Greek Economy on Downward Slope in May, Despite Slight Improvement in Some Sectors

The Greek economy went again on a downward slope in May, according to a survey by the Foundation for Economic & industrial Research (IOBE). The economy index fell to 91.4 points, compared to 92.7 points in April. The new, negative development is the result of deterioration of business expectations, especially in construction and services, and a decline in consumer trust. There was no cash inflow in the Greek market in May. Instead there was internal borrowing on the part of the Greek government and delay of repayment of state debts to suppliers. Thereby, the Greek market faced a serious liquidity problem. At the same time, the climate of uncertainty created by the stalling in negotiations between Athens and international creditors has put the lid on expectations. Businesses and individuals are in a continuous state of waiting  to assess the new situation arising from a possible short-term or long-term agreement. Specifically, regarding consumer trust, projections for the next twelve months are that the economic situation and unemployment will get worse, while the intention for more savings in the bank has improved slightly. In manufacturing, projections show growth in production, while estimates for supply and demand have also improved slightly. In the service industry, forecasts are negative in the short run at least, while the previously negative forecasts for the current state of businesses is improving slightly. Forecasts in retail show slight improvement, as well, especially in the short run. Finally, in the construction industry there is a sharp decline that also reflects in high unemployment figures in the sector.

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Greek Economy on Downward Slope in May, Despite Slight Improvement in Some Sectors

The Greek economy went again on a downward slope in May, according to a survey by the Foundation for Economic & industrial Research (IOBE). The economy index fell to 91.4 points, compared to 92.7 points in April. The new, negative development is the result of deterioration of business expectations, especially in construction and services, and a decline in consumer trust. There was no cash inflow in the Greek market in May. Instead there was internal borrowing on the part of the Greek government and delay of repayment of state debts to suppliers. Thereby, the Greek market faced a serious liquidity problem. At the same time, the climate of uncertainty created by the stalling in negotiations between Athens and international creditors has put the lid on expectations. Businesses and individuals are in a continuous state of waiting  to assess the new situation arising from a possible short-term or long-term agreement. Specifically, regarding consumer trust, projections for the next twelve months are that the economic situation and unemployment will get worse, while the intention for more savings in the bank has improved slightly. In manufacturing, projections show growth in production, while estimates for supply and demand have also improved slightly. In the service industry, forecasts are negative in the short run at least, while the previously negative forecasts for the current state of businesses is improving slightly. Forecasts in retail show slight improvement, as well, especially in the short run. Finally, in the construction industry there is a sharp decline that also reflects in high unemployment figures in the sector.

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German Media: The Last Offer to Greece

German media today are mainly focusing on the meeting between German Chancellor Angela Merkel, French President Francois Hollande, ECB President Mario Draghi, European Commission President Jean-Claude Juncker and IMF director Christine Lagarde, in Berlin. The German newspapers Die Welt, Die Zeit and Handelsblatt published articles entitled “A last offer to Greece, while Frankfurter Allgemeine’s article was entitled “Merkel concluded the last chance evening summit” and Suddeutsche Zeitung notes that yesterday’s meeting was “A final proposal.” According to Die Welt the meeting was intended to make a final offer to the Greeks, based strictly on the basis of the current program.” Indeed, according to the German newspaper, Athens made efforts to approach its creditors. Greek Prime Minister Alexis Tsipras hinted that he is ready to discuss raising the retirement age and making pension cuts. However, the final proposal has not yet been made. Frankfurter Allgemeine noted that the German government representative Steffen Seibert pointed out that the five officials agreed to seek a solution, but remain in close contact with the Greek government. Furthermore, Suddeutsche Zeitung reported that many believe the five officials’ discussion in Berlin, which lasted about three hours, is the prelude to a decision on Greece’s future in the Eurozone. During the summit held in Berlin, Greece’s creditors attempted to reach a final compromise, noted Die Zeit. However, the results of this meeting have not yet been announced. The Greek debt issue is now entering its last phase, noted Handelsblatt, explaining that on Friday, Athens needs to pay a 300 million euro installment. The country’s international creditors noted that the Greek government should accept a compromise package, but they have not managed to reach an agreement, the newspaper added. Finally, Der Spiegel reported that Greece’s creditors held an extraordinary meeting in Berlin in order to determine their next steps, in the absence of Greek Prime Minister Alexis Tsipras. The institutions are planning a last compromise proposal for Athens, noted the article.

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New Democracy Lashes Out at Government on its Negotiation Policy

Main opposition New Democracy (ND) spokesman Costas Karagounis on Tuesday lashed out at the Greek government on its negotiation policy. More specifically, he accused the government of having admitted that “the so-called proud negotiation has ended up in an ultimatum.” “Until last week, Mr. Tsipras was assuring us that the text of the agreement was being finalized,” while “today he says that an agreement has not been reached yet and he has just submitted his own draft,” Karagounis noted. He also referred to SYRIZA members’ statements on the possibility of early elections, elections that Greece cannot withstand. “What are they going to ask for? A mandate to drive the country into the rocks? Or an apology for the lies they have said?” Karagounis wondered. (source: ana-mpa)

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U.S. Senator Menendez Opposes Ambassador Koenig’s Statement on Cyprus

U.S. Senator Bob Menendez issued a statement expressing strong opposition to comments made by U.S. Ambassador to Cyprus John Koenig on Wednesday at the University of Cyprus where he said that he did not regard the Cyprus problem as a problem of invasion and occupation. “Cyprus is divided today because Turkey invaded and occupied the island over 40 years ago,” says the statement by Senator Menendez, adding that it is an undisputed historical fact and the violation of Cypriot sovereignty is at its core most certainly a problem of invasion and occupation. “That is why I strongly oppose the comments of U.S. Ambassador Koenig on this difficult topic for the Greek Cypriot community and its leadership who are striving to achieve a peaceful and meaningful resolution to this conflict,” he points out. The Ambassador’s remarks, he adds, only complicate that effort to produce a lasting peace for all Cypriots and does not reflect U.S. policy or views. “Cyprus and the Eastern Mediterranean region is poised for tremendous economic growth and opportunity, and these comments create additional challenges at a hopeful time that are unnecessary and regrettable,” concludes the statement. Cyprus has been divided since the 1974 Turkish invasion. A new round of UN-backed talks resumed last month with the aim to reunite the island under a federal roof. (Source: CNA)

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Creditors Finalize Text of Bailout Agreement for Greece

Greece’s international creditors are finalizing the text of a bailout agreement that they will present to Greece, according to a Wall Street Journal report. Top officials from European institutions and the International Monetary Fund have sent a draft of the economic reforms list Greece needs to implement in order to unlock further financial aid to the cash-strapped Greek government, according to the report, citing officials close to the talks. German Chancellor Angela Merkel, French President Francois Hollande, European Central Bank President Mario Draghi, European Commission President Jean-Claude Juncker and International Monetary Fund Managing Director Christine Lagarde met on Monday evening in Berlin to hammer out the details of the proposal. Their meeting lasted until after midnight on Tuesday. The proposal will end the stalemate in talks that has lasted almost four months, leaving Greece out of cash and creditors out of patience. With its state coffers almost empty, Greece is on the brink of default to the IMF as it has a total of 1.6 billion euros due in loan repayments until the end of June. Also, June 30 marks the end of Greece’s bailout extension. If Greece does not accept the deal, it faces the risk of default and subsequent bankruptcy, something that might lead the country out of the euro zone. Several hard leftists within the SYRIZA-ANEL coalition government are adamant that they would not vote for the deal in parliament if it contains any austerity measures that go against pre-election pledges. However, European officials familiar with the talks say the Greek government is showing more flexibility in private discussions with lenders on pensions and other difficult issues, signaling it knows it will have to make hard concessions. At the same time, Juncker said in a German newspaper interview published on Monday that a Greek exit from the euro “is not an option” in part because it would damage international faith in the currency, the Wall Street Journal report says. “There is no alternative to reaching an agreement with Athens,” said Martin Selmayr, Juncker’s chief of staff, “because the alternative would be even worse than to make compromises now,” he added.

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Police End Hostage Situation in Greek Ship Traveling to Piraeus

The passengers on the Greek ship KRITI II witnessed a terrifying experience when a women was held hostage by a man in the ship’s café area. According to the passengers, the man suddenly started yelling and causing problems. Before anyone had time to react, the man broke a glass or a bottle that was placed near him and grabbed a woman who had the misfortune of sleeping beside him. Her husband did not have any time to react, but then he tried to persuade the attacker to let go of his 28-year-old wife. As of six in the morning when the ship was approaching Piraeus port, KRITI II was accompanied by a Hellenic coast guard vessel. The other passengers were quickly removed from the area. The ship arrived at the port just a few minutes before 7 am and Greek police officers immediately went on board in order to clear the situation. The police managed to immobilize and handcuff the attacker. He was then transferred to the central Port Authority. According to witnesses, the young man who claimed to be in a rehabilitation program was delirious and police had to take blood samples to run tests. Fortunately the woman sustained only light injury to her neck. It was not a life-threatening wound, however, she was taken to a local hospital for purely precautionary reasons. The people who witnessed the incident stated that the man was beside himself, while the crew noted that his behavior indicated that he had been under the influence of alcohol or maybe drugs.

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