Today’s the day that final Greek “bailout” approval is due from the European Union’s finance ministers, a move that comes as Greece falls deeper into misery.
According to the latest numbers, one third of the Greek population now lives below the poverty line, and the austerity mandate imposed as a condition for the bailout will only make things worse.
As we write, the ministers are meeting, and The Guardian is liveblogging developments here.
The country’s new bonds, created to replace those condemned halved in value by last week’s haircut, aren’t being greeted with relish on the market, selling at junk rates.
And after the jump, a video of Sunday’s protests that drew hundreds of thousands onto the streets of Spain, plus a story of special interest to readers in nearby [to esnl] Richmond, California.
Wage and unemployment cuts begin
Both the working class and the unemployed are being hit hard this week as the massive Troika-mandated cuts in their pay and benefits take hold.
From Athens News:
Drastic cuts in unemployment and other benefits go into effect this week, despite a government pledge to protect the jobless.
The 22 percent cut in the minimum wage was approved by parliament last month, resulted in corresponding benefit cuts at the state employment agency (OAED), with monthly unemployment pay dropping from 461 to 360 euros, and payment for the long-term unemployed being reduced from 200 to 156 euros. Family support for low-income households dropped from 98 to 77 euros.
The measure has worsened hardship for hundreds of thousands of people on benefits, with unemployment at 21 percent in December, with 1,033,507 officially out of work that month.
The government had promised compensatory measures for the unemployed after the minimum wage cut, a pledge that was swiftly abandoned.
The unelected bankster brings in the hit squad
Prime Minister Lucas Papademos, installed by the Troika as prime Minister after the ouster of predecessor George Panandreou immediately following his call for a popular referendum on the austerity mandate, knows the bankster game well, having served as both Governor of the Bank of Greece and Vice President of the European Central Bank, as well as a stint on the staff of the Federal reserve Bank of Boston.
And like any good bankster bureaucrat, he knows the value of having a good team, especially when they represent the guys calling the shots.
And he wants them right there in his office.
From Ekathemerini in Athens:
Acting on the recommendations of French advisers as well as other experts, Prime Minister Lucas Papademos is overseeing the creation of a permanent team that will be responsible for coordinating the actions of future governments.
Sources said that Greece is hoping to create a unit made up of permanent staff rather than advisers that are picked based on their personal relationship with each premier and who change each time the prime minister or government changes.
Sources told Sunday’s Kathimerini that Prime Minister Lucas Papademos raised the issue with his ministers on Thursday. Athens is being advised on the overhaul of its public administration by French experts who have been brought to Greece by the European Union Task Force. However, a number of other experts, including those from the OECD and McKinsey consultants, have identified the lack of a permanent coordinating body as a key weakness.
Greek politicians are running scared
From Athens News:
The prime minister has called an emergency meeting to tackle increasing attacks on politicians, amid fears of violence at the March 25 national day parade and campaigning for the general election.
Lucas Papademos summoned his ministers of education, the interior, defence and citizen protection to the meeting, following violence at a parade in Rhodes last week and a crowd attack during a charity concert by singer George Dalaras.
Politicians have come under increasing attack during the financial crisis and resulting austerity measures, with groups of protesters routinely hounding public officials when they appear at outdoor events, on constituency visits and even when they go to the cinema.
Guess what? A dirty little secret
Holders of some of those Greek bonds think they’ve found a loophole that’ll keep their investments haircut-free.
From Sarah White and Tommy Wilkes of Reuters:
Some hedge funds have found a legal loophole they believe will force Greece to repay some of its debt in full, three sources close to the matter said on Thursday, in a move that would intensify the standoff between the country and its debtors.
Greece closed a bond swap offer to private creditors on Thursday after clearing the minimum threshold of acceptance to push the biggest sovereign debt restructuring in history.
Government officials said more than 75 percent of eligible bonds had already been committed resulting in losses of some 74 percent on the value of the debt in a deal that will cut more than 100 billion euros from Greece’s crippling public debt.
But because of a provision written into one particular bond, some hedge funds believe that Athens has already defaulted on that bond by asking bondholders to exchange their debt for new paper with a much lower value, according to the sources.
The funds are now trying to buy up enough of the bond — issued by state-owned Hellenic Railways and guaranteed by the government — to force Greece to repay them in full, to the tune of some 400 million euros.
If Greece refuses to do so, this may trigger similar provisions on other Greek railway bonds, potentially landing Athens with a bill of about 3 billion euros, with investors demanding immediate repayment, the sources said.
Meanwhile, Greece plans to borrow another billion
So Greece is already struggling under an occupation regime put in place to extract wealth from Greek citizens and the commons.
Given the grinding impacts of the loans already made, you’d think the new regime would spurn adding more borrowed burdens to the backs of the populace.
And you’d be wrong.
From Athens News:
The government hopes to get 1 billion euros in financing from the European Investment Bank (EIB) this year as a stimulus for its ailing economy, a senior official said on Saturday.
Greece and the European Commission are pushing the EIB, the European Union’s long-term investment arm, to disburse the funds, said Gikas Hardouvelis, top economic adviser to Prime Minister Lucas Papademos.
“I believe that in the end it will happen,” Hardouvelis told Greece’s Mega television, adding the EIB might channel the money into the Greek economy through local banks.
“The faster we do it, the better. The economy is sinking and everyone is too scared (to invest),” Hardouvelis said.
But the EIB was still worried about getting too exposed to Greece and a solution to overcome its reluctance might be to disburse the funds using local banks as intermediaries, he said.
Spaniards take to the streets in protest
While Greece reels, Spain rocks under the impacts of their own austerity regime. And as in Greece, Spaniards have been taking to the streets in protest.
From the Associated Press:
Hundreds of thousands of people in 60 cities across Spain took part Sunday in demonstrations called by the country’s main trade unions to protest the government’s tough new labor reforms and cutbacks.
The rallies are the unions’ first trial of strength before a general strike called for March 29 to oppose the recently approved reforms and austerity measures.
Most gatherings were preceded by remembrance ceremonies that marked the eighth anniversary of the March 11, 2004 bombings that killed 191 people on Madrid’s commuter rail system in Europe’s worst Islamic terror attack.
The reforms, passed by decree last month and confirmed in Parliament Thursday, slash the cost of firing workers and ease conditions under which they can be dismissed.
The leaders of Workers Commissions and the General Workers Union, who jointly called the stoppage and Sunday’s rallies, met before a large march in Madrid to call on the government to negotiate with them over the introduction of what they called “drastic” reforms.
Ignacio Fernandez Toxo of Workers Commission said the austerity package was so heavily tilted in favor of businesses that it made working conditions in Spain resemble those that existed under the dictatorship of Gen. Francisco Franco, who ruled from 1939-1975.
And here’s a video report from RT:
Pledging allegiance to the Iron Chancellor
Chancellor Angela Merkel’s rigid control of the German economy has a major league fan. Or, if not that, then a serious posterior osculator.
From Valentina Pop of euobserver:
European Central Bank (ECB) chief Mario Draghi on Thursday (8 March) pledged allegiance to Germany’s “stability culture” and said all his cheap loan decisions were taken in unanimity after a leaked letter from the Bundesbank head exposed a rift on the subject.
Praising the “unquestionable success” of the one-trillion-euro worth of ECB cheap loans aimed at averting a credit crunch in the eurozone, Draghi sought to downplay the disagreement with the German central bank over the programme.
“We all have to do the right things and do them together. We are all in the same boat. There is nothing to gain, fight or argue publicly outside the governing council,” Draghi said in a press conference after the monthly meeting of the ECB council.
He said his personal relationship with Bundesbank chief Jens Weidemann was “excellent” and he was sure that a letter exposing differing points of view over the cheap loans programme published by the Frankfurter Allgemeine Zeitung newspaper had not been leaked by the German banker.
Chinese invest some euros in Europe
With all that cached cash, the Chinese are bring some of their euros back to the continent that spawned them, and they’ve developed a serious jones for that rich, ruby red liquid gold from Bordeaux.
From Marion Douet of Reuters:
In France, Britain, Italy, Germany and elsewhere across Europe Chinese tourists are being catered to in high-end shops selling them top labels in everything from couture to cutlery. Hotels, department stores and luxury boutiques have taken on Chinese-speaking staff and most of Europe’s luxury firms have an Asian business strategy they are actively pursuing.
China has become the biggest importer of Bordeaux wines and consumption in the middle kingdom soared by 110 percent in 2011 alone, with no sign of quenching a seemingly insatiable thirst.
About 15 Chinese individuals or businesses have purchased wine-growing properties in Bordeaux and Chinese investors also want to develop luxury tourism in Bordeaux, which they think will be the next fad as Chinese wealth pours into Europe.
“For Chinese people, the Bordeaux region is a paradise of wine, for the drink but also for the image of France, the landscapes and the chateaux,” said Li Lijuan, the 28-year old Chinese woman in charge of managing the Grand Moueys property.
Bad news for Europe, good for the U.S.?
Europe’s aircraft emissions tax has resulted in ongoing protests from the world’s aircraft manufacturing nations, including the United States.
Now another protestor is thinking of throwing business to the U.S., and to a company that recently announced it was closing down its landmark plant in Topeka, Kansas.
The European Union carbon tax on airlines took effect at the start of the year, with the bill due next year. It’s all part of the EU’s program to cut carbon emissions by 20 percent by 2020.
A senior Chinese diplomat said it “makes sense” for Chinese airlines to shun aircraft made in Europe, owing to an EU tax on aircraft emisssions, the Wall Street Journal reported on Monday.
The newspaper reported that the new Chinese ambassador to the European Union in Brussels Wu Hailong told reporters that a decision by the European Union to make non-European airlines subject to the tax “contributed to the current dilemma.”
The EADS aerospace group which controls the European aircraft maker Airbus said last week that “Airbus is subjected to retaliation measures” and that “the Chinese government rejects (refuses) to approve airlines’ orders for long range airplanes.”
The main competitor to Airbus, which has important interests in the Chinese market, is the US group Boeing.
But more than two dozen countries, including China, Russia and the United States, have opposed the EU move, saying it violates international law.
French water utilities probed for price-fixing
Folks who live east of esnl in Richmond, take note. One of the companies under suspicion is Veolia, the same outfit your city council entrusted with running your sewer system.
The companies have been targeted by activists because of their role ibn privatization of public water and sewer systems.
A new report challenges the notion that corporations can deliver better service, leading to calls to roll-back liberalisation of water services in Europe and beyond.
“Proponents of privatisation promised increased investment and efficiency, but privatisation has failed to meet these expectations,” says the report by Food & Water Europe, which claims that privatisation can lead to higher prices without corresponding improvements in service and infrastructure.
In the French case, EU antitrust authorities said they were investigating whether Veolia, Suez and Saur colluded to fix prices on water and sanitation services. Two years ago, EU authorities launched probes into alleged cooperation between the companies in public tenders.
While the cases may bolster campaign groups’ calls to reconsider liberalisation of the water market – with major pushes for private water management now under way in troubled Greece, Portugal and Spain – there is also concern about exporting privatisation to developing countries, where needs are enormous.
Mildred E. Warner, an academic who has analysed water services in rich and developing countries, says development aid donors and lenders like the World Bank that promote a private role in the management of water services to improve service and efficiency should rethink their practices.
“The experience worldwide with privatisation, even in developed countries, has not been very positive. There is no support for the notion of cost-saving,” she said in a telephone interview.