Greece to get next rescue loan batch from eurozone

Finance ministers from the 17 euro countries agreed Friday to pay Greece its next batch of bailout loans, avoiding a potentially disastrous default, but acknowledged the country’s debt remained too high.

Greece’s debts are only one piece of Europe’s economic puzzle, and the ministers met in Brussels to address two more complicated — and arguably more important — issues: boosting the financial firepower of the eurozone’s euro440 billion ($607 billion) bailout fund to keep the larger economies of Italy and Spain from spinning out of control and forcing weak banks to boost their capital buffers as a defense against market turmoil.

After the meeting broke up Friday night, French Finance Minister Francois Baroin said they were “headed in the right direction” on these issues and their differences were narrowing. A tussle over how best to use the bailout fund derailed promises to unveil a grand plan at Sunday’s summit meeting. European leaders have now scheduled another summit for Wednesday.

Greek Finance Minister Evangelos Venizelos, meanwhile, welcomed the news that Athens would get the next euro8 billion ($11 billion) installment, calling it a “positive step.” A day earlier, Greek lawmakers approved new, deeply contentious austerity measures.

“The great sacrifices of the Greek people and the implementation of tough but nationally necessary rescue measures are the basis not only for the sixth tranche, but for the new program that will ensure the long-term viability of the Greek public debt,” Venizelos said.

The loans, which still need the approval of the International Monetary Fund, should be delivered during the first half of November. The money will keep Greece afloat for a little longer, but most economists agree that the country also needs a substantial cut to its debt load. The finance ministers said they were looking at ways to do that, including imposing bigger losses on the banks that hold Greek bonds.

If those debts aren’t reduced, Greece won’t be able to raise money on financial markets for another decade, according to a new report by the country’s international creditors.

A person familiar with the report said a deal reached with banks in July to give Greece easier terms on its bonds would leave it with a debt of 152 percent of economic output in 2020.

The person spoke on condition of anonymity, because the report is confidential.

A German official said earlier that Berlin was now pushing for a new deal with Athens’ private creditors that would reduce Greece’s debt to some 120 percent of GDP by 2020.

While eurozone officials try to figure out how to help Greece out of its debt hole, they are also trying to ensure that Spain and Italy don’t find themselves in the same situation. The eurozone doesn’t have enough resources to bailout those larger economies, so it has to act before Rome and Madrid find themselves unable to borrow as Greece, Portugal and Ireland have.

Increasing the effectiveness of the bailout fund, or European Financial Stability Facility, is meant to offer that protection, but Germany and France disagree over how to do that.

Still, markets appeared to give Europe the benefit of the doubt on Friday, when stocks and the euro traded substantially higher.

“Once we have the option for the leveraging (of the EFSF) then — building on that — we can develop all other points,” said Austrian Finance Minister Maria Fekter, as the arrived for the meeting in Brussels.

Governments have ruled out increasing their financial commitments, but they acknowledge that with some euro140 billion already going to Ireland, Portugal and Greece, the EFSF isn’t big enough to both help recapitalize weak banks and keep big economies like Italy and Spain from being dragged into the crisis.

Austria’s Fekter said up to seven technical options for giving the EFSF more leverage were currently on the table and both she and German finance minister Wolfgang Schaeuble ruled out the possibility that the fund will be able to tap into the vast resources of the European Central Bank. That proposal is still being pushed by France, which sees ECB help as the best way of giving the EFSF the necessary force.

The German official said that a combination of two options had crystallized as the most likely solution.

The first would involve the bailout fund acting as an insurer for bond issues from wobbly countries like Italy. That would essentially compensate investors against a first round of losses and support the bonds’ prices, keeping governments’ borrowing rates from rising too far.

In addition, the International Monetary Fund — which has already provided about a third of the bailout cash for Greece, Ireland and Portugal — would supply other stragglers with precautionary credit lines to make sure they have ready access to cheap money.

Last weekend, at a meeting in Paris, the finance chiefs from the Group of 20 leading economies opened the door for a larger role by the IMF, but only if the eurozone first does its part.

IMF Managing Director Christine Lagarde, who joined the ministers in Brussels Friday, said her institution would do everything it could to help Europe.

“We will find solutions,” she said, without going into details.

Europe’s leaders have already told their counterparts in the G-20 that they will have a plan ready to present to them at their next meeting in Cannes, France, in early November.

But Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the meetings of eurozone finance ministers, said the announcement to delay all decisions until the next summit on Wednesday looked “disastrous” to the outside world.

——

Melissa Eddy in Berlin and Sarah DiLorenzo in Brussels contributed to this story.


On Parliament vote, reforms, French frigates, tourism



Drop in tourism — what a surprise!

So Greece shoots itself in the foot yet again! No surprise there! As a nation with a brilliant asset in its tourism opportunities, it never ceases to amaze me (even after 30 years in Greece) that no matter how hard we who work in tourism try to reassure people that their holidays will be the great experience they hope for, we still end up with clients blockaded in airports by taxi drivers, stuck in ports because of ferry strikes, and unable to visit tourist sites due to strikes. No wonder tourism is down. Will we ever learn to actually make the most of our assets instead of ruining them?

Diana Giannoulis

The current state of Greece

I am so very saddened to see the current conditions in Greece. Having visited Greece for a number of months on two occasions I became a bit of a Greekophile: A beautiful country, friendly people and a great sense of morality and care for their fellow man. I am not an economist, so I don’t know the way out. All I know is the Greece of the drachma seemed a better place than the Greece of the euro.
I also met a couple from Australian and New Zealand who ran a bar on one of the islands. They were very forthcoming with their statements about how much “easy wealth” was to be made. They bragged about paying only 2% tax and keeping another set of books. They said it was so easy to fool the taxman. I was appalled!
They may have to pack up and leave, but it is the unscrupulous people within the society that have caused this situation, along with the politicians. Why should the proud and decent Greek majority suffer because of the few?
What is being forced on the people of Greece by the eurozone is completely intolerable and unfair, and I applaud the people for taking a stand.

Paula Svehaug

PASOK is mostly to blame

PASOK is mostly to blame for the current situation Greece is in. Since 1974, PASOK has governed most of the time. Andreas Papandreou, with his cheap populism and anti-US rhetoric, borrowed money from the then EEC and bloated the public service. Costas Simitis got Greece into the eurozone based on statistical lies. Greece should have never been allowed to join the eurozone. The structural reforms were never there and Greece has an uncompetitive economy. The EU must take responsibility for this.
Current PM George Papandreou could have negotiated a better and longer deal, and he had other options such as borrowing money from the Saudis or from the Chinese at more favorable interest rates. Instead, he chose the troika. Two years on, unemployment is higher than ever before, more businesses have closed, suicide rates are up and there is general pessimism among most Greeks. PASOK’s failure to reign in the rich for tax evasion or cut back the size of Greek Parliament is clearly evident. Why does Greece need 300 parliamentarians on an average monthly wage of 10,000 euros? Why not shed 150 Parliamentary jobs?
Illegal immigration, which is another huge issue among many Greeks, continues to drain the Greek economy with high crime rates and untaxed remittances going the other way. Greece can thank the PM for having signed the Dublin II regulation treaty in 2003 when he was foreign minister from 1999-2003. Under the terms of the treaty, the first EU country these people land in must process their claims of asylum. In other words, Greece is stuck with hundreds of thousands of illegal immigrants thanks to Papandreou. The EU for its part wants no changes to Dublin II. Anywhere you look PASOK is a failure.

George Salamouras

Greece needs to carry out genuine reforms

Liberalization, deregulation and privatization are the critical structural reform components of a brighter future in Greece. Greece needs to take this vital medicine immediately. This is an emergency. Without these across-the-board reforms in Greece, the future in Greece is truly bleak.
Greece has a public sector debt crisis. The Greek people have been poorly governed over the last 45 years, knowing full well what their government was doing. The Greek government and the corrupt civil service have been siphoning all the money. Let those who know they are reaping the corrupt system admit it and stop taking salaries for non-existent jobs, or perks for health, travel etc. The private middle classes are held hostage by the corrupt system. Greece has a failed protectionist economic and corrupt political system.
The Greeks’ biggest asset they can sell is sunshine. However, their tourism and solar power industries are heavily protected and mismanaged. If these protected industries were opened up to free trade, Greece could flourish and return to growth. It seems to me that Greece desperately needs to change its constitution, along with smashing and tearing apart the corrupt unions that brought Greece to this catastrophic disaster.
Greece needs clear decisive leadership to screw hard to its core the corrupt state apparatus that’s kept Greece a closed and uncompetitive economy, and to build a new open market economic structure based on meritocracy and low to non-existent protectionist regulation, from the ground up. I do hope that people in Greece protest against themselves, against their mentality, their way of thinking. The eurozone should also have had a common fiscal policy. A central EU policy wouldn’t be dictatorship, just common sense. It would lead to not only fairer wealth distribution but a stronger economy.
I hope they take my advise and I wish the Greeks well.

Brett
Oslo

Voting under duress

The point of a democracy is to be able to vote according to your conscience without fear of retribution. By ousting a member of his party, Mr Papandreou has clearly shown his true colors — a wimpy version of George Bush’s cowboy mantra: It’s my way or the highway. What is amazing is that he is the leader of the Socialist party, yet his actions belie that philosophy in favor of a dictator-like stance with regard to these austerity measures. Socialism only works when everyone agrees to and supports the system equally. None of the PASOK MPs have even suggested taking cuts in salaries, benefits or pensions, yet they clearly believe that the rest of the population should. We no longer live in a democracy. Our government has sold us out to the troika, which is intent on making all of us slaves to their repayment plan, which has absolutely no hope of succeeding. Say goodbye to the Greek way of life. Say hello to IMF Greece, in which our country and its assets including its citizens will be sold to the highest bidder, albeit at pennies on the euro. Shame on our government and the unions that have held our country hostage for decades. They are responsible for this economic crisis. Sadly, only the latter will now see what it is like to walk in the shoes of those who work in the private sector. We have not benefited at all from the ridiculous pay raises and benefits that previous strikes have generated. So, perhaps they will join us in our non-violent plight against the 300. Taking our cue from Mr Papandreou, here’s a tip old son — you are either with us or against us.

Jonathan Reynik

Greece, a middle class country?

Supposing that Greece is not a middle class country is supposing that Greece is still primarily a rural, agricultural nation of peasant villages with little industry and low levels of education. That is the Greece my grandparents left in the 1920s to come to the United States. That, however, is not the Greece of today. Agricultural workers make up only around 14-16% of the workforce, and agricultural production accounts for only 6% of GDP. Greece has some heavy industry as well, including metals, shipbuilding, mining, etc., that contribute significantly to the economy. But what places a nation’s economy in the high-income bracket is that it is overwhelmingly service-driven, which is true of the modern Greek economy. In fact, two of Greece’s largest and most important industries, shipping, and tourism, are almost as large a part of the economy by themselves as manufacturing, and they are far more productive than the agricultural sector of the economy. So, when my grandfather came down from his mountain village in the 1920s to emigrate to the US, while the rest of his family tended sheep and goats up until the 1970s, he probably couldn’t have imagined what Greece would look like today. While it is true that Greece has some serious problems and that living standards for most Greeks will fall, Greece’s economy still has come a long way in the last century and there is still room for growth and development.

Peter Kates

French Frigates

Can anyone really fault either France or Greece for the FREMM class frigate deal? The French are interested in keeping workers in their significant defense sector working, and the French haven’t been making as many large arms sales the last few years. Selling the frigates to the Greek Navy at a reduced price is the French subsidizing their own defense industry. Why wouldn’t Greece be enticed by the prospect of operating some of the most advanced warships being built today for almost 1/4 of the actual cost? As for the Greeks being interested in the French frigates, Turkish behavior toward the Cypriot exploration of fossil fuel deposits in its own EEZ and threats to break the Israeli blockade of Gaza should answer that. If not recent Turkish behavior, perhaps Turkish behavior over the last 37 years in and over the Aegean Sea should convince people that the Greek military must maintain at a reasonable level of readiness. Unfortunately, for right now, Greece is having to choose both guns and butter.

Peter Kates

While it seems completely illogical, almost Alice in Wonderland, to buy/acquire frigates, the fact that the Turks are stirring around in Cyprus and the Aegean is a cause for concern. They may just take the opportunity of a weakened Greece to snatch an island or two, or at least try to.
Can Greece defend herself, can she afford to, would the Turks attempt anything? The frigates may just be a psychological ploy to warn the Turks off trying anything to Greece’s detriment.

Philip Andrews


On Parliament vote, reforms, French frigates, tourism



Drop in tourism — what a surprise!

So Greece shoots itself in the foot yet again! No surprise there! As a nation with a brilliant asset in its tourism opportunities, it never ceases to amaze me (even after 30 years in Greece) that no matter how hard we who work in tourism try to reassure people that their holidays will be the great experience they hope for, we still end up with clients blockaded in airports by taxi drivers, stuck in ports because of ferry strikes, and unable to visit tourist sites due to strikes. No wonder tourism is down. Will we ever learn to actually make the most of our assets instead of ruining them?

Diana Giannoulis

The current state of Greece

I am so very saddened to see the current conditions in Greece. Having visited Greece for a number of months on two occasions I became a bit of a Greekophile: A beautiful country, friendly people and a great sense of morality and care for their fellow man. I am not an economist, so I don’t know the way out. All I know is the Greece of the drachma seemed a better place than the Greece of the euro.
I also met a couple from Australian and New Zealand who ran a bar on one of the islands. They were very forthcoming with their statements about how much “easy wealth” was to be made. They bragged about paying only 2% tax and keeping another set of books. They said it was so easy to fool the taxman. I was appalled!
They may have to pack up and leave, but it is the unscrupulous people within the society that have caused this situation, along with the politicians. Why should the proud and decent Greek majority suffer because of the few?
What is being forced on the people of Greece by the eurozone is completely intolerable and unfair, and I applaud the people for taking a stand.

Paula Svehaug

PASOK is mostly to blame

PASOK is mostly to blame for the current situation Greece is in. Since 1974, PASOK has governed most of the time. Andreas Papandreou, with his cheap populism and anti-US rhetoric, borrowed money from the then EEC and bloated the public service. Costas Simitis got Greece into the eurozone based on statistical lies. Greece should have never been allowed to join the eurozone. The structural reforms were never there and Greece has an uncompetitive economy. The EU must take responsibility for this.
Current PM George Papandreou could have negotiated a better and longer deal, and he had other options such as borrowing money from the Saudis or from the Chinese at more favorable interest rates. Instead, he chose the troika. Two years on, unemployment is higher than ever before, more businesses have closed, suicide rates are up and there is general pessimism among most Greeks. PASOK’s failure to reign in the rich for tax evasion or cut back the size of Greek Parliament is clearly evident. Why does Greece need 300 parliamentarians on an average monthly wage of 10,000 euros? Why not shed 150 Parliamentary jobs?
Illegal immigration, which is another huge issue among many Greeks, continues to drain the Greek economy with high crime rates and untaxed remittances going the other way. Greece can thank the PM for having signed the Dublin II regulation treaty in 2003 when he was foreign minister from 1999-2003. Under the terms of the treaty, the first EU country these people land in must process their claims of asylum. In other words, Greece is stuck with hundreds of thousands of illegal immigrants thanks to Papandreou. The EU for its part wants no changes to Dublin II. Anywhere you look PASOK is a failure.

George Salamouras

Greece needs to carry out genuine reforms

Liberalization, deregulation and privatization are the critical structural reform components of a brighter future in Greece. Greece needs to take this vital medicine immediately. This is an emergency. Without these across-the-board reforms in Greece, the future in Greece is truly bleak.
Greece has a public sector debt crisis. The Greek people have been poorly governed over the last 45 years, knowing full well what their government was doing. The Greek government and the corrupt civil service have been siphoning all the money. Let those who know they are reaping the corrupt system admit it and stop taking salaries for non-existent jobs, or perks for health, travel etc. The private middle classes are held hostage by the corrupt system. Greece has a failed protectionist economic and corrupt political system.
The Greeks’ biggest asset they can sell is sunshine. However, their tourism and solar power industries are heavily protected and mismanaged. If these protected industries were opened up to free trade, Greece could flourish and return to growth. It seems to me that Greece desperately needs to change its constitution, along with smashing and tearing apart the corrupt unions that brought Greece to this catastrophic disaster.
Greece needs clear decisive leadership to screw hard to its core the corrupt state apparatus that’s kept Greece a closed and uncompetitive economy, and to build a new open market economic structure based on meritocracy and low to non-existent protectionist regulation, from the ground up. I do hope that people in Greece protest against themselves, against their mentality, their way of thinking. The eurozone should also have had a common fiscal policy. A central EU policy wouldn’t be dictatorship, just common sense. It would lead to not only fairer wealth distribution but a stronger economy.
I hope they take my advise and I wish the Greeks well.

Brett
Oslo

Voting under duress

The point of a democracy is to be able to vote according to your conscience without fear of retribution. By ousting a member of his party, Mr Papandreou has clearly shown his true colors — a wimpy version of George Bush’s cowboy mantra: It’s my way or the highway. What is amazing is that he is the leader of the Socialist party, yet his actions belie that philosophy in favor of a dictator-like stance with regard to these austerity measures. Socialism only works when everyone agrees to and supports the system equally. None of the PASOK MPs have even suggested taking cuts in salaries, benefits or pensions, yet they clearly believe that the rest of the population should. We no longer live in a democracy. Our government has sold us out to the troika, which is intent on making all of us slaves to their repayment plan, which has absolutely no hope of succeeding. Say goodbye to the Greek way of life. Say hello to IMF Greece, in which our country and its assets including its citizens will be sold to the highest bidder, albeit at pennies on the euro. Shame on our government and the unions that have held our country hostage for decades. They are responsible for this economic crisis. Sadly, only the latter will now see what it is like to walk in the shoes of those who work in the private sector. We have not benefited at all from the ridiculous pay raises and benefits that previous strikes have generated. So, perhaps they will join us in our non-violent plight against the 300. Taking our cue from Mr Papandreou, here’s a tip old son — you are either with us or against us.

Jonathan Reynik

Greece, a middle class country?

Supposing that Greece is not a middle class country is supposing that Greece is still primarily a rural, agricultural nation of peasant villages with little industry and low levels of education. That is the Greece my grandparents left in the 1920s to come to the United States. That, however, is not the Greece of today. Agricultural workers make up only around 14-16% of the workforce, and agricultural production accounts for only 6% of GDP. Greece has some heavy industry as well, including metals, shipbuilding, mining, etc., that contribute significantly to the economy. But what places a nation’s economy in the high-income bracket is that it is overwhelmingly service-driven, which is true of the modern Greek economy. In fact, two of Greece’s largest and most important industries, shipping, and tourism, are almost as large a part of the economy by themselves as manufacturing, and they are far more productive than the agricultural sector of the economy. So, when my grandfather came down from his mountain village in the 1920s to emigrate to the US, while the rest of his family tended sheep and goats up until the 1970s, he probably couldn’t have imagined what Greece would look like today. While it is true that Greece has some serious problems and that living standards for most Greeks will fall, Greece’s economy still has come a long way in the last century and there is still room for growth and development.

Peter Kates

French Frigates

Can anyone really fault either France or Greece for the FREMM class frigate deal? The French are interested in keeping workers in their significant defense sector working, and the French haven’t been making as many large arms sales the last few years. Selling the frigates to the Greek Navy at a reduced price is the French subsidizing their own defense industry. Why wouldn’t Greece be enticed by the prospect of operating some of the most advanced warships being built today for almost 1/4 of the actual cost? As for the Greeks being interested in the French frigates, Turkish behavior toward the Cypriot exploration of fossil fuel deposits in its own EEZ and threats to break the Israeli blockade of Gaza should answer that. If not recent Turkish behavior, perhaps Turkish behavior over the last 37 years in and over the Aegean Sea should convince people that the Greek military must maintain at a reasonable level of readiness. Unfortunately, for right now, Greece is having to choose both guns and butter.

Peter Kates

While it seems completely illogical, almost Alice in Wonderland, to buy/acquire frigates, the fact that the Turks are stirring around in Cyprus and the Aegean is a cause for concern. They may just take the opportunity of a weakened Greece to snatch an island or two, or at least try to.
Can Greece defend herself, can she afford to, would the Turks attempt anything? The frigates may just be a psychological ploy to warn the Turks off trying anything to Greece’s detriment.

Philip Andrews


Mount Athos Fertility Relic Travels to Russia

A relic from Mount Athos in Greece has flown to St. Petersburg, where hundreds of believers, especially women, have queued in order to pay their respects and pray for blessing. This relic is believed to have miraculous powers to boost fertility.

The relic, on loan from Greece, arrived on Thursday afternoon at Saint Petersburg and is known as the Belt of Virgin Mary. It will remain in St. Petersburg until Monday and then it will travel on to the cities of Norilsk, Vladivostok, Kaliningrad and finally Moscow.

The relic arrived in Russia for the first time after an initiative taken by the influential Russian Orthodox Church, who is actively promoting motherhood to help the government halt a steadily rise in population decline.

The shrinking population has become somewhat of a matter of national security for Russian leaders.

‘It’s a serious problem and an important topic for our country,’ the head of the church, Patriarch Kirill, told this week AFP.

“The fact that this is such a singular relic helping women is especially important for our city and our country, where the demographic situation leaves much to be desired” added the Russian Patriarch.