GreeceWatch: Discipline, suicides, layoffs, selloffs

The bad news and knuckling under continues.

We begin with the latest grim economic numbers and yet another austerity suicide, then shift into the political realm, where a German demand is rewarded with a pledge of Greek fealty.

We’ve got the resignation of the deputy labor minister, unwilling to inflict austerity of his fellow Greeks, another round of pay cuts, the selloff of more state infrastructure, criminal charges against railway officials stemming in part from strange payments to a German industrial giant, a German invasion abandoned, and a bit of new that should warm the cockles of a University of California regent’s heart.

Latest economic numbers spell disaster

The bottom line: Austerity’s proving a grim debacle, and the economic outlook is growing even more bleak.


Greece’s economy will shrink a deeper-than-expected 6.9 percent this year due to falling demand from consumers grappling with wage and spending cuts, influential think tank IOBE said in its quarterly review on Monday.

The Foundation for Economic and Industrial Research, which was headed by Yannis Stournaras before he became finance minister last week, forecast unemployment rising to a new record of 23.6 percent this year, Reuters reported.

The forecasts were more pessimistic than its predictions in April, when it expected the economy to contract 5 percent this year and a jobless rate of 20 percent.

Another austerity suicide, one of many

Lots of folks are writing about Greece these days, and much of the talk about the financial crisis is rather abstract, a tangled skein of economic theory, political ideology, and colorful or dramatic imagery.

But for us, the true symbol of austerity is the human corpse, the life extinguished after prolonged confrontation of a future without hope.

And for all the talk of eventual rewards from adherence to a Germanic discipline, the future for growing numbers of Greeks looks ever-bleaker.

From Keep Talking Greece:

The relatives of the 42-year-old man were shocked to find him on Monday morning hanging in his home in Amaliada town of Peloponnese. The man was jobless since quite some time and was father of two children.

This tragedy is one of the many that hit families in times of economic crisis and recession. According to statistics more than 2,000 people have committed suicide in the two years Greece sought international financial aid.

At the same time the workers union of public ambulance service EKAV ring the alarm bell recording a sharp increase in suicides in Athens and the broader Attica prefecture.

According to Yiannis Xousos, president of EKAV workers’ union, 350 ambulance calls in relation with suicides were recorded alone in the month of June 2012. Fifty of these cases ended in death.

Xousos expressed strong concern as six calls in relations with suicide were made in the first eight days of July. Five of these cases ended deadly.

Read the rest.

Another German pushes discipline, austerity

Greeks are somewhat peeved that Spain’s been granted a grace period before implementing all the austerian demands linked to that nation’s bailout.

But if they were expecting any concessions, fuggedaboudit!

From Ekathemerini:

No concessions to Greece’s reform plans can be made, Germany’s Economy Minister Philip Roesler has said, warning that patience with the debt-wracked country is wearing thin.

“Actions speak louder than words; this is our position,” Roesler, who is also Vice Chancellor, said in an interview with Germany’s Bild newspaper.

The parties involved in Greece’s coalition government campaigned on a pledge to renegotiate the country’s bailout deal with the EU and the IMF.

Read the rest.

The new finance minister gets the message, obeys

When the common currency zone’s finance ministers met in Brussels to discuss the latest economic eruptions on their turf, the new Greek finance minister was there — absent hat in hand.

He’ll toe the line, he told his fellow ministers, and expect no concessions in return.

From Athens News:

Finance Minister Yannis Stournaras reassured Eurogroup finance ministers of the government’s intention to put the fiscal adjustment programme back on track, Eurogroup President Jean-Claude Juncker said shortly after the council’s meeting late on Monday.

Juncker said that the council looked at the first findings of the troika inspection and that finance ministers will reexamine the matter after the troika team submits its final evaluation report on Greece’s progress.

Stournaras made no mention of extending the time set for the government to meet the targets set under the second bailout programme, Jucker said.

“I imagine there are such requests on the Greek side”, he said, before stressing that this will be discussed by September at the latest.

Read the rest.

More from Keep Talking Greece:

For Greece the Eurogroup meeting ended on Monday with the wish to catch up at a later point. “See you in September”, the Eurogroup ministers told their Greek counterpart Yiannis Stournaras. Spain was high on the agenda on Monday, and the Troika had not concluded yet its inspections on the Greek progress or failure to meet its bailout-programme obligations and targets.

“EZ finance ministers will discuss at length the Greek programme in September,” Eurogroup head Jean Claude Juncker told reporters at a press conference.

Juncker revealed further that Greek Finance Minister Yiannis Stournaras “did not make any requests.” – even though Nea Dimocratia  heralded in its elections campaign that the re-negotiation of the bailout programme would be a priority. Even though there was talk in Greece that Athens would request a two year extension period in order to reach its deficit targets of 3%.

Read the rest.

Ekathemerini adds:

Greek Finance Minister Yiannis Stournaras said the government needs to come up with 3.5 billion euros in revenues “now” in order to get its reform program back on track and before it can make any demands from the country’s lenders to ease the terms of its bailout deal.

Speaking in Brussels following a meeting of eurozone finance chiefs in which it was decided that the discussion on Greece’s fiscal adjustment program be postponed until September, Stournaras said “because the program is significantly delayed in many of its aspects, for the time being there is nothing [they] can say.”

“We must bring the program back on track before we can make any demands,” Stournaras said, adding that while he did not discuss Greece being granted an extension to the program from the Eurogroup, he did “introduce the idea that once we receive a positive evaluation from the troika, we will suggest it.”

Stournaras was referring to the government’s plan to ask for a two-year extension for meeting the fiscal targets outlined in its 130-billion-euro loan agreement with the European Commission, European Central Bank and International Monetary Fund, collectively known as the troika.

“The problem with an extension,» Stournaras said, «is that it will require further funding. They understand our position, but no one would commit that they will accept it.”

Read the rest.

And then there’s this, from Greek Reporter’s Andy Dabilis:

While Greece has been denied any retooling of its loan conditions, Eurozone leaders said Spain would be given an extra year to reduce its deficit and that its banks would be directly recapitalized with bailout funds instead of having those monies added to the country’s debt, conditions that Samaras considered asking for but backed away. That drew mockery from Coalition of the Radical Left (SYRIZA) leader Alexis Tsipras, who said that Samaras was conceding to the Troika and should have asked for the same terms. Samaras is overseeing an uneasy alliance of his New Democracy Conservatives, who barely beat SYRIZA in the June 17 elections, but without enough of the vote to form a government, requiring him to bring in the PASOK Socialists and tiny Democratic Left as partners.

Read the rest.

A deputy minister disagrees, resigns

When it comes to the day-to-day work of running ministries, it’s the deputies who usually have the closest contacts with the subjects of ministerial actions, and the coalitions caving to the Troika proved too much for one New Democracy deputy, who tendered his resignation rather than carry out the austerian mandate.

From the Associated Press:

A deputy labor minister has resigned from Greece’s new coalition government, saying it should have pressed harder to renegotiate the terms of the country’s bailout agreements.

Nikos Nikolopoulos announced his resignation Monday, hours after the new conservative-led government won a confidence vote in parliament.

Nikolopoulos, in a letter, argued that the government should have taken a tougher line with international debt inspectors in Athens last week to “correct serious distortions in the labor, pension and benefit systems.”

Read the rest.

More from Reuters:

The resignation is a new setback for Prime Minister Antonis Samaras, whose government had already stumbled to a rocky start when his initial pick for finance minister resigned over health problems.

“The sole reason for my resignation is my personal conviction that the issue of renegotiating with the troika, as well as the correction of significant distortions in labour, pension, social security and welfare issues, should have been emphatically put on the table from the start,” Nikos Nikolopoulos wrote in his resignation letter.

Analysts said the resignation suggested internal rifts were emerging over the coalition’s stance on renegotiating the bailout with the three lenders – the European Union, the European Central Bank and the International Monetary Fund.

The government initially demanded numerous changes to the rescue package when it took power last month, but has struck a more conciliatory tone in recent days as it faces the prospect of running out of cash without more aid.

“It is an indication that the government will face internal problems between groups pushing for a ‘hard’ and ‘soft’ stance towards the troika and the terms of the bailout,” said Theodore Couloumbis, political analyst at Athens-based think tank ELIAMEP.

Read the rest.

Athens News posts the full text of his resignation letter here.

Greek unemployment continues to soar

A labor minister has good reason to resist the Troika’s relentless pursuit of pelf to repay financial speculators, especially if he sees his responsibility as working to ensure the health and well-being of his country’s laborers.

And the plight of the Greek worker is grim, with the latest evidence reported by  ANSAMed:

Unemployment will reach a record 23.6% while the recession will stay at 6.9% for the 5th consecutive year, higher than the 5% figure projected in April 2012, according to three-month data released by the Hellenic Institute for Economic and Industrial Research (IOBE) today.

Pay cuts for another 200,000 imminent

And yet another reason for a labor minister’s misery: He be forced to cut the pay of fellow civil servants.

This time it’s the professions that are facing the Troika’s salary hackers.

From Athens News:

As negotiations with the troika continuing on July 9, the government must address the commitment to further cut the pay of to 200,000 public-sector doctors, judges, priests, university professors and diplomats under the terms of the bailout commitments – or find additional savings of 600 million euros by the end of next year.

The memorandum details 12% cuts starting in July which aim to save 200 million euros this year and 400 million in 2013. The measure could be retrospective cuts from June, according to media reports.

The cuts would eliminate dozens of benefits and alter the method of salary grading. Initial government comments indicate that low-paid public sector staff members would be protected.

Read the rest.

Selling off more of the commons

The goal of the neoliberal agenda is transformation of public wealth into corporate hands, and austerity is the perfect tool for effecting the transfer.

With the New Democracy-led coalition under increasing pressure from the Troika, the government is selling off more of the public’s state-owned infrastructure to generate more cash to fork over to investors.

Here are the latest developments, with the first a cause for more labor ministry heartaches.

From Athens News:

The trade union head in the Public Power Corperation (DEI) has threatened to strike and cause summer blackouts if the government takes moves to privatise the electric company.

Speaking to radio station Alpha 98,9, Nikos Fotopoulos described the strike as “legitimate weapon, and a constitutional right “ and invited the Prime Minister Antonis Samaras to prove that Greek consumers would have cheaper power if electricity was privatised.

Fotopoulos also accused Prime Minister Samaras of choosing the easy target of the unions, rather than the more daunting challenge of taking on big corporations.

Government spokesman Kedikoglou Simos said that “the government will not leave people unprotected and vulnerable,” adding that the country will not succumb to threats and blackmail.

Read the rest.

And here’s the tale of the second sale, from Marianna Tsatsou of Greek Reporter:

Greece plans to sell four Airbus A340-300 passenger jets in order to raise money. The jets belonged to former state carrier Olympic Airways which now belongs to a successful Greek businessman and has been renamed to Olympic Air.

Finance Ministry officials stated on Sunday 8 July that the Greek government needs money to eliminate the public debt and consequently is selling these aircraft which could fetch almost 40.4 million dollars.

New Greek Finance Minister Yannis Stournaras announced several privatizations in a bid to increase the state’s income without any further taxation to burden Greek citizens.

Read the rest.

More walkouts hit Greece’s key industries

With its historic, cultural, and natural wonders, Greece generates the largest single sector of its national revenues from tourism, while another major sector is ship-building.

And now workers from both sectors are staging walkouts, yet two headaches for the labor and finance ministries.

From Ekathemerini:

Workers in the tourism and catering sector began a 48-hour strike on Tuesday morning, and have scheduled a protest rally later in the day at central Korai Square, as Skaramangas shipyard workers gathered in front of the Finance Ministry in Syntagma Square to hold their own march.

The union representing workers in tourist and catering services is demanding the re-introduction of a collective labor agreement for the sector as well as a higher minimum wage.

Meanwhile, workers from the Skaramangas shipyard, who have been working on rotation for several months, are demanding measures to boost business at the country’s biggest, and ailing, shipyard.

Read the rest.

Taxes, a shadow economy, crime, and history

In its efforts to extract the last pound of flesh, the Troika has been focused on the country’s shadow economy, transactions that may account for nearly a quarter of the country’s real business and takes place out of the tax collector’s sight.

From ANSAmed:

The shadow economy in Greece accounted for an estimated 52.2 billion euros last year, as daily Kathimerini reports quoting a European Commission report published Friday. Greece therefore ranks fourth among the 17 eurozone members in terms of the size of each country’s illegal economy, and ninth in the whole of the 27-member European Union.

It is also rock bottom in the collection of value-added tax revenues, according to 2010 data. The country’s black market amounts to 24.3% of its gross domestic product, while Austria is the country with the smallest illegal economy, estimated at just 7.9%.

This statistics show that despite the efforts to combat tax evasion, the problem remains as serious as ever in Greece, at a time when the country desperately needs to reduce its illegal economy so as to bolster public revenues and lighten its austerity program. Meanwhile, along with three other EU states, Greece failed to submit data regarding the cost of its tax collection mechanism.

So why are do Greeks evade taxes?

Partly because the rich do it all the time, and until recently is was all quite legal, breeding both righteous indignation and a not-unsurprising resistance of their own to paying their own taxes.

James Surowiecki of the New Yorker wrote back in November that many otherwise legal transactions and payments go unreported to tax officials for a number of reasons.

While the austerity regime has forced some changes, the nation’s tax code was

riddled with loopholes and exemptions: not only doctors but also singers and athletes were given favorable rates, while shipping tycoons paid no income tax at all, and members of other professions were legally allowed to underreport their income.

Read the rest.

Keep that in mind whilst reading the next item.

Railroad officials face criminal charges

Here’s another story that involves both privatization a charges of corruption.

The subject is the administration of the state-owned railroad and allegations that its leaders willingly broke the law.

But there’s a very fascinating German connection, too. One with some history, previously described here.

From Greek Reporter’s Andy Dabilis:

Thirteen former executives of Greece’s money-bleeding Hellenic Railways (OSE,) one of the companies the coalition government led by New Democracy Prime Minister Antonis Samaras is trying to sell off,  have been charged with stealing state funds and being involved in decisions that undercut the company’s interests. Not charged, however, was former New Democracy Transport Minister Michalis Liapis, who was implicated in the scandal but protected under the statute of limitations even though evidence was sent to Parliament.

Prosecutors conducted an investigation based on accusations against the former high-ranking OSE executives for actions or omissions in terms of procedures followed for procurements and in meeting contractual obligations, including attempts to change specifications for the purchase of new electrically-powered trains at a cost of $3.93 billion.

Read the rest.

Now here’s where things get interesting, and we await further details.

First consider this little nugget from CorpWatch:

{I}n December 1997, OSE and Siemens signed seven contracts totaling 705 million marks ($397 million). (The contracts ended up in court in May 2010 for failing to meet deadlines).

And then this, from an Athens News report on the new criminal case:

The final part [of the case] relates to OSE’s lease of eight Siemens Desiro electric trains for 16 months for 1m euros per month, when OSE could have had the trains without paying anything.

The trains had been given to OSE without charge from January 2004 until April 2007 as part of a penalty clause for failure to promptly deliver new rolling stock by the Siemens-Hellenic Shipyards consortium.

The consortium continued to owe the sum of 8.3m euros when the lease agreement was signed and, in the prosecutor’s opinion, the eight trains could almost have been bought for that amount.

Read the rest.

And this from Lena Mavraka and Vasilis Papatheodorou, writing for CorpWatch:

Millions of Euros have allegedly been paid into secret Swiss bank accounts of high-ranking politicians of the two parties that have run Greece since collapse of the military dictatorship in 1974 – Pasok (the Social Democratic party) and New Democracy on the right. All told the bribery is estimated to have had a cost of €2 billion to the Greek economy, according to a high level parliamentary investigation – and Siemens had a starring role.

“In Greece Siemens has spend the most black money (bribes) than in any other country of the European Union between the late 1990s and 2004,” says Tassos Telloglou, author of “The Network: File Siemens.”

New Demoracy? The same party whose official emerged unscathed from the railway scandal?

Germans cancel a planned invasion

Considering the tensions between the two country, both current and historic, we’d say this one’s a story about a move somebody finally realized was a really bad idea.


Germany has halted a plan to send as many as 165 tax officials to Greece to bolster tax collection, Bild reports today, citing unidentified people in the Finance Ministry and government Bloomberg reported.

Greek officials weren’t interested in help from Germany and saw it as meddling, the newspaper said.

Troika demands full private college accreditation

Well, this story’s good news for folks like University of California Regent Richard “Greasy Thumb” Blum, whose private college investment constitute a tidy part of that hefty income that enables the regent and senatorial spouse Diane Feinstein to live the high life.

From Greek Reporter’s Areti Kotseli:

Representatives of the country’s European and international creditors, known as Troika, have pressed Greek authorities to make necessary arrangements to  fully recognize degrees granted by private colleges operating as franchises of foreign universities in Greece within the framework of a general plan to liberalize the country’s higher education sector.

Although the Education Ministry has technically recognized the operation of private colleges long ago, the degrees granted by these institutions still do not enjoy equal status to those issued by Greek universities.

Opinions on the issue remain conflicting, as many academic representatives express the view that it is unfair to equalize a state university degree with that of a private college. First of all, the applicants have to pass a large-scale examination and prove their worthiness among thousands of pupils, and secondly they just have to be able to afford it, as many tend to believe. Others say it is unfair that people study for four years in private colleges and then have to go through a series of new exams to prove their value and knowledge. In fact many people believe that private colleges offer more specialized and methodical education than state universities which often suffer from lack of organization, staff shortages, and other resources.

Read the rest.


One response to “GreeceWatch: Discipline, suicides, layoffs, selloffs

  1. Pingback: GreeceWatch: Discipline, suicides, layoffs, selloffs | eats shoots 'n ... | Economic meltdown |

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