the setbacks and obstacles. When Greece entered the EC, the country’s public debt stood at 28 percent of GDP; the budget deficit was less than 3 percent of GDP; and the unemployment rate was 2–3 percent.

In 2011 Greece’s public debt reached 165.4 percent of GDP, the budget deficit was 9.1 percent of GDP, and the unemployment rate was 17.7 percent. What happened?

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Merkel risks high stakes in Athens

Financial Times
Editorial
October 10, 2012

Angela Merkel, Germany’s normally cautious chancellor, took a big risk in travelling to Athens this week. Barely two hours after her arrival, police were using stun grenades and tear gas to disperse angry crowds. But Ms Merkel was right to gamble.

Since Greece embarked on its deeply unpopular austerity programme, European leaders have largely avoided meeting the growing dissatisfaction head on. As leader of the country blamed for enforcing the painful cuts, Ms Merkel is the focus of this public fury. In this context it took courage to accept the invitation of Antonis Samaras, Greece’s prime minister, just as the government prepares a new round of cuts and tax rises.

It was also politically astute. Ms Merkel’s visit should draw a line under a damaging summer of speculation about Germany’s desire to keep Greece in the eurozone. Comments by German politicians that they did not fear a Greek exit have sowed resentment in Greece. Public opinion sees no point in accepting more austerity if, ultimately, Berlin wants the Greeks out. Germans, meanwhile, are not prepared to transfer yet more money to a country which has failed to implement promised reforms.

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Crisis shows why EU must renew its vows

by Guy Verhofstadt and Daniel Cohn-Bendit

Financial Times
October 9, 2012

Eurosceptics are shamelessly exploiting the economic crisis to misrepresent and undermine the EU, its history, its institutions, its goals and its working methods. Like a marital union, the EU requires constant attention, support and belief that it can work in difficult as well as good times or else it risks separation. It is time now for a renewal of vows; to recommit to a federal union that is more stable, more efficient and more accountable.

The crisis has shown up the key weaknesses in economic governance at EU level where a monetary policy was introduced without a parallel fiscal policy. Unlike other global currencies such as the dollar or yen, the euro depends on 17 different economic strategies and bond markets, no common treasury, no common debt issuance and no common banking supervisor. This explains, to a large extent, why the bond markets extort higher interest rates from eurozone countries than from the US or Japan despite lower levels of public debt. Some of these lacunae are being addressed but progress is slow and consensus on a common vision remains elusive.

This vision should be based on a federal structure, defined and agreed in a new, concise constitutional document to be drawn up by the next European parliament in conjunction with the European Council of Ministers and submitted to a referendum across the EU. The “f” word has been much maligned, yet many member states are federal structures. It is perfectly possible, for example, to be Flemish, Belgian and European all at the same time. In an increasingly post-national world, where the global economy is driven by big trading blocs and emerging markets, the European nation states of the 19th century lack economic and political clout. The make-up of the G8 in 2030 will probably look different from today. Sovereignty is better pooled at European level than lost at the global level.

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Relentless austerity will only deepen Greek woes

by Wolfgang Münchau

Financial Times
October 7, 2012

We have reached a point where the policies adopted to resolve the eurozone debt crisis are causing more damage than whatever may have caused the problems in the first place. This is painfully obvious in Greece and increasingly so in Spain.

The troika of the International Monetary Fund, European Commission and European Central Bank is now demanding that Greece front-load austerity measures for 2013 on the grounds that the country is certain to miss the nominal deficit target for 2013. The Greek government had forecast a fall in gross domestic product of “only” 3.8 per cent, but the troika believes the fall in GDP is more likely to be of the order of 5 per cent, according to the Greek newspaper Kathimerini. That would imply that Greece will miss the overall goal of a primary surplus (the surplus before the payment of interest on debt) next year.

Why is Greek GDP falling so fast contrary to what official forecasts have claimed? The global economic outlook might not help. But the Greek economy’s year-in, year-out annual shrinkage of a magnitude of 5 per cent is caused primarily by the relentless pursuit of nominal deficit targets. If the economy misses the targets, more austerity is applied, which causes a continued fall in GDP, followed by another failure to meet the target. In other words, the troika is demanding policy action whose effect will be a further deterioration in the Greek economy, and thus a further deterioration in the debt ratio, which in turn requires further policy action of the same self-defeating kind.

Spain is not quite there yet but it is heading in the same direction. Luis María Linde, governor of the Bank of Spain, last week told the budget committee of the Congress of Deputies that Spain risks missing this year’s deficit target. He recommended that the government adopt further austerity measures to make up for this shortfall. Since nobody, including presumably Mr Linde, believes in the Spanish government’s optimistic prediction of a 0.5 per cent fall in GDP next year, the probability of a large shortfall in the 2013 deficit is close to 100 per cent. As in the case of Greece, there is a dynamic at work in Spain where policy makers are chasing a nominal target, piling on one austerity programme over another, and then missing it by a wide margin.

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Economics: the failure of European monetary union has been abject

by Larry Elliott

Guardian
October 7, 2012

When he was leader of the Conservative party, William Hague once likened membership of the euro to being trapped in a burning building with no fire exit. It was an apt description, as young people in Greece would testify: in a country that has already contracted by more than Germany did during the Great Depression, the jobless rate for Greeks under 25 is 55%.

Little wonder then that Antonis Samaras, the prime minister of Greece, is warning that his country has been pushed to the limit and that there is, as with Weimar Germany, the risk of democracy collapsing.

Little wonder, either, that Spain, only just behind Greece in the youth unemployment misery stakes, is wary of seeking the help offered by the European Central Bank. Unlimited buying of Spanish bonds by the bank will come at a heavy price: more austerity for a population already buckling under the strain.

A study of hundreds of recessions dating from the 19th century shows that most are short, sharp affairs. They are like heavy colds, nasty but quickly over. Every now and then, however, the cold turns into something much more serious and the longer it lasts the more serious it gets.

It becomes more like a pandemic, affecting the immune systems of economies and spreading from one country to another. That is the situation in the eurozone today.

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Η δύσκολη καταπολέμηση της φοροδιαφυγής

του Πάσχου Mανδραβέλη

Καθημερινή
7 Οκτωβρίου 2012

Παραξενεύτηκαν κάποιοι Γερμανοί συνάδελφοι όταν προ καιρού είδαν την απόδειξη από έναν ταξιτζή στο Βερολίνο. «Μπα, και πώς τα κατάφερες να την πάρεις; Μη μας πεις ότι σου την έδωσε οικειοθελώς», ρώτησαν. Λογικό. Ξέρουν και οι ίδιοι ότι το πρόβλημα της φοροδιαφυγής δεν είναι ελληνική πατέντα. Υπάρχει και στα πιο... προτεσταντικά σπίτια. Απλώς εκεί, υπάρχει κατ’ αρχάς ο φόβος της πραγματικής τιμωρίας (προφανώς δεν ισχύει το «έλα μωρέ τώρα! Πώς κάνουν έτσι; Από την απόδειξη του ταξιτζή θα σωθεί η Γερμανία;). Υπάρχει όμως κι ένα άλλο στοιχείο που δεν κάνει τη φοροδιαφυγή μάστιγα. Η διάρθρωση της οικονομίας.

Κακά τα ψέματα. Οι προσωπικές και μικρές επιχειρήσεις έχουν κίνητρο να φοροδιαφεύγουν. Κάθε απόδειξη που δεν κόβεται σημαίνει καθαρό κέρδος στην τσέπη του επιτηδευματία ή του μικροεπιχειρηματία. Αυτό δεν ισχύει για τις μεγάλες επιχειρήσεις, διότι κάθε απόδειξη που δεν κόβει ο υπάλληλος μιας αλυσίδας σούπερ μάρκετ είναι κέρδος του υπαλλήλου και ζημία του μετόχου. Στις μεγάλες επιχειρήσεις, οι αποδείξεις χρησιμεύουν και για τον εσωτερικό έλεγχο της εταιρείας. Στις μικρές επιχειρήσεις, ελεγκτής και ελεγχόμενος είναι ο ίδιος, που σημαίνει ότι δεν υπάρχει το εσωτερικό αντικίνητρο για να μην κόβονται αποδείξεις.

Πολλοί μικρομεσαίοι

Το πρόβλημα της χώρας δεν είναι ότι οι Ελληνες είναι πιο φοροφυγάδες από τους Γερμανούς, αλλά το γεγονός ότι στους χίλιους Ελληνες αντιστοιχούν 73 μικρομεσαίες επιχειρήσεις, ενώ ο μέσος όρος της Ευρώπης των «27» είναι 40· στην Ολλανδία είναι 30 και στη Γερμανία 20 (Small and medium-sized enterprises. SME Performance Review, European Commission, 2008). Αυτό δεν σημαίνει μόνο διάχυτα κίνητρα φοροδιαφυγής –που μπορεί να είναι μικρή ανά μονάδα, αλλά αθροιζόμενη μας βγάζει τα τεράστια ελληνικά νούμερα–, σημαίνει κι άλλα πράγματα. Πρώτον, ο έλεγχός της από τις αρχές καθίσταται δυσκολότερος. Είναι διαφορετικό να έχεις προς έλεγχο χίλιες εταιρείες και διαφορετικό 100.000. Από ένα σημείο και μετά, το κόστος ελέγχου γίνεται μεγαλύτερο από το όφελος.

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Φτιάξε τον μύθο σου στην Ελλάδα

του Δημήτρη Τζίνη

Protagon.gr
7 Οκτωβρίου 2012

Σ’ αυτή τη χώρα έχουμε μάθει να ζούμε με μύθους. Αυτοί παίρνουν την μορφή είτε μιας εξιδανικευμένης εικόνας του Ελληνισμού, είτε «προσαρμόζουν» την πραγματικότητα για να χωρέσει στα «δικά μας» καλούπια. Φυσικά η κάθε χώρα έχει ανάγκη να φτιάξει τον δικό της εθνικό μύθο, αυτή τη «ζωογόνο για την κοινωνία δύναμη» που αποτελεί η «μυθολογική συγκρότηση της πολιτισμικής βάσης του (σ.σ. καλώς εννοούμενου) πατριωτισμού» (καθ. Γιώργος Πρεβελάκης, Η Καθημερινή, 20.05.2012). Όμως εδώ δεν μιλάμε για αυτήν την συγκολλητική ουσία που ενώνει τον πληθυσμό σχηματοποιώντας θεμελιώδεις καταστάσεις και γεγονότα έτσι ώστε να είναι πιο κατανοητά και περισσότερο θελκτικά στα μάτια του μέσου πολίτη. Μιλάμε για την πλήρη διαστροφή της πραγματικότητας, όπου ένα γεγονός παίρνει την εντελώς αντίστροφη ερμηνεία από αυτή που υποδεικνύει η ορθολογική συλλογιστική.

Αδιαμφισβήτητα ο δημοφιλέστερος μύθος των τελευταίων ετών είναι ότι το μνημόνιο φταίει για όλα τα δεινά της χώρας. Όμως το μνημόνιο δεν ήταν το πρόβλημα, ήταν η λύση που μας προτάθηκε για να (προσπαθήσουμε να) λύσουμε το πρόβλημα του τεράστιου δημόσιου χρέους. Κακή, άδικη, πρόχειρη αλλά λύση. Υποστηρίζοντας ότι το μνημόνιο ήταν το πρόβλημα αναιρούμε κάθε σχέση αιτιότητας. Και κάπως έτσι, αντί να δούμε τι κάναμε εμείς λάθος και να προσπαθήσουμε να το διορθώσουμε (σπάταλο κράτος, διαφθορά, κομματοκρατία κλπ.), ξοδεύαμε –κοινωνία και κόμματα– πολύτιμο χρόνο για να βρούμε τι έκαναν λάθος οι άλλοι. Προφάσεις εν αμαρτίες.

Παρεμφερής με τον πρώτο μύθο και με παρόμοια συλλογιστική: Φταίει το μοντέλο της νεοφιλελεύθερης καπιταλιστικής ανάπτυξης, αυτό κατέρρευσε με την κρίση. Αλήθεια; Μα ο φιλελευθερισμός σαν πολιτική ιδεολογία δεν ήταν ποτέ δημοφιλής στην Ελλάδα. Έπειτα, η ελληνική οικονομία, κατά βάση κρατικοδίαιτη, συγκεντρωτική και επιδοτούμενη, με ένα κράτος που ήταν πανταχού παρών και που φρόντιζε να «ρυθμίζει» τα πάντα (ακόμα και σήμερα μιλάμε για κλειστά επαγγέλματα!) μάλλον μοιάζει περισσότερο με το σοβιετικό μοντέλο παρά με μια δυτικού τύπου φιλελεύθερη οικονομία της αγοράς.

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Greece civil servants' secure jobs stir resentment among public

by Anthee Carassava

Los Angeles Times
October 6, 2012

With a new batch of budget cuts looming, Greek officials have made it clear that they must target the state's nearly 1-million-strong army of civil servants, shaving salaries, benefits and bonuses for the third time in three years.

"We're doomed," says social worker Dmitra, 44, who asked that her last name not be printed for fear of reprisals. "Whoever said we were privileged and protected?"

And yet, many Greeks emphatically contend that government workers are protected. At least they still have a job.

Since the financial crisis erupted here in 2009, the unemployment rate has vaulted to 24% from 7.8%, adding 800,000 Greeks to the ranks of the unemployed, for a total of 1.2 million. But all the job losses have come from the private sector.

"It's like a ship is sinking and there aren't enough safety rafts, but public sector employees, because of their lifelong job security status, are on deck, rushing on board the boats safely," says Nikos Tsafos, a Washington-based economist. "Does that seem fair?"

The civil service has long been a sacred cow. Successive governments, mainly headed by the socialist PASOK party, for decades stuffed it with political — and at times, doltish — hires, swelling it to a fifth of the nation's 4.2-million-member workforce in 2010.

Even now, few politicians seem willing to overly offend members of the potent voting bloc.

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Now on Greek Menus: Tax Battle

Wall Street Journal
October 5, 2012

A family-owned fish restaurant on this serene island has become an improbable focal point of Greeks' debate over their government's effort to collect more taxes.

Riot police were called to Hydra when a small insurrection erupted over the summer, after financial-crimes police tried to arrest a proprietor of a century-old seafood taverna for allegedly failing to give proper receipts.

The police action was part of a stepped-up effort to stamp out off-the-books transactions that Greek officials say are depriving Athens of vital revenue when every taxable cent is needed to ward off fiscal doom.

Tax-evasion is pervasive in Greece. Many Greeks, however, object to what they see as the government's uneven approach to the issue. They see heavy-handed treatment of small-business owners who are reeling from recession and an increased tax burden. They are resentful, meanwhile, over reports of tax evasion and money laundering among the politically connected and wealthy. Many also express anger over constitutionally decreed tax-exemptions for wealthy ship owners.

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Στο 7,1% αντί 6,9% η συρρίκνωση του ΑΕΠ το 2011

Καθημερινή
5 Οκτωβρίου 2012

Στο 7,1% τελικά ανήλθε ο ρυθμός συρρίκνωσης του ΑΕΠ το 2011, αντί του 6,9% που ήταν γνωστό μέχρι σήμερα. Η διαφορά αυτή μπορεί να φαίνεται μικρή ως ποσοστό, αλλά σε απόλυτα μεγέθη είναι σημαντική, καθώς το ΑΕΠ μειώθηκε κατά 6,5 δισεκατομμύρια ευρώ περισσότερα από ότι υπολογίζονταν.

Δηλαδή, αντί των 215 δισεκατομμύρια ευρώ που αναγράφεται στο προσχέδιο του νέου προϋπολογισμού ότι έκλεισε το ΑΕΠ πέρυσι, τελικά αποδεικνύεται από τα επικαιροποιημένα στοιχεία της Ελληνικής Στατιστικής Αρχής (ΕΛΣΤΑΤ) ότι έκλεισε στα 208,5 δισ. ευρώ.

Η αλλαγή αυτή προήλθε από τη διαδικασία της αναθεώρησης του ΑΕΠ για την περίοδο 2006-2011, με την χρήση των τελευταίων στοιχείων για την πορεία των οικονομικών δεικτών.

Πλέον, είναι ξεκάθαρο ότι οι στόχοι για το ΑΕΠ του 2012 και του 2013 που έχουν τεθεί με το προσχέδιο του νέου προϋπολογισμού θα αναθεωρηθούν επί τα χείρω. Αφού τα 215 δισεκατομμύρια ευρώ μειώθηκαν σε 208,5 δισ ευρώ το 2011 είναι αναμενόμενο να μειωθεί η εκτίμηση για το 2012 (200,9 δις ευρώ) και για το 2013 (193 δις ευρώ).

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Greek PM: society will disintegrate without urgent financial aid

Guardian
October 5, 2012

Greece is teetering on the edge of collapse with its society at risk of disintegrating unless the country's near-empty public coffers are shored up with urgent financial aid, the country's prime minister has warned.

Almost three years after the eruption of Europe's debt drama in Athens, the economic crisis engulfing the nation has become so severe that democracy itself is now imperiled, Antonis Samaras said.

"Greek democracy stands before what is perhaps its greatest challenge," Samaras told the German business daily Handelsblatt in an interview published hours before the announcement in Berlin that Angela Merkel will fly to Athens next week for the first time since the outbreak of the crisis.

Resorting to highly unusual language for a man who weighs his words carefully, the 61-year-old politician evoked the rise of the neo-Nazi Golden Dawn party to highlight the threat that Greece faces, explaining that society "is threatened by growing unemployment, as happened to Germany at the end of the Weimar Republic".

"Citizens know that this government is Greece's last chance," said Samaras, who has repeatedly appealed for international lenders at the EU and IMF to relax the onerous conditions of the bailout accords propping up the Greek economy.

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Europe Readies Bond Buying

Wall Street Journal
October 4, 2012

European Central Bank President Mario Draghi on Thursday said the bank's new bond-buying program is ready to activate, and put the onus on vulnerable countries such as Spain to first seek and receive assistance from other euro-zone governments.

Mr. Draghi defended the bank's decision to make its new plan reliant on political decision-making in the euro bloc, saying the process gives governments the right incentives to pursue sound economic policies.

The ECB said in September that it would purchase unlimited amounts of government bonds of Spain and other euro states that face high borrowing costs, provided the countries first seek assistance from the bloc's rescue funds and agree to international oversight of their fiscal and economic policies.

"We are ready [to activate bond purchases] and we have a fully effective backstop. Now it's in the hands of governments," Mr. Draghi said after the ECB's monthly meeting, which took place outside the Slovenian capital of Ljubljana.

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Greece sovereign debt enjoys quiet rally

Financial Times
October 4, 2012

Greece’s sovereign debt market has enjoyed a quiet but strong rally in recent months, with the country’s benchmark 10-year bond more than doubling in price since its nadir in late May.

The €3bn bond maturing in 2023 still trades at a price of just 28.7 cents in the euro – indicating that investors still think that Greece’s government finances are deeply distressed – but that is up from a trough of 13.9 cents in the euro on May 31.

The current price equates to an annual yield of 18.9 per cent, down from almost 30 per cent before the summer, and the lowest since March.

A senior government bond trader said that the tentative recovery in the price of Greek government bonds had primarily been caused by hedge funds making a “speculative” bet on the embattled eurozone country.

“We’ve seen interest in some parts of the Greek curve, particularly the 2022s and further out,” the trader said. “The activity has grown noticeably in just the last few weeks, but it’s highly speculative money.”

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Austerity has worsened Greek crisis, says institute

Guardian
October 4, 2012

An influential group of international banks and insurers has attacked political leaders in Europe over their handling of the Greek crisis, arguing that the singleminded pursuit of austerity has made the situation worse.
The Institute of International Finance, which last year brokered a deal between Greece and international bond investors to halve Greece's private debts, said politicians were playing a dangerous game by putting their desire for debt reduction ahead of co-ordinated efforts to spur growth.

Charles Dallara, the institute's chairman, said the world's major economies needed to co-ordinate their efforts or risk persistent instability and low growth.

He said: "The international financial community has a collective interest in reducing the uncertainty that currently surrounds the global economic outlook. If we want to lay the basis for a durable global economic expansion, then we need to see more concerted action by the world's policymakers."

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IIF: EU, ECB, IMF Should Lower Greek Loan Interest Rates

by Ian Talley

Wall Street Journal
October 4, 2012

The EU, the European Central Bank and the International Monetary Fund should slash interest rates on the Greece debt they hold to give the near-default nation a fighting chance to recover, the head of the Institute of International Finance said Thursday.

IIF Managing Director Charles Dallara also said that the ECB should offer its bond-buying program to Ireland and Portugal and that euro-zone officials must reorient their focus away from short-term targets in bailout countries and towards the longer-term economic overhauls vital to restoring growth.

Mr. Dallara’s comments came as the IMF is set to downgrade growth expectations around the world and warn against the escalating risk of another global recession, largely on the back of the euro crisis. IMF Managing Director Christine Lagarde has also urged euro-zone officials in recent days to address Greece’s debt.

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ECB: Outright monetary trepidation

by Stephanie Flanders

BBC News
October 4, 2012

In his monthly press conference on Thursday, European Central Bank boss Mario Draghi didn't go back on anything he said at the last one. I'm afraid that's about as exciting as it got.

He left most of the gaps in his September statement intact. And he refused to engage in any speculation about Spain - a disappointment for the many investors and analysts who can think of little else.

Mr Draghi cultivated an air of ambiguity on how and when, exactly, the central bank might start to buy the sovereign bonds of other troubled economies. And where he did add details, they did not sound very encouraging to those who are keen for the ECB to stop talking and start buying.

Notably, he said that to qualify for support from the ECB, a country would not just have to request a bailout, but have signed a memorandum of understanding. That usually takes at least a month.

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Immigrants as scapegoats

Economist
October 6, 2012

Protesters in wheelchairs jeered and whistled as officials from the “troika”—the European Commission, the IMF and the European Central Bank—arrived at the labour ministry on October 2nd to press for yet more public-expenditure cuts. Beleaguered Greeks are set to endure a sixth year of recession in 2013. Greek budget planners forecast a 3.8-4% contraction, the IMF a more pessimistic 5%.

Yannis Stournaras, the finance minister, is under huge pressure to find an extra €2 billion ($2.6 billion) of last-minute savings to appease the troika. Antonis Samaras, the centre-right prime minister, has an even harder task: persuading the coalition government’s left-wing partners to accept tighter austerity. Both still sound confident a deal will be reached, though the timetable is likely to slip by a couple of weeks.

Delays are not helpful for Mr Samaras. He has struggled during his first 100 days in office to keep his fragile coalition together while Mr Stournaras put together a €13.5 billion austerity package in return for Greece’s second €130 billion bail-out. At the European summit on October 18th, the premier promised that he would seek a two-year extension until 2016 for implementing the new measures, thereby softening their impact. But European leaders will not grant Greece’s request until the package has been agreed to with the troika and approved by the parliament in Athens. As a result Greece’s next €31.2 billion loan tranche, needed to recapitalise Greek banks so that they can start lending again, may not arrive until mid-November.

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The IMF and the euro crisis: Less cash, more impact

Economist
October 6, 2012

In 2006 it was hard to see a role for the IMF: a decade of stability meant its lending was falling rapidly. Not any more. The fund, which holds its annual meetings in Tokyo this month, has so far pledged $103 billion to Greece, Ireland and Portugal. That is already much more than during the Asian crisis of the late 1990s, when IMF lending reached $35 billion, and with a bail-out for Spain looming, the numbers could leap again. The fund counts 188 countries as shareholders; many are concerned both that it is lending too much to Europe, which is perfectly capable of looking after itself, and that it is conflicted because European countries wield disproportionate voting power at the fund. Are such critics right?

The fund has certainly become intertwined with European institutions because of the euro-zone crisis. It is the junior partner in a “troika” of institutions that have worked together on each of the bailouts; the other two members are the European Central Bank (ECB) and the European Commission (EC). The lion’s share of the financial support has come from euro-zone countries. That said, the scale of the IMF’s lending has still been remarkable. The IMF pledged €30 billion ($37 billion) to Greece in May 2010; big loans to Ireland and Portugal followed within a year (see chart). Each of these loans rivalled the IMF’s previous record, a $30 billion loan to Brazil in 2002.

But the charge that the fund has been spraying money around is unfair. Christine Lagarde, the IMF’s boss, has rowed back from the exuberant promise of Dominique Strauss-Kahn, her predecessor, that the fund would provide a third of the cash needed in the euro zone, and worked hard to win new IMF funding from cash-rich members, such as China. Support for Greece, Ireland and Portugal is roughly 10% of its total lending capacity of around $1 trillion. As a shepherd of its creditors’ cash, the IMF has been relatively prudent.

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Δίκαιος ανταγωνισμός στα πετρελαιοειδή, τώρα!

του Παύλου Eλευθεριάδη

Καθημερινή
4 Οκτωβρίου 2012

Σύμφωνα με πρόσφατο άρθρο της Wall Street Journal το Διεθνές Νομισματικό Ταμείο έχει διαπιστώσει ότι οι Ελληνες καταναλωτές πληρώνουμε ένα δισεκατομμύριο ευρώ επιπλέον τον χρόνο από την έλλειψη ανταγωνισμού στην αγορά πετρελαιοειδών. Η έκθεση ισχυρίζεται ότι οι ελληνικές εταιρείες Ελληνικά Πετρέλαια και Motor Oil έχουν προνομιακή θέση στην ελληνική αγορά με το πράσινο φως της Βουλής των Ελλήνων. Σε δήλωσή τους τα Ελληνικά Πετρέλαια αμφισβήτησαν τον τρόπο υπολογισμού της υπολογισθείσας απώλειας. Οσοι διάβασαν προσεκτικά τη δήλωσή τους, θα πρόσεξαν όμως ότι η ελληνική εταιρεία δεν αμφισβήτησε τα αλλά σημεία της έκθεσης. Οι λεπτομέρειες έχουν εδώ σημασία.

Σύμφωνα με την έκθεση του ΔΝΤ οι στρεβλώσεις του ανταγωνισμού στην ελληνική αγορά είναι κυρίως αποτέλεσμα νομοθετικών ρυθμίσεων – και άρα οι εταιρείες δεν παραβιάζουν κανέναν νόμο. Το ΔΝΤ σχολιάζει αρνητικά την υποχρέωση κάθε εισαγωγέα, μικρού ή μεγάλου, νά έχει αποθηκευτικούς χώρους που να καλύπτουν ανάγκες 60 ημερών, την αδυναμία εισαγωγής πετρελαιοειδών από ανεξάρτητα πρατήρια, την υποχρέωση εκτελωνισμού στο διυλιστήριο ακόμα και εισαγόμενου πετρελαίου και τέλος και την αδυναμία έκδοσης άδειας βυτιοφόρων σε αντίθεση με τις πρακτικές των χωρών της Ε.Ε. Θυμίζει επίσης ότι ακόμα και ο νόμος 4072/2012 (κυβέρνησης Παπαδήμου, επί υπουργίας Βορίδη) ορίζει ότι απαγορεύεται να μεταφερθεί πετρέλαιο από το εξωτερικό στην Ελλάδα, εκτός εάν το βυτιοφόρο φέρει το εμπορικό σήμα μεγάλης εταιρείας χονδρικής διάθεσης και άρα απαγορεύει στις μικρές εταιρείες να ανταγωνίζονται τις μεγάλες. Κανένα από αυτά τα ζητήματα δεν θίγεται από την ανακοίνωση των ΕΛΠΕ.

Το πρόβλημα δεν είναι νέο. Η προστασία της ελληνικής νομοθεσίας προς τις μεγάλες επιχειρήσεις πετρελαίου είναι συστηματική και μεθοδική. Το 2001 το Δικαστήριο των Ευρωπαϊκών Κοινοτήτων καταδίκασε το ελληνικό Δημόσιο για προστατευτισμό στην αγορά πετρελαιοειδών. Η Ελληνική Επιτροπή Ανταγωνισμού έχει αφιερώσει πολλές εκθέσεις στο θέμα, ενώ πρότεινε από το 2008 πολλές από τις απλές λύσεις που τώρα εισηγείται το ΔΝΤ. Οι διαδοχικές κυβερνήσεις ΠΑΣΟΚ και Ν.Δ. έχουν αγνοήσει συνολικά τέσσερις εκθέσεις της Επιτροπής Ανταγωνισμού και δύο αποφάσεις του Δικαστηρίου της Ευρωπαϊκής Ενωσης. Σήμερα δεν έχουν να πουν τίποτε για την έκθεση του ΔΝΤ. Ακόμη και ο συνήθως λαλίστατος ΣΥΡΙΖΑ, δεν είπε για το θέμα ούτε λέξη, ενδεικτικό της πραγματικής του διάθεσης να υπερασπιστεί το πελατειακό κράτος σε όλες του τις εκφάνσεις.

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Greek Leader Wins Favor Abroad

Wall Street Journal
October 3, 2012

Greek Prime Minister Antonis Samaras is undergoing one of the biggest metamorphoses of his long political life: from shrill opponent of Europe's rescue plan for Greece, to the man the Continent's leaders now see as the best bet for keeping the country in the euro zone.

Since taking office in June, Mr. Samaras, a 61-year-old scion of one of Greece's most prominent families, has struggled to push ahead with €13.5 billion ($17.4 billion) in austerity measures to satisfy international lenders despite opposition on the streets of Athens and in Parliament.

So far, that has won cautious support from other European capitals for Mr. Samaras and his country. But the mood could sour quickly if Greece fails to swiftly deliver on promised budget cuts and restructuring plans delayed for months by political turmoil.

On Wednesday, negotiations between Greece and a team of inspectors from the European Union, the International Monetary Fund and the European Central Bank—known as the troika—appeared hung up on details of some spending reductions and proposed changes to labor-market rules.

European leaders are eager to avoid the costs of a renewed crisis with Greece as they try to protect the common currency and keep other fragile economies, such as Spain's and Italy's, from weakening further.

Mr. Samaras "is seen as difficult and he's tough. But those traits also mean he has the best chance of pushing through the tough changes needed," a senior European Commission official in Brussels said. "He's the best port we have in this storm. But that's not saying much, giving how much mistrust there is right now."

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Democracy itself is at stake in southern Europe

by Mark Mazower

Financial Times
October 3, 2012

Economics has driven the debate on the eurozone crisis, but it is the politics we should be worrying about. After all, the postwar European project was all about using economic integration and its benefits to emancipate the continent from its bloody past. But now in southern Europe, violence is returning as a direct consequence of the austerity programmes that are touted as the price of continued eurozone membership. What is at stake is not just membership of a monetary union; it is the nature and future of democracy itself.

In Spain, austerity protests have revived the debate over regional secession. Leftwing activists are on the march in Lisbon and Paris. But Greece, most beset of the debtor nations, offers the clearest evidence of fracture. Last week’s general strike is the precursor of worse to come as the government struggles to implement the latest round of cuts.

We used to praise the way a two-party system had emerged soon after the junta had fallen in a country with a long history of political instability. Indeed, Europe itself could take much of the credit for facilitating Greece’s transition. Now it is unravelling as the crisis reveals Greek democracy’s fragility. One of the two historic ruling parties, Pasok, has already shrunk faster than anyone could have predicted – from 44 per cent of the vote in 2009’s general election to 12 per cent in June. If the government of Antonis Samaras falls, the same may happen to New Democracy on the centre-right. The cause is clear: seemingly endless austerity, plus the Greek electorate’s reasonable perception that these parties were the chief architects of the imbroglio.

What is likely to be the result? The closest parallel is perhaps Italy, where the end of the cold war led to the disappearance of Christian Democracy and brought Silvio Berlusconi to power, along with the Alleanza Nazionale, heir to the postwar neo-fascists. In Greece the future is bleaker economically and the prospects even less reassuring.

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ECB is tangled in its own logic on Greece

by James Mackintosh

Financial Times
October 2, 2012

Greek finances are so bad that the “budget” is a misnomer. Still, the finance minister this week forecast a sixth year in a row of recession, longer than the drop in US output during the Great Depression.

As the economy contracts, its debt is predicted to grow to 179.3 per cent of gross domestic product next year.

This is clearly unsustainable. Yet, Greece is in a bind. It has five groups of creditors and will find it hard to default on any of them. At least two, the European Central Bank and other eurozone governments, must be forced into a debt restructuring if Greece is to stay in the euro.

Take the creditors in order. Greece wiped out four-fifths of private sector debt in March. Defaulting again on the €60bn or so of new bonds would be legally tough as they are governed by English law, not the old bonds’ Greek law.

Private bondholders are gaining confidence that the pain of inevitable default will fall on others, with the new bonds’ yields close to where they first traded in March. The 10-year yield of 19.2 per cent is down from more than 30 per cent in May.

The International Monetary Fund’s €22bn of loans are unassailable. It is always paid.

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EU Presents Plan to Tame Banks

Spiegel
October 2, 2012

The EU on Tuesday recommended breaking off investment banking from retail banking and other risky investment activities to protect savers and taxpayers in future crises. However, they stopped short of calling for banks to be broken up into entirely separate entities.

The statement by Michel Barnier, the European Commissioner in charge of regulation, sounded like he was throwing down the gauntlet to the EU's financial sector. An EU advisory group on Tuesday submitted a report on banking reform that, according to Barnier, "underlines the excessive risks taken by banks in the past, and makes important recommendations to make sure that banks work in the interest of their customers."

The message is as clear as it is unflattering -- a sector needs to be monitored closely to make sure it doesn't harm its customers. The report was written by a group of experts led by Bank of Finland Governor Erkki Liikanen, who opted for a more cautious formulation. He said his group's recommendations were aimed at "establishing a stable and efficient banking system serving the needs of citizens, the economy and the internal market."

The central element of the report is the call for a strict separation between retail banking and investment banking.

"The group has concluded that it is necessary to require legal separation of certain particularly risky financial activities from deposit-taking banks within the banking group," said the report. "The activities to be separated would include proprietary trading of securities and derivatives, and certain other activities closely linked with securities and derivatives markets."

The move would affect banks such as Britain's Barclays, Germany's Deutsche Bank and France's BNP Paribas, which offer retail banking in addition to riskier trading in stocks, debt and other securities.

The proposed move wouldn't just protect customers' deposits in case the bank got into financial trouble through risky investment banking activities. It would also prevent the state -- meaning taxpayers -- from having to bail out banks in future.

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EU Panel Joins Call For Banks To Split

Wall Street Journal
October 2, 2012

A European Commission-appointed panel of experts recommended that banks should separate risky financial activities from their deposit-taking operations, spurring the European Union to launch a six-week public consultation to decide whether to proceed with legislation.

If the EU goes ahead, large institutions considered critical to the financial systems in Germany, Spain, France and the 24 other EU countries could be broken up. Retail banks would be stripped of their proprietary-trading businesses and forced to set up separate investment banks for all derivative positions, loan commitments, unsecured credit exposures to hedge funds, special investment vehicles or private-equity investments.

The panel, headed by Bank of Finland governor Erkki Liikanen, concluded that such a split would transform banks into simpler institutions that are easier to supervise, minimizing the risk of them needing taxpayer bailouts and making customer deposits safer. Only the deposit-taking banks would be allowed to supply retail payment services and each bank unit would be subject to its own capital requirements and oversight.

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Austerity Creeps Up on Greek Orthodox Church

Spiegel
October 2, 2012

The Greek Orthodox Church has managed to cling onto many of its economic privileges, despite austerity stinging nearly all other parts of the country's society. But after numerous scandals have revealed corruption and embezzlement in the Church, more Greeks appear to be demanding sacrifice.

His Eminence, Bishop Anthimos of Thessaloniki, 78, owes the government back-taxes. A two-page letter from the finance ministry rests on his desk, next to a stack of religious texts and images of saints, informing him that he has €1,350 ($1,740) to pay. And, incidentally, his monthly net income will be cut from €2,200 to €1,930.

The bishop is one of the most conservative spiritual leaders in Greece, notorious for his verbal attacks on Muslims, leftists and gays. He feels threatened by creditors who are preying upon his country; illegal immigrants, whom no one can control anymore; and by those who are picking a fight with his church -- intellectuals arguing that the clergy, too, can afford to make some sacrifices amid the crisis.

"We've been doing that for a long time," Athimos says.

For years, many Greeks have been resentful of the fact that the powerful Orthodox Church paid very little in taxes up until 2010. It receives considerable subsidies from the European Union, in addition to support from the Greek government. Salaries for priests and bishops cost taxpayers about €230 million per year. It wasn't until a few months ago that the government started trying to whittle that number down.

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Right-Wing Extremists’ Popularity Rising Rapidly in Greece

New York Times
September 30, 2012

The video, which went viral in Greece last month, shows about 40 burly men, led by Giorgos Germenis, a lawmaker with the right-wing Golden Dawn party, marching through a night market in the town of Rafina demanding that dark-skinned merchants show permits.

Some do, and they are left alone. But the action quickly picks up, as the men, wearing black T-shirts with the party’s name, destroy a stall with clubs and scatter the merchandise. “We saw a few illegal immigrants selling their wares,” Mr. Germenis says in the video. “We did what Golden Dawn has to do. And now we’re going to church to pay our respects to the Madonna.”

Just a few months ago, the name Golden Dawn was something to be whispered in Greece.

But three months after the extremist right-wing group won an electoral foothold in Parliament, talk of Golden Dawn seems to be on everybody’s lips.

In cafes, taxis and bars, Greeks across the political spectrum are discussing the palpable surge in Golden Dawn’s popularity, which has risen in recent political polls even as the group steps up a campaign of vigilantism and attacks against immigrants.

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Greek Government Proposes Deep Cuts in Bid to Please Foreign Lenders

New York Times
October 1, 2012

Greece’s government submitted its 2013 draft budget on Monday, outlining enormous spending cuts as the country’s foreign lenders returned to resume talks over a broader austerity package in exchange for the rescue money the country needs to meet expenses.

The draft budget spells out about $10 billion in spending cuts and savings for 2013. About one-quarter of that would come through reductions in civil servants’ salaries and social welfare benefits, and about 15 percent through cuts in spending on health, defense and local authorities, the government said. It also stipulates raising the retirement age to 67 from 65, but that is not expected to alter the bottom line in 2013.

The draft budget is expected to be revised significantly because it must be approved by the country’s troika of foreign lenders — the European Commission, the European Central Bank and the International Monetary Fund — before it can be submitted for a parliamentary vote.

The troika is insisting on further cuts in the public sector — including laying off public servants, a political third rail in Greece and other European countries — while the coalition government has been pushing back. The coalition, which consists of the conservative New Democracy, the Socialists and the smaller Democratic Left party, is asking Greece’s lenders for more time, saying such cuts are not politically or socially sustainable in the face of growing social unrest.

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Greece's Creditors Look Askance at Cutbacks

Wall Street Journal
October 1, 2012

Greece's international lenders cast doubt on parts of Athens' plans to save billions of euros through new cutbacks and tax measures, throwing a potential wrench in the government's efforts to reach a quick deal to unlock new aid for the country.

The troika of Greece's international inspectors—the European Commission, the International Monetary Fund and the European Central Bank—rejected as much as €2 billion ($2.57 billion) of austerity measures, a senior finance ministry official said.

"They have asked for clarifications, which we are providing," Finance Minister Yannis Stournaras said after the inspectors met with Greek Prime Minister Antonis Samaras. "Talks are continuing,"

The measures questioned by the troika were part of some €13.5 billion in savings for 2013 and 2014 that the leaders of Greece's coalition government agreed upon last week and presented as a fait accompli.

On Monday, Greece presented the first half of that two-year plan, the 2013 budget, to Parliament. Next year's budget details some €7.8 billion in cuts to be taken next year, with the lion's share—almost €5 billion—coming from further trims in pensions and public-sector payrolls.

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Blame the great men for Europe’s crisis

by Gideon Rachman

Financial Times
October 1, 2012

“This is what you have to do, if you want the people to build statues of you on horseback.” Valéry Giscard d’Estaing was doubtless being whimsical when he urged his colleagues to make bold decisions about the future of Europe. But the former French president’s remark offers a telling insight into the mentality that created the great euro-mess of today.

The EU is now having to deal with the consequences of the hubris of the “great Europeans” of a previous generation. The people who created the euro – men such as Helmut Kohl, the former German chancellor, and Jacques Delors, the one-time head of the European Commission – shared Giscard d’Estaing’s eye for the history books. But their dream of leaving a legacy of a United Europe, with a single currency at its core, has turned into a nightmare.

In the middle of a full-blown economic and political crisis it might seem pointless – or even vindictive – to criticise the statesmen of yesterday. But answering the question “who is to blame?” will be important in resolving the euro crisis. The country or groups that end up shouldering most of the odium for the crisis will emerge with their interests and worldview damaged and in retreat. Broadly speaking, there are three groups competing to be the villain of the piece: the Germans, the southern Europeans and the “Anglo-Saxons”.

Resentment against Germany is rife in southern Europe. A vivid recent example came in Italy, when Il Giornale ran a front page that screamed about a German “Fourth Reich”. But savage criticism of the Germans is not confined to southern Europe. Anatole Kaletsky, a much-respected UK economic commentator, wrote a column in June that stated: “Nobody should be surprised that Germany has become the greatest threat to Europe. After all, this has happened twice before since 1914.”

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Growth without rebalancing is not enough

Economist
October 1, 2012

My colleague writes that the turmoil in the euro zone will persist until growth resumes. In particular, he sensibly notes that beleaguered treasuries will not be able to prevent sovereign debt burdens from spiraling out of control unless tax revenues rise. Given how much taxes Europeans already pay, this means that the size of the pie has to grow. There is no arithmetically realistic alternative. I believe it is worth stressing, however, that the source of this growth is at least as important as its magnitude. As long as the peoples of Europe view themselves as separate nations sharing a single currency rather than a unified federation with centralized deposit insurance, unemployment benefits, and pensions (and why should they not?), the crisis cannot be resolved by returning to the pre-crisis pattern where Northerners flood the South with capital to finance trade deficits with the rest of the world and domestic spending booms (via Paul Krugman, see this IMF paper on the subject). This created claims that investors now suspect cannot be repaid. Right now, the people, nonfinancial corporations, banks, and government of Spain owe a staggering 950 billion euros to the rest of the world, mainly other countries in the euro zone like France, Italy, and Germany. If the single currency is going to be held together, these piles of claims have to shrink. There are three ways to do this.

First, the claims could be “Europeanised” by creating the kinds of programs mentioned above. In the United States, no one ever questioned whether retirees living in Florida and Arizona would get their Medicare and Social Security checks despite the collapse of those states’ economies. If Florida and Arizona were responsible for making those payments rather than the federal government, it is quite likely that there would have been a crisis similar to what is currently transpiring in Europe. This option is not realistic, however, since most Europeans believe that their national identities are more important than any concept of “European-ness.” The Germans have repeatedly denounced the idea of a “transfer union” on these grounds. It is unlikely that the crisis is making anyone besides a few bureaucrats in Brussels feel any great enthusiasm for an expansion of federal power at the expense of national governments.

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Euro Leaders Face October of Unrest After September Rally

Bloomberg
October 1, 2012

Europe faces a month that may decide the success of the European Central Bank’s bid to end the debt crisis, starting with the resumption of talks in Athens today between Greece’s international creditors and the government.

Leaders of the 17-nation euro area are confronting a tougher approach from the German-led pro-austerity bloc and unrest in Spain over budget cuts and a separatist movement in Catalonia. The first of three summits in the next three months, called “crucial” by European Union President Herman Van Rompuy, is set for Oct. 18-19, as investor sentiment toward the euro area that surged in September is on the wane.

“People are beginning to look at this in a more sober way” after the ECB bond-buying plan and a German high-court decision releasing bailout financing spurred optimism over the past month, Clemens Fuest, an economist at Oxford University’s Said Business School, said in an interview yesterday.

Political discord has underscored the inadequacy so far of ECB President Mario Draghi’s offer of unlimited bond buying to to overcome that squabbling that has hamstrung crisis-fighting efforts. With a report today showing the euro area’s unemployment rate climbed to the highest on record at 11.4 percent, October marks three years since Greece’s newly elected Prime Minister George Papandreou revealed an unexpected hole in his budget, triggering the turmoil.

Spain’s 10-year bond yields fell 5 basis points to 5.89 percent as last week’s stress-test results showing a capital deficit of 59.3 billion euros ($76 billion) bolstered confidence in Spain’s banking system. The euro rose 0.4 percent to $1.2909 as of 11:54 a.m. in Frankfurt, recovering after losing 2 percent over the past two weeks.

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Greece predicts deeper 2012 recession

BBC News
October 1, 2012

Greece is predicting its economy will shrink by much more than previously estimated this year.

Its economy will contract by 6.5% this year, worse than a previous estimate of 4.8% in March suggested to its bailout lenders, it said in a draft budget submitted to parliament.

Greece also said its economy will shrink for a sixth year in 2013.

About 8bn euros worth of cuts have been proposed for 2013, covering public-sector pay, pensions and welfare.

The economy will contract by 3.8% next year, the Greek government predicted.

The deeper contraction in the economy means that Greece will have to find extra money.

This may occur through further spending cuts and tax rises, or through additional money from its lenders - perhaps in the form of write-offs or postponements of what Greece already owes them.

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Το Άγος Της Προσοδοθηρίας

του Δημήτρη Δημητράκου

Ratio Vincit
1 Οκτωβρίου 2012

Αξίζει να διαβαστεί το άρθρο του Πάσχου Μανδραβέλη «Το έλλειμμα ανταγωνισμού στην αγορά» στην Καθημερινή της 30-9-12. Παραθέτω ένα χαρακτηριστικό απόσπασμα:

Μπορεί μάλιστα να περίμεναν [σ.σ. τα μέλη της τρόικας] ότι μειώνοντας τα εισοδήματα θα έπεφταν και οι τιμές· έτσι γίνεται σε όλο τον κόσμο, αυτό λέει και η οικονομική λογική. Αμ, δε! Σε μια χώρα που έχουν καταστρατηγηθεί όλοι οι νόμοι, θα την γλίτωνε ο νόμος της προσφοράς και της ζήτησης; Υπάρχουν, απίθανες -και συνήθως μεταμεσονύκτιες- διατάξεις που φτιάχνονται επίτηδες με στρυφνούς νομικούς όρους και παραπομπές σε παλαιότερους νόμους, έτσι ώστε νόμιμα να εξυπηρετούνται πελατειακά συμφέροντα. Και τα πελατειακά συμφέροντα του πολιτικού συστήματος δεν είναι μόνο οι δημόσιοι υπάλληλοι ή οι ταξιτζήδες. Είναι και οι επιχειρήσεις που διά νόμων λυμαίνονται μονοπωλιακά ή ολιγοπωλιακά κάποιες αγορές, απολαμβάνοντας υψηλά κέρδη.

Έτσι λειτουργεί η προσοδοθηρία : με την τακτική των (μεταμεσονυκτίων) τροπολογιών, οι οποίες έχουν εύστοχα ονομαστεί «ντροπολογίες». Πρόκειται για πρόσθετες παραγράφους που «τρυπώνουν» σε ένα νομοσχέδιο, με σκοπό να ευνοηθεί κάποια ομάδα συμφερόντων. Τα συμφέροντα αυτά μπορεί να είναι επιχειρηματικά, συντεχνιακά, επαγγελματικά κάθε είδους. Είναι κατά κύριο λόγο πελατειακά. Και οι εμβόλιμες διατάξεις που τα ευνοούν χαρακτηρίζονται σεμνότυφα ως «ευεργετικές». Κάποιοι, , δηλαδή, ωφελούνται εις βάρος των υπολοίπων, πράγμα που σκοπίμως αποσιωπάται με τη χρήση του επιθέτου «ευεργετικός». Κάποιοι πληρώνουν για αυτή την ευεργεσία και αυτοί δεν είναι οι πολιτικοί που εισηγούνται και ψηφίζουν τις διατάξεις αυτές. Οι πολιτικοί ευεργετούν με τα λεφτά των άλλων. Πληρώνουν οι ανυπεράσπιστοι, δηλαδή, οι φορολογούμενοι.

Οι «ευεργετικές» αυτές διατάξεις στρεβλώνουν την αγορά και βλάπτουν πολλαπλώς το κοινωνικό σύνολο. Δίνουν την ευκαιρία να εισπράξουν κάποιοι περισσότερα από όσα θα λάμβαναν αν δεν υπήρχε η πολιτική εύνοια. Αυτή αποκτάται με κάποιο κόστος. Το κόστος αυτό, όμως, είναι υπό τις τρέχουσες συνθήκες, μικρότερο από πού θα αντιστοιχούσε στην προσπάθεια βελτίωσης της παραγωγικότητας μιας επιχείρησης. Συνεπώς, ο προσοδοθήρας, σε αντίθεση με τον υγιή επιχειρηματία, έχει περισσότερα να κερδίσει επενδύοντας σε πολιτική εύνοια από το να επενδύσει σε εξοπλισμό ή σε ανθρώπινο κεφάλαιο. Αποσκοπεί όχι στο κέρδος – που είναι υγιές κίνητρο σε μια οποιαδήποτε επιχειρηματική δραστηριότητα, αλλά στην πρόσοδο, δηλαδή, εισόδημα το οποίο εισπράττεται εκτός παραγωγής, που είναι έξω ή πέρα από την πραγματοποιημένη εργασία ή την επιχειρηματικότητα.

Είναι τόσο κακό αυτό; Ναι, είναι! Διότι βασίζεται σε μονοπωλιακές ή ολιγοπωλιακές καταστάσεις που δημιουργούνται τεχνητά και το όφελος του επιχειρηματία είναι εις βάρος άλλων. Το ίδιο, φυσικά, ισχύει και για μη επιχειρηματικούς κλάδους, όπως είναι τα συνδικάτα, διάφορες επαγγελματικές ομάδες και γενικότερα όσοι είναι σε θέση να αποσπούν «ευεργετικές» διατάξεις με απεργίες ή διασάλευση της τάξης. Η «ευεργεσία» παρέχεται εκεί με γνώμονα τη «δύναμη βλάβης» που διαθέτουν οι ομάδες αυτές, και όχι την παραγωγικότητά τους. Αυτό θα παρασύρει τον υγιή επιχειρηματία, αλλά και τον έντιμο επαγγελματία και μισθωτό, στο να επιδοθεί κι αυτός στην θήρα πολιτικής εύνοιας. Επί τέσσερις δεκαετίες η ευγενής αυτή τέχνη έχει αποφέρει καρπούς σε ορισμένους και έχει περιορίσει και τελικώς παραλύσει τους περισσότερους. Και οι περισσότεροι, κάθε φορά, μη αντιλαμβανόμενοι ότι μέσω της παντοδυναμίας του Δοβλετιού παράγεται και ενδυναμώνεται η προσοδοθηρία, εκτρέφουν το τον κρατισμό, ελπίζοντας ότι θα αποκτήσουν μέρος της προσόδου.

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Eurostat: Από τις ακριβότερες χώρες στην ΕΕ η Ελλάδα

Ναυτεμπορική
1 Οκτωβρίου 2012

Η Ελλάδα, στις περισσότερες κατηγορίες προϊόντων, είναι ακριβότερη από τον κοινοτικό μέσο όρο και σε δύο από αυτές (γαλακτοκομικά και ηλεκτρονικός εξοπλισμός) είναι η ακριβότερη ευρωπαϊκή χώρα, σύμφωνα με στοιχεία της Eurostat που δημοσιέυθηκαν σήμερα.

Συγκεκριμένα, σύμφωνα με στοιχεία της Eurostat, η εικόνα ανά ομάδα προϊόντων διαμορφώνεται ως εξής:

- Συνολικά στα τρόφιμα η ελληνική αγορά ήταν το 2011 η 14η ακριβότερη μεταξύ των «27» της ΕΕ.

- Στο ψωμί -δημητριακά η χώρα μας βρίσκεται στην 8η θέση (από 7η το 2010), δηλαδή 16% ακριβότερη από το μέσο όρο της ΕΕ ενώ έχει και την υψηλότερη τιμή παραγωγού.

- Στα ψάρια η Ελλάδα είναι η 6η ακριβότερη χώρα με 12,4% πάνω από το μέσο όρο.

- Στο γάλα- τυροκομικά η Ελλάδα είναι η ακριβότερη χώρα, με 31,5% πάνω από το μέσο όρο στην ΕΕ. Και εδώ η τιμή παραγωγού είναι υψηλότερη (47- 56 λεπτά για το αγελαδινό γάλα έναντι 29 στην ΕΕ).

Περισσότερα

Euro Counterfactuals (Wonkish)

by Paul Krugman

New York Times
October 1, 2012

Via The Irish Economy, a new paper from the IMF looks at how, exactly, massive current imbalances emerged within Europe, with Germany running huge surpluses and the GIPSIs running huge deficits.

The paper shows that there were indeed huge capital flows from the European core to the periphery, in Spain largely taking the form of lending to banks, presumably by other banks:

The surprising result in the paper is that much of the rise in imbalances within the euro area involved trade with non-euro nations. Germany sharply increased exports to Asia and Eastern Europe, which had strong demand for German durable manufactures. Meanwhile, southern Europe saw a sharp increase in imports from low-wage countries.

There are two questions this result raises. First, what does it say about the causes of euro imbalances? Second, what does it say about the adjustment now required?

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Getting worse more slowly isn't good enough

Economist
October 1, 2012

The crisis in the euro area is beginning to feel like a permanent piece of the world's economic landscape: a great red spot that just churns and churns and never goes away. It isn't, though. One day the crisis will be over, either because the euro zone managed to muddle through or because it didn't, and came apart.

To avoid coming apart, the euro zone needs to accomplish three things. First, it needs a policy mix from the European Central Bank and from its member states sufficient to prevent a market panic leading to a quick end. There have certainly been moments when it seemed as though it would fail this first task, but at every point enough action has been taken to prevent an immediate disaster. The ECB's role has steadily evolved and has in the process reduced the risk of an implosion of the banking system and contagion across sovereign debt markets. And at the same time, Europe's governments have—slowly, haltingly, inadequately—begun building an infrastructure for a banking and fiscal union. The odds of a Lehman like miscalculation precipitating a sudden financial catastrophe and break-up seem to have steadily receded.

Yet that is just the first hurdle. The euro area also needs to reestablish strong growth, sufficient to begin meeting fiscal goals. On this score, the euro area has done very poorly. The story is more or less this. The crisis, recession, and capital outflows of 2008-09 led to broad weakness in the domestic economies of many peripheral countries. On top of this troubled sovereigns have been raising taxes and cutting spending in order to try and meet budget goals (some necessitated by markets, some imposed by core economies in exchange for fiscal assistance). The result was a descent back into recession, which has in turn worsened budget balance, undermining the process of fiscal consolidation. This weakness could be offset by rising net exports, but the peripherals biggest trading partners are in the same boat, and the world's other large economies aren't doing that great either and are also trying to raise net exports.

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Europe Intent on Saving Greece Despite Lag in Reforms

Spiegel
October 1, 2012

Greece's creditors have been less than impressed with the country's willingness and ability to carry out much needed reforms. But Europe is likely to continue supporting the country anyway -- out of fear of the consequences should the country go bankrupt.

They're at odds, once again. The recent standoff in Athens between Poul Thomsen, chief envoy of the International Monetary Fund (IMF), and Greek Finance Minister Yannis Stournaras was, by all accounts, rather heated. Stournaras even threatened to resign rather than implement the cuts Thomsen was calling for, reported the New York Times.

"It doesn't matter to me," the IMF envoy allegedly replied, and then left.

On Friday, Sept. 21, it was time for the "Men in Black," as the Greeks call them, to depart once again -- without having accomplished anything. The troika, consisting of representatives of the IMF, the European Commission and the European Central Bank (ECB), had had enough.

It isn't the first time that Thomsen and his colleagues have ended their visit prematurely, and it's also nothing new that they are unable to agree with their Greek counterparts over what is to be done. At the moment, the effort to rescue Greece is mainly characterized by one thing: a gloomy sense of déjà-vu.

Despite his words, of course it matters to Thomsen whether or not he and the Greeks reach an agreement. The goal, after all, is to rescue the country and make sure it stays in the euro zone, no matter what the cost -- which is why the three envoys from the troika returned to Athens on Sunday. They want to finally conclude the negotiations over a package of austerity measures designed to save more than €11.5 billion ($14.7 billion). It was supposed to have been concluded in June and is a condition for the second loan agreement. The government also hopes to collect €2 billion in additional tax revenues.

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Greek-Spanish Pension Split Illustrates Europe’s Dilemma

New York Times
September 30, 2012

The differences in approach could not be more distinct — or telling.

Two of the most economically distraught countries in the euro zone, Greece and Spain, mapped out additional budget cuts last week.

In the case of Greece, under last-chance pressure from its international creditors, the governing coalition tentatively agreed on an austerity package that includes some of the most severe cuts in public pensions ever imposed in a developed country. Pension payouts to retirees would be trimmed by as much as 10 percent.

And then there was Spain, where last Thursday the government of Prime Minister Mariano Rajoy introduced one of the most draconian budgets in the country’s history. It was intended to reassure international investors and demonstrate the fiscal discipline that the euro zone was demanding of Madrid.

The markets need reassuring: Spain has a stubbornly high budget deficit, its banks require tens of billions of euros in rescue loans and the government may soon have little choice but to request European aid.

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As Europe’s South Spirals, North Fiddles and Chaos Looms

Bloomberg
Editorial
October 1, 2012

Anyone who thought the euro crisis was coming under control might want to think again.

Only three weeks after the European Central Bank calmed markets with its open-ended promise to support sovereign bonds and hold down borrowing rates throughout the euro area, harsh reality is reasserting itself: Greece, Spain and other struggling governments are being compelled to stick to austerity measures that are thwarting their economies, while Germany and other core euro countries remain unwilling to do what’s needed to prevent the euro area from breaking up.

Spain has taken the spotlight as Prime Minister Mariano Rajoy pushes through the country’s fifth austerity budget in nine months amid a new wave of protests in Madrid and secessionist rumblings in Catalonia. It’s an impressive feat of fiscal responsibility: Rajoy is trying to make sure ahead of time that Spain’s finances will satisfy the European Stability Mechanism, the European Union’s bailout fund, with which his government must have an understanding before it can access the promised ECB support.

Rajoy’s government, in office less than a year, is walking a political tightrope. It needs to convince furious Spaniards that it’s acting at its own initiative and isn’t merely capitulating to the EU’s demands. Problem is, its belt- tightening efforts could prove self-defeating. They will weigh further on an economy that forecasters already expect to shrink by 1.3 percent next year, narrowing the tax base and increasing demands on government spending.

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Greek Economy to Shrink More Than Expected Next Year

by Stelios Bouras

Wall Street Journal
September 30, 2012

Greece's economy will contract more than projected in 2013, its sixth year of recession, under the weight of the next round of austerity measures demanded by international creditors, according to a draft budget the government will submit to parliament Monday, two senior officials said.

The Greek government sees the economy contracting at an annual rate of 3.8% next year, a senior government official said, in line with private-sector economists' expectations and suggesting that earlier forecasts from Greece's international creditors were overly optimistic.

In the spring, the European Commission, which backs Greece's bailout along with the International Monetary Fund, estimated a zero growth rate for the country next year, suggesting it would be poised for a modest recovery after its depression-era-like contraction.

The budget will also include a large chunk of the €13.5 billion ($17.36 billion) in required spending cuts and revenue measures that international inspectors will assess Monday as they resume meetings with Greek government officials on steps needed to open the way for the country's next aid tranche from its second €173 billion bailout.

"Cuts of some €7.8 billion will be included in the budget on items such as government operating expenditures," said an official from one of the parties involved in the coalition government.

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Berlin vs. Rome: A Tale of Two Visions

by Simon Nixon

Wall Street Journal
September 30, 2012

For weeks, the eyes of the world have been on Spain. Ever since the European Central Bank announced its Outright Market Transactions program, Madrid has kept the markets guessing over whether it will request aid from the euro zone's bailout funds, paving the way for the ECB to start buying its bonds. The market suspects an ill-tempered standoff between a stubborn Spanish government and its euro-zone partners. Anxiety last week spilled over into the market with Spanish bond yields rising sharply and stock markets selling off. But the reality is more complex. At the heart of the Spanish impasse lies a wider political dispute that goes to the heart of the euro crisis—and the main protagonists in this debate are Germany and Italy. How this disagreement is resolved will shape the future of the single currency.

From Berlin's perspective, the answer is clear: The German government believes the OMT should only be a last resort; Spain should avoid asking for ECB support unless it becomes absolutely necessary. That's partly because Berlin would have to submit any Spanish request for aid to a potentially troublesome vote of the Bundestag; it is also because any government bond-buying by the ECB will further antagonize the Bundesbank, fanning German opposition to the OMT; and partly because Berlin fears that no sooner does Spain request aid than the market will turn its attention to other countries including Italy, fueling the sense of crisis in the euro zone. If ECB support for Spain does become necessary, strict conditions will be required to ease the domestic political pressure on Berlin.

But viewed through Italian eyes, the situation looks very different.

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