How the world sees Greece
Greece holds out hope for 2013 budget target MiamiHerald.com ATHENS, Greece -- Greece's finance minister pledged Tuesday to stick with unpopular austerity measures and correct years of profligate state spending, in the hope of securing a budget surplus this year that could pave the way for a new debt reduction deal. |
 |
| READ THE ORIGINAL POST AT www.miamiherald.com |
|
| READ THE ORIGINAL POST AT www.forbes.com |
 Washington Post | Greek salad days Washington Post The Greek salad is a pretty simple affair that represents Mediterranean cuisine at its best. Healthful, refreshing and balanced, every bite of what the Greeks call “horiatiki salata” invites a sensation — be it the saltiness of the olives and feta ... |
|
| READ THE ORIGINAL POST AT www.washingtonpost.com |
 euronews | Rocky road to recovery as Greece concludes latest bailout deal euronews The Troika agreed to grant the 2.8 billion euros loan on the condition that Athens cuts thousands of civil service jobs. Greece was able to convince international creditors that important progress had been made on economic reforms. Greek Finance ... Greece wants primary surplus 'at all costs' to cut debt: minister Stournaras Steers Toward Primary Surplus Greece has completed most of its fiscal adjustment, says FM |
|
| READ THE ORIGINAL POST AT www.euronews.com |
All because two famous economists whose work is used the world over to justify austerity cuts just got their sums wrong
That's the question millions will be asking when they see the new paper by my friends at the University of Massachusetts, Thomas Herndon, Michael Ash, and Robert Pollin. Herndon, Ash, and Pollin (HAP) corrected the spreadsheets of Carmen Reinhart and Ken Rogoff. They show the correct numbers tell a very different story about the relationship between debt and GDP growth than the one that Reinhart and Rogoff have been hawking.
Just to remind folks, Reinhart and Rogoff (R&R) are the authors of the widely acclaimed book on the history of financial crises, This Time is Different. They have also done several papers derived from this research, the main conclusion of which is that high ratios of debt to GDP lead to a long periods of slow growth. Their storyline is that 90% is a cut-off line, with countries with debt-to-GDP ratios above this level seeing markedly slower growth than countries that have debt-to-GDP ratios below this level. The moral is to make sure the debt-to-GDP ratio does not get above 90%.
There are all sorts of good reasons for questioning this logic. First, there is good reason for believing causation goes the other way. Countries are likely to have high debt-to-GDP ratios because they are having serious economic problems.
Second, as Josh Bivens and John Irons have pointed out, the story of the bad growth in high debt years in the United States is driven by the demobilization after the second world war. In other words, these were not bad economic times; the years of high debt in the United States had slow growth because millions of women opted to leave the paid labor force.
Third, the whole notion of public debt turns out to be ill-defined. Countries can sell off assets to pay down debts: would this avoid the R&R high debt twilight zone of slow growth? In fact, even the value of debt itself is not constant. Long-term debt issued in times of low interest rates will fall in value when interest rates rise. If there is a high debt twilight zone effect as R&R claim, then we can just buy back bonds at steep discounts and send our debt-to-GDP ratio plummeting.
But HAP tells us that we need not concern ourselves with any arguments this complicated. The basic R&R story was simply the result of them getting their own numbers wrong.
After being unable to reproduce R&R's results with publicly available data, HAP were able to get the spreadsheets (zip) that R&R had used for their calculations. It turns out that the initial results were driven by simple computational and transcription errors. The most important of these errors was excluding four years of growth data from New Zealand in which it was above the 90% debt-to-GDP threshold. When these four years are added in, the average growth rate in New Zealand for its high debt years was 2.6%, compared to the -7.6% that R&R had entered in their calculation.
Since R&R country-weight their data (each country's growth rate has the same weight), and there are only seven countries that cross into the high-debt region, correcting this one mistake alone adds 1.5 percentage points to the average growth rate for the high-debt countries. This eliminates most of the falloff in growth that R&R find from high debt levels. (HAP find several other important errors in the R&R paper, but the missing New Zealand years are the biggest part of the story.)
This is a big deal because politicians around the world have used this finding from R&R to justify austerity measures that have slowed growth and raised unemployment.
In the United States, many politicians have pointed to R&R's work as justification for deficit reduction even though the economy is far below full employment by any reasonable measure. In Europe, R&R's work and its derivatives have been used to justify austerity policies that have pushed the unemployment rate over 10% for the eurozone as a whole and above 20% in Greece and Spain. In other words, this is a mistake that has had enormous consequences.
In fairness, there has been other research that makes similar claims, including more recent work by Reinhardt and Rogoff. But it was the initial R&R papers that created the framework for most of the subsequent policy debate. And HAP has shown that the key finding that debt slows growth was driven overwhelmingly by the exclusion of four years of data from New Zealand.
If facts mattered in economic policy debates, this should be the cause for a major reassessment of the deficit reduction policies being pursued in the United States and elsewhere. It should also cause reporters to be a bit slower to accept such sweeping claims at face value.
• This article was first published on 16 April on the CEPR blog and is crossposted by the author's permission
     |
|
| READ THE ORIGINAL POST AT www.guardian.co.uk |
 Greek Reporter | Why Greece failed Open Democracy How different is Greece? The beginning of wisdom about the current Greek crisis is to recognize that it is fundamentally political, and that it has been long in the making. Greece's failure is the outcome of a long process during which populism ... Loverdos Kicks Off Pact For New Greece Former Pasok minister Loverdos launches new party |
|
| READ THE ORIGINAL POST AT www.opendemocracy.net |
European commission says scandal a case of food fraud after publishing results of EU-wide testing for horsemeat and bute
Europe's horsemeat scandal is "a matter of food fraud and not food safety", the European commission said after publishing the results of random tests which revealed that less than 5% of tested beef contained equine DNA. The unprecedented testing exercise costing €2.5m (£2.13m) was ordered in February across 27 EU member states after consumer scares about horsemeat in processed meat and ready meals including traces found in a batch of Findus frozen lasagne. Inspectors who carried out 4,144 DNA checks and 3,115 for the banned horse drug known as bute – phenylbutazone – reported that only 193 samples contained positive traces of horsemeat, while 19 – some 0.5% – were contaminated with bute.
The UK got a clean bill of health, as did Ireland, where the meat contamination crisis was first identified in January. In the UK, 150 samples of pre-packed beef products and 34 that were not pre-packed were submitted for the survey by the Food Standards Agency, but none were found to contain horse DNA at or above the 1% threshold for reporting. The batch of tests show that Ireland 47 pre-packed and three non pre-packed samples of beef showed no signs of horsemeat.
The worst offender was France, which had more cases of horsemeat in beef products than any other EU country – more than one in every eight samples testing positive (353 samples of which 47 had horsemeat traces). In Greece, 36 out of 288 samples contained some horsemeat, compared with 29 out 878 processed beef samples in Germany. And Italy had 27 positive test results of 361 beef products.
Only last week the Netherlands recalled 50,000 tonnes of meat sold across Europe as beef over a two-year period which may contain horsemeat. A small number of UK businesses may have received products from a trading company selling the meat.
Member states were also asked to provide information on bute testing being carried out at slaughterhouses. During the relevant period (11 February to 4 April 2013) 836 carcasses were tested for bute in the UK, of which 14 were positive and were prevented from entering the food chain. Phenylbutazone is an anti-inflammatory drug used as a painkiller in veterinary medicine for pets and horses that have been explicitly excluded from the food chain.
Tonio Borg, the EC commissioner for health and consumers, said: "Today's findings have confirmed that this is a matter of food fraud and not of food safety. Restoring the trust and confidence of European consumers and trading partners in our food chain following this fraudulent labelling scandal is now of vital importance for the European economy given that the food sector is the largest single economic sector in the EU."
The commission sought to reassure consumers by referring to a joint statement from the European Food Safety Authority (EFSA) and the European Medicines Agency (EMA) this month which concluded that the risks associated to bute were of "low concern for consumers due to the low likelihood of exposure and the overall low likelihood of toxic effects and that, on a given day, the probability of a consumer being both susceptible to developing aplastic anaemia and being exposed to phenylbutazone was estimated to range approximately from 2 in a trillion to 1 in 100 million."
European commission officials and experts from the different states will meet on Friday to discuss proposals to strengthen official supply controls as well as introducing fines on food fraudsters.
And on Wednesday the board of the FSA will decide whether to launch a review into its own response to the food scare, which would be parallel to a wide-ranging government inquiry announced earlier this week.
Amid an ongoing slump in consumer confidence in beef products, Joanna Swabe, EU director of humane society international, warned that the EC tests were incomplete and putting public health at risk: "Testing for just one of the many drugs banned for use in animals that enter the food chain falls short of a precautionary and thorough approach to addressing fraud and ensuring food safety standards are met. It isn't just phenylbutazone in horsemeat that poses a potential risk to human health. The European commission has failed to seek tests for a whole host of other banned veterinary drugs, which are commonly administered to horses, and is thereby failing the public by allowing meat from these animals to be sold in the European Union in contravention of its own food safety and consumer protection regulations."
| |
|
| READ THE ORIGINAL POST AT www.guardian.co.uk |
Athina Onassis sells Skorpios, where grandfather married Jackie Kennedy, as Greek economic crisis leads to soaring costs
It was the ultimate symbol of status and celebrity for Greece's most famous dynasty – a private island playground for the legendary shipping tycoon Aristotle Onassis and the location of his wedding to Jackie Kennedy.
But soaring taxes and maintenance costs – largely as a result of the Greek economic crisis – have prompted Athina Onassis, heir to the oil tanker and business empire built by her grandfather and the sole surviving inheritor of one of the world's biggest shipping fortunes, to sell the family's private island, Skorpios, to the daughter of a Russian oligarch.
Ekaterina Rybolovleva, whose father has substantial shares in the Bank of Cyprus, has picked up the idyllic isle for €117m — and in effect cut the last remaining ties of the House of Onassis with Greece.
"This is the end of an era, the end of the Onassis myth as Greeks have known it," said Alexis Mantheakis, author of Athina Onassis: In the Eye of the Storm. "Skorpios was the iconic symbol of the Onassis legend and family."
Purchased by the late magnate in 1962 for 3.5m drachmas – the equivalent of $10,000 – the Ionian isle was where Onassis entertained his opera singer lover Maria Callas. It was also the setting for the tycoon's marriage to Jackie Kennedy in 1968 and the location of lavish parties that helped give birth to the concept of celebrity.
Establishing the rich man's trend of owning island paradises, the tycoon shipped hundreds of plants and trees to the isle, turning it from a barren outcrop into a green resort almost overnight. Sand was also transported to create his own private beach.
Bill Gates, the billionaire co-founder of Microsoft, and the pop star Madonna had both sought to buy the isle in the past.
An avid equestrian, now based mostly in Brazil, the 28-year-old Onassis heir is only known to have visited the island once, to pay her respects at the tomb of her mother Christina, who died of a drugs overdose and is buried on Skorpios along with her grandfather and uncle Alexandros.
"The last time she was there was in November 1998 to attend her mother's 10-year memorial," said Mantheakis, a former adviser to her French father, Thierry Roussel. "The three of us spent the night there but after that she never went back again."
The young Onassis is believed to have paid around €35m in inheritance taxes and maintenance costs since inheriting the isle. Hefty levies slapped on real estate by the Greek government in a bid to reduce the country's debt pile are also thought to have contributed to her decision to sell.
The tycoon's only descendant, Athina came into her wealth at the age of 18. Her fabled fortune included hundreds of priceless works of art, properties and companies spanning three continents.
If she wanted to, Onassis could dip into her 217 bank accounts to pay off the debts of most third world countries and still live comfortably. Although once known as the "poor little rich girl", the heir in recent years has also sold off a considerable number of Greek assets. To the surprise of friends and family, she recently auctioned the entire collection of her mother's jewellery and a plot of land on the Athenian Riviera where the dynasty's ancestral home once stood.
"In one sense she has been a true Onassis in being totally unsentimental about financial matters," said Mantheakis. "From what I know, all her cash is still in a trust formed by her father, which may also explain why she is selling assets."
While partly attributed to the Greek crisis, her decision to distance herself from her roots may also have as much to do with the notoriously bad relations she has with officials who run the Onassis Foundation – the other half of her grandfather's legendary estate in Athens.
A charitable organisation bequeathed by the shipowner to commemorate his son Alexandros, who died in a helicopter crash, the foundation cut ties with Athina after its board slammed her for not speaking Greek and for her poor knowledge of the country and its customs. She was raised speaking Swedish to her stepmother and French to her father Roussel, the heir to a pharmaceutical empire.
Famously reclusive, the heir has remained tight-lipped about the latest sale. But 24-year-old Rybolovleva, whose father Dmitry is the owner of the AS Monaco football club and has a history of snapping up trophy properties, says she regards her latest prized possession, which also includes the adjacent islet of Sparti, "as a long-term financial investment". A spokesman for the Harvard-trained Russian said she saw "significant potential for further improvement of the islands using environmentally friendly technology".
That, at least, has been music to the ears of locals now ruing the demise of the Onassis dynasty in Greece. "None of us know what tomorrow will bring," said Gerasimos Staurakis, a taverna owner on the nearby island of Lefkada who once worked on Onassis's super yacht Christina.
"We are all praying that we will eat a crumb or two … Onassis was a wonderful man and we would have liked other Onassises to be like him, but unfortunately that hasn't been the case."
|
| READ THE ORIGINAL POST AT www.guardian.co.uk |
|
| READ THE ORIGINAL POST AT www.huffingtonpost.com |
Greek Mythology Inspired the Loom-like Arianna Lamp Gizmodo Greek Mythology Inspired the Loom-like Arianna Lamp In Greek mythology, Ariadne is known as the mistress of labyrinths. She's also associated with weaving and in some traditions, she hanged herself. This jointed lamp—Baldessari's Arianna—was inspired ... |
|
| READ THE ORIGINAL POST AT gizmodo.com |
Greek skits are serious fun OCRegister (subscription) Even as the lively audience roared its approval after each performance, the actual judging was done by university administrators, who rated the skits on storyline, set design, costumes, backdrops and choreography. The annual tradition raises money for ... |
|
| READ THE ORIGINAL POST AT www.ocregister.com |
|
| READ THE ORIGINAL POST AT online.wsj.com |
Greek Salsa Meze Washington Post Among the many interesting types of dried tomatoes found in grocery stores, semi-dried cherry tomatoes packed in oil are particularly tasty. They make a great addition to this salsa, which goes well with grilled tuna, swordfish or shrimp. Spooned over ... |
|
| READ THE ORIGINAL POST AT projects.washingtonpost.com |
Greek banks' ECB funding drops in March, ELA flat Reuters ATHENS, April 16 (Reuters) - European Central Bank funding to Greek banks fell by 4.5 billion euros in March while emergency liquidity assistance (ELA) from the country's central bank was broadly flat, Bank of Greece data showed on Tuesday. Greek banks ... |
|
| READ THE ORIGINAL POST AT www.reuters.com |
 Business Times (subscription) | Greece holds out hope for 2013 primary surplus U.S. News & World Report ATHENS, Greece (AP) — Greece's finance minister pledged Tuesday to stick with unpopular austerity measures and correct years of profligate state spending, in the hope of securing a budget surplus this year that could pave the way for a new debt ... Greece wants primary surplus 'at all costs' to cut debt: minister Stournaras Steers Toward Primary Surplus |
|
| READ THE ORIGINAL POST AT www.usnews.com |
The International Monetary Fund more optimistic than in 2012, but it fears that prolonged stagnation in the eurozone could drag the rest of the world economy down with it
The International Monetary Fund feels more upbeat about the state of the world. Not by much, but a bit cheerier than it was six months ago when it was fretting about the eurozone busting apart or the United States imposing budget cuts that would have killed economic recovery stone dead.
Those two big risks have, the Fund believes, been greatly diminished.
It thinks the US is going about fiscal consolidation too hastily and too clumsily, and wishes eurozone policymakers would get their fingers out and get on with the creation of banking and fiscal unions.
But all in all it thinks the doomsday scenarios it was envisaging last autumn are now less likely.
So, while 2013 is not going to be a vintage year, with global growth similar to that in 2012, activity will strengthen in the second half of the year and into 2014.
Even so the Fund likes to pepper its World Economic Outlook with warnings about what could go wrong, and the spring 2013 edition is no exception.
The main short-term risk, predictably enough, is seen as Europe, where the crisis in Greece, the political impasse in Italy, the court ruling against austerity measures in Portugal and the speculation about the financial difficulties facing Slovenia have punctured optimism at the turn of the year that the worst was over.
The Fund's growth forecasts for the single currency area are dire. Of the big four economies only one – Germany – is slated to see any growth at all in 2013, and even then expansion of just 0.6%, weaker even than the forecast for the UK. France is expected to follow last year's zero growth with a contraction of 0.1%; Italy and Spain are both predicted to see output slump by around 1.5% in 2013.
Prolonged stagnation in the eurozone – GDP falls by 0.3% this year after a 0.6% drop in 2012 – is worrying in itself but it also has knock-on consequences for the rest of what the Fund sees as a three-speed global economy. In the first division are the emerging economies, which are exploiting their ability to catch-up with the countries of the developed world. They should see growth of more than 5% this year, similar to last year's performance.
The second division includes the US, Canada and Japan – even though the IMF clearly believes the stop-at-nothing reflationary strategy adopted by the new government in Tokyo is "risky" given the high level of public debt and the absence of a credible plan for putting the public finances back into some sort of order.
Finally, there is Europe, firmly in division three and with no immediate prospect of promotion. Britain, according to the Fund's forecasts is battling to avoid relegation into the bottom tier. It is expected to have higher growth and lower unemployment than the eurozone, but suffer from higher inflation and a bigger current account deficit. The danger from the Fund's perspective is that the eurozone drags the rest of the world economy down with it. Growth in Asia is highly dependent on what is happening elsewhere, while a special analysis by IMF economists showed strong linkages between expansion in the US and expansion in the eurozone.
Some indications of this are already starting to feed through into the most recent economic data, which in the US, China and Europe has been weaker than anticipated. When the Fund notes in the WEO that "financial markets have led the re-acceleration in activity", this is not strictly true. There has, as yet, been no "re-acceleration in activity" merely the expectation that there will be one. The wobble in the markets in recent days reflects concern that celebrations to mark the end of the most severe global downturn since the 1930s – and even the Fund's cautious optimism – may be a trifle premature.
| |
|
| READ THE ORIGINAL POST AT www.guardian.co.uk |