Conditions in the Cradle of Democracy are fast moving from bad to worse, and even the banksters are feeling the pain while medical school graduates are fleeing to other countries in the wake of the devastation inflicted on the national health system by the Eurocrats.
Survey reveals ominous findings
A survey taken by the European Union in December gives a clear indication of the crisis in Greece.
Bear in mind that the poll was conducted in December, and the results reflect the state of Greece public opinion before the radical public and private sector pay and pension cuts imposed in the latest bailout.
Keep Talking Greece has the results. Here’s a sampling:
97% of Greeks found that poverty has increased in our country last year, while 72% of Greeks believed that the situation would worsen in 2012.
One in two Greeks (50%) is in a state of panic in terms of finding a job in the next 12 months, while 80% believe that if they get fired, it would be difficult to find a job again.
Also one in two Greeks (45%) said they had come to the point of not being able to buy food or pay bills. This figure puts Greece at the top of the category when compared to other Europeans. Europeans.
Seven in ten (73%) Greeks admit they delay paying their bills. In fact, for one in two (45%) the payment of bills is a permanent source of anxiety, while 28% of respondents said that the payment of obligations is no longer possible.
More bad new for Greeks: Heating costs to soar
With their paychecks slashed and increasing numbers of Greeks struggling to pay for the basic necessities of life itself, this latest announcement is bound to send the public mood even lower.
From Keep Talking Greece:
Despite the rising temperatures Greeks ‘froze’ on Monday morning to hear that heating oil price will go up by 40%. Due to the so-called equalization of the tax for heating oil, one liter will cost €1.45-€1.47 as of next October. One liter costs one euro today. As heating oil is distributed from October to April, many consumers rush to fill up their home tanks and save some hundred euros.
The profit is immense. For 1,500 liters today, one will have saved 600 euro in October 2012. The question is where to find the 1,500 euro to pay the heating oil nowadays.
Nevertheless consumers can buy with the old prices until April 30, 2012.
Return of the drachma hinted
Some major players in Europe are already contemplating Greece’s exit from the euro, to the point of insisting that contracts be drafted to include provision in payments in drachmas instead of euros.
From the Italian news service ANSAmed:
The European Investment Bank (EIB) is hedging itself against a Greek exit from the eurozone by inserting drachma clauses in the loan deals it signs with Greek enterprises, as daily Kathimerini reports. The first such deal was two weeks ago when the management of Public Power Corporation (PPC), the country’s electricity giant began negotiating with the EIB about a 70-million-euro loan to fund its new natural-gas-powered plant at Megalopoli in the Peloponnese. The EIB proposed for the first time two new terms, one of them being the possible renegotiation of the agreement should Greece leave the eurozone or should the common currency area break up. The second was placing the agreement under British law, in case of any irregularities in the payback process. EIB sources suggest that the currency-change clause will be included in all contracts with countries applying economic stability programs (Greece, Portugal and Ireland) and gradually expand to all eurozone countries.
Greek banks report record losses
Here’s one story that should come as no surprise: 2011 ended with Greek banks recording their highest-ever losses.
From Athens News:
Greece’s top banks posted historic losses for 2011 on Friday, hit by a bond swap last month that blew holes in their balance sheets and nearly wiped out their capital base.
Together, National, Alpha, Eurobank and Piraeus, posted an aggregate loss of 28.2 billion euros ($37.3 billion), about 10 times their current market worth or 13 percent of the country’s GDP.
The banks treated losses from last month’s bond swap to cut the country’s debts – part of a rescue package for Greece negotiated with the European Union and International Monetary Fund – as if they took place last year.
Inflicting real losses of about 74 percent on bondholders, Greece’s debt swap proved a near fatal financial torpedo for lenders, crippling the sector’s capital base.
Nationalization next for biggest banks?
The term must be applied loosely, but we think that any move for state control of banks would be a step in the right direction.
However, we suspect that the proposed move is just an attempt to prop up a failing system, and nationalization without the government’s ability to produce its own currency is essentially a symbolic rather than a practical measure.
From Dimitris Kontogiannis of Ekathemerini:
Greece’s two main political parties, the country’s international lenders — known collectively as the troika — and top bankers want to see the country’s four major lenders recapitalized with private and public funds in order to minimize state influence in the way they are run. However, heavy losses registered in 2011 due to the implementation of the private sector involvement plan (PSI) and the impact of recession, which is evident in deteriorating loan quality trends, suggest all or at least three of the country’s biggest banks will likely face nationalization in the coming months and quarters. This is definitely not good news for their shareholders but should not be allowed to translate into bad news for the Greek economy as well.
The country’s four largest lenders — namely National Bank of Greece, Alpha Bank, Eurobank EFG and Piraeus Bank — reported dismal 2011 financial results last Friday, with group losses after tax exceeding 28 billion euros. Losses from bond and state-guaranteed securities linked to their participation in the biggest ever sovereign debt restructuring surpassed 23 billion euros, accounting for the lion’s share of group losses.
The hit was large enough to leave most of them with negative equity capital. According to bankers, the lenders with negative equity would not have been allowed to operate as ongoing concerns under normal circumstances if the Hellenic Financial Stability Fund (HFSF) had not given assurances it will provide up to 18 billion euros in total for their future share capital increases. Local banks deemed viable by the Bank of Greece will have to be recapitalized by early fall and up their capital adequacy ratio (core Tier I) to 9.0 percent.
Bad news for Greek bank employees
They’ll be working longer hours for less money.
From Keep Talking Greece:
Employees at the Bank of Greece ‘broke’ the collective bargain and agreed to 17% wages and allowances cuts and increase of the working hours. Bank employees and the management of BoG agreed on a new “sectoral bargain agreement”, for the period 1. May 2012-30 April 2015.
According to this agreement, employees will work three more hours per week. That is 12 hours per month without payment.
At the same time, their wages will be gradually reduced at 2.5%-7% per year, depending on the height of the salary.
Furthermore, allowances will undergo cuts between 15% and 60%.
Greek ferries to go on the block?
That’s the logical conclusion from this ANSAmed report:
The future is looking very gloomy for many Greek coastal and maritime companies which manage the routes between the islands and the mainland after having accumulated losses of over a billion Euros in the past three years (2009-2011). The future situation for some of these companies right now appears to be extremely severe, also considering that the long awaited Easter surge in passenger travel was not even close to the range of what had been hoped for. The number of people embarked between Greeks and foreign tourists went down at least 50% compared to the same period of 2011. Another reason for the drop in ticket sales was the Greek ferry strike on April 11 and 12. If we just look at the top four companies, ANEK, Minoan, Lesbos Maritime and Attica Group (all on the stock market) these have suffered losses of 215 million euros only in 2009, rising to 345 million in 2010 and back down to 210 million in 2011.
Last year many companies managed to limit their losses by transporting Libyan citizens fleeing from the civil war raging in their country. The prospect of failure thus seems to hang more and more over the heads of these companies. The fault does not only lie in the Greek economic crisis though but also in the snail paced state bureaucracy. The Greek government in fact owes the ship companies 12 million euros dating back to transport services in 2011.
Playing politics with pension cuts
With an election coming up next month, Greek pension authorities have “discovered” a problem that ensures that recipients won’t be seeing reduced checks before the election, even though the cuts mandated by the austerians were already scheduled.
From Emmanouela Seiradaki of Greek Reporter:
The Ministry of Labor and Social Insurance bombarded the media with information on how the pension cuts will be applied, and now, a few days before the payment of pensions and 15 days before the elections, the ministry faces a “problem” in the system of IDIKA (the Electronic Government – Social Security System), so the new cuts in the main and supplementary pensions will be postponed after the elections.
No matter how hard governmental officials argue that this is due to a computer failure, anyone who is familiar with the Greek political culture understands that the government simply didn’t want to butcher pensions ten days before the elections as pensioners would likely be frustrated and angry and probably vote for smaller parties.
It became known that cuts set by memorandum number 2 would be postponed by one month, and unionists made fun of the government’s excuse of a “computer problem,” saying that the government didn’t seem to have a problem to apply the cuts based on memorandum number 1.
“Why now all of a sudden? Right before the elections, it’s weird isn’t it? The preparations for the specific measure had already been done since March!,” said a unionist from inside the Ministry.
Gee, what a conveniently timed technical glitch!
Greek doctors flee the country
With the healthcare system in ruins and salary cuts already imposed, it’s no surprise that young Greek doctors are fleeing the country in droves.
About 40 percent of young doctors who graduate in Greece head abroad to specialize, while the number of qualified doctors applying for certificates to practice outside of the country increased by almost 40 percent last year, according to data seen by Sunday’s Kathimerini.
The economic crisis has led to a number of young Greeks seeking their future abroad but it seems that doctors are among those most likely to leave. Just over one in four medical graduates in Greece is jobless and according to the vice president of the National Health Council, Yiannis Datseris, some 1,200 new doctors graduate each year. Of these, about 500 are now heading abroad to finish off their studies. Datseris said the number has been rising over the past few years.
Statistics provided by the Athens Medical Association (ISA) also show a growing tendency for doctors to leave the country. In 2010, ISA was asked to issue 1,044 certificates allowing doctors to practice abroad. Last year, this figure rose to 1,483 and in the first quarter of this year 581 were issued.
Such is the reality of austerity: Cuts mandated by outside authority destroy hope, and those most needed to restore the health of a nation are driven out.
Maybe if the young doctors stay they could help implement the only possible cure: A debt jubilee.