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Welcome, 77 artists, 40 different points of Attica welcomes you by singing Erotokritos an epic romance written at 1713 by Vitsentzos Kornaros

Saturday, December 20, 2014

Olympiakos thrashes Kalloni 5-0 to top Greece

ATHENS, Greece (AP) A 15-minute, four-goal spree by Olympiakos midway through the second half turned a fragile 1-0 lead into a 5-0 rout for the ...


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Christmas Turkey With a Greek Flavor

This is a recipe for a different kind of stuffing for turkey that is rich in flavor and fragrance. Ingredients: 2 tablespoons olive oil 1 onion, chopped pinch of ...


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Greek polls show anti-bailout leftists still ahead but lead slips

17-18 after Greek lawmakers failed to elect a president in a first-round vote, showed support for Syriza at 27.1 percent versus 23.7 percent for Prime ...


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Apostolopoulos at Greek Appeals Prosecutor: Political Faux Pas were Committed by Mr. Chaikalis

apost Giorgos Apostolopoulos, the man who allegedly attempted to bribe MP Pavlos Chaikalis, appeared in front of the appeals prosecutor at 2:00 pm ...


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Greek Politics Wallowing in the Mire

The latest chapter in the history of corruption in Greek politics could be called “A bribery attempt through the lens of a camera watch.” It could have been a funny chapter, because it features a famous comedian and actor who has played in comedies ...


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Employed Greeks Rush for Early Retirement

Employed Greeks who belonged to special state and bank retirement funds rushed to retire early now that all security funds have been incorporated to the Social Security Fund (IKA). Figures from Helios — the Labor Ministry database — show that in the last four months, nine out of ten employed Greeks who opted for retirement were under the age of 62. Between September and December 2014, 76.33 percent of all new retirees insured in the public sector were under 62 years old. Of those, 91.96 percent were insured in special security funds. In the years of the economic crisis that brought several labor reforms, employees in the public sector opted for early retirement in order to get the large retirement bonus they are entitled to. The lump sum public sector employees get when they retire has been subject to cuts in the past four years. Many employees who had worked more than 25 years in the public sector used special clauses and loopholes in order to get an early pension and secure the retirement bonus while it is still large. Also, the Greek government has “aided” many public sector employees to retire early in order to produce smaller numbers of public employees, in compliance with the reforms proposed by Greece’s international creditors. The voluntary exit programs introduced by the state, generated many early retirees.  


READ THE ORIGINAL POST AT greece.greekreporter.com

Ex-Bank of Cyprus execs to face trial

These includes the transfer of funds from now-defunct Laiki Bank to Greece, loan write-offs, miss-selling of bank bonds to the public, the purchase of ...


READ THE ORIGINAL POST AT www.dailystar.com.lb

EFSF Approves Two-month Extension of Greece’s Bailout Program

Following a similar decision by the council of eurozone ministers, the board of the European Financial Stability Facility (EFSF) decided on Friday to grant Greece a two-month technical extension of its 2nd economic adjustment program financed by the fund. Instead of ending on December 31 2014, the EFSF program will now end on February 28 2015. The decision follows a request from the Greek Finance Minister Gikas Hardouvelis. As a result of this decision, the remaining €1.8 billion from the program can still be disbursed to Greece until the end of February, but it depends on the successful conclusion of the current program’s last review, the announcement said. “The technical extension of the EFSF program for two months gives Greece time to conclude the current review with the troika,” said EFSF CEO Klaus Regling. “The extension of the EFSF facility and bonds for two months ensures that these funds remain available for Greece. This will reassure the markets.” “The Greek people have made enormous progress in putting their economy back on sounder footing, but there is still a need for more reform,” Regling added. (source: ana-mpa)


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Now We're Mad?

How can we care about the Greek letters we represent more than who and whose we are? Don't get me wrong: I love my sorority and my sorors.


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Greece: What a SYRIZA government will do

The current contest for the presidency of Greece looks likely to lead to a new parliamentary election. In a first round of voting in parliament on ...


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Greece: What a SYRIZA government will do

The current contest for the presidency of Greece looks likely to lead to a new parliamentary election. In a first round of voting in parliament on ...


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Driver in guarded condition after crash in Farmington

site, Archive. Greece · 29° · eEdition. |. subscribe. |. newspaper ads. |. newsletter · Greece Post · Home · News · Top Stories. 10082. 10082. Community.


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Greece summer holidays guide

Jane Foster is a travel writer based in Athens and Dubrovnik. She has written guidebooks on the Balkans, Croatia, and Greece and writes for various UK and US newspapers. She has a degree in Architecture and speaks English, Italian, Croatian and Greek.


READ THE ORIGINAL POST AT www.telegraph.co.uk

Political storm in Greece over MP bribery claims

Prime Minister Antonis Samaras said he would sue a popular comedian-turned-lawmaker who claimed he was offered money to help rig the presidential vote, allegedly on the premier's orders. Failure to elect a new president by the end of December will usher in ...


READ THE ORIGINAL POST AT www.themalaysianinsider.com

What's for Dinner — Greek Lazy Lasagna

Pittsburg, Kan. Pasta, feta cheese, spinach and olives all mixed together and baked. INGREDIENTS. 1 (16 ounce) package uncooked mafalda pasta ...


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Trikala Pilot Scheme to Test First Driverless Buses in City Environment

The Greek city of Trikala in central Greece will be the first in the world to operate driverless buses in an urban environment, in a pilot scheme that city authorities hope will be up and running by September next year. The selection of the city to host the pilot scheme was announced in a press conference on Friday by Christoforos Rombos, the head of the municipality company e-Trikala SA that will run the pilot project. The technical details were outlined by Yiannis Karaseitanidis of the University Research Institute for Communication and IT Systems, who said the aim was to have six driverless vehicles circulating in the city centre by September 1. The Trikala project forms part of the broader European project CityMobil2, which is setting up a pilot platform for automated road transport systems implemented in several urban environments across Europe. It will be the largest and most complex pilot throughout Europe and will run on a trial basis from September 2015 until February 2016. Among others, the Trikala system will be the only one to use “on demand” vehicle movement on a trial basis. (source: ana-mpa)


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New Greek Poll Shows 7% Lead for SYRIZA

A recent Greek poll showed SYRIZA still in the lead with 7% difference from ruling New Democracy. The vote estimate for SYRIZA stood at 36.5% (38.5% in November) and 29.5% for New Democracy (27% in November). “To Potami” was in third place with 8.5% (same as in November). The Greek Communist Party (KKE) followed with 6% (6.5% in November), PASOK with 6% (5% in November) and Golden Dawn with 6% (same as in November). Independent Greeks (ANEL) gathered 3.5% (3% in November), DIMAR 1% (same as in November), while other parties had a total of 3% of the votes (4.5% in November). As for the projection of victory poll – a question that was focused only on the first two parties – it showed SYRIZA in the lead with 68% (same as in November) against New Democracy with 20% (22% in November). The survey was nationwide and was conducted between December 10 to 17.


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Political upheaval sharpens after bribe claims with threats and insinuations

Greek MPs are to vote Tuesday in the second ballot of a three-phase presidential election amid a growing political crisis that has been sharpened by the bribery allegations of Independent Greeks MP Pavlos Haikalis and a slew of threats and counter-threats... ...


READ THE ORIGINAL POST AT www.ekathimerini.com

Environment Ministry to reconsider controversial bill

The government over the weekend appeared to backpedal on proposed amendments widely seen as compromising legislation protecting Greek forests as well as Plaka, Athens’s old quarter. The bill, brought to Parliament under an emergency procedure, facilitated... ...


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Albanian couple starts new home, business in Dexter

Gezim, 42, grew up in a small town in his native land of Albania before moving to Greece where he worked in restaurants for 15 years before returning ...


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Greek Town Missing 2M Euros

Investigators are trying to determine what happened to two million euros collected by the municipality of Nea Kallikratia that was collected in debts and fines but vanished. The town, which is on the Halkidiki peninsula, was merged into a larger unit as part of a local administration overhaul. The lost money, collected between 2003-08, was […] The post Greek Town Missing 2M Euros appeared first on The National Herald.


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Police gets new communications system

A new communication system donated to the Greek Police (ELAS) by the British government is expected to go into operation in the next four to six months, Kathimerini understands. Public Order Ministry officials told the newspaper that the new platform, man... ...


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Most Greeks say they recycle daily

Greeks are embracing waste recycling, with the overwhelming majority saying it is part of their daily lives, according to a survey carried out by Alco for the Hellenic Recovery Recycling Corporation (HERRCO). A total of 96 percent said recycling was impor... ...


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Suspected migrant smugglers face prosecutor in Zakynthos

Six Greeks and a Syrian suspected of running a migrant smuggling ring were questioned by a prosecutor on the island of Zakynthos on Saturday and face criminal charges. The suspects were arrested after a month-long operation during which the coast guard an... ...


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Heroin seized from Italy-bound orange shipment

Port authorities in Patra, western Greece, on Saturday seized more than 11 kilograms of heroin found hidden in a truck carrying crates of oranges bound for Italy. The drugs were discovered by an x-ray van, which located 22 suspicious parcels packed into t... ...


READ THE ORIGINAL POST AT www.ekathimerini.com

This Week In Pictures: Faith In Practice Around The World, December 14 to 20

Humans express their faith in a multitude of ways. These photos capture the incredible diversity within faith practices that happen in our world in the span of just one week. Salt Lake City, Utah: December 14 Big Bird takes to the stage for a Christmas concert with the Mormon Tabernacle Choir in Utah. The choir teamed up with the Sesame Street Muppets this year for a special holiday show. Elmo, Count von Count, Abby Cadabby, Rosita, Bert and Ernie, Cookie Monster, and Big Bird all made appearances. Noida, India: December 14 Sikh Devotees take part in a long and colorful procession on the occasion of Prakash Parv. Vatican City, Vatican: December 17 Pope Francis blows candles on a birthday cake on the occasion of his 78th birthday as he arrives for his weekly general audience in St. Peter's Square. Jerusalem, Israel: December 17 Jewish ultra-orthodox children of the Krois family light candles on the second night of the Jewish holiday of Hanukkah, in a religious neighborhood of Jerusalem. The holiday commemorates the re-dedication of the holy temple in Jerusalem after the Jews' 165 B.C. victory over the Hellenist Syrians after Antiochus, the Greek King of Syria, outlawed Jewish rituals and ordered the Jews to worship Greek gods. Bali, Indonesia: December 18 Balinese Hindu devotees perform the 'Melukat' ritual during full moon at Tirta Empul Temple in Gianyar, Bali, Indonesia. During the 'Melukat' ritual, devotees bathe in the holy water of a spring, waterfall, or other water source believed to have the appropriate cleansing power for purification. It is a symbolical and literal cleansing of the body and soul aimed at preventing misfortune and bad luck, including sickness or havoc caused by daily activities and sins. Lincoln, Nebraska: December 18 Azalia Sisk, 2, and her brother Damian Sisk, 6, of Omaha, Neb., look over a Nativity scene set up inside the Nebraska Capitol building. The Chicago-based Thomas More Society has set up the Nativity scene, drawing criticism from those who say such displays amount to an unconstitutional endorsement by the state of a religion. Capitol administrator Bob Ripley said that the Thomas More Society applied and received permission to set up the display in the building's rotunda. Peshawar, Pakistan: December 19 Pakistani Muslims pray for children and teachers killed by Taliban militants in an attack on a army run school, during Friday prayers at a mosque in Peshawar on December 19, 2014. Pakistan is mourning 148 people -- mostly children -- killed by the Taliban in a school massacre that prompted global revulsion and put the government under new pressure to combat the scourge of militancy.


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Cretans Will Feed Sifis the Crocodile a Christmas Meal

The crocodile that was found in an artificial Cretan lake this summer has become a local sensation in the Rethymno area, Greece . Fearless locals — who have become used to the crocodile — are seriously considering performing the custom of “diving to catch the holy cross” in the lake. Locals have named the crocodile “Sifis” and now the reptile is a tourist attraction. They are thinking about offering Sifis a piglet for his Christmas meal, even though they say that he prefers ducks. The president of the Pantanassa Cultural Association Constantinos Ieronimakis said that they are thinking of performing the custom of “diving for the cross” in Sifis’ wetland. The custom of the Epiphany (January 6), that is performed in all areas near water in Greece,  consists of a Christian priest throwing a holy cross in the water to sanctify the water. Then, local men and boys dive in the water to bring it back. “The ceremony will take place here. I don’t have a problem diving first to catch the cross,” said Ieronimakis to Ethnos newspaper. “We will all go there for the ceremony. Sifis is not dangerous. I see him every day outside the dam and when he sees people, he runs scared into the water. All that hunting has made him nervous,” said Alexis Ieronimakis of the Pantanassa community council.  


READ THE ORIGINAL POST AT greece.greekreporter.com

Greek Workers Taking Early Retirement

Fearing more cutbacks, Greek workers are fleeing for early retirement, putting more stress on a beleaguered social security system. The post Greek Workers Taking Early Retirement appeared first on The National Herald.


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New hope for justice as Greek police reopen investigation in to mysterious death of Scots mum

POLICE in Greece have reopened the investigation in to the death of 53-year-old Scots mum Jean Hanlon who was found dead in a Crete harbour in ...


READ THE ORIGINAL POST AT www.dailyrecord.co.uk

Get your facts straight

The danger that political discourse in Greece will sink to the basest levels of vulgarity is already more than apparent from the allegations we have heard bandied about over recent days. The first responsibility to curb this phenomenon lies with the justi... ...


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Meet The 5 Wildcard Politicians Who Could Throw Europe Into Chaos In 2015

Europe is in a bad place right now. Deflation is looming and growth is nowhere to be seen. There's conflict in Ukraine, unemployment is still eye-wateringly high, and it doesn't seem like much of that is going to change any time soon. So insurgent opposition parties are popping up all over the continent, promising an end to crisis or a return to how things used to be. Here's what Citi's researchers had to say about Europe's political developments in their outlook for 2015: Future developed country elections will likely continue to see the popularity of new — and not so new — anti-establishment parties, from France’s National Front to Greece’s Syriza to Spain’s up-and-coming far-left Podemos, increasing the risk of fragile multi-party coalitions and reducing the already limited political capital of leaders. In our view, the appetite for political alternatives will endure for many years to come, and their public support could increase in the event of a triple-dip European recession, a non-negligible risk. Here's a look at the five leaders most likely to cause an upset in the year ahead: Berndt Lucke, Alternative fuer Deutschland Lucke often doesn't get a look-in when people are talking about Europe's fresh new populist movements. AfD is comparatively poorly supported and, unlike the emergent centre-right and right-wing parties in other parts of Europe, AfD and Lucke are less prone to inflammatory rhetoric.  But that shouldn't undermine Lucke's potential impact. Germany is a colossal, irreplaceable lynchpin in the European project. AfD support Germany's membership of the EU, but wants it to stop using the euro. Standard & Poor's went as a far as to say that the group posed a risk to the stability of the eurozone.  Angela Merkel's centre-right Christian Democrats enjoy widespread support for now, but some disgruntled voters are heading to the AfD. If more follow them as the German economy slows down, the Christian Democrats could be forced to pursue more anti-European policies in an attempt to get them back. German voters are overwhelmingly opposed to Europe-wide stimulus projects and a more stern stance from Berlin could worsen Europe's already achingly-slow growth.  Latest polling support: 6% (5th place) Alexis Tsipras, Syriza There's not much that Germany's Berndt Lucke has in common with Greece's Alexis Tsipras. Syriza have become the darlings of Europe's anti-austerity left, and look likely to triumph in the snap elections that could come at the start of 2015. Syriza has a political platform that puts it on a collision course with Europe's most important institutions. That prospect sent Greek stocks into the ground last week, seeing their worst sell-off in more than 25 years. Syriza is at the heart of Europe's far left: four Italian politicians were even elected to the European Parliament this year on a "Tsipras List". Greece was at the centre of the euro crisis from 2010 onwards, and it could still be the crux of European politics in 2015. Latest polling support: 24.3% (1st place) Nigel Farage, UKIP Farage, the long-time leader of the United Kingdom Independence Party (UKIP), poses a threat to Europe from outside of the currency union. UKIP aren't likely to win the UK's upcoming general election in May 2015. They're not even necessarily going to get any seats, owing to the UK's electoral system. But their shadow is hanging over British politics at the moment. The Labour party has hastily assembled its own strategy for dealing with UKIP, and the Conservative party have promised a 2017 referendum on the UK's EU membership which London's financial giants are dreading. Even with relatively little concrete political power, just a few seats in parliament for Farage's UKIP could be crucial. No party seems likely to get majority support from the country, so alliance-building will be unavoidable after 2015. If UKIP's handful of MPs held the balance of power, they could push for an EU referendum almost immediately. Latest polling support: 16% (3rd place) Pablo Iglesias, Podemos Spain's anti-austerity insurgents, Podemos, have surged from nothing to become the most popular party in Spain right now. If this list was ranked, Iglesias would be a serious contender for the man most likely to upturn the European political system in 2015. Iglesias is a fan of Greece's Alexis Tsipras, but unlike Greece, Spain is too big to be isolated by European authorities. There's now a real chance that the eurozone's fourth biggest economy might vote for a guy who refers positively to Vladimir Lenin in his political speeches. Even if the rest of 2015 goes well, Spain's election in December could prompt a huge crisis. Similarly to Syriza, Podemos would seriously clash with the eurozone's economic and political orthodoxy, particularly on the issue of fiscal policy. The eurozone has agreed to rules that try to limit the deficit spending of its members, which Podemos would not abide by. Latest polling support: 29.6% (1st place) Marine Le Pen, Front National Marine Le Pen is the most obvious representative of Europe's hard right. Le Pen leads Front National that her father, Jean-Marie Le Pen, led before her. A long-time presence in French politics which came in second place in France's 2002 Presidential election. Like Germany, France doesn't have elections this year, but Le Pen and FN are making their presence felt in France. The country has municipal elections next year, when FN are likely to make gains, adding to their victory (by more than four percentage points) in the European parliament elections in France. As in Germany, it's very unlikely that FN will enter a formal position of power. The country's two-round presidential elections make it functionally impossible for them to win at the highest level, but they will continue to have an effect on the mainstream parties of the French left and right, as they scramble to please its voters. Latest polling support: 27-32% (1st-2nd place)Join the conversation about this story »


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Samaras Says President Vote Bribe Claims Fabricated

Prime Minister Antonis Samaras' office said the Premier would take legal action against the Independent Greeks party after its leader, Panos Kammenos, and MP Pavlos Haikalis claimed a bribe was offered to vote for the ruling parties candidate for Greek President. The post Samaras Says President Vote Bribe Claims Fabricated appeared first on The National Herald.


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Demonstrators in Bulgaria's Smolyan blocked the main road to Plovdiv and Greece

Smolyan. Protesters in Smolyan living district of Ustovo blocked traffic on the main road to Plovdiv and Greece, a reporter of Radio Focus – Smolyan ...


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Greek Capital Gains Tax on Property Sale Postponed for Two Years

The Greek Finance Ministry announced that the introduction of a capital gains tax on property sale will be postponed for another two years, until December 31, 2016, through legislation to be tabled in Parliament on Friday. The new law is being tabled ...


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Point Person Q&A: Author Peter Toohey on jealousy

Peter Toohey, a professor of classics in the Department of Greek and Roman Studies at the University of Calgary, explores these emotions in his new ...


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Game show communicates ancient truths about Hanukkah

A brave woman, Yehudit (Judith), inspired the military victory that drove out the Syrian-Greek army and restored Jewish temple worship, he said.


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Maegan Cruz: A Busy, Busy Bee

Cruz is one of the countless women who are a part of the Greek organization Delta Sigma Theta Sorority Incorporation, as well as the Greek executive ...


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Thank You, America

From the report on torture issued last week by the U.S. Senate we can draw three lessons. The first is a terrible one, but the other two are encouraging. The first thing the report teaches us is that it is indeed possible for the most prominent intelligence agency of the world's most powerful democracy to commit torture on a large scale, to violate the most sacred international conventions, to operate secret prisons in friendly countries, and to lie--in short to operate illegally for six years running without reporting to its overseers or, what is even worse, by providing doctored reports. The president of the United States was unaware. His vice president, at least for the first year, also seemed to be in the dark. The Department of Justice, the Congress, and the press were systematically deceived. Not to mention what the current CIA director, John Brennan, revealed in his press conference of December 11: badly trained and inexperienced operatives, procedural conflicts with the FBI that could only have hampered the just fight against terrorism, the surreal yet very real risk that a judge might soon be compelled to release back into the wild a jihadist whose crimes were proven by illegal methods--in other words, a CIA that, in this battle so vital not only for the United States but for the world as a whole, navigated uncharted territory with the most complete and total amateurism. That is an alarming picture. It is the catastrophe scenario that the wildest anti-Americans, the most rapid conspiracy theorists, could not even imagine. And yet it happened. The good news, by contrast, is that this same democracy has once again demonstrated its extraordinary vitality, its capacity to pull itself together, to confront its crimes, and, in criticizing itself, to rediscover its founding values. Oh, one can expound on the puritanism of an America obsessed with any stain that might tarnish its pastoral vision of itself (Philip Roth). Hard heads can always be found to mock the nostalgia for innocence that is so characteristic of this country (Tocqueville) and whose consequences are often ridiculous or absurd. Be that as it may, there was something beautiful in the spectacle offered to the world by Senator Dianne Feinstein as she read, in a voice full of with emotion, the summary of 500 pages that are so damning for her country. President Obama struck the right tone in the difficult task of upholding his responsibilities as commander in chief, charged with safeguarding the security of his fellow citizens, while ceding no ground on the principles that make up the nation's credo--principles that are, in the last analysis, America's best weapon against barbarism. The Republicans, for their part, found a voice worthy of their party's great historical consciences in the person of Senator John McCain, who thundered, from the high ground of his own experience as a prisoner of war and victim of torture, that torture is not only sordid but ineffective. America is never so great as in such moments of crisis, doubt, and upset. It is never so strong as when it indulges its taste for the truth. As a citizen of a country that had to confront a similar situation during and after its war in Algeria, a country that spent not years but decades dismantling an official lie and acknowledging the extent of the crimes committed in France's name, I can only salute, with deep humility, the example given here. Especially since a third thing occurred at the same time and is perhaps the most important of all. We are well aware of the terms of a debate that is as old as torture itself but that has been recently revived by Michael Walzer and other thinkers: Torture is no doubt morally repugnant, the argument goes, but what else can we do when we know that a bomb has been set to explode and we have in custody the one who set it? Well, the most extraordinary thing about this austere report devoid of literary flourishes and embellishments is that it provides the irrefutable retort to the proponents of that theory disguised as an allegory. It does so by demonstrating, with ample evidence, that in the long war waged against terrorism, three things are true. First, the accurate information obtained by the CIA (Bin Laden's location, for example) was acquired without recourse to torture. Second--consistent with the principle, understood in ancient Greece, that a tortured man loses all sense of reality and will say anything at all--most of the information obtained through torture proved false, fanciful, or useless. (That is the testimony of Mourad Benchellali, a French citizen confined for two and a half years in Guantanamo.) Third, we had detainees who talked without being tortured but then were tortured anyway in case that might make them say a little more, and we saw them either retreat into silence (witness Abd al-Rahim al-Nashiri, the man behind the bombing of the USS Cole) or retract the information they had previously given and offer contradictory versions (as in the case of Khalid Sheikh Mohammed about the aborted attack on London's Heathrow Airport). Abject and useless. Transforming its victims into flayed meat for no purpose at all. That was Johanna's response to Franz in Sartre's The Condemned of Altona. That was Sartre, Camus, and Malraux against the supporters of "the question." That is the lesson in practical philosophy that, from Capitol Hill, the American people have just given us.


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Town Sends Homeowners Bill, 20 Years Late

Gruttadaurio is one of 31 property owners near North Greece and Latta roads who received the letter informing them that they were part of a sewer ...


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Greek MP alleges he was offered bribe for vote

The party of the Greek prime minister has said it is the target of a “staged provocation” following fresh allegations from an opposition MP who claims he was offered up to €3 million to back the government’s candidate in the country’s ...


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Greek Orthodox denounce Israeli law on Aramaic Christians as divisive

The Greek Orthodox Christian Patriarchate in east Jerusalem has slammed an Israeli law recognizing Aramaic Christians as a nationality, describing it as an attempt to divide the Palestinian minority. The Greek Orthodox Church said in a statement that the ...


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Light mag. 4.4 earthquake

Lárisa (Greece) (41 km NW from epicenter)(no details): 5th floor Larissa I was sleeping and the shaking made me wake up. Very short though (via ...


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Greek judicial authorities investigate opposition MP's allegation over bribery attempt

ATHENS, Dec. 19 (Xinhua) -- Greek judicial authorities have launched a preliminary investigation into an allegation made by an opposition lawmaker ...


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Will Greece Break Free?

Greece's political crisis is deepening. The vote on Wednesday to elect a new president did not go well for the current ruling government. Right-wing ...


READ THE ORIGINAL POST AT realmoney.thestreet.com

Things Could Get Much Worse For Russia

In the world of central banking slow, steady and predictable decisions are the aim. So when bankers meet in the dead of night and raise interest rates by a massive 6.5 percentage points it suggests something is going very wrong. It is: the Russian currency crisis many feared is now a reality (see chart) and the mood in Moscow close to panic. Russians are right to worry: they are heading for a lethal combination of deep recession and runaway inflation. Many of Russia's woes start abroad. The country is highly dependent on its oil-and-gas firms. Hydrocarbons contribute over half the federal budget and two-thirds of exports. The state has big stakes in many energy firms, as well as indirect links via the state-supported banks that fund them. The oil price has fallen by almost half in the past six months--it dropped below $60 this week, its lowest level since the depths of the financial crisis. The rouble has followed oil down. The war that Russia has fomented in Ukraine is the second big foreign problem. America and the EU have imposed financial sanctions on many Russian firms, making it hard for them to borrow abroad. On December 12th American politicians agreed to supply weapons to Ukrainian troops, raising the possibility of a further escalation in the conflict. There are plans for further sanctions in the pipeline. Yet the crisis has now become more general. On December 15th Brent crude barely budged--it dropped by 1%--but the rouble plummeted, losing 10% of its value against the dollar, the worst drop since the previous rouble crash in 1998. The Central Bank of Russia is thought to have intervened, using $2 billion to buy roubles. This did not work, and nor did the midnight rate hike: the rouble lost another 11% on December 16th. The trigger for this acceleration of the crisis is mysterious. One culprit could be the finances of the state-controlled energy giants, which include Gazprom and Rosneft. Optimists had seen them as a reliable source of dollars. But Rosneft, for one, also has big foreign debts to service or redeem. On December 12th it issued an $11 billion rouble-denominated bond at a lower yield than government bonds were offering that day, which the central bank immediately said it would accept as loan collateral. Some see this as a worrying commingling of government and corporate debt. Around $115 billion in dollar-denominated debt falls due before the end of 2015. The panic has spread to other assets. The Russian state has around $11 billion in rouble-denominated and $60 billion in dollar debt. The yields on these have risen to 15% and 8% respectively, higher than Greece. Shares in firms exposed to Russia--including French and Austrian banks--are losing value too. The dollar-debt problem will get worse. Credit-rating agencies including Standard & Poor's and Fitch were already pessimistic about Russia. With the central bank forecasting a 4.5% drop in GDP in 2015 a downgrade is a certainty. If debt is reclassified as junk, Russia's investor base will shrink. The volume of debt may jump too. The blurred lines between the state and Russian firms mean the Kremlin may end up on the hook for much of the $614 billion in external debt owed by banks and other firms. No wonder confidence in the prop provided by the Kremlin's foreign-exchange reserves, officially valued at $370 billion, is draining. With rate rises and sales of foreign reserves proving ineffectual, Russia needs other options to stem the rouble's plunge. One would be to try to negotiate extensions to bonds coming due in the hope of trimming demand for dollars, says Tim Ash of Standard Bank. A more muscular option, to which the central bank and the ministry of finance are opposed, is capital controls: the Kremlin could limit people's ability to convert roubles into hard currency and take it out of the country. Mr Putin may be inspired by Malaysia, which in September 1998, at the height of the East Asian financial crisis, choked off ringgit speculation by fixing the exchange rate and cutting interest rates. It capped the amount of currency residents could take abroad, and forced foreigners to hold proceeds from ringgit asset sales within the country. But Russia's economy is in a worse state than Malaysia's was and its lawless financial system would prove leaky. Even if Russia does manage to impose capital controls 2015 will be grim. Before this week's turmoil inflation was running at 9.1%. Now creeping price rises have been replaced by something more ominous: Russian shopkeepers have started to re-price their goods daily. Less than two weeks ago one dollar could be bought with 52 roubles; on December 16th between 70 and 80 were needed. Shops defending their dollar income need a price rise of 50% to offset this. Russian workers' pay will be cut massively in real terms. That explains why Russians are losing confidence in their currency. On the streets of Moscow, the talk is all about the crisis. State banks are imposing limits on the amount of dollars and euros they sell. A branch of Sberbank in central Moscow will sell only $2,000. VTB, another state bank, is promising $3,000 but only "tomorrow if you come early and if you are lucky". Even if the demand calms (or if bans on using dollars are imposed) Russian banks face huge problems. The shrinking economy, falling inflation-adjusted incomes and massive interest-rate hikes mean that defaults are bound to rise. Click here to subscribe to The Economist.Join the conversation about this story »


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Great new coupons for Progresso bread crumbs, Pillsbury biscuits, Yoplait Greek yogurt & more!

There are some super new coupons available today on Pillsbury.com! Each Thursday, Pillsbury.com is offering 5 new coupons. Supplies are limited ...


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Eagle Scouts

•Robert Reed of Greece, a member of Troop 130, sponsored by Our Mother of Sorrows Roman Catholic Church, built three park benches for the ...


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Political crisis in Greece impacts stock markets, investments

Yields on the Greek 10-year bonds breached the 9% mark on December 11, climbing the most since May 2012.


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Euroleague: Bomb Threat Interrupts Panathinaikos vs Barcelona

The Olympic Stadium in Athens (OAKA) was evacuated at halftime during the Panathinaikos vs Barcelona playoff game after a bomb threat. A few minutes before 11pm, authorities received a phone call informing them that there was a bomb at the stadium. OAKA was evacuated at half time and the game resumed about 30 minutes later for the second half. Barcelona is leading 51-42 against the Greek basketball team.


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