The Troika’s come to town, and the prime minister is begging for money yet again as the economy continues to contract and public sector protests intensify as police deploy in large numbers to the nation’s second-largest city where weekend protests are planned and more signs emerge that the ruling coalition’s growing shakier,
The country is selling off its major private sector stock holdings, the privatization authority has taken in millions for doing next to nothing, and Syriza is stepping up the heat.
We close with stories of devastation.
Coalition rushes to wrap cuts package
With the head of the European Commission, it’s what we used to call back in Kansas “fish or cut bait time” for the coalition to put the wraps on that misery-inflicting package of cuts demanded by the EB and it’s Troika partners.
From Deutsche Presse-Agentur:
The Greek government was rushing to finalise a new package of austerity cuts Friday, just as senior auditors from the country’s international creditors began arriving in Athens to determine whether it can receive the next tranche of emergency aid.
A junior team of auditors has been in the Greek capital since Wednesday to monitor efforts to push through additional budget cuts worth 11.5 billion euros (14.5 billion dollars).
The latest package of austerity measures was originally expected to have been adopted in June, but was pushed back when back-to-back elections were held. A privatisation plan, predicted to earn 19 billion euros by 2015, is also behind schedule.
While the new measures have not yet been finalized, they are likely to include further cuts to the salaries and benefits, including pensions, of several groups of employees on the state payroll.
Samaras begs again, show us the money
The Troikarachs have conditioned the release on the next tranche of bailout euros on the cuts, but that hasn’t stopped conservative Prime Minister Antonis Samaras from making yet another plea to release the cash.
The government’s in a desperate bind. Many public sector workers have been working without pay, and they’re growing increasingly angry at the government. But the cuts package would lead to further reductions in their already drastically reduced pay and pensions.
As crucial talks loom between government officials and envoys representing Greece’s foreign creditors, Prime Minister Antonis Samaras on Friday appealed for the timely release of a crucial tranche of rescue funding, on which the country’s solvency relies, following talks with European Council President Herman Van Rompuy.
Van Rompuy emphasized that the future of Greece was within the eurozone but stressed that economic reforms must move forward “to break the monopolies and narrow interests” that were hindering economic recovery. “I have no doubt that as long as Greece remains committed to the euro, its partners will continue to support it,” Van Rompuy told a joint press conference with Samaras. The premier, for his part, said the government was “committed to dealing with our fiscal problem” but that rising unemployment and an unprecedented recession posed barriers.
Van Rompuy was not the only European official to comment on Greece Friday. German Chancellor Angela Merkel also emphasized the importance of Greece moving ahead with reforms.
“Monopolies and narrow interests”? By the former he no doubt means publicly owned utilities, transits, and other vital services. As for “narrow interests,” he no doubt includes the public sector workforce and those who work for those about-to-be-privatized infrastructure services.
Economy shrinks still further under austerity impacts
The austerian premise holds that privatization of the destruction of organized labor leads to prosperity.
Besides the obvious flaw that comes from a logic holding that prosperity and growth comes from immiserating a populace by cutting their ability to spend, the Greek crisis is occurring within a large context, that of a global economic collapse.
The latest bad numbers from Athens News:
The economy shrank by 6.3 percent in the second quarter of 2012, the Hellenic Statistical Authority (Elstat) said on Friday.
In its Quarterly National Accounts report, Elstat revised its initial forecast of 6.2 percent for GDP in April–June.
The fall comes on top of the 6.5 percent reduction recorded for the first three months of the year.
International organisations predict that the GDP will shrink by around 7 percent this year, keeping the country in a recession for a fifth consecutive year.
Analysts also expect that the new austerity package will bring further deterioration of the situation.
Public sector protests intensify
The Troika’s arrival is being greeted with spreading unrest from government employees targeted by the latest round of cuts.
Judges, doctors, pharmacists and teachers are this week all expected to launch industrial action to protest government cutbacks, sparking a new round of strikes and protests that will coincide with meetings between government officials and foreign envoys.
Unionists representing judges met Friday with Prime Minister Antonis Samaras and Democratic Left leader Fotis Kouvelis separately to air their grievances after Finance Minister Yannis Stournaras refused to revoke plans to cut their salaries by up to 25 percent.
After the two meetings, the head of the National Union of Judges and Prosecutors, Vassiliki Thanou-Christofilou, met with members of the union’s managing board to decide on the form their action will take. Sources indicated on Thursday that judges might hold a five-day walkout in an attempt to paralyze courts and shake authorities.
Meanwhile, doctors working with the National Organization for Healthcare Provision (EOPYY) were to launch a new round of go-slow action from Monday, demanding the payment of outstanding debts by the organization. Pharmacists, who have also been protesting nonpayment of dues by EOPYY, are expected to continue their own protest by not supplying drugs on credit.
Teachers are to walk off the job on Thursday, protesting salary cuts, and hospital doctors are expected to launch go-slow or strike action next week in protest at cutbacks in their sector.
Here’s an Athens News clip of an action Wednesday by court officials in Athens, featuring Vassiliki Thanou-Christofilou, head of the Association of Judges and Public Prosecutors:
Police deploy to confront weekend protests
A massive police presence has been ordered to Greece’s second largest city where major labor actions are planned for the weekend.
Some 3,500 police will be deployed at the weekend in the northern Greek city of Thessaloniki where unions are planning protests against a new round of austerity that is set to see pensions and some state salaries cut further.
According to Reuters, police finalized measures a day before Saturday?s rallies by the country’s largest unions, which strongly oppose the cuts worth at least €11.5 billion ($14.4 billion) for 2013-14.
Police officers, themselves affected by the new measures, are planning their own demonstration in Thessaloniki earlier Saturday.
A headline that tells the tale
Greeks are gradually become Europe’s source of migrant labor, and they’re traveling far in search of work.
Consider this headline from an Ekathemerini story by Oliver Staley:
Jobless Greek resolved to cleaning toilets in Sweden
Such is the true face of austerity.
More signs of tension threaten coalition
The thought of imposing major cuts, including slashes to benefits for the disabled, is proving too much for some members of the coalition’s number two party, folks who pretend to the socialist label.
Their discontent comes at the same time as the coalition’s third party are growing increasingly uncomfortable with immiserating workers.
Four members of Socialist PASOK sent a letter to Finance Minister Yannis Stournaras, calling for proposed cuts to low-level pensions, civil servants’ salaries and disability benefits to be taken off the table of negotiations.
The letter — which was signed by Filippos Sachinidis, Paris Koukoulopoulos, Giorgos Koutroumanis and Christos Protopappas but which was decribed as “expressing the party’s position on the 11.5-billion-euro package of measures” by the party’s press office — said that the proposed cuts to pensions were “of a horizontal nature and extremely unfair” and the cuts to disability benefits were “extremely harsh,” noting that the reductions foreseen could reach up to 40 percent of the total.
The letter also claimed that foreign creditors had underestimated the revenue of Greece’s social security organizations by around 1.5 billion euros, which has led to a widening of the budget deficit, and called for this amount to be subtracted from the package of measures. It added that other measures should be taken to boost social security contributions and that proposed cuts to pensions should not be horizontal but scaled according to income.
The letter emphasized that Greece’s request for a two-year extension of its fiscal adjustment period should be raised again at a European Council summit on October 18 “at the latest.”
Meanwhile a spokesman for Democratic Left, the third party in the coalition, said that party officials had submitted their proposals for 4 billion euros in alternative measures out of the 11.5-billion-euro total. Andreas Papadopoulos said the measures had been costed by the State Audit Council but provided no details. Sources have indicated that Democratic Left wants further cuts to defense and health spending instead of cuts to low-level pensions and social benefits.
Greece to divest of corporate stock assets
The Greek government is one of the leading investors in the Greek corporate sector.
But not for much longer as the Troika’s demands bite deeper.
After years of delays, Greece is starting to privatize – a condition imposed by Athens’ international creditors to help the country out of its financial crisis.
Yesterday the council of ministers has scrapped the shares which the Greek state had in every company. Shares ranged from 34% to 51% for each company in which the state had a controlling interest. Under the new measure, the state will only be allowed to own a small share of capitals or sell all its shares.
Nine public companies will as a consequence be privatised. These include oil company ELPE, the electrical energy company DEH, the soccer betting society OPAP, horse racing betting agency ODIE, the water companies of Athens and Thessaloniki (EYDAP and EYATH), post office company ELTA and the organizations controlling the ports of Piraeus and Tessaloniki (OLP and OLTH) and ten other minor ports.
More from Capital.gr:
Greece scrapped on Thursday a law obliging the state to keep a minimum stake in a string of public companies, such as the country’s top electricity producer Public Power and gambling firms OPAP.
Greece has to modify or scrap about 70 rules and laws such as the one abolished on Thursday before it can kickstart the asset sale program, which mostly consists of long-term leases of state property and infrastructure.
The program trails badly behind targets after two consecutive elections in May and June paralyzed the privatization agency for more than five months.
Adding politics to red tape, party-bickering has held up the appointment of the privatization agency’s new leadership, Chairman Takis Athanasopoulos and chief executive Yannis Emiris.
Earlier on Thursday, the two men passed a parliamentary hearing, allowing them to formally start business next week, even though the government nominated them 40 days ago.
Privatization authority spent millions, does little
Some folks in Greece were doing quite well, such as the folks who failed to fulfill their mandate to sell off the public commons.
It took a push from the number two party in parliament, Syriza, to get the numbers to the public.
From Andy Dabilis of Greek Reporter:
As Greece’s privatization board remained mostly dormant from July of 2011 to March of 2012, the government paid its workers and advisors nearly $8.74 million in salaries and expenses, according to data presented to the Parliament.
The monies were paid to advisors for the Hellenic Republic Assets Development (TAIPED) that had almost no work to do because a previous government dragged its feet on privatizing state entities and selling or leasing state properties, and then two rounds of elections earlier this year put the board in limbo.
TAIPED has a new leader, Takis Athasopoulos, and his appointment was ratified as Alternate Finance Minister Christos Staikouras gave Parliament the figures on salaries and expenses that had been requested by Coalition of the Radical Left (SYRIZA) leader Alexis Tsipras, the main opposition party that is fighting government plans to impose more austerity and another $14.16 billion in cuts aimed primarily at workers, pensioners and the poor.
Those do-little technocrats may be seeing a pay cut, a concession drawn out of the finance ministry under parliamentary questioning by Syriza leader Alexis Tsipras.
Civil servants’ pay has been cut by about a third since the country received its first EU/IMF bailout in 2010. They stand to be lowered even further under the second bailout agreed in March.
Finance Minister Yannis Stournaras said he would consider lowering the fund’s compensation package.
“We’re looking into it. Wages have to be in line with the overall economic climate,” he said in response to the opposition leader.
Syriza leader steps up the heat
Judging by our extensive reading of the English-language Greek media, Alexis Tsirpras has been honing his attacks on the ruling coalition, and they’re getting more effective.
His parliamentary ripostes have been increasingly on point, as exemplified by his latest critiques.
From Athens News:
The leader of Syriza told parliament on Friday that he wished Greece “had become Argentina”.
Alexis Tsipras made the remarks when asking a parliamentary question during the prime minister’s question time about the proposed government sell off of Hellenic Postbank.
Antonis Samaras was not in the chamber for questions and his place was taken by Finance Minister Yannis Stournaras.
Addressing the finance minister, Tsipras said: “You say how “we didn’t become Argentina’. I wish that we had: Argentina went through huge difficulties and its citizens were able to stand with dignity.”
The Argentine example is telling, recalling the December, 2001, climax of an economic crisis which had produced forced pay cuts and led to riots. Rather than subject the nation to further austerian assaults, the government opted to default on its debt followed by the abandonment of a fixed currency exchange rate.
The Syriza also honed in on the conservative prime minister, as reported by Andy Dabilis of Greek Reporter:
As Greek Prime Minister Antonis Samaras struggles to get his coalition partners to back $14.6 billion in new cuts, main opposition leader Alexis Tsipras of the Coalition of the Radical Left (SYRIZA) has accused the Premier of being afraid to take questions in Parliament.
It’s traditional for Greek leaders to take part in what is called the Prime Minister’s Hour but Tsipras said the New Democracy leader has been conspicuous by his absence. “If he does not want to answer to Parliament, then he should abolish the Prime Minister’s Hour,” the leftist leader said.
Tsipras went on to accuse Samaras of shirking his responsibility toward the House by not being present during the fixed Q&A session. “This is the fifth question that the prime minister has not shown up to answer,” Tsipras said.
Turning to [Finance Minister Yannis] Stournaras, he said, “I have nothing against you and I don’t underestimate your presence,” he told Stournaras. “But, I wonder where the Prime Minister is. He hasn’t stepped foot in the House since July 6, when he read out the government’s policy program. Is this some kind of new perception of respect for the Parliamentary process? If he does not want to answer he could abolish the Prime Minister’s Hour and make it the Finance Minister’s Hour.”
Thessalonki retail devastated
With less cash to spend because they’ve either lost their jobs or seen their paychecks cut, Greeks have less to spend. One result has been a devastation of the Greek retail sector.
Here’s one telling example from ANSAmed:
With just a few hours left before the opening of this year’s Thessaloniki International Fair, the decline of the city’s commercial center is more than apparent as three in 10 enterprises have shut down. Popular streets such as Aghias Sofias have seen a succession of closures, at a rate, on this particular stretch, of 34.2%, according to data released on Thursday by the National Confederation of Greek Commerce (ESEE) as kathimerini reports.
Even on the city’s most popular shopping strip, Tsimiski Street, the closure rate has increased by 33% in the last six months, to 20.4%. Commercial property owners have resorted to reducing lease rates dramatically or to splitting their properties in two or even three so as to secure tenants.
Tourism industry remains in decline
Hardly a surprise.
Losses for Greek tourism are contained so far this year according to data regarding international arrivals at the country’s main airports released on Thursday by the Association of Hellenic Tourism Enterprises (SETE) as daily Kathimerini reports. Arrivals posted a 3.1% yearly decline in the year’s first eight months, dropping from 8,833,785 in the January-August 2011 period to 8,559,165 this year. However, with the exception of the country’s main and costliest airport, arrivals are showing a small rise from last year, with Athens International Airport experiencing a 13.6% drop in the number of visitors to the country compared to 2011.
Nevertheless, in August the yearly decline in arrivals amounted to just 1%, as bookings from foreign markets increased pace following the election results in June and the formation of a stable government.