The seismic shift continues, with movement both north and south.
We’ve got more bad financial numbers, heavy White House pressure to get the European mess straightened out, American economic indicators of a European hit, a major Thursday meeting at the eurobank starring some big names, another warning of German central banker reluctance to fund eurobond buys, and some good rating news for Germany.
Spain is a hot topic, with the Italian prime minister hustling Madrid to make a Spailout bid, some favorable rater news, the crisis in Catalonia [which nonetheless signed on to the austerity deal while other regions are still resisting], video and newspaper reports on growing austerity resistance, a don’t-blame-the-Germans plea from Madrid, and some stock market turmoil.
We’ve got the latest from Italy on the peripatetic Marion Monti, and the near-certainty of a bailout for his country, and French bonds selling at rock-bottom rates.
From Greece comes word that the memorandum-imposed cuts have finally been agreed, along with the details on some of specifics, a rare kudo from the IMF boss, dissension over the proposed closing of Greek universities, the use of Greece as a GOP SuperPAC campaign slur, an ethnically pure Golden Dawn food handout, and declining population and bribe numbers.
There are terms for the Cyprus bailout, and some concluding musings about the euro salvation scramble and its real beneficiaries.
We’ll open with a perspective piece. . .
Europe’s good old days
And they were only last month, if only you believed the headlines.
From Bloomberg Businessweek’s Emma Ross-Thomas:
Remember Europe’s good old days? You know, June? The Greeks had finally elected a government, and the country’s new ruling coalition was willing to stick with an austerity program. In Brussels, a June 29 summit ended with German chancellor Angela Merkel yielding a little on the need for harsh medicine for any country that applied for rescue funds. The leaders of Spain and Italy claimed victory, and markets momentarily stopped pummeling their bonds.
Now, deeper into summer, Europe is lurching back into full-blown crisis. This time it’s not Greece (though talk of a Greek exit from the euro has been revived). The flash point is Spain, the euro area’s fourth-largest economy, which may need a full-fledged bailout. That in turn would make it much more expensive for Italy to raise money, as investors worry that it will be next to need a rescue Europe may not even be able to afford. What will happen if Europe can’t rescue Italy? No one knows.
In the early days of the euro crisis, policymakers and economists could not imagine the contagion spreading beyond the euro’s periphery, where the smallest economies—as well as Spain—were to be found. The need for an Italian rescue was seen as remote. Now Spain and Italy are at the heart of the story, which could yet end with a breakup of the euro zone. A botched rescue of Greece will not in itself deal a body blow to the euro. A botched rescue of Spain and Italy could.
More bad numbers announced
This time from the manufacturing sector, where the southern malaise is afflicting the north.
From Agence France-Presse:
Eurozone manufacturing activity slumped to a three-year low in July, with an economic downturn across the single currency area dragging down star performer Germany, new survey data showed on Wednesday.
The Purchasing Managers Index (PMI), a survey of 3,000 eurozone manufacturers compiled by Markit research firm, fell to 44.0 points in July, down from 45.1 points in June. A score below the neutral 50 mark indicates contraction.
The index has now fallen over 12 consecutive months to hit a 37-month low with Markit warning that rates of manufacturing decline in Germany, France and Spain were “either at or close to the steepest since mid-2009.”
“The eurozone faces a deepening slide back into recession,” said Markit chief economist Chris Williamson citing faster rates of decline in output and new orders translating into staffing reductions and cuts to inventory holdings.
“Rates of decline hit the fastest for three years or more in Germany and France, but Spain and Greece continue to stand out in seeing particularly disappointing performances,” Williamson added, with only Ireland bucking the trend.
Obama administration steps up the heat
The White House is becoming even more involved in the eurocrisis, driven by the desperation inspired by the approaching November elections and a critical Thursday meeting.
From Paul Carrel and Gernot Heller of Reuters:
The United States raised pressure on euro zone leaders to take decisive action to solve the region’s debt crisis, notably by lowering troubled members’ borrowing costs, on the eve of a crucial European Central Bank meeting.
U.S. Treasury Secretary Timothy Geithner said the euro zone must take steps including “bringing down interest rates in the countries that are reforming and making sure those banking systems can provide the credit those economies need”.
He made the comments in an interview with Bloomberg Television recorded in Los Angeles on Tuesday and broadcast on Wednesday, a day after he flew to Germany to meet Finance Minister Wolfgang Schaeuble and ECB President Mario Draghi.
But Geithner was only the warm-up to the main event.
Obama gives a jingle to the Troikarchs’ man in Rome
Prime Minister Mario Monti, the unelected technocrat installed by the Troika to replace the then-distressed/now resurgent Silvio Berlusconi, got a jingle from a friend in a very high place.
Monti’s become the austerian emissary, hopping hither and yon on the Troika’s mission, the technocrat of choice with just the right background.
From Agence France-Presse:
US President Barack Obama called Italian Prime Minister Mario Monti on Tuesday to ask about the latest developments in the eurozone debt crisis and prospects for the future, the Italian government said.
Obama “asked for his views on the situation on the eurozone and on the likely developments,” the government’s press office said in a statement.
At a campaign donor event in New York on Monday, Obama said that “decisive steps” needed to be taken by eurozone leaders to tackle the crisis.
“I don’t think ultimately that the Europeans will let the euro unravel. But they’re going to have to take some decisive steps,” he said.
A London Telegraph report offers some motivation for the Washington push:
Manufacturing contracted in China and Europe and slowed in the United States and Canada in July as the eurozone debt crisis dented global and domestic demand.
Manufacturing in the world’s biggest economy grew at its slowest pace in nearly three years last month, while Chinese factory output grew at its slowest rate in eight months.
Eurozone manufacturing activity contracted for the 11th month in a row as star performer Germany was began to feel the affects.of a two-and-a-half-year debt crisis which has sapped growth and market confidence.
Whle in Britain the sector shrank at its fastest rate in more than three years in July, as wet weather and the euro crisis hit output, new orders and exports.
The final Markit US Manufacturing Purchasing Managers Index stood at 51.4 in July, below both a preliminary estimate of 51.8 and June’s reading of 52.5. It was the lowest reading since September of 2009. A reading above 50 indicates growth.
Mixed expectations for Eurobank meeting
An all-star cast of chiefs of state is gathering in Frankfurt in hopes of cobbling out a package of measures to ease the crisis.
Just how successful they’ll be is another question entirely, given the rapid spread of the crisis and the reluctance of a certain Northern nation to send more cash down South.
From Deutsche Presse-Agentur’s Andrew McCathie:
The European Central Bank meets in Frankfurt Thursday amid market concerns that it might fail to meet expectations of new action to tackle the debt crisis following ECB chief Mario Draghi’s pledge to do what it takes to safeguard the euro.
Analysts are not expecting the bank’s 23-member governing council to announce another a rate cut, after it delivered a 25-basis-point reduction in borrowing costs to a historic low of 0.75 per cent at its July meeting.
But Draghi’s comments last week that the ECB would do whatever it takes to protect the eurozone sparked market speculation that the bank would stem the surge in borrowing costs in countries at the centre of the crisis – notably Spain and Italy – by reactivating its controversial government bond-buying programme.
Since then, Draghi’s remarks have been backed by a round of coordinated statements from key European political leaders, including German Chancellor Angela Merkel, French President Francois Hollande, Italian Prime Minister Mario Monti and the head of the Eurogroup, Jean-Claude Juncker.
But the Bundesbankster wants to just say no
The intractability of the economic crisis is nowhere more clear than in Germany itself, where the administration of Chancellor Angela Merkel, a reluctant convert to the notion of more Spanish and Italian bond buys, is being met head-on by the reluctance of the Bundesbank, normally her staunchest ally.
From Olider Tree of International Business Times:
Bundesbank head Jens Weidmann has warned that Germany’s central bank is “more important” than other European institutions, as tensions continue to rise between Berlin and Brussels over how to save the euro.
The warning comes after European Central Bank President Mario Draghi said last week he would do “whatever it takes” to save the common currency, prompting speculation the ECB was poised to buy bonds from debt-ridden nations in a bid to lower borrowing costs and prop up their economies.
The move, according to Weidmann, would violate the ECB’s charter which prohibitis it from funding government debt.
“I certainly would not say that we are “just” one of 17 central banks,” Weidmann said in an interview on the Bundesbank’s own website.
“We are the largest and most important central bank in the Eurosystem and we have a greater say than many other central banks in the Eurosystem.”
“In the short to medium run, Mr. Draghi can afford to ignore” Mr. Weidmann, Jörg Krämer, chief economist at Commerzbank in Frankfurt, told the Wall Street Journal.
“In the long run, the central bank depends on support by the German public, and its views are formed by the skepticism of the Bundesbank.”
One ray of German sunshine
Unlike Moody’s, rater Standard and Poor’s sees Germany on a solid footing and with good prospects.
From the Associated Press:
Standard & Poor’s has affirmed its top credit rating and outlook on Germany. It says Europe’s biggest economy is strong enough to withstand any shocks that might come from the region’s debt crisis.
The rating agency says it is keeping Germany’s rating at “AAA” with a “stable” outlook.
Last week, rival agency Moody’s lowered its outlook on Germany to “negative.” Moody’s cited its concern over Germany’s exposure to risks posed by Europe’s ongoing crisis.
Monti hustles Spain to take the Spailout
There’s just a wee bit of stereotyping in this piece from Ambrose Evans-Pritchard of the London Telegraph.
It’s not necessarily Spanish pride that’s making the country’s politicians reluctant to sign on for the full bailout. They know full well that all such measures are accompanied by those dreaded memoranda imposing even more draconian measures which can only outrage an already angry populace:
Italy’s leader Mario Monti is to make a last-ditch effort tomorrow to persuade Spain to swallow its pride and accept a formal rescue, hoping to clear the way for double-barrelled action by bail-out funds and the European Central Bank.
The frantic diplomacy comes as investors wait nervously to see if German-led officials on the ECB’s governing council will stand behind the bank’s chief, Mario Draghi, who triggered a euphoric stockmarket rally last week with hints of intervention in the Spanish and Italian bond markets.
“The situation is dramatic: markets will react very badly if the ECB doesn’t deliver,” said Dmitris Drakopoulos from Nomura, ahead of the ECB’s crucial policy meeting tomorrow. The bond markets are continuing to signal deep alarm, with safe-haven flows into German two-year debt pushing yields to minus 0.08pc.
Former ECB governor Athanasios Orphanides said Mr Draghi had boxed himself into a corner. “Expectations are now so high, the ECB will have to announce something,” he said.
Bundesbank chief Jens Weidmann shows no sign of relenting, warning today that the ECB must not “overstep its mandate” or stray into fiscal rescues. He issued a blunt reminder that the German central bank is master of the euro project, and not “just one” bank among others. “We are the biggest and most important central bank in the euro system,” he told the Bundesbank journal.
The rater loves the austerity
And it’s the same outfit that just gave the Teutonic thumbs upthrust.
From Deutsche Presse-Agentur:
The ratings agency Standard & Poor’s on Wednesday welcomed Spain’s austerity policies, confirming the country’s long-term credit rating at BBB+.
The agency praised Spain’s “strong commitment” to implementing fiscal and structural reforms.
However, it kept Spain’s outlook negative, citing “multiple risks” to the country’s economic rebalancing.
Prime Minister Mariano Rajoy’s government recently announced an austerity package worth 65 billion euros (80 billion dollars), in an attempt to trim the 8.9-per-cent budget deficit.
The package includes a rise in value added tax, eliminating public employees’ Christmas bonuses and reducing unemployment benefits.
Spain has also launched reforms of the labour market and financial sector.
Catalonia stricken by cash shortage
And the suffering’s getting deeper.
From El País via machine translation from Mike Shedlock at Mish’s Global Economic Trend Analysis:
This month, the Government of Catalonia cannot tackle payments owed to hospitals, schools, residences, social organizations, and children in care centers and workshops. These are the services provided by entities, public and private, funded by the Government but managed not depend on it.
The move affects up to 7,500 associations and some 100,000 workers, according to the third sector.
The news that the Government could not meet its commitments this month was confirmed on Monday after several days of negotiations with the affected entities. Sources from the Departments of Health and Welfare explained ten days ago it “could not meet the payments this month.” Welfare, however, has ensured that other non-contributory pensions paid or the minimum income.
The federations that warn-grouped after an emergency meeting with Social Welfare that many of them are on the verge of “collapse” in a situation “unprecedented”. And is that the default is added to other cuts that have affected the sector this year, as 56% of the budget on labor market policies.
The Catalan Association of Relief calculated that 63% of companies cannot meet the payroll this month. To alleviate this choke, Acra has asked for help from families, proposing that advance a couple of months of contributions.
This is not the first time that the Government is obliged to defer payment of the concerts. It happened last September when he could only address 65% of the amount and the rest was paid by the end of the year.
Iberian Austerian antipathy accelerates
Here’s a report from RT’s Aleksey Yaroshevsky on the growing social divisions within Spain:
A story from the El País English-language website reports on growing discontent over the austerian agenda:
The Spanish central government’s deficit in the first six months of 2012 exceeded its target for the full year as Madrid was obliged to step up transfers to the regions and other public administrations in order to prevent a liquidity crunch and as the recession took a toll on revenues.
The shortfall in the government’s finances widened to 4.04 percent as of the end of June from 3.41 percent as of the end of May. The target for the full year is a deficit of 3.5 percent of GDP. Brussels recently agreed to give Spain another year to bring its deficit back within the European Union ceiling of three percent of GDP and relaxed the target for this year to 6.3 percent from 5.3 percent.
Despite being given more leeway by Brussels, the government has insisted the regions adhere to their target for the year of 1.5 percent of GDP. Catalonia, the region that contributes most to the domestic economy, refused to attend a meeting of the Council for Fiscal Policy on Tuesday to protest the central government’s intransigence on the deficit target, while Andalusia’s representative walked out of the meeting after saying the fiscal goals that had been set for Spain’s biggest region were unreachable.
Catalonia caves to austerity
Turns out their temporary abstinence was just an ornamental rage [H/T to Jerry Pfaffl].
Catalonia will respect central government-imposed deficit-reduction targets for 2012 and 2013 in spite of not showing up at the last meeting with Spanish budget and finance leaders, regional Economics Minister Andreu Mas-Colell told reporters on Wednesday.
‘’It’s one thing for us to express dissent by not showing up at a meeting, and another to confuse public opinion by saying we don’t want to make the deficit-reduction targets,’‘ Mas-Colell said. Also on Wednesday, Catalan Minister for Territory and Sustainability Lluis Recoder called Spanish Finance Minister Cristobal Montoro’s statements ‘’inappropriate.’‘ Montoro said on Tuesday that all regions are obligated to respect government-mandated debt limits, including ‘’rebels’‘ like Catalonia, Andalusia, the Asturias and the Canaries.
Other Spanish regions still in opposition
But others are rebelling, as the London Telegraph reports in a story written before the Catalonian cave-in:
Several Spanish regions are rebelling against the central government’s decision to cap their debt, raising fresh doubts on Wednesday over Madrid’s ability to meet deficit targets agreed with Brussels.
Regional finance chiefs at a meeting with the national treasury agreed late on Tuesday to an overall debt ceiling for the 17 regions of 15.1pc of output in 2012 and 16pc in 2013, AFP reports.
But four regions, including two of Spain’s largest, Catalonia and Andalucia, refused to accept the central government’s clampdown on their finances.
Catalonia, Spain’s richest region with an economy equal in size to Portugal’s, boycotted the meeting altogether while the finance chief of Andalucia, Spain’s most populous region, walked out of the gathering.
Two smaller regions, Asturias and the Canary Islands, voted against the targets at the meeting.
Madrid says don’t blame the Germans
Though reports have the Germans pressing Madrid for more cuts in health and education, they ain’t true, says the Spanish government.
And they’re not even gonna make the cuts in question.
Spain’s government denied it would further cut health and education spending in exchange for European Central Bank (ECB) anti-spread intervention, economics ministry sources told El Mundo daily online on Wednesday.
The sources denied Bloomberg news agency reports that Germany pressured Economics Minister Luis de Guindos to cut health and education spending in exchange for green-lighting a BCE market intervention to reduce the bund-bono spread.
The Mariano Rajoy administration considers its austerity measures sufficient to make this year’s deficit-reduction target, the sources said.
Spanish chaos roils the stock market
The turmoil in Spain is having major impacts on the stock market, as Deutsche Welle reports:
And so to Italy. . .
Monti takes his show on the road
It’s all about selling confidence and, as a second AFP story reports, Monti is busily doing his technocratic best to shore up the ailing euro wherever he lands:
Italian Prime Minister Mario Monti held talks on efforts to protect the eurozone with his Finnish counterpart Wednesday, seeking to mend ties with one of the most outspoken critics on the debt crisis.
Monti entered talks with Jyrki Katainen at the Finnish premier’s official residence in Helsinki around lunchtime, according to AFP correspondent at the scene, and they are to hold a joint press conference later in the afternoon.
The Italian leader is also due to meet President Sauli Niinistoe and the speaker of parliament Eero Heinaeluoma on his one-day visit.
The trip is the latest of a series of visits to European capitals as part of Monti’s efforts to persuade reluctant members of the single currency zone to help shore up the euro.
Another reason for the Three-card shuffle
Three-card monte’s a confidence game that’s a variation of the basic staple of the street magician’s craft, cups and balls, where sleight of hand leads the mark to mark the wrong choice, one profitable to the con artist.
We call Mario Monti “Three-card” because he’s using sleight of word to accomplish the same end, selling the public on a choice that’s bad for them.
Now comes yet another confirmation that the game’s not been working as promised, and from Three-card himself.
Italian Premier Mario Monti on Wednesday said Italy may need to ask for European rescue funds to be used to support its bonds if the money markets are slow to see the country’s efforts to put its economic house in order. He stressed the use of the so-called spread shield would not mean that Italy would need a full-blown bailout. Italy does not need special help right now, but that does not mean it will not need a shot of “oxygen” to help it breath in future, Premier Mario Monti also said Wednesday.
Monti is travelling across Europe this week urging his counterparts to work collectively to lower borrowing costs across the region. In an interview with Finnish daily Helsingin Sanomat, Monti is quoted as saying that Italy at this time does not need special help, but that could change.
“The basic idea is that Italy does not seem to need special aid right now, especially not to save its economy,” Monti said in the interview. But it might need “a breath of air” in the future, he said, adding he feels frustration that Italy’s painful reforms have not yet been reflected in lower interest rates. Monti, who met Tuesday with French President Francois Hollande, is meeting Wednesday with Finnish Prime Minister Jyrki Katainen in Helsinki.
French bonds sell at record low returns
That another sign that the con isn’t selling comes from latest French bond sale.
Even with the Frfench economy increasingly shaky, investors are so eager to buy their bonds that they’re bidding interest down to near-German lows [where fearful folks actually pay to park their money].
From Radio France Internationale:
France’s 10-year bond yield hit a record low level on Wednesday, touching close to 2.0 percent, as investors turn to French debt as a safe haven from problems affecting Spain and Italy.
In late morning trade, the rate of return asked by investors to hold French 10-year bonds fell to 2.010 percent, replacing a previous record set on July 20, before rising back to 2.039 percent.
In recent weeks France has taken advantage of low borrowing rates, offering short term-debt at negative rates, meaning lenders pay for the privilege to lend cash to France.
And now to Greece. . .
The Greek coalition crew agrees on cuts
The Troika demands and the German grumbles provided the motivation, along with a government till that runs down in three weeks.
Leaders of Greece’s three-party ruling coalition signed off on the government’s 11.5 billion euro spending cuts, which were requested by the EU-IMF-ECB troika, ERT TV reported on Wednesday.
‘’Political leaders have accepted Premier Antonis Samaras’ proposals,’‘ Finance Minister Yannis Stournaras told reporters after a three-hour meeting.
Socialist leader Evangelos Venizelos said Greece should ask for more time to reach the troika-imposed deficit-reduction target, but is willing to set his criticism aside for the good of the country.
Democratic Left party leader, Fotis Kouvelis, expressed optimism because the cuts won’t affect the most vulnerable parts of the Greek population.
More from Greek Reporter’s Andy Dabilis:
Samaras had made it clear that any renegotiation with Troika depended on first imposing more Draconian measures on Greek workers, the elderly and the poor, which he said he opposed before winning the critical June 17th elections. Venizelos said he wanted only half the cuts to be made over the next two years and the remainder until 2016, but Troika officials rejected that idea. “The prime minister’s proposal was accepted by political leaders,” Finance Minister Yannis Stournaras told reporters after a nearly three-hour meeting.
The agreement buys Greece some time to impose more reforms and avoid the chance that the new coalition government – formed only because Samaras did not have enough of the vote to control Parliament and a stalemated May 6th election failed to yield a government – would collapse and yet another election would be held.
No specifics on the cuts were revealed, although there were reports that workers, elderly and the poor will be hit again, creating the prospect of more of the protests, strikes and riots that brought down the PASOK government of former Prime Minister George Papandreou last year. Venizelos and Kouvelis asked Samaras to pressure the Troika to convince the lenders not to support measures that would make the economy worse. But while the government said the new measures would be “as fair as possible,” it was clear the burden would again be borne by Greece’s most vulnerable classes while tax evaders owing the country some $70 billion, and the rich and privileged would again escape sacrifice.
Largarde gives a rare Greek blessing
The announcement brought a rare instant of praise from International Monetary Fund boss Christine Lagarde, who has been one of the most intransigent critics of Greece’s reluctance to speedily hew to the austerian line.
“When I look back to the initial program and the achievements of the Greek economy and the Greek population, it’s impressive,” Lagarde told reporters in Washington on Wednesday. “There is still a lot that the country can do.”
Greece’s budget deficit will narrow to 7 percent of gross domestic product this year and 2.7 percent next year, the Washington-based IMF said in a July 16 report.
The IMF had forecast in April that Greece’s deficit will be 7.2 percent this year and 4.6 percent in 2013.
“The IMF never leaves the negotiation table,” Lagarde said when asked about the lender’s role in Greece. “Will the IMF lose its credibility in the process? I will do everything I can to avoid that.”
Parsing the cuts: Cities lose out to patients
One result of the cuts: Cities will be getting a loit less, with the cash skimmed off the top to fund the nation’s most afflicted.
Municipalities will see their funding for August cut by 30 percent so that the money the government saves can be used on social welfare spending, including payments to disabled Greeks and cancer sufferers, the cash-strapped government revealed on Wednesday.
Interior Minister Evripidis Styliandis said that he has signed two decisions allowing the funding to local authorities to be reduced and instead diverted toward the social welfare budget, where payments have been delayed.
“By taking today’s decision, we have responded to a great moral dilemma caused by the acute economic crisis,” he said. “Given that public expenditure has been severely curtailed, we had to decide what were going to prioritize: continuing the monthly funding of 135 million euros for the operational costs of local authorities or pay in full the outstanding benefits for May and June for a section of our society that is being severely tested? We chose the second for obvious moral and social reasons.”
Just over 183,000 Greeks claim social benefits and had not received any payments over the last two months. The claimants were due to receive almost 130 million euros in May and June.
Anger over university closings
One piece of the cuts package targets a program that was one of the old PASOK governments main accomplishments, the opening of dozens of new university campuses, many of which are now marked for closing.
And that’s not going down well with some folks in the coalition’s number two party.
The top MP of the Second Athens district of PASOK, Andreas Loverdos, conveyed his position, which opposes the changes promoted in the law of higher education, to the members of the party.
According to reports, Mr. Loverdos intends to downvote all the changes. His position is the recommendation he would have made to the Group if he had attended. According to other information, the bill will be downvoted by Christos Aidonis, while individual provisions will probably be downvoted by Odysseus Konstantinopoulos, protothema reported.
Beyond that, it is characteristic that Markos Bolaris, rapporteur of the bill for PASOK, declined to comment to the parliamentary committee with reference to the speech he is to make in the House, scheduled for tomorrow.
In his statement, Mr. Loverdos refers to an “anti-educational legislative initiative of the Government” which “should be withdrawn, and if that is not done, downvoted by the House”. He also described the bill “as a bill with anti-reform provisions”.
Privatizing, downsizing parliamentary security
After those stories about the massive bodyguard details of Greek parliamentarians and ministers, the coalition was embarrassed into ordering some cuts as part of their package of cuts.
Not surprisingly, the corporate sector is being cut in for a piece of the action.
From Athens News:
Parliament building security will be undertaken by a private company, while the number of police officers used to guard politicians and other public figures will be drastically reduced, it was announced on Tuesday.
According to a decision by Public Order and Citizen Protection Minister Nikos Dendias and a relevant report by a Greek Police (ELAS) special committee, roughly 1,000 police officers, 100 patrol cars and 60 motorcycles will be redirected to regular duties. The changes will be implemented after the signing of a relevant presidential decree.
The decision provides that police protection for public figures will no longer be mandatory and will be awarded on the recommendations of a special committee. Only the President of the Republic and the prime minister will be entitled to mandatory police protection.
The number of police officers serving in the security of the prime minister will be reduced by 25, while those guarding the leader of the main opposition party will be reduced by 20.
Similar reductions will be in effect in the number of police officers protecting leaders of political parties represented in parliament, government ministers, political party offices and television stations. Also, there will be no police escorts for MPs, MEPs, regional governors and mayors.
Read the rest.http://www.athensnews.gr/portal/1/57398
Republicans say Obama will make U.S. Greece-y
Greece has become everyone’s bad example.
The latest to invoke the Greek example is a GOP SuperPAC, and that’s provoked some righteous umbrage from a scribe at one of our daily reads, Keep Talking Greece:
As if we, Greeks, had not enough problems trying to cope with anti-Greece publications on international media, now we are used in the US presidential elections. In fact we are misused and exploited and turn into a scapegoat by anti-Obama Republican campaigners, to serve their own political purposes and interests.
I was perplexed see a picture a friend posted on Facebook. She took the picture yesterday, while she was driving on highway I-95, a highway leading from Miami, Florida to Boston.
“Look what we saw today on our way home here in Miami”, she wrote.
This is the way Republicans view Greece – demonizing a country for their own benefits, featuring it as an example to avoid. Scaring to death average US-voters who has no insight knowledge of the situation in Greece, and the information they get about Greece is filtered through various channels.
Golden Dawn doles out food in Syntagma Square
First, a video report from Athens News:
And the story from Ekathemerini:
Members of Greece’s far right Golden Dawn party handed out free food to hundreds of people on Syntagma Square on Wednesday.
The food was only made available to Greeks.
Organizers asked for the ID cards of people queuing for food to check if they were Greek citizens. They said that unemployed persons and people with many children would be served first.
More than two hundred people turned up, according to witnesses.
Golden Dawn spokesman Ilias Kasidiaris said the food — potatoes, pasta, milk and olive oil — came from Greek firms and Greek producers exclusively.
The campaign took place despite a ban from local authorities which on Tuesday refused to give permission for the event. In a letter sent to the party, the Athens municipality said Syntagma Square cannot be made available for this type of events.
More from Greek Reporter’s Marianna Tsatsou:
Golden Dawn spokesman Ilias Kasidiaris said the food, which included potatoes, pasta, milk and olive oil, came from Greek firms and Greek producers only in a bid to avoid previous ‘mistakes’ that in past soup kitchens there were items bought from German supermarkets!
Greek state and police officials reacted to the party’s decision to give free food at Syntagma square, just right in front of the Greek Parliament. They ordered them to leave the Square since “Syntagma, the capital’s most famous square, is not offered for such actions.” But the Golden Dawn members ignored orders!
MP Ilias Kasidiaris described Mr Kaminis, mayor of Athens, as ‘mayor of illegal immigrants’ and concluded in a clearly insulting language that Golden Dawn will keep flouting Greek officials’ decisions exactly like Greek citizens do.
‘Legal’ Greek population plummets below 10 million
Though while the number of “legal” residents is falling, the growing numbers of undocumented residents are keeping the total into the eight-figure range.
From Athens News:
The legally resident population of Greece fell beneath 10 million in 2011, according to the results of the 2011 census announced by the Hellenic Statistical Authority on Tuesday. Based on the number of registered inhabitants in each municipality in the country, the number of legal residents is 9,903,268 people. The census was carried out between May 10-24 2011 with May 9 as the reference date.
Based on temporary figures released by ELSTAT on July 22, 2011 shortly after the completion of the census, the total population of the country was 10,787,690 individuals, though European Union estimates of the Greek population on January 1, 2011 were significantly higher at 11,329,600 individuals – a difference partly attributed to the reluctance of illegal migrants and citizens fearful of crime to open their doors to census takers.
The biggest concentration of population is in the center of Athens, with 750,982 people living in the Central Sector of Athens alone, while the number of inhabitants registered at the Athens municipality rolls are 467,108 people. A further 446,721 are resident in the North Sector, 386,953 in the West Sector and 394,191 in the South Sector.
Greek bribes downsized as well
Greeks, whose country is facing bankruptcy, can no longer afford the expensive customary cash-filled “fakelaki” or “little envelope” bribes paid to public sector workers, according to an official.
Greece, dependent on international aid to remain solvent, has struggled for years with rampant corruption that has hampered efforts to raise taxes and reform its stricken economy.
The health sector and the tax authorities topped the country’s corruption rankings for 2011, said a report by Leandros Rakintzis, tasked with uncovering wrongdoing in the public sector.
“While the crisis has not reduced corruption itself, it has reduced the price of corruption,” Rakintzis told Skai TV after publishing his annual report.
“They (civil servants) have lowered their price,” he added.
Troikarchs prepare austerity memo for Cyprus
And it won’t go down easily, according to this report from Capital.gr:
International lenders negotiating a bailout for cash-strapped Cyprus are likely to seek cutbacks in its public payroll and some increases in taxation, the Cypriot finance minister said on Tuesday.
Officials from the International Monetary Fund, European Commission and European Central Bank held inconclusive talks in Cyprus last week. Cypriot officials said discussions would continue, with a new visit by the team, known as the “troika”, possibly in September.
“From our side, there are certain issues which are not acceptable from the outset and require further discussion,” said Vassos Shiarly, Cyprus’s finance minister, Reuters reported.
He did not elaborate on the differences with lenders – the troika?s insistence on scrapping wage indexation has been widely reported as a point of dispute – but implied that cutbacks in salaries in an inflated public sector could be an option.
More from Greek Reporter’s A. Papapostolou:
Cyprus, one of the smallest of 17 nations sharing the euro, became the fifth member of the currency bloc to seek a bailout last month, in its case from a banking sector burdened by the debt restructuring European leaders agreed for Greece.
“Based on the experience of Portugal and Spain, we believe the troika will expect cutbacks in state spending, which include the payroll, and an increase in taxes which will not impact the economy,” Shiarly, a former top banker, told the semi-official Cyprus News Agency.
He said however that the decision on what measures to take would be up to Cyprus, and not lenders.
“Since we are trying to find a considerable amount, that won’t be achieved by cutting back on electricity or telephone bills,” he said.
Cyprus’s two largest banks booked considerable losses on the writedown in Greek sovereign debt this year, diluting their regulatory capital and forcing them to seek government aid to recapitalise. Combined, the banks seek 2.4 billion euros, the equivalent of more than 10 percent of Cyprus’s GDP.
Shut out of international financial markets for more than a year in part because of fiscal slippage, Cyprus had little option but to seek aid from its EU partners.
Does the euro really merit salvation?
And who really benefits from all that furious activity to save it?
We’ll close with this from Simon Jenkins of The Guardian, who raises many of the key points:
Conventional liberal wisdom remains that the euro must be saved, at whatever cost. It is liked for being a grand idea. It is liked for merely existing. It is liked for what might happen if it did not exist. In an extraordinary speech last week, the leader of Europe’s central bank, Mario Draghi, compared the euro to a bumblebee. It was so badly designed that scientists could not see how it flew, yet it had flown for years and should now “graduate into a real bee”. This bizarre evolution, said Draghi, required “more Europe not less”, by imposing more austerity on southern states in the interest of northern banks (though he was not this explicit). They had to cede their sovereignty “to fiscal, financial, economic and political union”.
How much longer will aloof eurocrats believe such things will ever happen? On the evidence of the past two years, the euro will stumble on, but it is hard to see how Greece and Spain can remain in it without huge transfers from Germany and others, transfers which German voters clearly find intolerable – 70% of Germans want a “Grexit” from the euro, and half want rid of the euro itself. Sooner or later someone will have the guts to admit that pressure on the core eurozone would greatly ease if Greek and Spanish debts could be restructured, and their currencies devalued outside the euro.
This so-called crisis is being run by and for banks. They were burned by the credit crunch, by their own reckless lending to a housing bubble and to spendthrift governments. Declaring themselves too big to fail, they demanded policies whose sole virtue was to see their loans secured, at whatever cost to the European economy. They do not want a collapse of even a part of the euro, as that would jeopardise their balance sheets.