IMF: Kudos to Greece

Greece has made progress in resolving structural problems amid a severe and painful social recession, IMF says in its evaluation report of the Greek program. It specifically states:


Progress in fiscal consolidation compared with any international example is impressive, with a cumulative improvement of 10% of GDP at the end of 2013 amid a GDP shrinking over 20%.


The major labor market reforms have helped in adjusting nominal wages and productivity at enterprise level. IMF calculates that the competitiveness gap as measured by cost of production per unit of labor, has been closed by about two thirds since 2010, while the current account deficit has declined cumulatively by about 10% of GDP.


The banking sector stability was maintained despite significant losses associated with debt restructuring and the sharp rise in non-performing loans because of the deep recession. Inadequate structural reforms, however, have led to the adjustment being achieved mainly through recessive channels with unequal distribution of the adjustment burden.
 

According to IMF there are three main problems:

    very little progress has been made in massive tax evasion. The rich and the self-employed do not pay their share, which ultimately led to the program heavily relying on spending cuts and higher taxes for employees and retirees
    although labor market reforms have caused a significant reduction in nominal wages, they have not led to lower prices for products and services, and this because of the failure to deregulate closed professions to boost competition
    although the rebalancing of the economy has led to a surge in unemployment in the private sector, especially among young people, the overcrowded public sector has not suffered at all, mainly because of the taboo issue of layoffs

Financial challenges remain

 

IMF warns that the major fiscal challenges are still ahead. "With no more room for large tax increases or spending cuts, the government has been forced to focus on difficult social cuts, from wages to funds for social policy."

 

According to IMF, "the 2013-14 fiscal program is a testament to the determination of the Greek government to achieve its objectives in the financial sector. European partners of Greece have also responded by agreeing to reduce the mid-term primary surplus target from 6.5% of GDP to 4.5% and prolong the adjustment period until 2016.

 

However, Greece will need to go through further structural fiscal adjustments to achieve these goals.

Where is Greece

Many people don't know where is Greece. This country is the center of the european crisis.

Learn where is Greece:

Crucial week for the future of the euro

The coming days seem crucial for the future of the euro for many, even in the European Union, as pressures on the Spanish economy are rising and scenarios about further support of Greece from its partners are giving and taking, along with the conflicting views of European policies on how to manage the debt crisis in the EU.

The meetings of EU president Herman van Rompuy with European leaders are particularly important, as he will try to find a common line before the ECB meeting and the decision of the German Constitutional Court about the Permanent Support Mechanism (ESM).

Specifically, on Tuesday September 4, van Rompuy will meet with Angela Merkel, and the next day with François Hollande in Paris.

Diplomatic sources cited by the French news agency report that Greece will be found high on the agenda of van Rompuy’s diplomatic contacts, who has made an informal request for a two-year extension of the loan program.

The issue of Spain will also be discussed, about which the EU has announced that it can release up to 100 billion euros to recapitalize commercial banks, while there is still an open issue regarding its appeal for a complete bailout package, and not just for the banking system.

On Friday, September 7, van Rompuy will come to Athens to meet with prime minister Antonis Samaras. On Saturday, he will visit Cernobbio on the shores of Lake Como in northern Italy, where he will meet with Italian prime minister Mario Monti.

Greece: The package of austerity measures 11,5 billion

At 12 pm today the cabinet will sit at the negotiating table for the adoption of the new measures. The staffs have formulated their own red lines and require equivalent measures against the proposed package of 11.5 billion euros. 

After the briefing they had from the government on Wednesday evening, members of financial staffs from PASOK and the Democratic Left were in continuous consultations on Thursday. 

In PASOK Protopapas, Koutroumanis and Sachinidis met with party president Venizelos on Thursday morning, but also held a meeting amongst themselves. In the Democratic Left, Chatzisokratis discussed the proposals with president Kouvelis and later convened the central secretariat of the party. During these meetings they discussed the proposed measures of the economic team that include: 

- elimination of the 13th and 14th pensions for all pensioners without exception

- elimination of the 13th and 14th salaries for civil servants

- decrease of pensions

- elimination of seasonal unemployment benefits

- reduction of benefits for people with disabilities

- implementation of age-related criteria in EKAS

- elimination of automatic wage increases in the security forces

- reduction of tax exemptions

 

Officials also discussed the increase of the pensionable age by one or two years, which is a “red line” for many MPs of the three governmental parties. 

PASOK and the Democratic Left also seem to require equivalent measures to total cuts in the bonuses of pensioners. Their members say "no" to cuts in OGA pensions. A former PASOK government member wondered who will vote for a reduction in disability benefits. 

On the ND side, disagreements lie in different issues. According to information, they rejected the Democratic Left’s proposal for the State not to pay the total of clergy salaries, but left an open window for the possibility of cuts in the salaries of bishops.

Meeting Juncker - Samaras in Athens today

PM Antonis Samaras will meet at 5.30 pm today with eurogroup president Jean-Claude Juncker, who arrives in Greece at 1:00 in the afternoon.

The meeting is very important, as the prime minister will present the measures taken by the Greek government and attempt to persuade Juncker on his determination to meet the commitments of the country.

Samaras will also raise the issue of the fiscal adjustment extension. The Eurogroup president has repeatedly distanced himself from statements against our country and believes that there should be no departures from the eurozone.

After being convinced of the Greek side’s intentions he can affect the overall climate in view of the October summit and eurogroup meetings that will be crucial for the disbursement of the next loan tranche.

After the meeting at Maximos Mansion, Juncker will visit the Acropolis Museum and in the evening Samaras will host a dinner in his honor.

The PM, who takes off tomorrow for Berlin, did not convene a meeting of political leaders wanting to show that he takes responsibility for the policy to be followed from now on, and also to avoid any disagreements on the package of measures that would have had a negative impact.

The rough German stance discourages Athens

 

 

 

No governmental member expected that the renegotiation path of the memorandum would be easy, but the most pessimistic expected that the climate would improve after the determination shown by the government in the implementation of the 11.5 billion measures for the period 2013 -2014. Thus, unpleasant placements by members of the German government in recent days Eurozone, not only limit their expectations for the meeting between PM Antonis Samaras and Angela Merkel in Berlin, but are forcing the government to redefine its tactics on the request of an extension to the fiscal adjustment program.

 

Maximos Mansion learned Monday evening with embarrassment about German Foreign minister Guido Westerwelle’s placement - after meeting with Avramopoulos- that there is no room for renegotiation. It were preceded by similar placements by Finance minister W. Schäuble and parliamentary leader of the Christian Democrat party Volker Kauder.

 

Faced with this German attitude Samaras will redefine his tactics. Maximos Mansion already leaked that no decisions will be taken in the meeting and that the issue of extension will be officially placed in the European institutions during the upcoming summit in October.

 

Naturally, Samaras will set out the situation in the country, emphasize that recession is larger than estimated due also to the memorandums and will defend the need for changes to the agreed framework for the country to be able to meet its obligations and debts.

 

Until the extension is officially placed in the summit, Samaras wants to avoid negative statements by Merkel and the German political elite. He will seek to get Merkel's declaration that Germany is in favor of Greece’s stay in the eurozone. He will also try to convince the German leadership to depend its stance on extension to the troika report and the package of 11.5 billion euros and its adoption by the Greek parliament, that will be a testament of determination by the Greek government.

 

Thus, the prime minister and the economic team are completing the package of 11.5 billion euros, which will be extremely hard as it will include cuts in pensions over 700 euros, reduction and elimination of benefits for which the prime minister and political leaders had committed not to touch before the elections, significant cuts in payrolls of SOEs, a new type of redundancy in the public sector as well as significant reductions in welfare, health, education etc.

 

This was the subject of yesterday's meeting at Maximos Mansion. And since the argument of hard European and German elites against our country is that there can be no new funding, the Greek leadership has to develop proposals that the extension cost be restricted to the minimum to avoid having to pass it through the parliaments of member countries and it will be covered by the Greek economy when it enters a development phase. The prime minister will argue that Greece must remain in the euro at all costs and that it should take all necessary steps as hard as they might seem to restore its credibility.

 

Samaras will attempt to transfer the critical decisions so that when the package of measures is brought in parliament, MPs of the three parties that support the government will be found in front of the dilemma either to vote in its favor or to pave the way for the fall of the government and the country’s exit from the euro.

Crucial week for Eurozone and Greece

The first tour abroad as prime minister of Greece, Antonis Samaras has a mission to win the last chance that Greece has to escape the economic collapse.

The international press is full of scenarios for a possible exit of Greece from the euro area. Besides German media are trying to determine the cost of "buy out" of the Greek debt and refinancing of the deficits of Spain.

Many European politicians talks about “Babel” without a common line, the burden of decision falls in Germany, which enters the final straight for the elections of 2013 and therefore affected by the partisan balance in order to attract votes.

The appointment of Mr. Antonis Samaras with Mrs Angela Merkel is the most crucial of the three tests required to pass prime minister the next seven days. Mr. Samaras has realized that the choices are limited and there are no magic solutions to overcome the crisis.

The risk of running the country is very great and European partners are sure to make it absolutely clear through public statements and leaks to the intentions and to consider alternatives without Greece in reports published in major international media .

The prime minister knows that the leeway that has been limited. The decision taken at the highest government level and are known as the leader of PASOK Evangelos Venizelos and the chairman of the Democratic Left Fotis Kouvelis is to present the German chancellor plan to reduce state spending by 11.5 billion just for by the Memorandum.

Under this plan, Mr. Samaras will seek to conduct an initial exploratory discussion with Ms. Merkel on the possibilities of extending the fiscal adjustment program by 2016.

The Greek prime minister, according to reliable information, will try to refute the view expressed mainly by German Economy Minister Philipp Relser that a possible way out of the euro by Greece is manageable from the other 16 eurozone countries. The Greek effort will be to convince the German government that Athens did not ask Berlin to transfer even more money from the pockets of German taxpayers to the Greeks.

Juncker sees no Greek exit from eurozone

Luxembourg’s prime minister says Greece won’t leave the 17-nation eurozone, arguing that an exit wouldn’t be politically feasible and would carry unforeseeable risks.

Greece has been kept afloat by international loans but has fallen behind on implementing reforms and austerity measures demanded in exchange, feeding speculation about a possible euro exit.

But Luxembourg’s Jean-Claude Juncker (photo), who also chairs eurozone finance ministers’ meetings, was quoted Saturday as saying in an interview with Austria’s Tiroler Tageszeitung newspaper, “It will not happen unless Greece violates all the conditions and keeps to no agreements.”

Juncker said he assumes Greece will redouble efforts to reach its targets, so “there is no reason to assume that this exit scenario can become relevant.”

He said an exit would be “technically” but not “politically” feasible.

AP

Greece or eurozone* catastrophe**

The presence of Greece in the Euro zone will be discussed in the next few days between European heads of state.

 The Greek Prime Minister Antonis Samaras schedule a  travel to Germany and France, two months after his election. In these countries, the leaders will meet Chancellor Angela Merkel  and President Francois Holland. At the end of September, a European Summit of the Heads of state and Government of the European Union will take place in Brussels. This Summit is expected to have a key theme of the Greek crisis.

European leaders must decide on the future of Greece. The Troika has requested a new package of 11.5 billion euro to continue to provide funding. Analysts say that the new austerity measures are expected to increase even more the depression rates. As a result, Greek government may take additional measures in 2013.

Thus, Greece will enter in a death spiral that may induce others countries such as Spain and Italy.
At the same time, German politicians discuss publicly for Greece's exit from the Eurozone. Returning politicians and players in Brussels disagree with such a prospect. They believe that such a development would lead to severe risk of complete dissolution of the Eurozone.

Mario Monti, Italian Prime Minister, in an interview with Der Spigel was quoted as saying: "the tensions that have accompanied the Eurozone in the past years are already showing signs of a psychological dissolution of Europe".  Also he notes “If governments allow themselves to be entirely bound to the decisions of their parliament, without protecting their own freedom to act, a break up of Europe would be a more probable outcome than deeper integration"

Observers from around the world expect that developments in Europe will be rapid, after the meetings Samara - Merkel, Samaras - Holland and the Summit.
Discouraging is the official figure of the Greek Statistical Authority for the evolution of the Gross Domestic Product.

Discouraging is the official figure of the Greek Statistical Authority for the evolution of the Gross Domestic Product.
According to ELSTAT “available non-seasonally-adjusted data indicate that, in the 2nd quarter of 2012, the Gross Domestic Product (GDP) at constant prices of year 2005 decreased by 6.2% in comparison with the 2nd quarter of 2011. The GDP of the 1st quarter of 2012 is revised, based on 1st quarter 2012 data of the General Government accounts (compiled at the end of June), ας well as new estimates of the short term indices”.

The additional austerity measure include:
-  drastic reduction in the income criteria to be adopted for granting social benefits and welfare benefits to 30,000 euros or even lower at 25,000 (annual income). But then almost half of beneficiaries will lose their benefits from this year
-  halving the lamp sum of beneficiaries, even if they have already gone from their service. However extreme, officials are thinking of the possibility to request from those that managed to get the lamp sum at the last minute this year, to pay back part of it as "additional levy". This is because the economic team estimates that the 24 of the 37 Funds that give a lump sum pay excessive amounts of more than 2% to 83% of the paid contributions
-  a benefits plan under which the annual income that is as a criterion for their issuing, will also include presumptive items instead of the actual acquired incomes. Thus, most homeowners may lose their EKAS too. Officials are also considering of now giving it to pensioners aged 65 and over, instead of the current 60
-  the law that -as revealed by Proto Thema- is being prepared to place under redundancy the public servants involved in corruption or those that have harmed (intentionally or not) the State

The final proposals will be in the hands of the political leaders no later than Monday, August 20, to give them a period of at least 10 days until the arrival of troika.

 *  eurozone is a Greek word
** catastrophe is a Greek word, too

                                     

Peres in Greece

Three-day visit to Greece  President Shimon Peres of Israil started on Monday. Mr. Peres met with the President of the Republic Karolos Papoulias, the Prime Minister Antonis Samaras and the political leaders Tsipras and Venizelos.

The visit is at the center of energy issues, investment, defense and agricultural policy.

The cooperation between Greece and Israel is very important for the Mediterranean region. In recent years Israel has “frozen” diplomatic contacts with Turkey.

Karolos Papoulias and Shimon Peres in Greece Monday. (photo credit: Moshe Milner/GPO/Flash90)

Shock!! Greece: package 11,5 billion in order to remain in the Eurozone

 The package of 11.5 billion for 2013-2014 includes the decrease of the principal amount of pensions, expansion of public utilities in a single payroll, pensions cap, the repeal of 13th and 14th pension and welfare benefits cut by income criteria.

Before leaving the Troika, handed to Finance Minister Mr. Yannis Stournaras the list of measures in principle accept. In a meeting with Finance minister and minister of Labour have arisen some measures of austerity, the position of which may be required more.

According to reports, at 11 pm and Saturday ahead of his departure from Athens, Troika delivered the text with the commonly accepted measures, seems to be accepted most of the cuts that have suggested the ministries of Labour, Health and Education.

On Monday Prime Minister Samaras will join government leaders Venizelos and Kouvelis. Three politicians are going to discuss the measures and the depression after these.  

Greek "wall" against illegal immigration to Europe

Greek border guards on the Greek-Turkish frontiers

A giant project, stretching from Evros (the northern greek side) to Athens (capital) and bearing the name of “Xenious Zeus”, aims to “seal” borders and remove illegal immigrants, is now in full swing..

Early on Saturday morning, police forces operate in the wider city center to detect illegal immigrants.

According to the organizational plan of Police HQ, 1500 police officers, DIAS, Security, Riot Police and Local police departments are taking part in exploring known hangouts of immigrants, houses, apartments, shops and even abandoned buildings.


Those foreigners found to be in the country illegally will be led to Amygdaleza’s reservation, and for those with Justice cases pending, legal process will be followed. 

On Friday, in police schools of Xanthi and Komotini, around 200 illegal immigrants were transferred, in order to be returned to their countries.

At the same time, strong police forces are already in Thrace, in the program prepared by the Ministry of Public Order and Citizen Protection which had been announced by Minister Nikos Dendias, referring to a potential wave of immigrants from Syria.

Specifically, the minister stressed that “1800 border guards are already moving towards Evros, with floating craft, for the first phase. Six boats are on the move now, which will reach 26 by the end of the month on Evros, in order to try to finally “seal” it. What we aim is to stop Greece being an easy place to enter illegally and take advantage of”.

Immigrants pass the borders in Evros

At the same time, for fear of a mass influx of refugees from Syria via Greece, the German interior minister Hans-Peter Fritrich urges Turkey to contribute to stop illegal immigration into the EU.

In an interview in the newspaper Rheinische Post the German Minister argues that the EU is trying to “seal all entrances” on the GrecoTurkish borders to Europe, since it is apparently above the capabilities of Greece”.

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.




  

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. 

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)