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How the world sees Greece
Wednesday, July 31, 2013
Greek court convicts 9 over sinking of cruise ship that left 2 presumed dead
A Greek court has convicted nine officers and shipping company officials of negligence in the sinking of a cruise ship off the resort island of Santorini more than six years ago.
Greece economic progress praised by IMF
The International Monetary Fund says Greece has made 'exceptional' progress in stabilising its economy.
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Greece Plans To Keep Rowdy Tourists Out Of Town
Daily Mail | Greece Plans To Keep Rowdy Tourists Out Of Town Gadling Greece club signs Roger Price, Flickr Disrespect the locals a few too many times and they may decide to shun you from the local enclaves and relegate you to tacky tourist ghettos. Unfortunately, that may be exactly what's in store for visitors headed ... Greece denies 'tourist ghettos' plan to keep partying holidaymakers outside ... Greece considers special areas for rowdy holidaymakers Death in Crete: Greek islands consider segregated tourist zones |
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IMF finds $11 billion 'black hole' in Greece's finances
Raw Story | IMF finds $11 billion 'black hole' in Greece's finances Raw Story The International Monetary Fund warned the eurozone yesterday that it may be forced to write off a chunk of Greece's debt after identifying an $11bn black hole in the finances of the recession-stricken country. In its regular update on the programme of ... |
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Latin American Countries Refuse to Back New IMF Aid for Greece
Voice of America | Latin American Countries Refuse to Back New IMF Aid for Greece Voice of America “Implementation [of Greece's reform program] has been unsatisfactory in almost all areas; growth and debt sustainability assumptions continue to be over-optimistic,” said Batista, criticizing the IMF executive board's decision on Monday to release 1.7 ... IMF says Greece must deliver reforms Greece wins IMF praise despite delays in axing state jobs Brazil did not support IMF aid payment for Greece |
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Massive 5-ton steel wheel stars in ancient Greek drama
Massive 5-ton steel wheel stars in ancient Greek drama CNET (blog) The actor, who plays the lead role in an upcoming version of the Greek tragedy "Prometheus Bound," will spend most of the play strapped to the giant contraption, a staging that requires harnesses -- and surely some getting used to. The highly ... |
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No support from Latin America for IMF Greece payment
Eleven Latin American countries represented by Brazil did not not back the latest International Monetary Fund bailout payment for Greece, which was authorised by the Fund's board on July 29.
Brazil's executive director at the IMF, Paulo Nogueira Batista, said on July 31 that the lending agency's latest report on Greece cited risks that it may not be able to repay its IMF loans if its recovery program falls off track.
The unusual public statement said Brazil abstained from the IMF Executive Board vote that approved the payout of 1.7 billion euros this week.
Batista said Greece's implementation of austerity measures — conditions of its massive international bailout — has been "unsatisfactory in almost all areas" and assumptions about growth and ability to sustain debt payments "continue to be over-optimistic."
Meanwhile, just two days after the IMF board gave its approval for the release, the Fund said in its report that Greece needs to take more action to promote growth and deliver promised structural reform, and pointed out that there is a potential shortfall of up to €11bn in Greece's bailout programme over the next two years.
However the Fund did say that Greece has made "exceptional" progress in stabilizing its economy and remains on course to emerge from a near six-year recession in 2014
Greece is the recipient of a mammoth bailout, of around €240bn, administered by the EU and the IMF. Analysts think that it is highly likely the country will need a second debt haircut - this time debt held by sovereign lenders, for example other EU member states, will have to be shaved off as in spring 2012 private debt holders took a hit.
But it is thought that the issue will not be put on the agenda before the German general election takes place in September.
Greece has seen a 25 percent drop in output since a 2007 peak, and unemployment rate from under 10 percent to nearly 27 percent, Europe's highest rate.
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IMF finds $11bn black hole in Greek finances and warns of new write-off
Greece 's debt after identifying an $11bn black hole in the finances of the recession-stricken country.In its regular update on the programme of financial austerity and structural change agreed to by Athens in return for financial help, the Washington-based IMF said weak growth and a sluggish pace of reform had opened up a funding gap in both 2014 and 2015.The IMF, which is struggling to ...
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Wealthy Greeks lose security perks in austerity cutback
Greeks fearing attacks by anarchists will no longer be entitled to free police bodyguards in the latest cost-cutting plan from a government trying to meet budget targets set by international creditors.
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Greek police to seek terror-related charges for 6 arrested over Turkish arms shipment
ATHENS, Greece - Greek police say they will demand that terrorism-related charges be brought against three Greeks and three Turks arrested for allegedly trying to ferry weapons and explosives in a speedboat to Turkey.
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Greece wins IMF praise despite delays in axing state jobs, fears of $14bn bailout cash gap
ATHENS, Greece - The International Monetary Fund said Greece had made "exceptional" progress in stabilizing its economy and remains on course to emerge from a near six-year recession in 2014, despite missing targets to axe state jobs and the threat of an 11 billion euro ($14.6 billion) gap in bailout financing.
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Greek bailout has ?11 billion funding gap
Greek bailout has ?11 billion funding gap
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Brazil did not support IMF aid payment for Greece
Brazil did not support IMF aid payment for Greece Businessweek WASHINGTON (AP) — Eleven Latin American countries represented by Brazil are not backing the latest International Monetary Fund bailout payment for Greece. Brazil's executive director at the IMF, Paulo Nogueira Batista, said Wednesday that the lending ... |
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Latin American countries did not support latest IMF bailout payment for Greece
Latin American countries did not support latest IMF bailout payment for Greece Washington Post Batista said Greece's implementation of austerity measures — conditions of its massive international bailout — has been “unsatisfactory in almost all areas” and assumptions about growth and ability to sustain debt payments “continue to be over ... |
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Europe's Still Got Extremely Deep-Rooted Problems That Won't Get Fixed Anytime Soon
Stocks in Europe have bounced about 9.7%, measured by the performance of the MSCI Europe Index in dollars, from their low point of a little over a month ago. This is ahead of the gain of 7.5% in the U.S. stocks in the S&P 500 Index over the same period. Several recent surveys and economic data points appear to have renewed a sense of optimism over Europe’s economic future and lifted European stocks. Last week, four of these grabbed investors’ attention:
- France emerged from recession in the second quarter. French Finance Minister Moscovici predicted that France’s recession ended in the second quarter of 2013 with economic growth of +0.2% after declining in three of the prior four quarters.
- Spain nearly emerged from recession in the second quarter. The Bank of Spain announced that in the second quarter of 2013, Spain’s economy contracted by only 0.1% as the pace of deterioration slowed from the -0.4% pace of the prior seven quarters.
- The European PMI rose above 50 in July. The Purchasing Managers’ Index, an economic indicator made from monthly surveys of private sector companies, climbed to 50.4 points in July. This marked the first time the index rose above 50, the threshold between contraction and growth, in 18 months.
- Consumer confidence improved. Germany and the United Kingdom produced strong consumer confidence readings for the second quarter. Although the consumer confidence reading for Greece was low, it rose seven points between the first and the second quarters of the year, registering the largest improvement of any of the more than 50 countries measured.
Conditions have stopped worsening, and Europe’s economy may be stabilizing after a period of rapid economic deterioration. However, the deep-rooted negatives that lie not far under the surface may disappoint those expecting steady improvement, much less a powerful rebound, following the back-to-back recessions of recent years.
- The unemployment rate in France is soaring and is now just under 11%, up almost 1% from a year ago, as it has steadily worsened over the past couple of years. France is far from alone among Eurozone nations in seeing already high unemployment worsening at a rapid rate. For example, the Netherlands, Italy, and Portugal saw their unemployment rate rise about 2% from a year ago.
- The unemployment in Spain fell in June for the first time in 18 months, but it rose after stripping out temporary holiday workers. Spanish unemployment is the highest in the Eurozone at about 27%, with the rate over 50% for those aged 18 – 25. This extreme level of unemployment, similar to the United States at the height of the Great Depression, may take a decade to cure.
- Fiscal conditions are worsening in the Eurozone, despite years of austerity in the form of tax hikes and spending cuts. Last week, Eurostat, the official statistics office of the EU (European Union), reported that Eurozone government debt-to-GDP (gross domestic product) rose to a record 92.2%, up 4 percentage points from a year ago.
- European banks are still tightening lending standards for both companies and mortgages as of the second quarter, according to last week’s release of the quarterly survey by the European Central Bank (ECB).
While unemployment and fiscal conditions highlight the deeply entrenched and hard-to-resolve problems facing the Eurozone, these indicators tend to lag a recovery and may stabilize if the economies actually begin to grow again. However, the lending situation suggests stabilization and a flat pace of growth may be more likely than a return to the 2 – 4% annualized growth rates that preceded the downturn.
European stocks (MSCI Europe) have climbed 25% in dollars since one year ago on July 26, 2012, when ECB President Mario Draghi turned markets around when he said policymakers will “do whatever it takes to preserve the euro.” Over the past year, Spanish 10-year note yields fell to 4.6% from a euro-era record 7.5% the day before Draghi’s speech. Likewise, Italian yields slid more than 2 percentage points. The ECB’s efforts have made it easier for countries to borrow, but that has not extended to businesses or consumers. Lending to companies and households in the euro area has contracted over the past year.
In the United States, banks have continued to ease lending standards each quarter, making it easier for borrowers to access credit. But the opposite remains true in the Eurozone. Although business loans are rising at a 7% rate in the United States and housing has been a key support for the U.S. economy, the demand for business loans in the Eurozone continued to slow in the second quarter and decelerated “substantially” for housing loans. According to the ECB’s report, banks expect loan demand to drop even further in the current quarter.
Banking on the Banks
Banks’ willingness to lend is particularly important for Europe’s economic outlook. In Europe, companies are more reliant on banks as sources of financing than in the United States. According to the European Banking Federation, about 75% of European business financing comes from banks, compared to 30% in the United States. And smaller businesses are particularly affected by a banking crisis because they rely even more heavily on bank lending to finance themselves than larger companies. According to ECB and EU data, in the Eurozone smaller-sized businesses have historically accounted for three-fourths of employment (and 85% of net new jobs) and generate 60% of economic value added, much higher than in the United States. Since the onset of the European financial crisis, smaller businesses have lacked financing to retain workers and have lost jobs faster than large companies. Therefore, the difficulties that small companies face in securing financing from banks that continue to make it harder to borrow dampen hopes of a rebound in the European economy.
Banks may not become more willing to lend anytime soon. Banks are likely to continue to be cautious on lending and hoard capital due to an agreement, yet to be approved, that EU finance ministers reached a month ago over the rescue of troubled European banks. The new agreement establishes the hierarchy of who should pay first when a bank gets in trouble. First, shareholders and bond owners may be wiped out. Then depositors of more than 100,000 euros will suffer losses before governments step in with taxpayer money. This means banks must maintain capital buffers at all costs, since any trouble will prompt large depositors to flee—leaving fewer funds available for lending and lessening the willingness to make riskier loans to smaller businesses.
Stabilizing but Fragile
The upbeat surveys and statistics released last week suggest that economic growth is stabilizing in Europe. This is primarily the lagged result of the ECB reversing the upward spiral of interest rates and providing stimulus over the past year in addition to an easing of some of the austere budget targets in some countries. But record-high unemployment levels in Southern Europe and rising unemployment in core Northern European countries along with unwillingness by banks to lend and worsening fiscal conditions across the Eurozone all point to lingering stagnation. In addition, while potent at averting a crisis, monetary policy can do little to fix Europe’s deeper structural faults, such as weak international competitiveness and low domestic demand from an aging population.
While there is no longer any reason for dire predictions about Europe’s economic future, neither is there reason for much optimism. Most countries in Europe will remain economically fragile, and flat-to-weak economic growth is likely to be the prominent trend. Alternatively, the United States is poised to see positive and accelerating economic growth in the second half of 2013. As we have all year, we continue to believe U.S. stocks will outperform their international peers.
SEE ALSO: The Strongest Bull Market In 65 Years
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Eurozone unemployment falls for first time in two years; Greece shows highest rate
Kathimerini | Eurozone unemployment falls for first time in two years; Greece shows highest rate Kathimerini The number of people unemployed in the eurozone fell for the first time in more than two years in June, the latest sign that the bloc's economy may be pulling out of recession, while inflation held steady in July, fuelled by spending on food. Compared ... Euro Zone Releases Fresh Assistance to Greece Eurozone jobless rate remains at record high Eurozone jobless down for first time in 2 years |
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Greece denies 'tourist ghettos' plan to keep partying holidaymakers outside ...
Daily Mail | Greece denies 'tourist ghettos' plan to keep partying holidaymakers outside ... Daily Mail Greek tourism officials have denied suggestions that they are planning "tourist ghettos" as a way to solve problems caused by drunk Britons in certain party towns. The mayor of Malia, in Crete, where 19-year-old Tyrell Matthews-Burton was murdered ... Greece considers special areas for rowdy holidaymakers Death in Crete: Greek islands consider segregated tourist zones |
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Agus Morales: Syrian Exodus, Chapter Four: The Syrian Exodus Reaches Athens
In 2012, almost 8,000 Syrians arrived in Greece by irregular means, compared to 1,709 in the first four months of this year, according to data from the Greek police. Most migrants and refugees used to head for the land border between Turkey and Greece at Evros, in the north, but in the summer of 2012 the Greek authorities built a wall and deployed a 2,000-strong security force to stop the influx of new arrivals.
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Greece economy rebalancing via recession IMF staff
There is no quick fix, and I am not here to promise any quick fixes. The world economy is challenged, and so is the Indian economy. We have got a pretty good idea of how to fix the fiscal deficit, said the ...
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Steve Jobs? Family Holidays In Greece
The yacht of late Apple founder Steve Jobs showed up in Hydra last weekend with locals wondering if his family would stay long in Greece and visit the Ionian Sea islands. Venus carried members of the Jobs family and other guests and passed through the Corinth Canal from the Saronic Gulf to the Corinthian Gulf with destinations in the Ionian. The luxury boat, of 80 meters, has a large terrace ...
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Greece Targets Wrongdoing Civil Servants
Getting ready to transfer or fire up to 40,000 public workers over the next two years on the orders of international lenders, Greece is finally going after those who’ve been disciplinary problems or been wrongdoers at work. Some 104 civil servants were fired in June, four more in one month than the previous 11 months as the government picks up the pace of weeding out workers who have ...
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IMF warns of ?11bn Greek bailout shortfall
Eurozone governments have been told they should fill almost half the gap before the end of the year, and that they may have to accept big losses
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Turkish militants held in Greece for weapons: minister
Hurriyet Daily News | Turkish militants held in Greece for weapons: minister Reuters Greece's anti-terrorism squad is carrying out further investigations, interrogating witnesses and confiscating cell phones, computers and manuscripts across the country. (Reporting by Humeyra Pamuk in Ankara and Harry Papachristou in Athens; Editing by ... Greece seizes explosives-laden boat heading to İzmir, detains two Turkish citizens 24 Illegal Migrants Drown in Aegean Sea Terrorism: Greece; arms found on speedboat headed for Turkey |
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