We open with a video of a Greek-born economist on the real meaning of austerity, then look at a U.S. news magazine’s anointing of Prime Minister Antonis Samaras as Europe’s golden boy, a europol’s assurances, another plea for an austerian delay, and a Merkel ally’s Grexit worries.
The head of Greece’s socialist-in-name-only party takes up a Merkel tune, there’s still no decision on pay cuts for the privileged, we’ve some good news for Greek banks, a report on a battle with heroin dealers, declines in retail trade and travel, and word that immigrant raids will last through the year.
Then there’s the sell-off of government jets and the introduction of a key piece of Reaganomics.
“Nonsense Economics” and the Deepening Greek Crisis
From Paul Jay of The Real News Network an interview with Costas Lapavitsas, professor of economics at the University of London School of Oriental and African Studies and a specialist in international finance.
Their concise description: “Greece is being destroyed as all the players prepare for next stage of austerity measures.”
A transcript is posted online here.
Antonis Samaras, golden boy of Europe
That’s the judgement of an American medium, and provocative of an engaged response from Andy Dabilis of Greek Reporter:
It might not be the compliment he’d like, with Greeks furious he’s going to impose more austerity measures and critics saying he has kow-towed to international lenders, but the American news magazine Time says that Greek Prime Minister Antonis Samaras is the golden boy of European leaders because he’s supporting more pay cuts, tax hikes and slashed pensions to keep bailouts coming to prop up the failing Greek economy.
In an article entitled How is Samaras Doing? the magazine noted that European Union (EU) officials like him because the head of the New Democracy Conservatives is keeping the anti-austerity major opposition party, the Coalition of the Radical Left (SYRIZA) leader Alexis Tsipras – deemed an enemy to Europe’s political establishment, at bay.
“There is a lot of discomfort ahead of us but up to now, Merkel and the Germans like what they hear from the Greek Prime Minister. Will the honeymoon last?” the magazine asked. “Just two months after his political party won the contentious elections … Samaras excites another tough crowd,” it added, referring to the leaders of the Eurozone.
“The Eurozone sees him as the last opportunity for Greece for some time now it is considered that Samaras is stalling, but the Europeans believe that there is no other choice,” said Yiannis Emmanouilides, an analyst at the European Center of Politics in Brussels, seat of the European Union.
The article continued that EU leaders were relieved with the results of the Greek elections that were narrowly won by Samaras’ New Democracy Conservatives over SYRIZA and Tsipras, who had vowed to remove Greece from the bailout memorandum he said was crushing Greek workers, pensioners and the poor.
Yep. Tsipras may be the coming thing when times get worse, and that’s got a lot of folks worried.
Greece in eurozone to say, says EU head
But strong measures are required.
And there’s that golden boy to get things done.
From Agence France-Presse:
Greece’s membership of the eurozone is “irreversible” European Union president Herman Van Rompuy said Tuesday during a visit to Spain to discuss the eurozone crisis.
“Let there be no doubt the euro is irreversible and Greece’s presence in the euro as well,” Van Rompuy told a joint news conference in Madrid with Spanish Prime Minister Mariano Rajoy.
“It is only by adopting strong measures by each individual member state and strong actions collectively that we can put this crisis behind us,” Van Rompuy said after talks with the Spanish leader.
Rajoy said a Greek exit would be a setback for the region. “If Greece leaves or anyone leaves the eurozone it would be a collective failure of Europe,” he said.
Still pleading for that austerian delay
And folks up north have got to know that’s their best chance of keeping Tsipras at bay.
From Agence France-Presse:
Greece is trying to convince its eurozone partners that spreading out its fiscal adjustment programme will not burden them financially, government spokesman Simos Kedikoglou said on Tuesday.
Speaking to radio station To Vima, Kedikoglou said Greece is “already discussing” the possibility of an extension of the deadline to reduce its public deficit by less than three percent of the GDP.
“Our plans show that additional funding from other EU members will not be necessary,” he added.
Merkel ally despairs of Grexit
Michael Meister, the number two in Merkel’s Christian Democrats in the lower house of the national legislature says that a Greece departure from the euro could be the just first domino to fall in in southeast Europe.
From Matthias Sobolewski of Reuters:
“I believe we have to open up the debate beyond the purely financial and economic dimensions,” he said.
“Just look at the map and see where Greece is located,” Meister added, noting its proximity to the Middle East, now racked by civil war in Syria, and to still-fragile parts of the Balkans.
His comments echoed those of another prominent CDU politician, Armin Laschet, who told Reuters at the weekend that a Greek exit could trigger undesirable upheaval in southern Europe.
“(An exit) could lead to instability in a NATO member state. Russia is standing ready with billions to help Greece in such a scenario,” Laschet said. “Much more is at stake here than just the question of whether Greece meets the criteria (of its bailout).”
Both Laschet and Meister stressed the importance of Greece, now in its fifth year of recession, implementing the fiscal and other reforms agreed under its bailout packages.
But their comments suggest that Berlin could be more flexible than many have assumed if Greece fails to deliver on all its promises.
PASOK boss takes shot at Grexit pushers
Considering that Angela Merkel and some other folks with real clout have said the same thing, the call from the “socialist” leader means very, very little. But he’s got to say it nonetheess.
From Deutsche Presse-Agentur’s Takis Tsafos:
Evangelos Venizelos, the head of Greece’s Socialist party, said European politicians arguing for Greece to leave the euro zone are attempting to “castrate” the currency bloc, his party announced Tuesday.
“Some who think it right to exert pressure on Greece by teaching it a lesson need to know that they are emasculating the eurozone with these tricks,” Venizelos said in a speech to parliamentarians Monday night.
Last week, Greek Prime Minister Antonis Samaras held a series of top-level meetings in Berlin and Paris following signs of growing political tensions, especially in Germany, over aid to Greece.
“Our European partners and our German friends have given us no money and have lost no money. The only way (possible) to lose money is after an exit of Greece from the euro,” Venizelos said.
No firm numbers yet on cuts for the privileged
Upper level and key civil servants are facing another pay cut. But just how much and for whom remains a matter of debate.
From Greek Reporter’s A. Papapostolou:
Continued political infighting is holding up plans to make cuts to “special salaries” to professions in Greece that want to be protected against more punishing pay cuts put on civil servants.
A meeting was held among Finance Minister Yiannis Stournaras, Citizen Protection Minister Nikos Dendias, Defense Minister Panos Panagiotopoulos and the heads of the three branches of the armed forces, as well as officers from the police and fire departments, who don’t want their pay cut.
The newspaper Protothema reported that the government plans to replace special payroll cuts of $257.25 million with equivalent horizontal cuts in expenses and to implement the measure in 2013 to save $752.87 million annually.
Officials are also discussing the weighted average reduction of 12-14% in payroll costs for doctors, teachers, diplomats, civil servants, police, and the armed forces, but propose that it should be scaled to protect sectors that have already been severely affected, and are expressing strong opposition.
The largest cut in this proposal, about 20%, would hit judges and diplomats, the groups with the highest incomes. Teachers would be cut another 10 percent, and priests would for the first time have a similar reduction as they are paid by the government. The government is trying to finalize plans to make an additional $14.16 billion in cuts to be presented to international lenders to insure lifeline loans keep coming.
Greek banks hold on to funds
At least for the moment, the Greek bank walk has stopped, unlike Spain, which saw a near-record pace in the same time frame.
Greek banks stopped bleeding deposits in July after June elections decreased the worst fears of the country dropping out of the common currency bloc, European Central Bank data showed on Tuesday, Reuters informs.
Speculation about Greece possibly quitting the euro was intense in May when anti-bailout parties saw a strong showing in elections, but the Greek central bank said the process had reversed after the elections.
The ECB’s deposit data for July confirmed this. Private-sector deposits in Greek banks rose about 2 percent, after a fall of almost 5 percent in the previous month.
The total rose to 159.4 billion euros at end-July from 156.2 billion a month earlier, but is still one-third below the peak in December 2009.
Shots fired as anarchists try to evict heroin dealers
The action came after dealers set up shop, apprently with police blessings, right near a university gate in Athens.
From the Greek Streets reports:
At approximately 16.50 on Saturday, August 25, a group of people tried to push away a couple of heroin dealers or users (still unclear) at the corner of Stournari Street and Kannigos Str, in Exarcheia. Some background to how this happened: The “unofficial” (but wholly sanctioned by the police) heroin trading spot has recently moved outside the Stournari gate of the Athens Polytechnic. In response, groups of anarchists and others have chosen the ambivalent tactic of forcibly moving dealers and users out of the area.
This time round, the two dealers or users (as said, still unclear, with reports differing) called the police. In a few minutes, two motorcycles of the ZITA force appeared, chasing the group up to Exarcheia square. They snatched the last person in the group, and, according to an indymedia report they told them, “it is us who are in control of heroin, you have no idea what you got yourselves into”.
Meanwhile, the rest of the group had reached Exarcheia square and joined by many others at the square, returned to attack the three delta motorcycles. In response, one of the ZITA police took out his gun and shot three times up, diagonally from the crowd. He then pointed his gun toward the crowd without shooting. The person who had at that time been detained by the police was freed. However, moments later, tens of DELTA and DIAS motorcycle police flooded Exarcheia square detaining and eventually arresting at least three people.
Immigrant raids to last through year’s end
The raids, which have generated controversy and some violence, come in part because the Troika’s been insisting that Greece do more to keep out immigrants who sneak in through what amounts to Europe’s back door.
Public Order Minister Nikos Dendias told Skai on Tuesday that the police’s “Xenios Zeus” operation aimed at tackling illegal immigration will continue until the end of the year with raids being extended beyond the capital to other cities where the population of undocumented migrants has been growing.
Raids will focus on apartment blocks and other premises believed to pose a public health risk, Dendias said.
The minister added that three new temporary reception centers for migrants would be created by the end of the year, without determining their location, but emphasized that the centers would not create problems for local communities.
Greek airport traffic declines
Considering that tourism is the country’s biggest industry and employs a fifth of all workers, that’s bad news indeed.
Passenger traffic at Athens International Airport SA declined 12 percent in the first seven months of the year as Europe’s economic crisis continued to hurt spending on travel.
The number of people passing through the country’s biggest airport dropped to 7.4 million in the seven months through July 31 from 8.4 million a year ago, according to a statement posted on the airport’s website. International passenger traffic fell 14 percent to 4.8 million and domestic travelers were down 8.4 percent to 2.6 million, according to Bloomberg.
In July, the number of people passing through the airport fell 11.6 percent to 1.5 million, compared with a 12.3 percent drop in June, the Athens-based company said.
Tourism, Greece’s biggest industry, accounted for almost 16 percent of gross domestic product and almost one in five jobs in 2011, according to the London-based World Travel and Tourism Council.
Retail trade declines precipitously
Greeks are spending far less on retail purchases — up to 50 percent less in some areas in the last two years.
Considering that employment is at catastrophic levels and salaries have been cut for folks who still have jobs, the decline can hardly be called surprising.
The state of retail trade in Greece is continuing to deteriorate with no sign of any letup, as indicated by the current summer sales, which have seen a contraction in volume totaling more than a third within just two years.
Retail turnover in the sales period that started in mid-July and ends this Friday is not expected to top 4 billion euros this year, compared to 5 billion euros in the same period last year and 65 billion in the summer sales of 2010, according to the head of the Athens Chamber of Commerce and Industry, Vassilis Korkidis. Speaking on Skai TV on Monday, Korkidis said that this would lead to a new round of enterprise closures.
A recent survey by the General Confederation of Greek Small Businesses and Traders (GSEVEE) suggested that in the next couple of months some 11,000 small and medium-sized trade and manufacturing enterprises would shut down.
Despite the fact that many Athenians curtailed their vacations to just a few days this summer, the money saved clearly did not go toward retail spending, as turnover is estimated to have fallen by no less than 35 percent year-on-year in the capital. In other cities the drop in turnover is seen at around 30 percent, although there are cases, such as Larissa in central Greece, where the decline is estimated at as much as 50 percent.
Government sells off its jetliners
Because it’s the austerian thing to do.
From Greek Reporter’s A. Papapostolou:
Austerity measures imposed on Greece have resulted in the government giving up almost all state flights.
Greece’s prime minister has decided to get rid of two of the government’s three jets as part of the debt-crippled country’s cost-cutting efforts.
A government statement says Antonis Samaras has instructed officials to hand over the biggest of the planes to the air force, which will use it for pilot training and as a medical transport.
A second Embraer jet will be sold, and the proceeds given to the armed forces – whose budgets have been cut over the past two and a half years of austerity.
Monday’s statement says the government will keep the third aircraft, but make it available to the air force when it’s not used for state missions.
Greece tries some Reaganomics
One of Ronald Reagan’s early moves was the creation of so-called “enterprise zones,” a corporate giveaway pushed by neoliberals in which areas were set aside in urban areas offering low taxes and fewer regulations in the name of encouraging economic development.
Now Greece is taking the same page from the Gipper’s book.
Greece plans to set up “special economic zones” to attract private investment and help lift its debt-laden economy out of depression, the government said on Tuesday, according to Reuters.
The zones would offer investors tax and administrative advantages. Athens is already in talks with the European Commission to get approval for the move, Development Minister Costis Hatzidakis told a news conference.
“We believe these zones will boost the real economy by creating a special regime to attract investment and generate exports,” Hatzidakis said.
Hatzidakis urged the country’s EU partners to accept Greece’s plan to establish these zones. “There are already objections outside Greece because it (the zones) would give the country a comparative advantage,” he said.
The zones, however, would not allow investors to pay workers especially low salaries, said Hatzidakis, who is the cabinet minister in charge of economic growth policy.
More from the London Telegraph’s Louise Armitstead:
Greece’s plans could face legal difficulties due to the European Union free market rules. Mr Hatzidakis admitted that he had already encounted some issues. “There are already objections outside Greece because it (the zones) would give the country a comparative advantage,” he said.
But he insisted the plans would be compliant with EU rules. “Current labour law will be fully respected,” he said.
The economic zones are the latest in a run of attempts by Athens to kick-start Greece’s economy, now in its fifth year of recession. The government has already axed minimum wages and liberalised employments laws to encourage the creation of new jobs.