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.

Change of climate in Greco – German relationships

The Greek government appears satisfied with the meetings in the German capital, as it believes the first crucial step towards the normalization of relations between the two countries has been taken, and that it will affect the overall climate against our country.

Samaras assured that whatever has been agreed with the Greek side and its partners it will be respected. His colleagues say that the package of 11.5 billion euro will be the last to be imposed on the Greek people and especially those who have lifted the biggest part until now.

Although much will depend on troika’s report, the government believes that the path to the exit from the euro would be stopped and that by the end of October we will get the next tranche and the extension.

Indicative of good the climate is the fact that after the formal meeting and working dinner, Merkel held a private meeting with prime minister Samaras, which lasted another 40 minutes.

Samaras affirmed that "Greece will remain loyal to its commitments and obligations".

The Greek delegation believes that this was the first major step, not only to restore the credibility of Greece, but also to remove the mistrust between the two countries. They believe that this will help to change the psychology in international markets towards our country.

During the meetings the two sides discussed all issues and Greeks officials presented the views of the Greek side, including the way the recession burdens the deficit in a vicious circle that can only be broken by returning our economy to the path of growth. Naturally, they discussed about the issues of privatization and structural changes, where the officials of the German government raised the question as to why the agreed commitments and timelines are not being met.

"From our side we showed the resolve that we will take the necessary steps in order to give perspective to our country. The prime minister made it clear that the key issue is the lack of recovery," a PM associate said.

The Greek delegation argued that already in five years of recession, GDP has fallen by 20% cumulatively and it will continue until 2015, reaching 30%. The government believes that the suffocation from lack of liquidity of the Greek economy must stop, as it leads to further reduction of incomes and worsening of the recession.

They agreed to create a Greek Development Fund, with the participation of a German bank and individuals, in order to provide development resources.

Another issue discussed with the German officials was the tackling of tax evasion. For this issue, secretary of State Yorgos Mavraganis will meet early September with the relevant minister of Switzerland, in order to implement an agreement on the taxation of savings, similar to that which has been applied with England and Germany.

Also, Samaras’ adviser Stavros Papastavrou will discuss with German officials the unfreezing of the memorandum previously agreed between Papandreou and Merkel. It was also agreed that the German government will provide expertise and help to structural changes and reforms in various sectors, such as health.

Juncker expressed his love and support to Greece and the Greeks, but... he notes: proceed with the reorganization and we will give you the next tranche

After his meeting with prime minister Antonis Samaras, Eurogroup head Jean-Claude Juncker expressed his confidence that the Greek government will do what is necessary, while he emphatically stood against the country's exit from the Eurozone and asked foreign dignitaries to stop the relevant statements.

The two politicians agreed on the need to implement the program of financial stability, advance structural reforms and accelerate privatizations.

The meeting was attended by Finance minister Yannis Stournaras and deputy minister Christos Staikouras. They discussed all the developments in our country and the eEurozone, the necessary steps to be taken to tackle the debt crisis, and the geostrategic conditions for stability, given the turbulent situation in Syria.

The PM said that he informed the Eurogroup president that "in the last two months we have changed a lot in the country and in the future we will change even more. We have expanded the agenda of privatizations and accelerated structural changes, and during the next few weeks we will close the package of 11.5 billion euros. Also, we spoke on efforts to tackle tax evasion, as well as on the safety of citizens and tackling illegal immigration."

Samaras stressed that it is particularly important for the three parties to support the policy. "Greece is turning over a new leaf politically, economically and socially. We will implement all objectives to get the country out of the crisis, but we ask to enter a development phase because due to continuous recession and massive unemployment, we cannot stabilize our economy. We emphasize liquidity and look for ways to stimulate the economy and strengthen the SMEs. The Greek people asked for the country’s stay in the European Union and that their sacrifices bear fruit."

The PM referred to those within and outside the country who gamble on its exit from the Eurozone and said "we will disappoint them with deeds, not words." He concluded his speech by saying that very soon “we will restore the credibility of the country and change the psychology of the international markets."

Eurogroup president Juncker acknowledged the country’s efforts to overcome its debt problem. He too addressed its critics abroad, saying that "the country is making great efforts to consolidate its finances, but this is not understood. After two years Greece faces a credibility crisis."

He said the priority of the country is the consolidation of public finances because they will restore its credibility. He argued that "with a serious policy of deficit reduction, the country can count on the disbursement of the next tranche." However, he explained that both the next tranche and the extension will depend on the Troika report. "The ball is in Greece’s court, and this is the last chance."

Replying to a relevant question, he said that "I do not support a third memorandum. The Troika will examine the way to fully implement the second program, and I don’t want to say that in the next six months Greece will not be given any help." But he refused to refer to his own suggestion for the extension, which he discussed with Merkel.

Juncker said that the measures to be taken by the country should be reliable and strong, acknowledged that "low wage earners have suffered enough and should not shoulder new burdens, but other social groups must contribute more."

He pointed out that Greece must proceed with its structural changes and noted that a lot of work has been done, especially in the labour market. He stressed that all professions must be deregulated even though there are reactions from powerful lobbies.

He clarified that "an exit from the Eurozone will not help Greece, while it will have a huge impact on Europe. If they stop talking about Greece’s exit from the euro, they will help with privatizations too." He concluded by saying that "I did not come here to give lessons to the government and I'm on the side of Greece."

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.

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)

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.