How the world sees Greece
Opah! Greek Carnival in San Juan Capistrano Patch.com Attendees come cloaked in full Mardi Gras garb and enjoy a night filled with Greek everything: salads, fruits, traditional dishes, a band and dancing, homemade pastries and other activities that range from a casino night to face-painting. Prizes will ... |
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You have to be one of Vince Cable's 'austerity jihadists' to believe you can cut your way out of a slump
Vince Cable is shocked – shocked! – to find that he's been sharing a coalition with Tories waging an "ideological jihad" on public services. As if to back him up, Liam Fox yesterday obligingly decried Tony Blair's "great socialist coup", and called for a £345bn cut in public spending, as well as a complete suspension of capital gains tax (this last measure doesn't actually feature in General Pinochet's Little Book of Counter-Revolution – but from tiny acorns and all that).
Fox fits snugly into his former cabinet colleague's pigeonhole. Yet if the business secretary really is on the hunt for austerity jihadists in the government, he'd better pack a giant butterfly net. If one definition of an ideologue is one who clings on to a strategy long after it's been proven to be a failure, then on deficit reduction David Cameron is as swivel-eyed as they come. Last week, the prime minister claimed "signs that our plan is beginning to work", but next Wednesday will see George Osborne deliver yet another budget in which growth forecasts are lowered, borrowing projections raised and even more spending cuts laid out.
This will be completely in line with every other budget and mini-budget the chancellor has delivered since he first laid out Plan A. To revisit those debut budget predictions from June 2010 is as tantalising as a glimpse of heaven to a fallen sinner. Back then, Whitehall assumed that Britain would now be amid a roaring recovery, with GDP growing 2.8% in 2012 and 2.9% this year. Instead, national income shrank in the last three months of last year and we will be lucky to see a 1% increase this year. Back then, it was assumed that unemployment would now be drifting downwards, businesses would be investing like billy-o, while public debt would be about to peak before heading south and the government would be on its way to the polls in 2015, the work of fiscal consolidation done.
Clearly, none of those things are going to happen, which is partly why Tory backbenchers are now so restive. But you would have to be one of the austerity jihadists to believe that you could cut your way out of a slump. The entire modern history of expansionary fiscal contraction, as coalition ministers used to call it, is that it almost never works.
Instead, severe austerity tends to turn recessions into depressions, consign millions to the dole or under-employment and lead to frightening political turbulence.
The most famous episode of austerity was during the interwar years, as Germany, Britain, France and Japan all fought to stay on the Gold Standard even amid the Great Depression. The deflationary impact of keeping their currencies pegged to gold, along with the austerity policies they followed to do so, was disastrous.
In Britain, unemployment jumped from 10.4% in 1929 to 22.1% by early 1932, even while government debt surged. In Germany, the Social Democrats stupidly clung to the orthodoxy of austerity, pushing joblessness up to to 30% by 1932, and opening the door to the Nazis.
In Japan, the Showa Depression saw household incomes more than halve within two years between 1929 and 1931. Tokyo cut spending by nearly 20%, with the military bearing the brunt of the privations. The result was a wave of assasinations of government ministers and bankers and attempted coups. As the political scientist Mark Blyth says in his new book, Austerity: "Austerity didn't just fail – it helped blow up the world. That's the definition of a very dangerous idea." And yet when Europe's crisis began in earnest in 2009, rightwing politicians across the continent adopted the line that the best governments could do was cut spending to encourage the private sector to spend. Two of the leading proponents of the argument, economists Alberto Alesina and Silvia Ardagna were invited to present their ideas to European economy and finance ministers.
Yet as Blyth points out, their counter-examples of successful austerity were nothing of the kind. Ireland's cuts from 1987-9? The economy piggy-backed on the Lawson boom in Britain and a global upswing. As for Australia, Alesina and Ardagna mysteriously ended their happy story just before the worst recession in its postwar history. Even now, austerity merchants scratch around for poster children. There's Latvia, whose cuts over the past few years have been described by IMF boss Christine Lagarde as "a success story … an inspiration for European leaders grappling with the euro crisis". Yet around one in 10 of the labour force have emigrated, a further 16% are unemployed and, on IMF estimates, the country will not get back to its pre-crisis trajectory for another decade.
When austerity fails to deliver economic recovery. its proponents fall back on exactly the kind of naked ideology attacked by Cable. Last week, I attended a meeting of Syriza Cambridge and heard the party's central committee member Stathis Kouvelakis describe how Greeks had been forced to accept the most painful austerity programme in recent European history. The parallels with Britain were striking. Where Athens lost its sovereignty to the IMF and Europe, the coalition claims it must placate financial markets. Where ordinary Greeks were branded as lazy and cosseted, Osborne and Iain Duncan Smith want to end the "culture of welfare dependency". And where in Greece, historic cuts were rolled out in the name of economic modernisation, here Cameron wants to whip us into a "global race".
If Cable thinks he has to fend off a few austerity jihadists, he should think again; he's in a government full of them.
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Holy Trinity Greek Orthodox Church in Westfield to host Babies Quilt-a-thon NJ.com Holy Trinity Greek Orthodox Church, Westfield, is preparing for the 20th annual Babies Quilt-a-thon to be held on Saturday, March 30, at the church hall, 250 Gallows Hill Road, Westfield, beginning at 9 a.m. This is truly a “community event" with ... |
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 Kathimerini | Greek economy shrank by 5.7% in 4th quarter last year, by 6.4% for whole of 2012 Kathimerini The Greek economy contracted by 5.7 percent in the final quarter of 2012 compared to a year earlier, according to provisional data released by the Hellenic Statistical Authority (ELSTAT) on Monday. It was the smallest contraction for the four quarters ... Greek GDP Shrank in Fourth Quarter as Investment Falls TABLE-Greek Q4 2012 GDP slump revised to -5.7 pct y/y Greek Economy Contracted Less than Estimated |
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Yannis Stournaras insists Greece is over the worst but says Europe needs to show beleaguered country more solidarity
Greece's finance minister Yannis Stournaras is a long-distance swimmer who fixates on goals. As monitors from the EU, ECB and IMF continued on Monday to scour the debt-choked nation's books – and the president of Cyprus beseeched Athens for help in propping up the island's banks – the macro-economist was in upbeat mood dismissing talk of rows and ructions, preferring instead to focus on the target ahead.
"It's like a marathon, the last kilometres are the most difficult because you are so tired," said Stournaras, insisting that Greece is close to overcoming its worst crisis in modern times.
There may still be protests – even violence at times – but the country that only last summer had been almost written off as a euro member state was finally about to turn the corner.
"To a large extent Greece is out of the woods. No one talks about Grexit now – even economists who advocated Grexit have apologised for it," the Oxford-educated technocrat, who relishes nothing more than a three-hour sea-race against himself, told the Guardian in an interview.
"As far as fiscal adjustment is concerned we have covered two thirds of the goal. As far as competitiveness is concerned we have covered three quarters of the distance to the goal," he enthused. "Greece has paid a very high price in terms of austerity … But I think the worse is behind us and we can look at the future with hope."
Stournaras, who took over the post of finance minister when prime minister Antonis Samaras' tripartite coalition government assumed power last June, accepts he is an optimist by nature. Seated behind his impeccably neat desk, the Greek parliament shimmering on the other side of Syntagma Square in the early spring sun, the finance minister is confident that the euro zone has also learned by its mistakes.
Cyprus, whose own finances are hanging by a thread thanks to the losses it sustained when Greece restructured its debt, will get by just as Athens has, even if it is hard. "Of course Cyprus poses a systemic threat," he says of the impact of a possible default by Nicosia on the 17-member eurozone. "And being so close [economically and politically to the Greek Cypriots] we have to be careful and vigilant. But now the eurozone is experienced in handling crises, I am not afraid of having a problem with Cyprus."
For a man who measures his words carefully, Stournaras unsurprisingly refuses to be drawn on whether Greece would ever allow Nicosia to participate in its own €50bn bank recapitalisation scheme.
In his first official trip abroad on Monday, the island's newly elected president, Nicos Anastasiades, is believed to have urged Athens to hand over €2bn in aid as part of the bid to help rescue Nicosia. After fighting so long and hard to win the bailout funds in the first place it is difficult to imagine austerity-whipped Greece giving up any money easily. "Its very delicate," says Stournaras.
But amid all the talk of bank depositors on the island being forced to accept losses as the price of a bailout, he quickly adds that whatever the solution, "we should avoid [one] that might destabilise Cyprus."
Stournaras does not deny that with much of Athens' two-year fiscal consolidation programme frontloaded in terms of cuts and tax increases, this year may well be the most trying yet in Greece's gargantuan struggle to defeat a debt load projected to reach a staggering 185% of GDP by the end of 2013. He recognises that the very notion of a "haircut" might also be unfashionable not least in pre-electoral Berlin.
But, at some point, action will need to be taken to slay the monster that lies at the core of the country's economic woes.
"What I expect from Europe is more solidarity. We need more investment, more financing from the European Investment Bank," he avers. "And I want to remind the euro group [of single currency finance ministers] of their decision in November 2012 that when Greece enters into a primary surplus our peers will take all the necessary action to bring down interest rates on the loans so that we are able to bring down our debt level."
Reducing interest rates, he argues, will be less painful and, by implication, less politically costly for creditors who have already earmarked an unprecedented €240bn in rescue loans for the country that triggered the euro zone crisis, revealing the extent of its deficit in late 2009.
"We started with a primary deficit of 10% per of GDP and budget deficit of 15.9% and loss of competitiveness as a result of entering the euro of more than 30%," he says reeling off the figures.
"Greek society has shown a great deal of fortitude and patience … we have implemented structural reforms. We have opened up more than 50 closed professions."
There are many, however, who do not share Stournaras' optimism and even more who find it difficult to believe that Samaras' fragile conservative-lead coalition will survive beyond the summer.
Given record rates of unemployment – at 26.7% the highest in the EU – and a recession that began in 2007 and has begun to bear all the hallmarks of a great depression, analysts say it is a wonder that the uneasy alliance of conservatives, social democrats and ex-Eurocommunists has survived at all.
As the spring sets in and the rains subside, there are fears that protestors may return to the streets as they did on Sunday evening once again clashing with riot police beneath Stournaras' office in Syntagma Square.
The government's inability to rake in revenues as a result of persistent tax avoidance has added to concerns that new measures will have to be taken to make up for budget shortfalls. The spectre of mass public sector layoffs also hangs like the sword of Damocles.
With the country at the edge of bankruptcy, Stournaras, a social democrat, says ideological differences no longer matter. He cannot say when Greece will return to international capital markets, the pre-eminent sign of the crisis' denouement. Nor can he say when tax evasion will be dealt with, once and for all, although academic studies have shown conclusively that it is the rich who partake of it most.
What he can say with certainty, however, is that Greece will be lead out of its crisis by a new generation that is "well-educated, empowered, emotionally intelligent".
"I constantly tell the prime minister that the future lies in our hands … we just need to overturn the tradition of lack of meritocracy," he insists.
Greece's future will also depend on Europe. "It will depend on [its] architecture," he says. "We need a more federal Europe, closer unity, more cohesion. The bailouts of Greece, Portugal and Ireland are an example of the important changes to that architecture."
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 MyrtleBeachOnline.com | Cash-strapped Greece will sell government buildings USA TODAY ATHENS, Greece (AP) — Greece's cash-strapped government detailed Monday its plans to sell 28 state-owned buildings on long-term lease, including tax offices, ministry buildings, and the main police headquarters in Athens. A government privatization ... UPDATE 1-Suffering Greece's economy shrank again at end of last year Greek economy shrinks 5.7 percent in 4th quarter Crisis: Greece; economy shrank by 6.4% for whole of 2012 |
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Cash-strapped Greece puts govt buildings on block Houston Chronicle Greece is under pressure to speed up its privatization program by its rescue lenders, the other eurozone countries and the International Monetary Fund, who have been providing bailout funds since 2010 that are set to total €240 billion ($312 billion). |
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Investors shrug off Italian downgrade and disappointing Chinese data to push markets yet higher
Leading shares closed above 6500 for the first time for more than five years, as investors took comfort from Friday's positive US jobs figures and shrugged off an Italian downgraded and poor Chinese data.
The FTSE 100 finished 20.05 points higher at 6503.63, its best level since 12 December 2007, but with little corporate news trading was fairly subdued. Declines in Greek, Italian and Portuguese GDP failed to cause ructions, nor did news that Chinese inflation came in at a 10 month high and factory output and consumer spending were weaker than forecast. Even the continuing fall in the pound was seemingly brushed aside. Chris Beauchamp, market analyst at IG, said:
After all the excitement of last week, with the Dow hitting new all-time highs and then US job numbers, a degree of calm has descended on global markets. As both Europe and the US are quiet on the economic front, attention remains focused on Chinese data that came out over the weekend. Now it is apparent that inflation is running at a higher level than anticipated, Beijing will have its work cut out to stimulate the economy while simultaneously keeping a lid on prices.
Oddly, it does not feel as if this is the calm before a storm, with the general impression being of a market that is girding itself for the next push higher.
There were some notable fallers, however. Sage lost 7.5p to 341.9p after analysts at Bank of America Merrill Lynch cut their rating on the accountancy softwear specialist. Merrill moved from neutral to underperform and cut its price target from 330p to 320p.
The group's price has been buoyed by share buybacks, but on a trading level Merrill said it faced stiff competition from rival SAP, and its move into cloud computing was by no means a guaranteed success. Merrill said:
Going forward the key driver for the stock will be the company's ability to launch and gain traction with its new Cloud solutions in key geographies. This, in our view, is a slow process, and the market should remain sceptical over the next few quarters given that historically very few companies have managed to transform themselves from onpremise vendors to credible cloud players.
Matt Basi, head of UK sales trading at CMC Markets, said:
Of the 28 analysts covering [Sage] only 4 recommend buying shares, whilst the average price target of 310p falls short of current levels.
Heading in the other direction following a research note was SABMiller, lifted 47p to £34.52 after RBC raised its target price from £28 to £35.
With China a key consumer of commodities, mining shares came under pressure following the latest data, with Kazakhmys - soon to depart the FTSE 100 - closing 12p lower at 520.5p.
But Antofagasta added 10.5p to £18.61 after analysts at Societe Generale moved from sell to buy and lifted their price target from 970p to £10.80. Ahead of the mining group's results on Tuesday, the analysts said the company had scope for a special dividend this year, and its recent weakness now made its valuation attractive. SocGen also said investment plans at Kazakhmys make it a riskier prospect for investors, who could switch to Antofagasta if they wanted exposure to the copper sector.
Banks are also unwanted, not helped by Friday's downgrade of Italy by Fitch, with Royal Bank of Scotland down 4.9p to 301.3p and Barclays off 7.1p to 311.5p. Lloyds Banking Group, which announced after the market closed a placing of a 20% stake in St James's Place, lost 0.07p to 50p.
Among the midcaps, online grocer Ocado added 3.5p to 138p. Supermarket group Morrisons, which has in the past been tipped as a possible bidder for Ocado since it has fallen behind in the online world, is due to unveil its new strategy this week. Morrisons closed 5.5p to 268.5p.
Icap dropped 12.4p to 330.2p as UBS moved from neutral to sell:
We are cautious on the interdealer brokers as we expect structural pressures on banks and thus on intermediaries to remain elevated. (1) over the counter clearing goes live in the US from March and in Europe in the second quarter of 2014; this will increase the cost of trading swaps materially and also lead to volumes moving to futures (2) European banks still have 5%-10% deleveraging to do (3) consolidation in fixed income, currency and commodities is set to continue.
One of the day's biggest fallers was Anite, which supplies handset testing software to the likes of Samsung and Ericsson and technology to the travel sector.
Its shares lost 25p to 130p, or 16%, after it warned it would need a strong performance from its handset division in the final quarter to meet full year expectations. It said third quarter sales reflected a quiet seasonal period, especially compared to last year when its customers were investing in 4G systems.
Revenues and profits for the first nine months of the year were broadly in line with expectations, but order intake remained below last year's level.
Elsewhere gaming group 888 added 8.25p to 166.75p as it made further moves ahead of the opening up of the US market.
It is forming a joint venture with investment group Avenue Capital to launch and operating an online gaming business, once Federal or state legislation is finalised. The venture will be known as All American Poker Network, and 888 chief executive Brian Mattingley said:
We now have a significant financial partner for our leading B2C product - the final piece in the jigsaw, completing our US online strategy.
The company already has partnerships with Caesars Interactive Entertainment and gaming machine manufacturer WMS. It has now also agreed a deal with Las Vegas operator Treasure Island to launch online poker in Nevada, again once a licence is in place.
Elsewhere Ladbrokes climbed 14.6p to 239.8p following its move to boost its own online presence by signing a software deal with Playtech, up 18.5p to 570p. At the start of this month William Hill announced plans to buy out Playtech's stake in their joint venture for £424m.
Soco International, the oil firm with its key project in Vietnam, rose 6.3p to 383.3p after it reported a 181% rise in full year profits to $445.6m and said it expected to start making dividend payments to shareholders this year.
Finally Bahamas Petroleum jumped 26% to 6p after the government of the islands deferred a referendum on the future of oil exploration until the size of any reserves had been determined. The company said the move would help its talks with potential partners about taking a stake in its developments, and allow it to proceed with exploratory drilling.
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 The Voice of Russia | Greece puts ministry buildings on sale The Voice of Russia A sale and lease ad was posted on the Privatization Agency website as Greece is to gain 2.6 bln from privatization to meet its “troika” obligations. The country also plans to sell itsstate-run gas company DEPA, a number of regional ports, airports and ... |
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Intrade is dead. And we come to mourn it.
It was, of course, the Ireland-based betting market that was most famous for letting people wager on news events—the outcome of the presidential race most prominently, but also any number of geopolitical events, like whether Greece might leave the euro or Israel attack Iran.
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 Kathimerini | Half of Greek companies fail to pay employees on time, says Labor Inspectorate Kathimerini Half of Greek companies fail to pay their employees on time and one in three workers is uninsured, a Labor Inspectorate official told Skai TV on Monday. “As we speak, employees are owed a total of 2.5 million euros in Christmas bonuses,” said Michalis ... |
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Greece appoints new privatisation chief NEWS.com.au GREECE has appointed its third privatisation chief in less than a year as it struggles to speed up delayed state asset sales to meet bailout goals. The head of Greece's main water provider EYDAP, Stelios Stavridis, was brought in to spearhead a lagging ... |
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 Kathimerini | Greece 'directly' affected by Cyprus crisis: PM Economic Times ATHENS: Economic problems in Cyprus "directly" affect struggling Greece and the traditional allies will coordinate policies ahead of a European eurozone summit later this week, Greek Prime Minister Antonis Samaras said on Monday. "It is our common ... Cyprus seeks aid from Greece (And, no, April Fool's Day is still weeks away) Cyprus Wants Greece To Pay For Bailout Cyprus mulls tax hike, Athens plays down talk of help for banks |
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 EU News | Stimulating business in Greece as signs for optimism emerge – 138 businesses ... EU News To support SMEs and the restart of the real economy in Greece, European Commission Vice President Antonio Tajani travels today with Daniel Calleja Crespo, Director-General of DG Enterprise and SME Envoy to Athens, accompanied by representatives of ... Boosting business action in Greece |
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