Tag: Greece

It’s Greece Again

Austerity….protests…..violence…..IMF loans….more austerity…..more cuts….more privatization…..more protests…. and the beat goes on…….but sports fans, will all this austerity and cuts and protests and…….will Greece be saved?

Not only will they NOT be saved but will still probably default……all that BS and they still cannot be saved…..

From BBC…….

“The announced EU programme… implies that the probability of a distressed exchange, and hence a default, on Greek government bonds is virtually 100%,” the agency said.

[…]”The support package for Greece also benefits all euro area sovereigns by containing the severe near-term contagion risk that would likely have followed a disorderly payment default or large haircut on existing Greek debt,”

Now my question is……with all the cuts and austerity….who will benefit the most if default is coming?   I can tell you the big losers…..the Greek people….that is who!

You realize that this is FAR from over, right?

Will The EU Survive Greece?

Inkwell Institute

European Desk

For about a month or so A loyal reader of Info Ink, Quin of Quintessential Havoc (blogroll will get you to his insightful site….visit often) and I have been having an exchange about the happenings in Greece and the possible effects on the rest of us mortals…..my view, at this point, is that the people of Greece are pulling for a default……and the EU is trying to help Greece save itself from itself……buy are there other forces at work here?  If you have been reading then you know that I think that this whole process is a situation brought on by world financial services and their solution does little to help the people of the country, but rather give them access to to a wide variety of profit making enterprises…..but that is just my opinion and not held by too many others…..but for this post I want to ask if the existence of the EU could be shaken by a failure of Greece……

In a piece written by Toby Helm for the UK’s Guardian…….

The talk was no longer of high ideals and “more Europe”, but of mere survival for the European project. Where they used to talk of “ever closer union” in the commission press conferences, the phrase i s now rarely, if ever, heard except when referring to history. José Manuel Barroso, the pragmatic European commission president, set his sights at this summit on “stability” for the foreseeable future, meaning the EU will do well to steady the ship in the face of Greece’s financial implosion and possible exit from the single currency. Never mind any new European dreams.

From Schwaiger’s perspective, one of the reasons why Europe has run out of idealism is the passage of time. He argues that Germany’s postwar guilt, which did so much to power the European project, no longer drives young Germans to think about the EU as their parents and grandparents did. “In Germany the new generation, just out of school, has no memory of this,” he says. Instead the young see a Germany united from its former east and west, communism fallen and a continent no longer haunted by its past or racked by the fear that it could plunge back into war. Much of Europe’s original raison d’être has disappeared and Germany is now less willing to be its unquestioning, selfless paymaster.

The immediate challenge for Brussels is to ease the Greek crisis and hope that its economy can be revived. The aim is to get private banks that are exposed to Greek debt to exchange them for new loans. Then pray the rescue measures work. In the meantime, plans are being pushed through the European parliament to toughen up the kind of rules that were supposed to apply under the stability pact. There will be new surveillance “early warning” measures aimed at ensuring eurozone countries are not heading into economic trouble, such as unsustainable property booms.

Optimists in the EU try to convince themselves that something good could come from the crisis – meaning more economic integration and harmonisation of taxes – steps towards the single EU economy of which Prodi dreamed. One of the arguments the commission deploys to calm anxiety is to make out that Europe is no stranger to crises – indeed, it says, it has always thrived on them.

I think the concern is for the EU and not what is best for Greece…..and since it is a form of centralized government I can understand the need to see the the Union survives over the state……but Greece could not be the only weak link……hiding in the economic weeds is Spain, Portugal, Ireland and slowly entering into the game is Italy…if things do not improve the EU could be just a not so fond memory…….to some it will be….Good Riddance!

The US needs to watch and learn!

P.S.  At the time of this draft….the Euro has sunk to $1.40 in value….that is one of its lowest points so far.  Is it a sign of the coming storm?

Yet Another Greek Post

Inkwell Institute

European Desk

I know….we all are well aware of the problems that Greece is having……socially, economic and political……….violence, forced austerity and dissension……people having to pay for the problems created by a government…. that is pretty much always the case……

The EU and IMF plan is that Greece needs to cut spending, suspend benefits and to sell off as much as possible of the governments assets….like airports or bridges or toll roads….etc…..but there is a problem…..

As reported in UK’s Guardian……

Up for sale are 39 airports, 850 ports, railways, motorways, sewage works, a couple of energy companies, banks, defence groups, thousands of acres of land for development, casinos and Greece’s national lottery. George Christodoulakis, Greece’s special secretary for asset restructuring and privatisations, said the sell-off would raise €50bn (£44bn) to help pay back the country’s €110bn bailout debt.

The private equity bosses gathered in the hotel’s ballroom for the parade of Greece’s national treasures showed little interest in buying anything.

But why would rock bottom prices for assets not be attractive to speculators and developers?

Aref Lahham, managing director and founding partner of Orion Capital Managers, said most private equity firms would not buy Greek assets because the “risks are too high”. He added: “I think people will not buy those assets, that is the sad truth.”

Lahham said more than half of the assets up for sale comprises land for commercial or residential development, which is unattractive because of the difficulty of securing financing to build in Greece. His firm was attracted by the potential of Greek tourism but legislation made it difficult for foreign companies to develop the country’s islands and beaches. “Greece is a fantastic tourism destination with very undeveloped infrastructure. There isn’t a Four Seasons or a Shangri-La or a Peninsula or any of the major hotel chains in Greece,” he said. “It’s strange, they would love to be there and we would love to build it for them, but somehow regulations don’t allow you to do so.”

To me that sounds like the people with the cash want to eliminate any regulations that would keep them honest…….kinda like the big corporations in the US…….in a recent vote even more austerity measures have been approved by the Greek parliament……and since the first round of austerity was not as productive as anticipated….I ask what happens if this round is not successful?

The claim that “healing” and “renewed growth” will come from the further suppression of wages, deeper government spending cuts and the sell-off of government-owned assets is a contemptible lie as millions of people know through their own bitter experiences. The austerity measures of the past year—also introduced with the promise of “recovery”—have seen a rapid economic contraction and rising unemployment. But rather than bring down the level of debt, the ratio of debt to gross domestic product has continued to rise and is heading to 160 percent.

Who will pay the next round?  Will the people be cut even deeper?  The people have little left to be taken away….or maybe this time they can have the people work for free and to keep working until they drop dead….now that would settle a bunch of costs to the government……Greece is being RAPED!

I swear if I was a hard core conspiracist I would say that this is a world wide plan to eliminate the middle class and to return us back to the days of serfdoms…..(now that sounds like a future post in the making)…….

Does Greece Look Familiar?

Inkwell Institute

European Desk

How many of you remember your Greek history?  NO!  I am NOT talking about the Spartans or Plato, Socrates or Aristotle or even the trials of Heracles ……NO!  I am talking about the days of the 70’s…….

There was a time when I had to do a bit of travel and Greece was on my agenda….that was the Dark Ages of the 70’s…….a little of Greece’s recent history…..

After the end of WW2…Greece went through a bunch of social upheavals….mostly between the pro west forces and those darn pesky commies……it was a civil war that left the country in economic trouble as well as a hit to the social side of life….there were almost daily protests and violence….like shootings bombings and other assorted civil war thingys….it was not safe for Americans to travel to the country and in 1975 there were elections and a centrists won…..in the years after, the left was marginalized and there was rapid economic growth…most of it was from the remnants of the Marshall Plan…you know that plan to help countries re-build after the war…..and then all was quiet for a couple of decades…there was political and social progress that made most everyone happy….but in 2010 that came to an abrupt halt….(key sounds of screeching tires)…..

Fast forward to today……there are protests and violence and political woes…….

GREEK SOCIETY has exploded into protest against austerity measures, threatening to bring down the government of Prime Minister George Papandreou and his center-left PASOK party. Meanwhile, the country staggers to the brink of default and economic collapse.THE VAST majority of Greeks reject Papandreou’s attempt to implement austerity measures demanded by the European Union, International Monetary Fund (IMF) and European Central Bank in return for a bailout package negotiated in May 2010 that was worth nearly $160 billion. This “troika” is threatening to withhold further funds for the Greek government unless it accelerates the pace of the cuts.

As a result of the bailout deal, Greece’s population of 11 million is suffering its deepest social crisis in generations. Waves of draconian cuts, including a 20 percent wage cut for public-sector workers, reductions in pensions of up to 55 percent, and an increase in the retirement age have upended social life in Greece and decimated working-class living standards.

Now turn the page back…..the 70’s have returned….but this time it will not be communists vs anti-communists but rather banks vs people….the violence has returned, the shootings have returned, political upheaval has returned and the people have returned to the streets….how long before the cycle is completed?

As I see it, there is a way to avoid all this repeat of history…..my thoughts will piss off the banks and power elite….but it needs to be done to save Greece…..I know….what is my big idea?

Glad you asked!  1–leave the EU, 2–drop the Euro, 3–write down debt and 4–cut spending 5–raise taxes……this would NOT be popular with the bosses of the EU….but I think the people of Greece would be better off and maybe help eliminate the need for them to take to the streets….but as long as the answer to Greece’s problems is the people and what they must endure to make the economy whole again…there will be return of the days of yore….the 70’s.

Just saying!

Side note:  Greek PM wins vote of confidence……more violence will follow closely…..

A More Austere Greece

Greece has lots of problems, along with several other countries in the EU and some even say that the US is looking at major economic problems….Greece has erupted in violence….again.

I have been writing about the problems and some of the solutions that the IMF will look for and some of the other choices that Greece must come to terms with and soon……..

I wrote a piece the other day about what the IMF will most likely demand of Greece…..http://bit.ly/mEUNw0……and today there is another post on the austerity politics ….all are related to the happenings in Greece….

But if Greece is to save itself from financial ruin what must it do?

In an article written by Wayne Madson…..

What lies in store for Greece, Portugal, Spain, Ireland, Italy, and, in short order, the United States, is the wholesale sell-off of public property to private corporations at bargain basement prices. What the despots who gather in their secretive lairs at Davos, Cernobbio, Bilderberg, and G8/G20 are bringing about is a world where no property is owned by the state, which by default means the people. Total corporate control over every facet of life equals extreme fascism.What is occurring in Greece is a bellwether for what will befall other nations in Europe, as well as the United States, if the bankers get their way. And in Greece, the people know how generations of investments by the taxpayers are being turned over to vampire capitalists who have the full backing of the International Monetary Fund, European Commission, and the European Central Bank.

The European and global bankers have demanded that the Greek government sell off entirely or assume a minority stake in a number of state enterprises and utilities.

For example, this year global capitalists are slated to acquire 84 percent of OTE, the Greek telecommunications provider. In addition, private bankers will assume 66 percent ownership of the Greek Postal Savings Bank; 51 percent of the National Lottery; 60 percent of the Salonika Water Authority; 68 percent of DEPA, the natural gas utility; and 25 percent ownership of the ports of Piraeus and Salonika.

Next year, the capitalist grab for public property increases in intensity with Athens International Airport coming under 79 percent private ownership. The global capitalists will also obtain 100 percent ownership of the Egniata toll motorway; 60 percent of Hellenic Post; 66 percent of OPAP, the state-run video-lotto and online sports betting firm; 73 percent of the Athens Water Authority; 83 percent of DEI, the Greek Electric Authority; and 51 percent of the Greek Regional Airports Authority.

There you are……an all out assault on the public sector…….an attempt to make everything and I mean everything is controlled by the private sector….everything will be for profit and NOTHING will be based on need or society’s needs….not a bad deal…..one gets to control the public sector for pennies on the dollar………..and NO one can see why the people are pissed off?  What is the first thing companies do when they buy another company?  (pause here for reflection)…..do not hurt yourself…..they fire people and shit can benefits…..and this what the whole world is looking at when the people scream about austerity…….

What part of any of this austerity crap is good for the people?  Where will it improve their lives?

Happy days are here again!

Here Comes History Again

Inkwell Institute

European Desk

I try to help my readers stay up on the happenings around the world that could possibly involve the US….and on that note…..here comes history……. again…..

In my early years of being a world traveler I had a chance to visit Greece….that was in the days of the junta and the communist uprisings….both fighting to control the country……the US was not really too popular in those days for we were entrenched with the junta and the communist were determined that we pay for our loyalty….any way I take this trip down memory lane because I see something occurring in Greece that could be a replay of those days……

The U.S. Central Intelligence Agency warned in a report that the tough austerity measures and the dire situation could escalate and even lead to a military coup, according to a report by Germany’s popular daily Bild.  According to he CIA report, ongoing street protests in crisis-hit Greece could turn into escalated violence and a rebellion and the Greek government could lose control, said Bild. The newspaper said the CIA report talks of a possible military coup if the situation becomes more serious and uncontrolled.

Greece is under immense pressure owing to public debt that has swollen to 340 billion euros. The EU, IMF and European Central Bank are pressing Greece to step up a privatization program and get all political parties to approve more austerity and reform measures that have sparked violent protests, but emergency talks called by the president on Friday failed to make any headway, AFP reported.

Opposition parties have mostly refused to support the government in its quest to cut spending by trimming an overblown civil service and the sweeping privatization drive announced this week has attracted even stronger protests.

All this protests and demonstrations give some validity to the concerns….and the US will most likely return to the policy of supporting the junta, if it occurs….why?  Economics, my friend, economics!

It’s All Greek To Me

Oh my God!  So much has been said about the crisis in Europe and most verbally the situation in Greece.  Gloom and doom is predicted…..if Greece then on to the others in P.I.G.S. and then if that why not the US going down the drain?

But what if?  What if the crisis in Greece could ultimately benefit the US?  In an article written by Derek Thompson for the Atlantic Business:

But what if Europe’s debt disaster actually works out for the United States … kind of? Tim Duy finds three reasons:

1. Capital Gains for the U.S. Scared investors are running from peripheral EU states that look like they could follow Greece into the abyss. (It’s called the contagion effect: explanation here.) Running from Europe, investors might seek shelter in US investments, driving down our interest rates and giving companies looking to hire more access to capital. Duy concludes, “the odds of sustainable recovery look better every day.”

2. No Tightening from the Federal Reserve. Some liberals and moderates are concerned that the Federal Reserve might try to prematurely tighten its monetary policy by selling assets to squeeze inflation before we’ve achieved sustainable recovery and consistent job gains. But the crisis in Europe makes it more likely that the Federal Reserve will sit tight and keep money easy. After all, a Greece default — which is all but certain — could shock high-debt, low-growth states like Portugal and Spain and send jitters throughout the global economy. The Fed, nervous about feeding those fears, will probably keep interest rates low for an extended period of time with the European debt bomb ticking.

3. Cheap Oil. A weak Euro and a stop-start European economy means cheap oil, relief at the pump for the re-emerging American consumer, and marginally higher demand for cars. An exogenous oil shock helped to pop the housing bubble in the mid-2000s. Cheap gas is an economic lubricant.

What is the possibility that the US could see some minor benefit from the crisis in Greece and possibly the rest of the EU?  What are the possibilities of other countries seeing the same?

From The Fire Into Greece

Inkwell Institute

European Desk

World Economy/Economic Crisis

First of all, I am not the only person that sees the possibility of a total collapse of the economy in the future……we have been burned, economically and the fire is NOT out and it will be hotter the next time we get burned……

By now anyone interested in economics has heard or seen the reports on the problems in Greece….their economy is on the verge of collapse and if it does some of European will go with it……

For those interested:

Credit default swaps are insurance-like contracts that permit banks and hedge funds to place bets on whether or not a company, or even a country, will default on it debts. The nature of CDS trading, which is unregulated, is such that CDS speculators have an incentive to push companies or countries toward bankruptcy. According to one analyst, “Its like buying fire insurance on your neighbor’s house—you create an incentive to burn down the house.”

The role of CDS trading has been highlighted in relation to the financial crisis of the Greek state. Attracted to the highly indebted Greek economy like vultures to a decaying corpse, the CDS traders at major banks and hedge funds have moved in. According to the Depository Trust and Clearing Corporation, trading in credit default swaps linked to Greek debt has surged over the past year.

The overall amount of insurance on Greek debt hit $85 billion in February of this year. One year earlier, the same figure stood at $38 billion. The surge in such types of trading invariably drives up the cost of insuring Greek debt. The cost of insuring Greek bonds nearly doubled in February compared to early January. This, in turn, worsens the budgetary plight of the country and brings closer the specter of default—and a jackpot for CDS speculators.

The list of world players in derivatives and CDS trading is headed by the US banks JPMorgan Chase, Citibank, Bank of America and Goldman Sachs. According to the Office of the Comptroller of the Currency, United States banks held a total of $13 trillion in notional value of credit derivatives at the end of the third quarter of 2009.

US banks, however, are not alone in such trading. A number of Europe’s biggest banks, including Credit Suisse Group, UBS, Société Générale, BNP Paribas SA, and Deutsche Bank, are amongst the biggest buyers of swap insurance. Their activities on the derivatives market reflect their exposure to the Greek economy. The Bank for International Settlements reports that French banks hold $75.4 billion worth of Greek debt, followed by Swiss institutions, at $64 billion, and German banks, with an exposure of $43.2 billion.

Now Greece has had to make many concessions to the EU and the world, in an attempt to sure up the economy and try desperately to avoid a total collapse…….

It is increasingly doubtful, however, that Greece can obtain loans on American or Asian financial markets. The Daily Telegraph cited Simon Derrick of Bank of New York Mellon: “China is becoming concerned about Europe. Greece is going to struggle to find anybody to buy its debt. There is no road-show in Asia, and it may pull out of its show in the US.”

Moreover, financial commentators increasingly anticipate that Greece will be unable to repay its debts, even with European or IMF loans. While a joint European-IMF bailout of roughly €45 billion has been discussed, German central bank governor Axel Weber recently said that €80 billion might be needed. He told a closed-door meeting of German lawmakers that Greece’s position was worsening and “the numbers are changing all the time.”

In a Financial Times column, Wolfgang Münchau wrote: “Greece has a debt-to-gross domestic product ratio of 125 per cent. Greece needs to raise around €50 billion ($68 billion, £44 billion) in finance for each of the next five years to roll over existing debt and pay interest. That adds up to approximately €250 billion, or about 100 per cent of Greek annual GDP.” He concluded, “The best thing you can say about the rescue package is that it buys time to negotiate an orderly default.”

Greece has tried several things that involves the people making sacrifices but not the banks that have caused the problem…….

More than 10,000 civil servants and students marched to parliament, calling for cutbacks to be scrapped, beating drums and chanting: “No more illusions, war against the rich.”

Nurses, teachers, tax officials and dockers stopped work during the 24-hour strike, which paralyzed public services, while EU and IMF officials met in Athens for talks that could lead to a financial bailout for Greece.

Workers are protesting against public wage cuts, a pensions freeze and tax hikes imposed by the government to try to pull Greece out of a fiscal crisis that has shaken markets worldwide and driven Greece’s borrowing costs to a 12-year high.

You now know more about the problems in Greece and Europe than most of your elected officials….but you will no doubt ask……why?  Well sports fans you need to see what happens when a country’s economy collapses……why?  The way the US is going with its debt, in ten years this scenario could be playing out here and you will be warned…..but why would I say that?  Easy…NOTHING being done, by either party in Washington will control the risk of the CDS……since 2008, the banks have gone back to business as usual and the risk to the economy is STILL there waiting for the next glitch…..that will make them billions and drag the US economy down yet again……

UpDate:  Since I originally wrote this post there has been a further erosion of the Greek problem.  There bonds have been downgraded and are now JUNK!   And Greece has agree to more austerity programs and to raise taxes if they want the $145 billion carrot dangled in front of them…..now there is a novel idea….raise taxes to stem off any budgetary problems…..why did not someone think of that sooner (BTW that is called sarcasm)….BTW (again) it will be $8 billion of US taxpayer funds coming from the IMF……