IMF debt will not be paid on time, says Greek minister

Athens will be unable to repay the IMF on schedule next month, a Greek government minister says, reiterating previous warnings by officials during ...

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Radical Greek Coalition Wants to Stops IMF Payment

Crude oil futures edged lower toward $65 a barrel as the dollar strengthened on Monday, with a public holiday in the United States and much of ...

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Greek Govt Backs Down on Red Lines to Secure Deal

The Greek government has been forced to back down on several of its pre-election campaign pledges as negotiations continue at a slow pace while state coffers are emptying at an alarming rate. The so-called “Thessaloniki program” that Prime Minister Alexis Tsipras had announced in September 2014 and boosted his popularity is now subject to negotiation with creditors while many items have been abandoned altogether. In other words, the “red lines” the government has set in negotiations are already partially crossed. The impasse in deliberations over the reforms that need to be implemented in order to secure further financial aid for Greece has forced Tsipras to push back several of his pledges. Government spokesperson Gavriil Sakellaridis indirectly admitted that several of the items of the Thessaloniki program cannot be implemented saying that they will be pushed back to a four-year timeframe. More specifically, the pledge for a 751-euro minimum wage has been pushed back for 2016. Accordingly, this means that the unemployment benefits raise also promised is pushed back as well. The abolition of the single property tax (ENFIA) will remain, for 2015 at least. The bill will apply, albeit with a different name. The bonus Christmas pension (the so-called 13th pension) also goes to the back burner. The pledge that incomes up to 12,000 euros will not be taxed is also “forgotten.” The 2-billion-euro program to battle the “humanitarian crisis” has been reduced to a bill reinforcing these actions by 200-300 million euros. The plan to form a program that would fund 300,000 job positions was also a promise that would never be kept. The pledge to stop privatizations does not seem to materialize either as the government is already negotiating partial sale of the Piraeus Port. Finally, and most importantly, the pledge to get a generous debt haircut from creditors was forgotten as early as February 20, when the bailout extension was signed. According to analysts, the mistake Tsipras made when he announced the Thessaloniki program was that he was counting on the 11 billion euros available in the Hellenic Financial Stability Fund (HFSF). At the time, Tsipras believed that he could use these funds in order to implement his social program. However, the purpose of HFSF is to secure the country’s banking system and its funds cannot be used for other purposes. Thereby, after the SYRIZA government signed the February 20 deal with creditors, the 11 billion euros of the HFSF were transferred to a Luxemburg account after a Eurogroup decision. Also, according to analysts, the Greek PM was counting on sizeable revenues from tax evaders. However, the new government lacks the expertise and ability to create tax collection mechanisms. Thereby the revenues expected were not as high as expected.

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Greece crisis continues to hang over the market – BBH

“The immediate problem is that Greece owes the IMF about 1.6 bln euros spread out over four payments in June. Recall that the last payment to the ...

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Finance Ministry lines up changes to car taxation

The Finance Ministry has announced plans to change the way that cars are taxed in Greece, creating what it says will be a “fairer” system.

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Sakellaridis hopeful of deal with lenders, dismisses talk of capital controls

Greece has the responsibility to pay its obligations but needs a deal with lenders as quickly as possible because of its cash crunch, the government spokesman said on Monday in response to questions about whether it can make a debt payment on June 5.

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The Greek Crisis Needs Mediation Now

The latest meeting earlier in May of the eurozone's finance ministers in Brussels, anticipated by an increasingly frustrated audience worldwide, routinely marked five years of interminable talks getting nowhere since Friday April 13, 2010. Reflected, too, in the fruitless discussions the Greek Prime Minister had with Angela Merkel and François Hollande last week in Riga, Latvia. All three officials in the end merely waving "Good Night" when anxiously asked to comment on what progress was made during their two-hour talks. A classic disappointment all around. From the moment the EU began implementing an unorthodox strict-austerity adjustment program for Greece after "securing" a total financial aid package of €240b from the IMF, the European Commission and the ECB. Both sides have since displayed a remarkable lack of professionalism: ignoring internationally protected human rights standards first; and, second, turning also a blind eye to the grave financial and economic damage their poorly researched program, enforced by Greece's creditors, was bound to entail. Not to mention the inevitable opportunity costs created in the process. As it happens, the enjoyment of fundamental human rights -- and more particularly the economic, social and cultural rights of the Greek people -- has been undermined as a result by violating existing obligations protected primarily by the Constitution of Greece, Article 2(1) postulating that "respect and protection of the value of the human being constitutes the primary obligation of the state". Also abusing, however, standards set out in core international human rights treaties. Including the Covenant of Economic, Social and Cultural Rights that characteristically binds international financial institutions with a mandatory obligation. Namely, to ensure that their policies and activities respect established human rights standards by not adopting or promoting policies, or engage in practices, that put at risk the enjoyment of human rights. Nothing could have been clearer for the trio of lenders here to understand -- from day one. Nonetheless, Europe's "blind austerity" program went ahead defiantly adopting successive deep spending cuts, drastically eliminating jobs in the public sector, coupled with consecutively compulsive increases in direct and indirect taxation -- prematurely emphasizing structural changes such as privatizations and labor market reforms with arbitrary cuts across the board of salaries and pensions. This bouquet of heavy even aggressive compulsion has directly contributed to a steadily collapsing aggregate effective demand in the Greek economy - a growing insufficiency of which has been for years pushing the country deeper into merciless recession asymptotically converging at present to a 50 percent drop of GNP. This anomaly is currently reflected in exponential rises in unemployment in Greece, especially of younger persons, along with steadily rising homelessness and spreading poverty now threatening a humanitarian crisis already compromising the social cohesion of a member-state of the European Union. So, one wonders, how is it possible that contemporary Europe should also remain indifferent even at the point where thousands of ordinary tax-paying citizens in the country, since that fateful day in April 2010, are known to have committed suicide in utter desperation? The suggestion, recently put forward by Paul Krugman in the International New York Times, that "we live in an age of unacknowledged errors", seems instructive here. Considering that a likely profitable alternative policy, ceremoniously announced by the European Commission, back in 2011, was in the end quietly cast aside in favor of the controversial "bailout" adjustment program in question. Far more reasonable, the idea originally was to launch in lieu a series of mainly labor-intensive "pilot projects." Jointly promoted with the Greek government, but also designed to attract worldwide interest to invest in the infra-structure of the country. Correctly aiming to revive confidence, step by step, and gradually normalizing the financial and economic landscape in Greece: indeed a relatively small country easier to put back on track. Driven, however, by the demonstrably poor direction subsequently chosen instead, the Eurogroup finance ministers, typically destitute of vision again in Brussels this month, were still pushing headlong for more structural reforms in Greece. With a view to modernizing public administration, liberalizing trade, "opening-up" regulated professions, further ensuring greater labor market flexibility, and so on. All these, needless to add, being desirable initiatives no doubt. But which, of course, would make sense only in different circumstances: more responsibly aiming to help Greece emerge faster from the crisis. What should have already happened, first and foremost, precisely in order for the country to become capable to forge ahead with these and more reforms, was the scaling-down in real terms (though also as a moral imperative) of the country's bulging nearly unserviceable debt today. Adjusted downwards to reflect the massive damage incurred in financial, economic and human terms from the very day the so-called adjustment program for Greece emerged in April 2010. Such a key rectification would naturally have established the remaining sovereign debt of Greece as €150b. A pivotal contribution, indeed, bound to create unparalleled enthusiasm in Greece for widespread reform. In remarkable contrast to today's obsessive stalemate with only bits and pieces of occasional progress made here and there. This figure is consistent with privately conducted professional estimates so far -- as, for example, from the Julius Bar and Mitsubishi banks -- in Europe and elsewhere. Significantly down, too, from the €350b level inaccurately presumed to be the case today. And so, why not consider bringing this whole festering situation before a specially-convened European conference or synod to settle by arbitration this destabilizing issue? The United States is eminently poised today to offer its services and goodwill for mediation -- highly appropriate at this stage -- following the US Treasury Department's intensified and widely acknowledged efforts in recent months to dampen hostility and unnecessary confrontation between the two sides. Greece needs an honest break to get ahead: by completing ex post all known far-reaching structural reforms required to help transform its economy -- languishing in disarray for too long -- into an engine of progress. Securing in the end sustained economic growth serving best the rightful interests of the Greek people. A just and realistic settlement will also help restore the reputation of Greece's creditors. -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

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