How the world sees Greece
Wrapping up Greek Week of Service InsideVandy Four hundred and sixty-seven members of the Greek community completed a total of 1,237 hours of community service between Monday, Oct. 15, and Saturday, Oct. 20, in honor of the second annual Greek Week of Service. “Service is such a great bonding ... All Greek Assembly announces winners |
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 Telegraph.co.uk | Greece says it has been given more time on austerity Reuters ATHENS (Reuters) - Greece's finance minister said on Wednesday that his country had been given more time by its international lenders to implement austerity cuts, an assertion played down by leading European Union officials. European paymaster ... Greece Official Says Deal Reached With Troika of Lenders Greece to Get Two More Years on Budget Targets Greece celebrates bailout extension, but EU says no deal yet |
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Finance minister backtracks after telling MPs he had secured a two-year extension for debt repayments
Chaos in the Greek parliament following a row over the country's revised bailout plan brought fresh gloom to the eurozone as figures showed the currency union moving closer to recession.
The Greek finance minister was forced to drop claims that he had secured a two-year extension for debt repayments and an agreement with creditors over €13.5bn (£10.9bn) of proposed austerity measures when he addressed MPs on Wednesday.
Yannis Stournaras had previously told MPs that a deal was ready, only to later admit that negotiators had yet to approve a final draft. The U-turn, which Stournaras was forced to admit after Germany denied any deal, triggered chaotic scenes in parliament as opposition MPs objected to proposed tax rises and job cuts.
It was unclear last night whether the government will be able to submit two separate bills on austerity cuts and labour reforms due to be debated in parliament next week.
Greece has spent months in talks with its creditors, headed by the troika of the International Monetary Fund, the European Central Bank and the European Union.
Stournaras wants Greece to cut its debt pile by reducing the interest and extending the term of its bailout loans. Analysts still expect Athens to win improved loan terms, though not until it relinquishes more supervisory powers to the troika, which wants to closely monitor any deal.
One Greek official said the troika would need to back down over demands for tough labour laws or risk a political revolt.
"Even if the troika give us a negative report, what are they going to do? Are they really going to not give us the instalment [to keep Greece's economy afloat] two weeks before the US elections, with everything that entails – default, bankruptcy, global market turmoil?" he asked.
"These labour reforms will turn our country into Bangladesh. They have no fiscal benefit and will actually derail the adjustment programme. The political system will collapse if we impose them.
"The troika is demanding that we commit suicide, which is why we believe this is a matter that should be solved on a political level by the prime minister and not with the troika."
Stournaras was forced into his U-turn after the German finance minister, Wolfgang Schäuble, told reporters in Berlin that a deal would be impossible until the troika concluded its report.
Schäuble, who is a key architect of the austerity measures dominating Europe's economic landscape, warned that the eurozone's finance ministers must also read the report before agreeing to the two-year loan extension called for by the Greek government.
The failure to settle the long-running dispute in Greece over the terms of its second bailout came as the latest data showed other eurozone economies worsening.
Factory output plunged in Germany, Europe's top economy and exporter, matching deteriorating conditions elsewhere that suggested the downturn will accelerate over the last quarter of 2012.
The financial data provider Markit said its eurozone purchasing managers' index (PMI) fell to 45.8 in October, its lowest reading since June 2009. The index has now been below the 50 mark that divides growth from contraction since February.
Chris Williamson, Markit's chief economist, said the eurozone was heading for recession. "The PMIs are running at levels in the third quarter and start of the fourth quarter historically consistent with GDP falling at about 0.6%," he said.
A decline in manufacturing output in Europe was offset by figures from the US and China showing the world's top two economies recovering from a poor summer.
A survey of Chinese manufacturers showed output shrank for a 12th straight month, but at the slowest rate for three years and order books were their most robust since April.
Manufacturing grew in the US, edging up to 51.3, said Markit. But falling overseas demand and uncertainty surrounding the US elections and fiscal policy suggested the sector's recent struggles would continue in the months ahead.
Many US companies have reported lower earnings for the quarter, hit by lack of demand and slower global growth.
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The 'American' global economy punishes the poor while giving handouts to failing banks. It's time for some balance
Gore Vidal, the recently demised American writer, once famously quipped that the US economic system is "free enterprise for the poor and socialism for the rich".
Since the outbreak of the global financial crisis in 2008, not only has the US lived up to Vidal's caricature but the whole of the rich capitalist world has become more "American". The poor are increasingly exposed to market forces, with tougher conditions on the diminishing state protection they get, while the rich have unprecedented levels of protection from the state, with virtually no strings attached.
The poor are told that their states are bankrupt because their previous governments splashed out on welfare payments for them.
They – especially if they happen to be from the "lazy" eurozone periphery countries – are lectured that they have to pay for the "good times" they had with "other people's money" by working harder at lower wages and by accepting lower levels of welfare provision, with more stringent conditions.
Of course, this narrative is completely misleading. The current budget deficits are mainly the outcomes of the fall in tax revenues caused by the financial crisis, rather than excessive social spending.
In fact, in the runup to the crisis, countries like Spain and Ireland had run budget surpluses (for a decade, in the case of Ireland), while the deficit levels in other countries, except in Greece, were at manageable levels.
The "laziness" argument also does not wash, as most poor people work much harder than the rich in any given country, while the Greeks, the Spaniards and the Portuguese work much longer (by at least a few hundred hours per year) than the Germans or the Dutch. In contrast, the rich are enjoying unprecedented levels of protection from market forces.
Many financial and industrial companies have been bailed out with the public's money, but very few of those who had run those companies have been punished for their failures.
Yes, the top managers of those companies have lost their jobs – but with a fat pension and mostly with a handsome severance payment. None of them have been punished for gross negligence or incompetence, even when they had flatly denied there was anything wrong with their business.
The most prominent case in point is Joe Cassano – the chief financial officer of AIG, the American insurance company, who has been described as "Patient Zero of the global economic meltdown" by the journalist Matt Taibbi, who famously referred to Goldman Sachs as "vampire squid". Just six months before his company's bailout, Cassano had said: "[i]t is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of the [credit default swap] transactions".
There were, to be sure, occasions when the governments punished companies for obvious wrongdoings. However, those punishments were too meek to have any corrective effect on their subsequent behaviour, in contrast to the harsh punishments meted out to benefit cheats (they used to call this "class justice" in the 19th century).
For example, in 2010, the US government fined Goldman Sachs $550m for the misselling of financial derivatives, but that was equivalent only to a couple of weeks' profit for the company in that year.
Not only were they not punished for their failures, the surviving financiers have been drawing large salaries and bonuses despite the fact that they are living off state protection: – guarantees for bailouts, in the case of deposit banks and other financial institutions allied with them; and monetary policy of historical laxity, which has allowed them to operate with a fat profit margin even within a generally depressed economy. And some of them have done this even when their companies were doing very poorly, defying the basic market principle of linking compensation to performance.
Moreover, even when they injected public money into failing companies, the governments made sure that they didn't apply market disciplines. When it bailed out General Motors, the US government deliberately took shares that do not have voting rights (albeit priority in dividend payouts) – so that it would not have any say in the management of the company.
The British government has taken over (with shares with voting rights) two of the world's biggest banks – the RBS and HBOS – but refuses to order them to do its bidding, as any decent capitalist would have done to a company that he/she had taken over.
While being helped by government protection to make money, the rich have also been given special allowances to keep as much of it as possible.
And while they spend significant resources tracking down and punishing welfare cheats, the governments of the rich countries do nothing to close down tax havens, which have allowed many large companies and super-rich individuals to get away with paying less than their fair shares of tax.
The spread of Vidal's "American" system, fortunately, may be meeting resistance. The recent news about the French government's injection of public money into the struggling car maker Peugeot-Citroen in return for tough conditions on the company's dividend payouts and re-investment, is a case in point.
The very fact that the French government proposal is considered unusual eloquently speaks to the absurdity of the current situation in which the rich get more and more government protection with fewer conditions, while the poor get less and less protection with increasingly demanding conditions. It is time to redress the imbalance.
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Private lenders criticise Greek debt talks Financial Times Private creditors complained about being kept in the dark by the “troika” of official lenders during the protracted discussions over restructuring Greek sovereign debt, according to the group that represented them in talks. A report from a joint public ... |
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 Kathimerini | The Greeks and the diaspora Kathimerini Whenever Greece is in danger, the Greeks of the diaspora feel the need to contribute to the national struggle, honoring their roots, helping fellow Greeks whom they may never meet. The same applies today, with Greeks around the world wondering what ... |
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