Greece Outside In: 12/29/13

Sunday, December 29, 2013

Stournaras Sees 2014 Greek Market Return

Greek Finance Minister Yannis Stournaras, continuing to champion a recovery he said will begin next year, now also says the country may return then to the bond markets it has been locked out of since getting bailouts and stiffing investors with 74 percent losses under a previous PASOK administration. He cautioned that it would happen […]

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Murderous Attack on Businessman in Athens

Earlier today, shortly after 1pm, unknown assailants launched a ferocious gun attack on the 50-year-old businessman and owner of the MEKO car importers and dealership in the Alimos area of Athens, Greece. Two men on a motorcycle drew up outside the dealership on Poseidon Avenue 1 and began firing at the businessman who had just […]

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SYRIZA Takes the Lead in New Poll

A Kapa Research opinion poll carried out on behalf of the newspaper “TO VIMA,” gives SYRIZA a 0.8 percent lead over New Democracy. In particular, the opinion poll places the major opposition party first with 22.5 percent and second comes New Democracy with 21.7 percent. The Greek neo-Nazi party, Golden Dawn, seems to be stable […]

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One of Two Greeks Wants to Emigrate

According to an opinion poll that was conducted by Kapa Research on behalf of the newspaper “TO VIMA,” one out of two Greeks would seek better luck abroad if the right opportunity arises. It’s no secret that Greeks — especially the younger ones — are really worried about their future. Poll results showed that Greeks […]

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Taverna Greek Grill in Fort Collins closes without explanation

Taverna Greek Grill in Fort Collins closes without explanationThe ColoradoanRyan Field and Ryan Rezinas moved to Fort Collins from Flagstaff to open Taverna, aiming to serve authentic Greek food and culture by two Greek men, according previous Coloradoan reporting. They had hoped to move to the city “for a long time” and found ...and more »

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Greek woes to challenge EU presidency, analysts say

Eurosceptics and far-right parties poised to score major gains in European Parliament elections

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Greek EU presidency a challenge given ongoing crisis

Greek EU presidency a challenge given ongoing crisisGlobalPostAdded to Greece's own considerable economic and political troubles, these issues could prove a major challenge to the Greek presidency, analysts note. "I don't expect that the Greek presidency will be, and can be, as smooth as other presidencies," said ...and more »

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Greek Peak Reveals New Renovations

With crisp weather and new snow on the ground many area locals are hitting the slopes. Those headed to Greek Peak in Cortland are going to see some new renovations on and off the mountain. "I think there's a wow factor amongst our customers who have been here year after year," said John Meier, general partner. Greek Peak is working on a 5 million dollar project to improve the resort. This week ...

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The horsemeat scandal erupts

15 January: supermarket products found to contain horsemeat

When our initial results on supermarket burgers showed that the products we had tested contained equine DNA, my first reaction was that it was impossible. Somewhere along the line there had been a mistake – or these products had been accidentally contaminated. After we repeated the tests with new samples, our priority became to make absolutely sure that it wasn't a food-safety issue. We tested the meat for veterinary drugs and found none present in doses high enough for it to be dangerous to humans. But what we did know was that we had a food fraud issue on our hands.

We had to inform the food manufacturing companies involved, who then told the supermarkets they supply what we'd found. The supermarkets pulled their contaminated products from the shelves and that's how the story broke. When I looked at the results, I knew the tsunami of horse manure this would cause, but I could never imagine what would be uncovered across Europe in the months to come. This wasn't just an Irish problem – it spanned across England, Greece, France and beyond.

The most important ingredient in food is trust, and once consumers lose that, it takes a long time to get it back. I think the industry has learned its lesson – stringent structures are in place to make sure it can't happen again: all meat products now have to have a certificate of authenticity, for a start. I certainly think and hope that something like this will not be repeated, at least in my lifetime.

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Graffiti makes an art world sensation of the ECB's Frankfurt building site

The European Central Bank created a cultural buzz – and a new tourist attraction – when it let children spray-paint its fenceClick here to view an online gallery of the graffiti artworks

When Frankfurt social worker Stefan Mohr needed a new location for the troubled children he works with to express themselves through spray paint and graffiti, it did not take him long to find a potential site. The trouble was, the vast area of fencing he found, down the road from the derelict warehouse the children had been using, was round the site on which the European Central Bank's new €1bn headquarters was being built.

Mohr contacted the bank. To his surprise, it not only agreed to let him use the fence around one of Europe's biggest building sites for graffiti, it offered €10,000 to pay for wooden panels to be attached to the fence, and for supplies of spray paint.

Mohr said he thought from the start that the homeless and underprivileged young people he works with would get a kick out of spraying on the site of such a politically symbolic building. But he had no idea that some of the world's most famous graffiti artists would help turn the fence into one of Frankfurt's biggest tourist attractions.

"All we wanted to do was find a place for kids to express themselves and show the public that graffiti is art, not vandalism," Mohr said.

"It has proved amazingly popular, with people coming from across the world to paint and take photos, and pictures from the wall are used in the press all over the world. We never thought it would get popular; all we wanted was somewhere to paint."

The graffiti, which is often highly political and includes caricatures of ECB president Mario Draghi and German chancellor Angela Merkel, has proved so popular that dozens of banks and money managers have been interested in buying the works.

"A lot of people want to buy pieces, but we didn't do this to make money," Mohr said. "We don't want to sell them. We like to see the pictures painted over. That's how graffiti works."

However, their landlord, the ECB, was allowed to buy one of the first works, showing two cocks fighting, and will display the piece inside the building when it opens in 2014.

Another artwork was sold after an investment fund owned by computer billionaire Michael Dell hired investigators to track down the artist behind a piece inspired by the Bond film Casino Royale. It shows Draghi and Merkel as 007 and a Bond girl inside a casino.

The painting, on plywood, now hangs in the Manhattan office of Dell's company, MSD Capital. Both MSD and Mohr declined to state how much the work was sold for, but it was less than the cost of shipping it to New York. The money went to the artist, rather than the publicly funded Under Art Construction project Mohr runs. Mohr has refused to sell any of the works since, despite more than 20 approaches.

Although many of the works depict Merkel, Draghi and the ECB in a derogatory way – in reaction to their role in forcing austerity measures on struggling eurozone economies – the bank does not censor the art.

"They don't tell us what to paint or not paint – just that there must be no fascism or sexism," Mohr said.

He added that about 60% of the works reflect the eurozone crisis, and that painters from Spain, Portugal and Greece are most likely to choose political themes. "Painters and young people have ideas that connect with the ECB and the problems of Europe."

Andrea Jürges, who looks after the project on behalf of the ECB, said the bank was happy to be satirised: "They can paint whatever they want – negative things about the ECB are fine in my view."

She said everyone at the ECB, Draghi included, is delighted that the project has proved so popular. "When they did a painting session one night recently, it was so packed you couldn't get near the front to see them."

The mayor of Frankfurt, Peter Feldmann, himself a former youth worker, supports the project and is calling on all construction sites in the city to allow graffiti on their perimeters. Jürges said: "I agree with the mayor: construction sites are ugly and this sort of thing is a wonderful opportunity to make something nice, and give young people space to express themselves."

The art works will continue to be replaced by new graffiti every three months until the new 45-storey building, designed by Austrian architect Wolf Prix, opens in late 2014. After that, anyone will be able to bid for pieces, with money going to the Under Art Construction programme.

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Global economy: hopes and fears for 2014

Will the coming year be one of tax cuts, pay rises and good cheer, or will the legacy of the financial crisis still haunt us? And what of China, Japan, the eurozone … Observer writers try to predict the economic shape of the next 12 months

Will rising house prices and higher pay bring back the feelgood factor?

As the Bank of England's chief economist, Spencer Dale, pointed out recently, Britain's microwave-like housing market tends to "turn from lukewarm to scalding hot in a matter of a few economic seconds" – and that seems to be exactly what's happened over the past 12 months. By the end of 2013, the London market was well on the way to scorching and, in almost every other part of the country, it had at least begun to defrost.

Brits – at least those who have managed to clamber on to the housing ladder – love nothing better than rising property prices, and the recovery has been a key driver of growing consumer confidence and spending. But for those locked out of the housing market, the key to a happier new year will be whether, and when, real wages finally start to recover from the longest squeeze in more than a century.

With overseas demand weak, a large pool of jobless workers and an extraordinary 3 million people saying they are "underemployed" and would prefer to work more hours, it's hard to see what would make employers start paying more. For the time being, we're likely to be left relying on a good old-fashioned, debt-fuelled boom.

Will Mark Carney raise interest rates in 2014, as the economy gathers pace?

He certainly hopes not. The whole thrust of the Bank of England's policy since the Canadian central banker took up the reins in Threadneedle Street has been to reassure consumers and companies that the Bank won't "pull the rug out" from under the recovery by raising rates too soon.

Of course, the definition of "too soon" is up for grabs. The monetary policy committee opted for an unemployment rate threshold of 7% when it announced its policy of forward guidance, assuming at the time that it would be at least three years before that was reached. Just three months later, they conceded we could get there within a year and a half.

But the Bank has enthusiastically embraced the new macroprudential tools that it hopes will allow it to smooth out booms and busts in certain markets – such as property – without clobbering the economy with an across-the-board rate rise. Its director for financial stability, Andy Haldane, has called this a "sharp philosophical shift". So even if unemployment drops below 7%, it seems unlikely the Bank will reach for a rate rise without yanking other levers first – and that's likely to take us into 2015 at the earliest.

Is the global economy heading for another crash?

Not much has been seen of Gordon Brown since he left Downing Street in May 2010, but the former prime minister caused a stir earlier this month when he said failure to learn the lessons of the 2007-09 financial and economic crisis means the global economy is heading for another meltdown.

Brown speaks from experience and has a point. The unity displayed when the world was looking into the economic abyss after the collapse of Lehman Brothers did not last long. Many problems, including too-big-to-fail banks and the growth of a largely unregulated shadow banking system, have not been adequately addressed. Central banks are unclear about how and when to remove the colossal stimulus they have provided for their economies over the past five years.

These core weaknesses mean it would be unwise to rule out another financial crisis in 2014. Crashes did, after all, have a habit of breaking out every few years before the Big One in 2007. Nor should it be any comfort that no one can see one coming in 2014. That's what they said last time.

How will Janet Yellen fare as Federal Reserve chairman?

Ben Bernanke will bow out in the new year, having already set in train the process of tapering the Fed's vast programme of quantitative easing. Bernanke said he expected it to take until the end of 2014 to shut the money presses down altogether, but it will be helpful to Yellen, who has often been seen as dovish, that the symbolic first step towards weaning the financial markets off super-cheap money has already been taken. Better still, world markets responded enthusiastically.

But it may not all be plain sailing: just because investors shrugged off the first step doesn't mean there won't be a more severe response as tapering continues. And the make-up of the Fed's open markets committee, which sets interest rates, is due to take on a more hawkish tone as QE sceptics Richard Fisher (of Dallas) and Charles Plosser (of Philadelphia) take up voting seats. If inflationary pressure rises as the economy picks up, Yellen will face growing calls to move faster. As a serious economist and Fed veteran, she has as good a chance as anyone of walking the fine line between scuppering recovery and letting inflation run out of control. But unwinding QE on this scale is an unprecedented challenge: it seems all but certain that more turmoil lies ahead.

Which of the emerging markets looks risky in 2014?

If there is to be a seismic shock to the global economy next year, the smart (sic) money is on it coming from the emerging world. Developing countries have seen large flows of "hot money" courtesy of the QE activities of the west's central banks. With interest rates low in the developed world, investors have parked their cash in the higher-yielding currencies of the emerging economies. Now that the Federal Reserve has started to reduce the amount of stimulus it is providing each month, the fear is that the hot money will leave emerging markets as quickly as it arrived, leaving countries facing runs on their currencies.

The most vulnerable emerging markets look to be those with big current-account deficits, because they are likely to be the first targets for currency speculators. High on the list would be Brazil, South Africa, Turkey and India.

The biggest risk of all, however, is China. Foreign investors have been impressed by the economic reforms announced by the communist leadership but, in the short term, China is slowing down after its debt-fuelled recovery from the last recession. A hard landing in China would have severe global ramifications.

Is the eurozone over the worst of its tribulations?

Yes, to the extent that a disorderly breakup of the single currency has become far less of a risk since Mario Draghi said in July 2012 that the European Central Bank would do "whatever it takes" to safeguard the euro's future. But no, if the criterion is the state of the eurozone economy. Four big legacy problems from the last crisis will hold Europe back over the coming 12 months: growth, unemployment, deflation and zombie banks.

Unlike the US and, latterly, the UK, the eurozone has yet to recover from the recession of 2008-09. A double-dip recession ended in 2013 but growth is still barely positive and not nearly strong enough to bring down a joblessness rate of more than 12%. Deflation is already a reality in Greece and Cyprus, while in Portugal, inflation is only just above zero. Falling prices increase the real value of debt, making it harder for countries to repay what they owe. The two potential flashpoints for 2014 are the ECB's asset quality review of Europe's banks, and the need for fresh bailouts for the two most vulnerable countries: Greece and Portugal.

What's more likely: tax cuts in the budget or the sack for Ed Balls?

Rumours have been swirling around Westminster since the autumn statement that Ed Miliband is losing patience with his shadow chancellor and is thinking of replacing Balls in a reshuffle. But it looks improbable, and not just because the Labour leader lacks a credible alternative. Balls was right when he warned austerity would hold back the recovery; to throw him overboard now would give the impression that George Osborne was right all along.

There is far more chance the chancellor will provide a bit of a budget giveaway. After all, the public finances are improving and, by March, the general election will be little more than a year away. But Osborne is in no position to throw money around: the public finances are in much worse shape than he expected them to be when he took office in 2010, and the priority is to balance the books by the end of the decade. Any tax cuts will be small, and largely financed by savings elsewhere. If there is to be a giveaway, it will be in the 2014 autumn statement or the 2015 budget.

Will Abenomics succeed in fixing Japanese economy?

The drastic attempt by Japanese prime minister Shinzo Abe, to jolt the moribund economy into life has already borne fruit: since he took power a year ago, growth has picked up to a cracking annual rate of 3%, and deflation of -0.1% year on year in December 2012 had given way to inflation of 1.1% by October.

But the burning question for 2014 is whether the first two of his three policy "arrows" – a spending surge and quantitative easing on a massive scale – will be followed by the promised third arrow: economic reform. Among other things, the Abe administration is creating hundreds of thousands of childcare places, in a bid to tempt more mothers into the workplace and harness the power of what he calls womenomics. A series of overseas trade deals, including the ambitious Trans-Pacific Partnership, are also likely to lead to the opening-up of new sectors of Japanese industry to competition.

But these are long-term reforms, and investors are expecting Abenomics to go on yielding quick results. There's a clear risk markets will lose faith with the debt-burdened Japanese government in the meantime (ratio of debt to GDP: 246%). By the end of 2014, we will have a much clearer idea of whether Abe's gamble has paid off.

Economics Global economy Economic growth (GDP)Economic policy Economic recovery Interest rates Bank of England Janet Yellen Eurozone crisis Tax and spending theguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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Fake Plate Liapis’ Day in Court

ATHENS – Former Greek Transport Minister Michalis Liapis, freshly back from a trip to Malaysia after complaining he couldn’t pay a tax to keep his luxury car on road, will face trial on Dec. 30 on charges of false certification and forgery after being caught on Dec. 17 driving it with fake plates. Returning to […]

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