We’re breaking out Greek news separately, because Europe’s just brursting with news these days.
With a big week in grand strategy planned by the eurocrats and ministers, along with the latest developments in Spain, Italy, even England, Greece remains the chief victim of the austerians, as well as the target of lots of resentment.
We’ve got a new finance minister, a crackdown on ministerial travel, another bank downgrade, strange games with immigrants, and the latest deadly austerity impacts.
But we’ll start with the warm and fuzzy.
Obama gives a call to new BFF Samaras
Barack Obama was elected by Wall Street money, and despite the rhetoric, he’s served their interests well.
Now he’s chumming up to neocon Greek Prime Minister Antonis Samaras, a good tactical move given the precariousness of the American financial industry.
From Ekathemerini:
US President Barack Obama has called new Greek Prime Minister Antonis Samaras and urged him to work closely with European and international institutions as his government seeks to renegotiate terms of tough austerity measures under its international debt bailout agreement.
The White House says Obama spoke with Samaras on Monday and congratulated him on his recent election. Obama voiced strong support for Greece and wished Samaras a speedy recovery from eye surgery as well.
The White House said Obama also encouraged Samaras to work with the European Union, the International Monetary Fund and the European Central Bank to implement fiscal changes.
It’s musical chairs in Samara’s government
Boy, it’s getting to be that you can’t know the players in new New Democray government even if you do have a program.
First, not sooner did Antonis Samaras announce his cabinet than he lost his finance minister to health problems. And as soon as he named a replacement, a deputy minister was forced out on ethical grounds.
First, from Capital.gr:
Greece’s ruling coalition appointed economist Yannis Stournaras as the country’s new finance minister, the prime minister’s office said on Tuesday.
“Prime Minister Antonis Samaras has decided to name Athens University economics professor and Director of (economic think-tank) IOBE Yannis Stournaras as Finance Minister,” Samaras’s office said in a statement.
Party officials said the three Greek coalition leaders had quickly agreed on Samaras’s choice of Stournaras, 55, who is nicknamed “Mr. Euro” in Greece, according to Reuters.
>snip<
“Stournaras is a serious, respected person who will inspire some confidence in the markets. But he is entering a bad government, where many old-style, spendthrift politicians are occupying key positions,” said political analyst John Loulis. “He will have to wage a hard battle against them. He is entering the wolf’s lair and he won’t survive without the prime minister?s solid support.”
Stournaras most recently was development minister in the caretaker government that led Greece to elections on June 17.
Some background on the new minister from Athens News:
Stournaras, who was born in Athens on 10 December 1956, is seen as a liberal economist and an ardent supporter of structural reforms to open up the economy and make it more competitive.
He received his first degree in economics from the University of Athens in 1978, after which he attended Oxford University for postgraduate studies in economic theory and policy (MPhil 1980, DPhil 1982).
After receiving his doctorate, he was a research fellow and lecturer at St Catherine’s College, Oxford University, until 1986.
Following his return to Greece, he worked as a special advisor to the ministry of economy and finance (1986-1989) and to the Bank of Greece (1989-1994).
During that period he represented the Bank of Greece as an alternate member at the meetings of European Union central bank governors.
He was appointed professor of economics at the University of Athens in 1989, a position he still holds.
Deputy minister didn’t read the fine print?
That’s the most charitable construction we can give to decision by a man doing offshore business to accept the number two slot in the Greek ministry having the most to do with offshore business.
And we note that neither the guy nor the government discovered the error of his way. Nope, the folks who did that were from Syriza, the number two-ranked party, and the largest bloc of seats outside the government coalition.
From Ekathemerini:
Prime Minister Antonis Samaras has accepted the resignation of Deputy Merchant Marine Minister Giorgos Vernikos, after SYRIZA revealed the businessman was involved in an offshore company, which contravenes parliamentary rules.
Vernikos, a businessman who was one of PASOK leader Evangelos Venizelos’s choices for the cabinet, quit soon after the opposition party pointed out that he was breaking the law by taking up a cabinet position.
In its statement, SYRIZA said that it had “nothing personal against Vernikos,” recognizing his resistance to the military junta between 1967 and 1974, but highlighted that the law prohibits politicians from being involved in offshore companies. The leftist party said Vernikos had links to a company in the Marshall Islands.
Vernikos is unlikely to be replaced at the ministry. His departure is a further embarassement for Samaras’s fledgling government, which has suffered a series of setbacks since last week, including the prime minister being forced to stay at home for several days after an eye operation.
Samaras cracks down on ministerial travel
The new Prime Minister is keeping close tabs of subprime ministers, demanding they seek his approval before leaving the city of Athens.
From Keep Talking Greece:
“Leaving Athens without permission” will be very difficult for Ministers and deputy Ministers of Greek coalition government as Prime Minister Antonis Samaras decided to tight the working schedule of his government.
If a minister, a deputy minister or an alternate minister wants to leave Athens for traveling across the country Greece or abroad for whatever reason, he would need to submit his request to the secretary of the cabinet and obtain a permission by the prime minister.
A Samaras’ aide told Proto Thema, “when the PM says government members need to work seven days per week and be available 24 hours per day, he means it. The phenomenon that ministries remain 2-3 days without ‘head’ because ministers and deputies visit their home areas to attend weddings, baptizing ceremonies or keep contacts with the local community will be on hold.”
This decision has also to do with Samaras’ intention to separate the legislative and excecutive powers and to proceed to a substantial incompatibility between ministerial posts and parliament membership.
It will be hard for ministers to keep their local offices and …clients.
The aide’s statements are very revealing. In the normal course of ministerial or cabinet businesses in most, the boss is often on the road, gathering fuel for policy-making [and, yes, politicking as well]. It’ll be interesting to see how this plays out.
More downgrades for Greek banks
This time the downgrade comes from the Nomura zaibatsu, the giant Japanese financial conglomerate.
Nomura’s top boss is under some pressure from other quarters, with regulators demanding information of a series of 2010 initial public offerings where investors were tipped to insider information before shares went public.
From Capital.gr.
Greek banks have to meet two key core capital targets, according to a report that was published today by Nomura, 9% by September 2012 and 10% by June 2013.
While the final print of the recap plan will be announced by the new government in due course, Nomura estimates a potential capital shortfall (including Blackrock losses under the stress scenario) of EUR 22bn for a core tier 1 of 9% and EUR 24bn for a core tier 1 of 10%.
The government, through the Hellenic Financial Stability Fund (HFSF), has provided bridge capital of EUR 18bn, a contribution of 75% of the total shortfall, which leaves the residual shortfall at EUR 4bn and EUR 6bn, explained the bank.
Nomura downgrades Alpha Bank to Neutral from Buy, Eurobank and NBG to Reduce from Neutral, and maintain our Reduce rating on Piraeus.
The immigrants who weren’t
Ah, the ingenuity of the artful entrepreneur!
One Greek employer discovered a way to save a lot of money on his Greek workforce.
Just declare yourselves Bulgarians and leave the cost of healthcare to the Bulgarian government. And besides, he could also pay his workers less than if they were Greeks, giving him a twofer.
And with unemployment soaring, what choice did the workers have?
Oh, and it’s in the same industry that here in California has hired lots of “illegals” too.
From Greek Reporter’s Areti Kotseli:
The financial crisis is indeed a source of problems, but sometimes employers cross the line just because the crisis supplies them with ample justification to do so. A very imaginative “solution” was found in Larissa where a witty employer declared his employees as Bulgarians changing their citizenship and, of course, their salaries.
That virtual migration gimmick was revealed after POEEYTE – the Federation of Restaurant, Bar, Catering and Tourism Employees, filed a complaint on the matter. It appears that a large business in Larissa proposed its employees to accept a virtual migration to Bulgaria.
Following that, the employers would rent personnel from Bulgaria and would invite them to virtually come and work in Greece. However, the employees -who would of course continue living in Larissa- would then be insured by the national insurance agency of Bulgaria.
That means that not only would the employees get a lower salary but that the Larissa business would have committed fraud against IKA.
The profits of people-smuggling
This one’s a story about that hot-button European issue, immigration. And it’s also a story about hostages and organized crime — plus the revelation that the operation isn’t run by Greek but by Afghans.
From Nikolaj Nielsen of EUobserver:
Refugees and asylum seekers in Greece may be paying up to €5,000 to get smuggled into Italy and elsewhere in Europe.
Children are left behind with the smugglers who use them as “guarantees” or “deposits” to ensure future payment by desperate parents.
Once the parents obtain asylum, in say Sweden or the Netherlands, the smugglers then escort the children to Athens-based NGOs who are then able to reunite them.
“We have become a tool of the smugglers and part of this game,” Kenneth Brant Hansen from the Greek Council for Refugees in Athens told EUobserver.
“Of course we are not happy about this situation; on the other hand we cannot refuse to reunite families especially when it involves minor children,” he said.
Hansen said the men who bring him the children are professional Afghan smugglers.
Read the rest.http://euobserver.com/22/116767
Austerity a burning issue in Greece
And we mean that literally.
From Ekathemerini:
The number of wildfires in Greece is up by some 40 percent compared to last year but funding for the fire service has dropped by almost the same amount, leaving firefighters dangerously exposed, as the death of 28-year-old Christos Chaidas while combating a blaze west of Athens last week indicated.
Kathimerini understands that 20 percent of some 3,500 vehicles used to fight fires are not in operation because of lack of funds to service them. Fire service sources said vehicles’ tires have not been changed since 2008 and that many of the fire trucks are only kept in circulation because of donations.
Funding for the fire service was cut by 30 percent in 2011 and another 15 percent in March this year.
The cutbacks are also affecting waterbombing planes. Kathimerini understands that one in three of the Canadair aircraft at the disposal of the fire service cannot fly. Seven of the 21 planes are grounded as there are not enough resources or spare parts to prepare them for flight.
Once again, austerity reveals it’s true and bloody visage. To repay the reckless speculators, Greece must burn, sometimes literally.
Big Pharma begs the EU
The message: Greeks need medicine, but they gotta pay us. So give Greece some money that they can give to us.
From Ekathemerini:
The head of Europe’s drug industry has written to EU leaders ahead of their summit this week seeking major concessions to help keep supplies of medicines flowing to crisis-hit countries like Greece and Spain.
Faced with deep price cuts and billions of euros in unpaid bills, companies want two special measures to prevent discounts offered in southern Europe from being exported to rich states in the north, where governments can afford to pay for innovation.
In a forthright letter, GlaxoSmithKline Chief Executive Andrew Witty, who heads Europe’s pharmaceuticals association, says failure to ring-fence austerity cuts will undermine a sector that provides 660,000 European jobs.
“In these extraordinary times for Europe, its economies and its citizens, business as usual – cost-containment policies that create market distortions – will drive investment elsewhere,” Witty said.
Reuters reviewed a copy of his letter sent to European Union leaders, Commission President Jose Manuel Barroso and Council President Herman Van Rompuy ahead of the June 28-29 summit.
Ah, the joys of corporate compassion.
