The Greek thriller

The latest secret opinion post show that the Greek election of Sunday will be a derby between the center-right New Democracy and the left party SYRIZA. The secret opinion poll results change by the day.
The battle between two parties will be continued until on Sunday.
Speaking on a television show on NET, Alexis Tsipras, the President of SYRIZA said that "the currency is not a fetish" and that SYRIZA will say "no" to the stay of the country in the eurozone if the price for the Greek people is too great.
The President of New Democracy, Antonis Samaras, answer today: “We do not touch, we do not risk anything that leads to the destruction of the country. What does Tsipras mean by saying the euro is not a fetish?”
In main pre-election speech in Omonia square Tsipras wondered:  "Do not bet your money on Greece's exit from the eurozone on Monday because you will lose!" and he argued that SYRIZA guarantees all that was compromised, meaning the stay on the euro, and the deposits and pensions of the people.

Greek Election 17 June 2012

International Political Review (IPR) covers the Greek Election. Minute-to-minute IPR will report all details and exit polls, on Sunday, from Athens. The Greek Election will affect the future of Euro and European Union.

Moody's against Spain and Cyprus

Before 24 hours European statements supported that Spain, Cyprus and Italy are the three new problems of Eurozone. The IPL wrote this. (Read details http://internationalpoliticalreview.blogspot.com/2012/06/italy-spain-cyprus-three-problems-of.html) Today Moody’s cuts Spain and Cyprus to one notch above junk.


* The IPR notice: now, the most crusial fact for the future of Europe is the Greek election, 17 June.



This is the Spain announcement:

London, 13 June 2012 — Moody’s Investors Service has today downgraded Spain’s government bond rating to Baa3 from A3, and has also placed it on review for possible further downgrade. Moody’s expects to conclude the review within a maximum timeframe of three months.


The decision to downgrade the Kingdom of Spain’s rating reflects the following key factors:


1. The Spanish government intends to borrow up to EUR100 billion from the European Financial Stability Facility (EFSF) or from its successor, the European Stability Mechanism (ESM), to recapitalise its banking system. This will further increase the country’s debt burden, which has risen dramatically since the onset of the financial crisis.


2. The Spanish government has very limited financial market access, as evidenced both by its reliance on the EFSF or ESM for the recapitalisation funds and its growing dependence on its domestic banks as the primary purchasers of its new bond issues, who in turn obtain funding from the ECB.


3. The Spanish economy’s continued weakness makes the government’s weakening financial strength and its increased vulnerability to a sudden stop in funding a much more serious concern than would be the case if there was a reasonable expectation of vigorous economic growth within the next few years. …


The review for downgrade will focus on the outcome of the ongoing external audits of the Spanish banking system, the conditionality and details of the EFSF/ESM loan agreement, and the specific execution strategy developed for the banking system’s recapitalisation. Moody’s will also consider any further initiatives at the euro area level. In addition, Spain’s rating — as well as the ratings of other euro area countries — could be adversely affected if the risk of a Greek exit from the euro area were to rise further. …


RATINGS RATIONALE


The first key driver underlying Moody’s three-notch downgrade of Spain’s government bond rating is the government’s decision to seek up to EUR100 billion of external funding from the EFSF or ESM. A formal request will be presented shortly, but the euro area finance ministers announced on 10 June their willingness to accede to that request. The sum of EUR100 billion is twice the size of Moody’s previous base case estimate, and in line with the rating agency’s adverse case estimate.


While the details of the support package have yet to be announced, it is clear that the responsibility for supporting Spanish banks rests with the Spanish government. EFSF funds will be lent to the government which will use them to recapitalise Spanish banks. This borrowing will materially worsen the government’s debt position: Moody’s now expects Spain’s public debt ratio to rise to around 90% of GDP this year and to continue rising until the middle of the decade. Stabilising the ratio will be a key challenge for the Spanish authorities, requiring years of continued fiscal consolidation. As a consequence, the government’s fiscal and debt position is no longer commensurate with a rating in the A range or even at the top of the Baa range.


The second driver of today’s rating action is the Spanish government’s very limited financial market access, as evidenced both by its reliance on the EFSF or ESM for the recapitalisation funds and its growing dependence on its domestic banks as the primary purchasers of its new bond issues, who in turn require funding from the ECB to purchase these bonds. In Moody’s view, this is an unsustainable situation. In the absence of positive developments that shore up investor sentiment, such as a resumption of growth or rapid progress in achieving fiscal consolidation objectives, neither of which is likely in the current environment, the government is likely to become increasingly constrained with regard to the terms under which it is able to refinance maturing debt. If unchecked, Moody’s believes that the risk of the government losing access to private debt markets on affordable terms and needing to seek direct support from the EFSF/ESM will continue to rise.


Given the experience with private-sector involvement (PSI) in Greece and the intentions expressed by euro area officials around the development of the ESM, Moody’s believes that the debts of euro area sovereigns that are fully dependent upon official sources to fund their borrowing requirements represent speculative-grade risk. Support would, if needed for a sustained period, be likely to be made conditional on loss-sharing with private investors or in extremis withdrawn altogether.


Moody’s action to place the government’s rating one notch above speculative grade reflects the rating agency’s view that Spain has moved much closer to needing to seek direct support from the EFSF/ESM, and therefore much closer to being positioned within speculative grade.


Moody’s decision to leave the government’s rating in investment grade reflects the underlying strength of the Spanish economy and the government’s clear desire to reverse the debt trajectory through a strong fiscal consolidation programme. Moody’s also acknowledges several factors that differentiate the current programme from the support packages extended to Ireland, Portugal and Greece. In particular, the size of the support package is significantly smaller than it is in the other cases. The maximum amount of EUR100 billion equates to around 10% of Spain’s GDP, compared with more than 54% of GDP in the case of Ireland, 114% of GDP in Greece and 46% of GDP in Portugal. Moody’s therefore also considers the issue of subordination of bondholders to the senior creditor EFSF/ESM to be less of a negative factor. Senior creditors account for 37% and 40% of total public debt in Ireland and Portugal, while the respective share in Spain is 11% (in case the maximum amount was drawn).






This is the Cyprus announcement:

London, 13 June 2012 — Moody’s Investors Service has today downgraded Cyprus’s government bond ratings by two notches to Ba3 from Ba1, and has placed the ratings on review for further possible downgrade.


The key driver for today’s rating action is the material increase in the likelihood of a Greek exit from the euro area, and the resulting increase in the likely amount of support that the government may have to extend to Cypriot banks. The two-notch downgrade reflects Moody’s assessment that this risk is exacerbated by the fact that the country’s finances are already strained and access to the international markets is still denied.


Moody’s decision to maintain Cyprus’s sovereign bond ratings on review for further downgrade reflects the need to assess the substantial downside risks to the banking sector and the sovereign as a result of a Greek euro exit. These risks have the potential to rise in the aftermath of the Greek elections on 17 June 2012.


RATINGS RATIONALE


The key driver of Moody’s two-notch downgrade of Cyprus’s government bond rating is the significant deterioration in the country’s outlook as a result of the material increase in the likelihood of a Greek exit from the euro area. The immediate result is a further increase in the likely amount of government support that the Cypriot banks may require due to their exposure to the Greek government and economy as well as the deterioration in domestic macroeconomic conditions.


Moody’s prior Ba1 rating for Cyprus incorporated an assumption that the Cypriot government would need to contribute capital support equivalent to around 5-10% of GDP to the country’s banks. The rating agency now expects this to be materially higher. For Cyprus Popular Bank alone, Moody’s expects most, if not all, of the €1.8 billion in recapitalisation costs to be borne by the government, which will increase debt levels by just over 10 percentage points of GDP.


Moody’s has reflected the increased risks emanating from the increased likelihood of a Greek exit in the ratings of the three largest Cypriot banks, two of which were downgraded on 12 June 2012, with all banks being placed on review for further downgrade. The close linkage between the government and the banking sector means that these increased risks for the banks may lead to much larger recapitalisation costs to the government, and Moody’s needs to reflect these in the Cypriot sovereign’s ratings.




  

The enthusiasm of Angela Merkel for Euro 2012

Merkel exults when Germany beats the Netherlands (final score and result:- Netherlands vs Germany 1-2 // Van Persie/ Gomez*2).

The response of Ukrainian goverment about boycott Euro 2012

"I have attended many world cups and European championships and I've never seen high-ranking politicians at group games," said Borys Kolesnikov, Ukraine's Deputy Prime Minister. Kolesnikov answer for Euro 2012 boycott over Ukraine's treatment of jailed opposition leader Yulia Tymoshenko.

"Attending a national team game is an opportunity but not an obligation for any politician" he said. 
"All the hotels in Ukraine are 99.9 percent full" he said too.

Eugenia Tymoshenko welcomes boycott of Euro 2012 by politicians

“The politicians who come to the finals should ask to meet political prisoners and make sure they understand and make sure the media and the Ukrainian community understand that they are against political repression, but they are there to cheer their team,” said Eugenia Tymoshenko, the daughter of jailed opposition leader Yulia Tymoshenko.

Eugenia Tymoshenko welcomed the boycott of European politicians of the Euro 2012 football competition.

The boycott started by the German, French governments and British ministers.

According to wikipedia " the trial against Tymoshenko has been rated as "selective justice" and "political persecution" in statements by the U.S.A, Russia, United Kingdom, Germany, Italy, Spain and other European countries; and in statements of the European Union, NATO, the European People's Party; as well as by human rights organizations: Transparency International, Freedom House, Amnesty International and Human Rights Watch"

Article / Jon Meacham: Why Politics Is Always About Ideology

Nearly a quarter century ago, on a warm July night in Atlanta, Michael S. Dukakis accepted the Democratic nomination for president. “This election isn’t about ideology; it’s about competence,” Dukakis said. “It’s not about meaningless labels; it’s about American values—old-fashioned values like accountability and responsibility and respect for the truth.” As The New York Times reported the next morning, the ideology v. competence point was designed to blunt George H.W. Bush’s attacks on the Massachusetts governor as a liberal who was out of step with the American mainstream.

As we know, it didn’t work. Labels may be meaningless, but worldviews are not. On reflection, the Dukakis dichotomy is fundamentally flawed. In politics you can never really separate the execution of a task from the idea that brought that task within the purview of government. To run a government is to be engaged in the world of ideology and values and of making judgments according to those values.

Another Massachusetts governor, Mitt Romney, will be trying through the next five months or so to convince independent voters to hire him to replace President Obama as America’s CEO. He will emphasize his competence to take over the stewardship of the economy, as his ads put it, on “Day One.”

It’s an interesting and open argument. But one thing is clear: it is also about ideology, about what Romney believes versus what Obama believes. Even a reassuring “Mr. Fix-It” has to work according to a larger compass.

Which Americans intuitively understand. Last week the New York Times published a dispiriting story about its poll findings that none of the three branches of the federal government so painstakingly constructed in Philadelphia 225 summers ago is approved of by even half of Americans. President Obama is at 47 percent; Congress at 15 percent.

The news in the survey was that the Supreme Court has only 44 percent approve of the job it’s doing. Even more interesting was that three-quarters of those polled say the justices’ personal views affect their rulings. And what is true on the court is even more true in the White House.

Bill Clinton had it right recently when he conceded Romney’s qualifications for the office. The real issue, as Clinton said, is not how a president does the job but what he does in the job. That’s the threshold question this year, and every year.

Meacham, executive editor at Random House, is the author of the forthcoming Thomas Jefferson: The Art of Power to be published this November. The views expressed are solely his own.

(TIME)

AFL-CIO Chief: I've Talked With President About Second Term Agenda

Greek Election 17 June 2012

The International Political Review (IPR) covers the Greek Election. Minute-to-minute IPR will report all details and exit polls, on Sunday, from Athens. The Greek Election will affect the future of Euro and European Union.

The Greek radical left leader, Alexis Tsipras said that "We take the responsibility to govern the country in order to guarantee a stable, safe and just (fair) course for the people and the country, within the Eurozone".

The today's speech of Alexis Tsipras.

Greek people, with their vote for SYRIZA-USF, on Sunday, will open the chapter of the new post Junta era in Greece’s history.
On Monday we will form a government of all Greeks.
We live the past behind.
We live behind the old partisan division of the people that the New Democracy party is currently implementing to save itself in these elections. And we are all making a fresh start, all together. United – not divided. We take a step into the future.
We set the foundation for a new Greece.
A democratic Greece.

With dignity, stability, safety, rule of law and growth.
We take the responsibility to govern the country to put an end to the rotten, corrupt and ineffective political and economic system that threatens Greece’s membership in the Eurozone.
The party of corruption and intertwined interests on the backs of the Greek people is over on Sunday.
We take the responsibility to govern the country in order to guarantee a stable, safe and just (fair) course for the people and the country, within the Eurozone. .

We take the responsibility to govern the country in order to restore its international credibility and prestige. In this way, we will ensure the equal participation of Greece in all European and International institutions.

We take the responsibility to govern the country to replace the ineffective Memorandum of bankruptcy with a National Uplifting Plan for the economy, the development and the productive reconstruction.

We take the responsibility to govern the country to restore the right of every Greek family, of every Greek, to a decent life, safe work and fair and just remuneration.

We take the responsibility to govern the country so that all citizens receive a decent pension for old age and care, regardless of their income.

We take the responsibility to govern the country to restore not only the collective but also the individual rights of citizens.
The citizen’s individual rights to safety and security.


We take the responsibility to govern the country with the self-confidence of a calm power that has the will, the knowledge and the ability to change the fate of the people and of the country.

On Monday we will be forming the government of the new post-Junta era:

 Ministerial cabinet with a few members.

 Ministerial cabinet that will co-operate directly with the public administration.

This in fact signals the end of the armies of highly paid, well-off, settled advisors who replace public administration– in a rather unworthy fashion – functioning as imperium in imperio (a power within a power).
Political party and state are two different notions.

 Staffing of the state mechanism with transparent, meritocratic criteria rather than with intransparent and arbitrary partisan criteria.
The unacceptable phenomenon of  fat cat (earning unreasonably high salaries) managers, directors, presidents, CEO’s and members of the BoDs of the Public Utilities will be brought to an end on Sunday.
Their fees and remunerations will correspond to the actual circumstances of the economic and social crisis that the country is going through.

In no case will their remunerations be higher than those of ministers.
Enrichment with public borrowed money will be stopped. The disconnection of public administration from partisanship and favoritism, the utilization of accumulated knowledge and experience of public administration executives will be to the benefit not only of the Government but of Greece as a whole.

By act of the new ministerial cabinet:

 The Prime Minister’s and the cabinet members’ salaries will be cut in half.

 A registry of personal assets will be drafted starting, symbolically, by the members of the cabinet and by all those who will hold offices and positions of state responsibility, in order to facilitate the direct and immediate comparison of their assets before and after their tenure in government positions.  
 Privileges of deputies, such as free of charge telephony and the use of cars leased by the Hellenic Parliament, will be cut back.
There will also be a cut down of secondments of public executives to deputies’ offices – in particular from critical services, with vacant established posts, such as doctors, nurses, teachers, professors and security corps staff.

 Replacement of the minister’s liability law, currently in force, since it is but the institutional auto-immunity of cunning politicians.


The new government’s first draft laws include:
1. The return of the minimum salary to €751 euros for all, regardless of age. The return of the unemployment benefit to €461,5 euros and its granting for double period of time, that is for two years. The return of the after-effect and the obligatory extension of sectoral collective agreements.

2. The abolishment of special taxes for small and medium incomes and first and foremost for the unemployed, those on low wages, low pensions and those living on the poverty line.

3. The new “Seisachthea” (Shaking off burdens).

With the total or partial write-off of loan obligations of households to banks, according to their current situation and the reduction of their income.
With the respective write-off of loan obligations for small and medium enterprises, depending on the reduction of their turnover.
With the settlement of farmers’ debts to banks and the safeguarding of the assets of every farmer at their current levels.
With the freezing of every procedure for sale, by auction of assets, for two years.

4. The upgrading, expansion of the beneficiaries and stable funding of the “Help at Home” programme.

5. Re-establishment of the Workers’ Housing Organization and of the Workers’ House.

The immediate priorities of the new government include:
 Achievement of the three parallel and interconnected objectives to stop the downfall of salaries, pensions, social expenditure, in the economy and society overall:

• The objective of the material relief of the victims of the crisis and of the memorandum policy,
• The stabilization of the economy to deter an even more massive and broad financial disaster,
• Instilling the feeling of security and hope, by restricting generalized insecurity and forming visible positive economic and social expectations and prospects.
 Combatting corruption, intertwined interests and re-examination of the scandal of scandals of the former bi-partisanship (two party system) – the Siemens scandal.

Monday morning the regime of impunity in Greece will be terminated. Those who think they swept their doings under the carpet and erased their traces are wrong. The new Parliament for the first time with a majority of incorruptible forces, for the first time with a minority of the post-Junta two-party system forces of corruption and intertwined interests, will seek to identify and to assign liabilities for the big scandals of the previous period as well as for the transformation of a manageable debt crisis into a national tragedy
Dear Friends,
What we are actually experiencing in our country in these last few days is a historic process of peaceful revolution.
A historic process of the political emancipation of our people.
No matter how hard the powers of the past try to bring down the endless passion of our people for a life with dignity, using the architecture of mud and Nero’s syndrome, they will not make it.
From Monday morning, the powers of domestic intertwined interests and international loansharking will stop writing down memoranda because our people will start writing history.
The New Democracy and PASOK parties will pass in oblivion.

However, what is left behind is a pillaged people, a desolate land.
It is we who simply take responsibility.
We assume the heavy weighing historic responsibility to rebuild the country from the ruins of the memorandum.
To establish on solid foundations a fair, effective and meritocratic state, an economy that will respond to the social needs, the needs of our people.
We are neither saviors, nor heroes.
We simply respond to the call of history and do our duty. Our patriotic and democratic duty. To a great extent, whether we make it or not will depend on how much the people will support our efforts.
We cannot promise anything more, nor anything less than what we have been saying before and after the 6th May elections, what we are saying even now, looking all Greeks in the eye:
We will not betray you.

Thank you.
  

Rumours for Eurogroup on Sunday or Monday

Hommes d' etat from Brussels entertain an idea for eurogroup, after the Greek elections, on Sunday or Monday.

The Greek election are crusial for the future of Europe. 

Fekter: Italy may need help, Monti: it is completely inappropriate

The statement of Austria´s Finance Minister Maria Fekter argued yesterday that Italy may need help by the ESM. Fekter support that the rising interest rates on Italian sovereign bonds. The IPR wrote before that Italy faces problem with its economy. European economic analysts wonder how Italy will come up against its public debt quota reached 120.1% in 2011.

Today Prime Minister of Italy Mario Mody responted: "I think it is completely inappropriate that a Finance Minister comments on the financial situation of another member country. And it is particularly inappropriate how she did it". 

Italy, Spain, Cyprus: three problems of European crisis

The economical problems for these three countries continue.

Spain - Italy: The bonds erased their morning profits and spreads rose again.
Spain:  The premium required by investors to hold the ten-year Spanish bonds rose by more than 20 basis points.
Italy: A rise was recorded by the Italian spread, too.
Bloomberg for Italy: "The third highest debt for a developed country after Greece and Japan."
EU official on Dow Jones Newswires for Cyprus: "the eurozone is vigilant about the Cypriot banks and everything is ready for an immediate help". 

Article / Paul Krugman: Latvia and the Romney Record

OK, not a connection you expected anyone to make. But there’s something there.

You see, there has been some back and forth over Romney’s job creation record as governor of Massachusetts. The truth is that governors don’t have much impact on such things, but for what it’s worth, MA job creation was lousy. The response of the Romney people has been to cite the state’s low unemployment rate when he left office; the response to the response is that this was due to people leaving the state.

Now, there’s nothing wrong with labor mobility; but driving down unemployment by getting people to move someplace else isn’t exactly a recipe for national recovery.

Which brings us to Latvia, where unemployment, though still very high, has come down. But this has a lot to do with a huge fall in the labor force, driven to an important extent by emigration. From Eurostat:

Again, nothing wrong with labor mobility — but if Latvia is supposed to be a role model, somehow having all of Europe move to someplace else in Europe doesn’t quite seem like a sustainable proposition …

(New York Times)

What happens about the security of the Euro 2012 ?

Prime Minister of the Ukraine Mykola Azarov requires strict compliance with all security measures during the European Football Championship, according to web portal of Ukranian government.
He said this while visiting the official fan zone Euro-2012, located on Independence Square and Khreschatyk Street in Kyiv.
"Questions of order, safety and health for you must be in the first place" - said the Prime Minister, addressing the organizers of the fan zone, the leaders of the city administration and law enforcement.
In turn, representatives of the Kyiv authorities and law enforcement officials informed that it was established rules of entry and behavior in the fan zones similar to those applied in the stadiums during the matches of Euro 2012. These measures are an international testing; comply with all recommendations of UEFA. In order to maintain law and order in the fan zone in the surrounding area law enforcement departments, medical, fire, rescue and other services are constantly on duty. In addition, over 50 fixed cameras were installed, with which you can clearly monitor the situation on each square meter of the fan zone.
However, the organizers assured Prime Minister that the staff of the fan zone received international special training in particular – it was studied the international experience of major sporting events and regulations of behavior in emergency situations and passed the relevant training.

No european politician in Euro 2012?

The German and French governments, British ministers and others European politicians have decided to boycott the Euro 2012. The reason is based on concern over the treatment of Yulia Tymoshenko.
This decision has created a great deal of discussion in the Ukraine.

“I urge you to show full Ukrainian hospitality, sincerity and friendliness”, said the President of Ukraine, Viktor Yanukovich.

Mario Monti met with greek politician

The situation in Greece, was at the center of a meeting held earlier between Prime Minister of Italy, Mario Monti and the President of the Greek party PASOK, Evangelos Venizelos.

Venizelos described the conversation he had with the Italian PM as "useful and effective".

At the same time rumours support that - after Spain - Italy may ask for help, because of its debt...