While the rest of Europe convulses, Greece continues to sink ever deeper into the austerian trap.
We open with a creative response in the form of the growing number of barter markets appearing across the country, catch the latest round of austerity cuts just rubber-stamped by the cabinet, get the latest placebo prime ministerial pronouncement, learn of an ironic declaration by the IMF, and note Greece role in U.S. presidential politics.
A German Greek-basher says stop bashing Greece, but most Germans don’t agree.
We turn to the latest round in the war of words between the coalition and parliament’s second-largest party, follow with a report on the delayed paychecks private workers aren’t getting, and catch reports on the Greek worker’s diminished purchasing power, the curious choice of the new European currency, and an upcoming anti-austerity rally of police and the military.
Barter economy arises as crisis deepens
A video report from Ireland’s Occupy Dame Street:
As Greece enters its second year in financial trouble, more and more people are trading goods and services without using money.
More than a hundred networks which deal in what are called non-currency transactions have sprung up across the country.
From Athens, Malcolm Brabant reports on Greece’s alternative economy.
Cuts get the coalition nod
Desperate to get that next round of the bailout, the coalition government headed by conservative New Democracy’s Antonis Samaras sucked it up, held their noses, and gave their approval to those billions in cuts demanded by the Troika.
From Antoniou of Greek Reporter:
Greek Prime Minister Antonis Samaras’ Cabinet met on Aug. 31 to rubber stamp more than $14.7 billion in cuts demanded by international lenders in return for continued aid, with salaries and pensions again at the top of the list amid speculation there could be as much as another $2.3 billion in cuts coming.
The budget for 2013-14 will end the annual two months holiday bonuses given workers at Easter, summer and Christmas, which is bad news for retailers with the holidays a few months off as some 68,000 have already closed because of previous austerity measures. Already battered by big pay cuts, tax hikes and slashed pensions, Greeks will now face increases for public transportation as well.
The plan is expected to get its final okay on Sept. 3, two days before inspectors from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) return to Athens to check progress on reforms. The Troika will decide whether it is satisfied before releasing a last loan installment, of $38.8 billion, from a first bailout of $152 billion in rescue loans next month, and a pending second package of $173 billion, without which Greece will go broke.
The measures reported include a $4.4 billion cut to pensions, health cuts of $1.84 billion, and a $649.5 reduction in defense spending. ”This list did not come from us,” a Finance Ministry source told the newspaper Kathimerini, declining to comment on the figures. Under the package, public-sector wage expenditure will be cut by $4.14 billion by slashing 12 percent from so-called “special salaries” for categories such as uniformed officers, judges, diplomats and academics, and eliminating what’s left of the holiday bonuses that had already been cut up to 68 percent. A unified pay scale for all civil servants will be introduced a year earlier than planned, which will result in $150.7 million in savings.
Cutting the salaries of 68,000 employees in public utilities companies, known as DEKO, by 30 percent will result in $344.2 million in savings over the next two years, along with a reduction in state subsidies to these companies, but are likely to be met with fierce resistance. There are also plans to lay off 30-35,000 public workers at further reduced pay for an undetermined time and then firing them. The Troika wants 150,000 gone. A freeze on all promotions in the military and police will save $207.3 million. Savings are also planned from cutting the monthly bonus benefits enjoyed by department heads in ministries – which currently range from $314-$1,130, larger than most workers salaries.
Read the rest.
Samaras says Grexit now less likely
After those northward treks by the prime minister and his finance minister, Samaras says the threat of a Grexit is growing fainter.
And despite the rebuffs, he says he’s still hopeful the Troika will delay the full implementation of all those cuts his cabinet just approved.
Given the recent softening of some of the cold rhetorical winds from the North, maybe there’s a chance.
The risk of Greece leaving the euro zone has diminished in recent weeks, the country’s Prime Minister said Friday, as Athens pushes ahead with a diplomatic drive aimed at softening the terms of its second 173 billion ($217 billion) euro bailout.
“The risk of a euro exit has become a bit more remote, our negotiating position has become a bit stronger,” spokesman Simos Kedikoglou cited Mr. Samaras as telling his ministers at a cabinet meeting Friday, Wall Street Journal reported citing Dow Jones Newswires.
The cabinet meeting was the first since Prime Minister Antonis Samaras returned from high-level talks last week with German Chancellor Angela Merkel and French President Francois Hollande where Mr. Samaras raised the issue of giving Greece more time to enact spending cuts the country has promised its creditors.
Read the rest.
IMF weighs in as advocate for the powerless
The stench of hypocrisy permits their call, given that the International Monetary Fund is a pillar of that very same Troika that imposed the austerity memorandum.
Greece’s austerity measures must be carried out in a way that “helps to protect the most vulnerable groups,” an International Monetary Fund spokesman said on Thursday.
An IMF mission will return to Athens next week, fund spokesman Gerry Rice said at a briefing with reporters in Washington. He said Greece faces “a major challenge” implementing its reforms.
Europe’s economic slump is deepening as governments struggle to restore investor confidence and companies eliminate jobs. Economies are stalling or contracting amid concern about a possible Greek exit from the euro and the ability of Spain and Italy to service their debts.
IMF Managing Director Christine Lagarde spoke with Greek Prime Minister Antonis Samaras by telephone on Wednesday to discuss the economy in Greece and the euro area, Rice said.
Romney throws a little cold water of Greece
For the Republican presidential nominee, Greece has its uses: Most notably, as a bad example.
From Andy Dabilis of Greek Reporter:
U.S. Republican Presidential hopeful Mitt Romney, accepting the party’s nomination at his convention in Tampa, Florida, said he wants to restore America’s economy and cited Greece as an example of what happens when it goes wrong.
Referring to his plan to create 12 million jobs, Romney declared that every business person who creates positions will not disappear like those in Greece, where 68,000 businesses have closed, and help reduce America’s deficit. “We will put America on course to a budget that is balanced,” he said. Greece is drowning in nearly $460 billion in debt, while the U.S. has a debt of nearly $16 trillion.
Read the rest.
Habitual Greece-basher says stop bashing Greece
German Foreign Minister Guido Westerwelle on Friday called for an end to ”Greek bashing” and said he had confidence that Athens would Continue reading