Greece

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WishingWealth
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Re: Greece

Post by WishingWealth »

apater:
...even thought their military spending is well above average.
It looks like the Germans have a symbiotic/parasitic relation with Greece.
@ Spiegel again: http://www.spiegel.de/international/eur ... 73,00.html
Complicit in Corruption
How German Companies Bribed Their Way to Greek Deals
...
The German defense industry has also apparently been just as active as Siemens in Greece. Athens spends between €3 billion and €4 billion on arms imports each year, according to estimates -- an absurd amount for such a small country. German arms manufacturers have reaped the greatest benefits from these sales. Between 2004 and 2008 alone, they delivered roughly a third of Greece's defense imports.

Munich's state prosecutor is currently investigating whether everything was done by the book during the sale of four submarines. The order amounted to nearly €3 billion, and €2 billion had to be paid in advance -- which is unusual for such deals.

Dubious Payments

Investigators became suspicious when they discovered a questionable payment to a supposed consultant for the deal. A few years ago, a Greek man reportedly contacted the Essen-based conglomerate Ferrostaal and demanded a double-digit million euro amount in connection with the submarine transaction. At the time, Ferrostaal had formed a consortium with ThyssenKrupp subsidiary HDW. When company executives in Essen refused to pay, the man threatened them with a lawsuit.

They eventually agreed to an out-of-court settlement brokered by a Zurich lawyer in 2006. Shortly thereafter, Ferrostaal transferred €11 million. What was the payment for? That is precisely what the Munich state prosecutor who is investigating the company's top executives would now like to know. Ferrostaal CEO Matthias Mitscherlich, who was recently forced to leave the firm and is one of the defendants in the case, allegedly knew about the dubious payment.

Greek authorities have now also taken a keen interest in the submarine deal. Investigators in Athens are looking into suspicious payments that were reportedly made via Austria, the Caribbean, Liberia and Cyprus. The beneficiaries have yet to be identified.
...
All that's missing is the mention of a Mr. Schreiber.

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Re: Greece

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Exit, pursued by a bear.
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Re: Greece

Post by marty123 »

A very interesting investigative article from Michael Lewis about interviews that uncover the systemic problems in Greece.

http://www.vanityfair.com/business/feat ... table=true

I don't usually post links alone without quotes, but I thought that just quotes wouldn't do justice to this article, which is probably best read in its entirety.
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Re: Greece

Post by Wallace »

marty123 wrote:A very interesting investigative article from Michael Lewis about interviews that uncover the systemic problems in Greece.

http://www.vanityfair.com/business/feat ... table=true

I don't usually post links alone without quotes, but I thought that just quotes wouldn't do justice to this article, which is probably best read in its entirety.
Thanks for the link, marty.
Scary stuff. :roll:
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Re: Greece

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Greece Considers Exit from Euro Zone
It should say they threaten exit if Germany doesn't agree to a haircut. and greeks get a real job



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Re: Greece

Post by parvus »

Even some on the left have turned against Greek state capitalism:
PASOK always was a party of patronage—not a party of programmatic change. PASOK, from its first electoral victory in 1981, offered public sector jobs, credit, loans and favors to its electoral constituency. At the beginning in the early 1980’s, the addition of new public functionaries was ostensibly to implement the socio-economic reforms, which the right-wing public bureaucrats were sabotaging. But as the momentum for ‘reform’ petered out, job appointments continued to multiply, as part of a process of building a large scale electoral party machine.

Thousands of under-employed university graduates with organizational skills crowded the Party offices and over time secured a permanent place in the bloated public bureaucracy. They contributed to securing votes for the PASOK candidates, following the practices of the right wing New Democratic Party. The public sector became the major employment office for several reasons: Most ‘public employees’ held ‘multiple jobs’, some as many as four and five, including self-employment and jobs in the informal economy. Secondly, the so-called private sector in Greece never developed a capacity to grow, invest, innovate, apply technology, compete and create new markets. Most leading Greek businesspeople depended on political links to the Party of Government to secure loans for projects that never materialized, credits that they used to import capital goods from the European Union and loans to import consumer products.

<snip>
PASOK was built around an elite and mass constituency that never paid taxes but extracted and depended on state handouts. Billionaire ship owners avoided taxes as they operated under foreign flags (Panama) but agreed to hire Greek ship captains and contribute to Party coffers. Professionals, lawyers, doctors and architects, barely declared any income, receiving under-the-table cash payments as undeclared income far exceeding any salaries. Business leaders, real estate speculators, bankers and importers all paid off Party leaders in order to secure tax abatements while securing EU loans, which they recycled into tourist properties and overseas accounts. What passed as the Party and business elite were in fact an organized network of kleptocrats: They plundered the treasury and left it to wage and salaried workers to pay the bills, since the latter suffered obligatory payroll tax deductions.
Of course, Greek workers, students and pensioners saw nothing askance ...
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newguy
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Re: Greece

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I found this Greece/Newfoundland comparison interesting, but I don't really know my Canadian history.

http://ftalphaville.ft.com/blog/2011/07 ... foundland/

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ghariton
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Re: Greece

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Greece is in deep shit:
Greece’s economy remained deep in recession in the second quarter of the year, as preliminary estimates by the Hellenic Statistical Authority (ELSTAT) showed on Friday that the economy shrank by 6.9 percent compared with the same quarter last year.

The recession rate posted a slowdown from the first quarter, when the economy had contracted by 8.1 percent, but showed an increase from the 4 percent shrinkage in the second quarter of 2010.

Gross domestic product keeps dropping as consumption decreases and investment has declined, while there is not a single sector in the economy that has not been affected by the crisis.

“The economy is marching across a big desert. The intensity and the extent of the recession is unprecedented, exceeding even the most pessimistic forecasts,” commented opposition New Democracy deputy Christos Staikouras, the party’s spokesperson on the economy.

With unemployment climbing to 16.6 percent in May and the new austerity measures from the midterm fiscal plan applying as of September, the target of containing recession to just 3.8 percent of GDP seems more distant than ever. In the first six months of the year it soared to 7.5 percent, while when the seasonal elements are factored in, it goes down to 4.5-5 percent on an annual level.
And ordinary citizens are under pressure:
The financial crisis is forcing households to cut down on all their expenses, including even the most basic ones such as food and electricity, according to the latest available data, with a consumer confidence survey by the Institute for Economic and Industrial Research (IOBE) suggesting that six out 10 households can barely make ends meet.

Hellenic Statistical Authority figures revealed a 7.6 annual decline in sales at big food stores such as supermarkets, while sales at other food stores (butchers, bakeries etc) have shrunk by 20.1 percent year-on-year.

Fuel sales have declined by 12.3 percent annually and consumers are even cutting down on electricity use, as power consumption by households and small businesses showed a 2.45 percent annual decline in the first seven months of the year.
We are indeed fortunate in Canada, and in the U.S., and so on.

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newguy
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Re: Greece

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ghariton wrote:We are indeed fortunate in Canada, and in the U.S., and so on.
No :roll: , so.....

It's the austerity budgets that do it. Italy just passed one, US is on the way and if oil revenue falls Canada won't be far behind. Never mind the rest of the European periphery.

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Re: Greece

Post by newguy »

So this risk-free rate on government guaranteed sovereign debt is 90%. Is it time to buy?
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It's interesting to look at olde threads and see what people were saying. Can somebody point me to the Italy thread now?

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Re: Greece

Post by flywaysuzy »

Greece has also experienced a massive reduction in tourism as a result of striking protesters, etc. Fewer tourists and grocery stores sell less food.
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Re: Greece

Post by Descartes »

Greek Decision Tree = no happy ending?

http://www.bbc.co.uk/news/business-14977728
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Re: Greece

Post by Shakespeare »

Greek Decision Tree = no happy ending?
Excluding deus ex machina.

A Greek tragedy....
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Re: Greece

Post by mac1214 »

A Greek default would be a fast way to clean up their finances. If they can't pay they can't pay, a few bankers loose some money they shouldn't have risked in the first place. Perhaps they'll be buying a new Mercedes in 8 months rather than 6. When a banker makes a loan, he makes a bet, which sometimes don't work out as planned. People who bought Nortel found out the hard way as well. Some people lose money and move on, after some crying and a few threats. The same thing happened in 2008. Sometimes a baseball game ends after 5 innings - that's the way it worked out -too bad. It's not the end of the world, but it's a new start for Greece.
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Re: Greece

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Greeks pulling together in the face of adversity:
Striking civil servants have blocked access to Greece’s statistical agency building in Athens since Tuesday, undermining efforts by Elstat, the statistics agency, to bring Greek figures in line with EU standards after years of fudging.

The so-called troika – the European Commission, the European Central Bank and the IMF – are in Athens to inspect the budget figures before deciding whether to release the next €8bn ($10.9bn) tranche of its current bail-out loan.

”We will miss [Friday’s] deadline for sending final debt and deficit figures for 2010 to Eurostat, the Commission and the troika, because I and my team can’t get into the building,” Andreas Georgiou, chairman of the Elstat statistics agency, told the Financial Times. “These detailed figures are urgently needed for the troika to recalibrate the draft budget, if required, before it goes to parliament on Monday.”

Mr Georgiou, a former IMF official, was hired by the government last year with a brief to set up an independent statistical agency.

He said members of the agency’s board have tried to undermine EU-mandated work practices. One former board member faces a criminal investigation for allegedly hacking into Mr Georgiou’s work computer.
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CROCKD
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Re: Greece

Post by CROCKD »

The rush for the exits.

Greeks rush at chance to head Down Under
The lack of jobs is so severe that many recent immigrants are thinking of going elsewhere. Every day Pakistanis line up outside their embassy in Athens trying to get papers to go home.
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Re: Greece

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New York Times:
Stories of eye-popping waste and abuse of power among Greece’s bureaucrats are legion, including officials who hire their wives, and managers who submit $38,000 bills for office curtains.

The work force in Greece’s Parliament is so bloated, according to a local press investigation, that some employees do not even bother to come to work because there are not enough places for all of them to sit.

But as Europe looks for any sign of hope that Greece is on the road to reform, there are growing concerns about its ability — and willingness — to trim its payroll, a crucial element in bringing expenses under control enough to win continued international financing.

<snip>

Some experts believe that Greece could reap significant savings by reducing its bureaucracy, which employs one out of five workers in the country and by some estimates could be trimmed by as much as a third without materially affecting services. But though salaries have been cut, the government has yet to lay off anyone.

The main reason is also one of the very reasons that Greece got into trouble in the first place: The government is in many ways an army of patronage appointments built up over decades. When election time rolls around, state workers become campaign workers, and their reach is enormous. There are so many of them that almost every family has one.

<snip>

In four days of tense negotiations, the auditors pushed hard for cutting the bureaucracy. Still, the plan to cut 30,000 jobs is modest by any measure. It amounts to about 4 percent of the public work force and would affect mostly people close to retirement. They would get a soft landing, too: 60 percent of their pay for a year while they remain in a “reserve” pool. After that, those who did not retire or find another job in the administration would be laid off.

The government has about 700,000 employees and 80,000 more who work for government-owned entities like the power company. Thirty years ago, experts say, the public sector was about one-third that size. (Until a census was carried out last year, however, government officials admitted they did not really know how many employees they had.)

<snip>

Greece’s bureaucracy has been growing steadily since democracy was reinstated in 1974, with each new administration adding its supporters to the payroll — and wages rising steeply in the past decade, experts say.

“There was really a party going on,” said Yannis Stournaras, an economist and the director of the Foundation for Economic and Industrial Research in Athens. “The government kept adding bonuses and benefits and pensions. At election time there was a boom cycle as they handed out jobs.”

“Now they need to cut,” he added. “But they have already lost precious time.”

<snip>

But some experts question whether the culture of bloat and favoritism will ever be conquered. Last month, for instance, Anna Diamantopoulou, the education minister, proposed appointing 150 young supporters of Mr. Papandreou’s party, Pasok, to her ministry’s Youth Institute, but the project was canceled after critical media reports. Ms. Diamantopoulou’s spokesman said the jobs would have been paid for by the European Union, but were eliminated after a budget review.
Government is NOT my friend.

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ghariton
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Re: Greece

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Editorial in Kathimerini, a widely read Greek newspaper:
It’s high time that the country’s biggest political parties got rid of union leaders accustomed to feeding off state funding and those who employ or even threaten to employ violence in order to further their demands.

Greece cannot move a single step forward until union barons who resort to such extremes are finally deprived of support from political parties.

PASOK and New Democracy, Greece’s two main political parties, need to come together in the battle against the most powerful unions if they want the country to ever become governable, irrespectively of who will be at the helm.
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Re: Greece

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Editorial in Athens News:
For the second year running, the country will miss its deficit-slashing target. The recently upwards revised figure of 8.5 percent of GDP by the end of the year is almost a full percentage point higher than the bailout target. More crucially, the debt-to-GDP ratio - the key measure of whether the massive public debt will come down - is set to rise from 145 percent to 162 percent of GDP. That at a time when we’re supposed to be getting our spending under control.

The culprit is the anticipated 5.5 percent recession projected by the end of the year (up from an initial estimate of 2.6 percent).

The simple fact is that, once again, the figures don’t add up.

As we head into what will be - even by recent standards - an especially gruelling week of public transport, taxi, garbage collector, teacher, dock worker, journalist and lawyer strikes, it might have been a good idea for union heads to be invited to join the troika negotiations.

They could then have proposed their alternatives to the people really calling the shots. Perhaps then they may have realised the futility of holding the country to ransom. Their dispute is with the government, not the public
The underlying problem, it seems to me, is that, even if Greece were to write off all their sovereign debt 100%, they would still be in big trouble. They would still be running huge deficits, but now with nobody to lend to them to finance these deficits. The resulting "austerity" is unimaginable.

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Re: Greece

Post by Shakespeare »

It's possible that Greece's only way out is with a military government, as unpleasant as that is.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Re: Greece

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Shakespeare wrote:It's possible that Greece's only way out is with a military government, as unpleasant as that is.
Well, it wouldn't be the first time.

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Re: Greece

Post by parvus »

mac1214 wrote:A Greek default would be a fast way to clean up their finances. If they can't pay they can't pay, a few bankers loose some money they shouldn't have risked in the first place. Perhaps they'll be buying a new Mercedes in 8 months rather than 6. When a banker makes a loan, he makes a bet, which sometimes don't work out as planned. People who bought Nortel found out the hard way as well. Some people lose money and move on, after some crying and a few threats. The same thing happened in 2008. Sometimes a baseball game ends after 5 innings - that's the way it worked out -too bad. It's not the end of the world, but it's a new start for Greece.
Interesting perspective on indebtedness, I must say. Bankers are in the moving business, not the storage business. Those loans have been peddled forward, to mutual funds, pension funds and other banks. So who suffers the loss from the default? Shared suffering, methinks.
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Re: Greece

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ghariton wrote:Greeks pulling together in the face of adversity:
Striking civil servants have blocked access to Greece’s statistical agency building in Athens since Tuesday, undermining efforts by Elstat, the statistics agency, to bring Greek figures in line with EU standards after years of fudging.

The so-called troika – the European Commission, the European Central Bank and the IMF – are in Athens to inspect the budget figures before deciding whether to release the next €8bn ($10.9bn) tranche of its current bail-out loan.

”We will miss [Friday’s] deadline for sending final debt and deficit figures for 2010 to Eurostat, the Commission and the troika, because I and my team can’t get into the building,” Andreas Georgiou, chairman of the Elstat statistics agency, told the Financial Times. “These detailed figures are urgently needed for the troika to recalibrate the draft budget, if required, before it goes to parliament on Monday.”

Mr Georgiou, a former IMF official, was hired by the government last year with a brief to set up an independent statistical agency.

He said members of the agency’s board have tried to undermine EU-mandated work practices. One former board member faces a criminal investigation for allegedly hacking into Mr Georgiou’s work computer.
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Why You Can’t Trust IMF’s Statistics
It’s nearly impossible to accurately price sovereign risk using data provided by organizations like the International Monetary Fund (IMF), Eurostat and the World Bank. That’s the conclusion delegates took away from the keynote presentation by Dev Kar, a former IMF economist who is now the lead economist at Global Financial Integrity.

To make his point, Kar presented the case of Greece, who as late as April 2009 reported that its deficit to GDP stood at just 5% – only a few months later, in November, Greece revised that number to 7.7%. According to Kar, that huge revision indicates serious weaknesses in Greece’s statistics and, more importantly, it points to big problems with organizations like Eurostat who are responsible for ensuring that reported statistics are accurate.

Moreover, said Kar Greece’s inability to provide accurate statistics was well known by policymakers and in the run up to 2004, the country had misstated its economic statistics no fewer than 11 times.

Unsurprisingly, organizations like the IMF did not see the global financial crisis coming.
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Re: Greece

Post by parvus »

ghariton wrote: The underlying problem, it seems to me, is that, even if Greece were to write off all their sovereign debt 100%, they would still be in big trouble. They would still be running huge deficits, but now with nobody to lend to them to finance these deficits. The resulting "austerity" is unimaginable.
+1
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Re: Greece

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Clashes At Greek Protest Between Demonstrators, Anarchists
-Clashes have broken out Thursday at a protest in the Greek capital, Athens, between Communist demonstrators and hooded, self-styled anarchist youth.

Several hundreds of the youth attempted to force their way through a peaceful protest organized by Greece's Communist-led PAME union in front of the parliament building opposing Greek government austerity measures.

But the Communist protesters, numbering in the thousands, clashed with the youth before chasing them across the city's main Syntagma Square and beating them with sticks. The anarchist youth fought back by hurling rocks and petrol bombs.

Riot police then entered the square to restore order. There were reports of several injuries.
I don't care who wins....as long as there are lots of casualties on both sides. :thumbsup:
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