Financial Crisis in Greece

[Phoenix]

...I reckon you could buy all of Greece for about 2 Euro right now.

I reckon a box full of plastic dog turds in your investment portfolio will offer more long term growth than the grk economy.

[makedonche]

Hey RTG, did they ask for the change in notes?

[Risto the Great]

Hey RTG, did they ask for the change in notes?

The change was given in cheque form. Think Marx brothers and the cheque literally bouncing off the ground haha

[Stojacanec]

If you want to add value to Greece, just take the Greeks out.

[George S.]

worthless that's what greek banking is about.

[George S.]

How Will the Euro Break Up?

How Will the Euro Break Up?



By Martin Hutchinson

August 20, 2012

http://prudentbear.com:80/index.php/thebearslairview?art_id=10698

When even the strongly europhile Economist (August 11th-17th, pp. 19-22) publishes a lengthy piece on how the euro might break up, the question must be worth addressing again. For one thing, we should think about how many pieces the euro Humpty Dumpty egg might form when it hits the ground, and what future currency unions might emerge from the wreckage. The question of costs and benefits in a break-up, which The Economist addressed in detail but not necessarily accurately, is another that’s well worth consideration.

The Economist begins by asserting that Greek exit from the euro is more or less inevitable, absent gigantic subsidies. Here I agree; it is not just inevitable, but two years overdue. Had Greece been shoved out of the euro in March 2010, when it first came begging for handouts, announcing that its national accounts had been fraudulent for a decade, the effect on other misbehaving Mediterraneans would have been highly salutary.

The Economist, incidentally, indulges in the Winston Churchill “I read Ancient Greek at school so they must be OK” fallacy, when lamenting that Greece might “sink into the criminal swamp of the Balkans.” That, gentlemen, is a gross insult to the Balkans, in particular to Macedonia, a much poorer country neighboring Greece that has received little or no help from the world, largely because of disgraceful Greek opposition. Currently Macedonia, admirably run since 2006 under prime minister Nikola Gruevski, ranks 69th on Transparency International’s Corruption Perceptions Index, 43rd on the Heritage Foundation’s Index of Economic Freedom and 22nd on the World Bank’s Ease of Doing Business Index, compared with Greece’s 80th, 119th and 100th respectively. The reality is that whatever the (overrated) glories of Periclean Athens in the fifth century B.C., they have nothing whatever to do with the modern Greeks, alien 6th Century invaders who since their independence from the Ottoman Empire have failed to live up to even the modest Balkan standards of competence and integrity.

The Economist also overstates the bill for Greece’s exit, putting it at 320 billion euros, about $380 billion. First it assumes the EU would need to give Greece yet another 50 billion euros to tide it over on its exit – an absurd assumption, throwing good money after bad (though as Greece would remain a member of the EU and its GDP per capita would be sharply reduced, no doubt it would gain some of the slush-funds for poorer members that prop up the likes of Bulgaria and Romania). Second, the EU assumes that another 170 million euros of Greek government debt would have to be written off. Again, that is absurdly generous – since Greece would have a GDP of 100-120 billion euros, compared to its current 215 billion, and, after a short interval, a balance of payments surplus, it should easily be able to support debt of 100 billion euros (plus any short-term funding for the transition) making the necessary write-off only 70 billion or so.

However, the most serious overstatement of the cost of a Grexit – and the other potential exits – is the likely Greek default on 100 billion euros of Target 2 payment system obligations to the Deutsche Bundesbank and other “surplus” central banks. As discussed in an earlier column, these obligations should have never been allowed to arise. They came about because the eurozone payments system routed euro payments between Greece and Germany through their respective central banks. That’s not entirely unprecedented; payments from Alabama to New York go through the respective Federal Reserve Banks when the two banks concerned don’t have a correspondent relationship. However in the U.S. system and when payments are being made between individual banks, the imbalances are not allowed to build up, but are settled on a periodic basis. The Bank of Greece should have been forced to settle accounts quarterly with the Bundesbank – which would have drained the Greek economy of funds years ago, raised Greek interest rates and prevented the country’s debts spiraling to the extent they did.

The reality now however is the Target 2 balances are worthless, whether or not Greece remains a member of the eurozone. Given Greece’s indebtedness, and the deflation necessary in the Greek economy, it is unimaginable that a Greece that remained a member of the Eurozone could find an additional 100 billion euros, over and above its existing debt, in any finite timeframe. That 100 billion euros is thus not a cost of Grexit, it is a cost that the Bundesbank and the other surplus countries must bear whatever the fate of the euro.

The same applies to the gigantic “Target 2” balances between Germany and Italy, Spain and probably France; they are all illusory. Probably two thirds of Germany’s 727 billion euros ($850 billion) of Target 2 claims at July 31, 2012 will never be seen again, and will have to be borne by German taxpayers, euro or no euro. For German taxpayers, the single most important reform to pursue is the immediate closure of the Target 2 payments system, and its replacement with a system which includes automatic monthly clearing payments between the central banks concerned. (Even the replacement system should be temporary; once equilibrium has been regained; international payments between two countries using the same currency should be left to private-sector correspondent banking).

As for the cost of a “Grexit” over and above costs that must be borne anyway, it is limited to the partial write-off of Greek debt, or about 70 billion euros ($85 billion). That is entirely bearable, and far preferable to the huge economic damage done by leaving Greece as an over-subsidized member of the euro. A similar argument limits the cost of other members leaving the euro, although whether or not they leave, their “Target 2” balances are probably unrecoverable.

If Greece had been thrown out of the euro two years ago, the crisis could probably have been stopped there. Portugal and Ireland would have needed bailouts, but the prospect of life with a currency sharply devalued against its neighbors’ would have put the fear of God into PIGGY governments in Spain, Italy and France and made them undertake austerity programs that actually bit. However, we are not in that position, and it thus seems highly unlikely that even a Greece-less euro can remain intact.



Of the countries that received rescues last year, Ireland appears to be on the road to recovery; its problem was primarily one of a banking crisis rather than anything structural in the economy itself. Portugal is more doubtful; the latest figures show second quarter GDP declining by 1.2%, rather more than had been expected. On its own, Portugal could probably be bailed out, but if other countries (beyond Greece) leave the euro Portugal will do so also. Spain’s GDP also fell in the second quarter, but only by 0.4%. Like Portugal, Spain could probably survive with at most a modest further bailout, but if the egg breaks, Spain will be one of the shards.

The two largest problems by far are Italy and France. Italy has failed to address its structural problems, which are primarily those of over-powerful public sector unions. While the replacement last autumn of Silvio Berlusconi by Mario Monti may have pleased The Economist (which sees Italy as remaining in a smaller euro while Spain departs), it has in reality made matters worse because no significant reforms have been carried out and the Monti government has no legitimacy and must be replaced in new elections next March. Since Italy has the highest government debt in the eurozone (now that part of Greece’s has been written off), it is far more likely than Spain to be the trigger for a eurozone breakup. Even though Italian GDP declined in the second quarter by 0.7%, more than Spain’s, the markets do not realize this; they currently trade Italy’s 10-year government debt on a 5.68% yield compared with Spain’s 6.64%. The markets are wrong.

The markets are even more wrong about France, whose 10-year bonds trade at only a 2.16% yield. While France’s GDP was flat in the second quarter, that does not reflect the damage being done by the new Hollande government. This has reversed the modest reforms in pension age carried out by Sarkozy, has increased the already onerous wealth tax and plans to introduce a 75% top rate of income tax on the rich. Given that most wealthy Frenchmen speak English and often German, this will cause not only capital flight but emigration over the next year, reducing France’s tax base and its GDP, and causing a massive government funding crisis. Even if France survives Greece’s exit from the euro, and the inevitable Italian crisis, it will itself need to leave the common currency within the next year, since there are no funds large enough to bail it out.

The obvious euro split would form a “Mediterranean euro” of France, Italy, Spain, Portugal and probably Malta and Cyprus (but not the hopeless Greece.) This would allow the Mediterranean countries to retain much of the efficiency benefits of a multilateral common currency, while gaining trading advantages of a weakening of perhaps 10-15% against the northern euro economies.

However, the eurozone’s unhappy history over the last few years has demonstrated that if you don’t trust the governments of your neighbors, you don’t want to be in a common currency with them. At the current time, it would be madness for the relatively well run Spain and Portugal to enter into a currency union with Italy and France, without the counterbalance of Germany. Both Italy and France as currently run would see departure from the euro as providing them room for profligacy, the last thing Spain and Portugal should want to tie themselves to. Equally, if France and Italy left the euro, the Spanish and Portuguese economies are probably not strong enough to remain with the northern euro and suffer a further 10-15% uplift in their exchange rates against Italy, France and the world.

Hence a euro split would probably leave Greece in solitary sub-Balkan disgrace (possibly accompanied by Cyprus), while France and Italy each went their own way, their profligacy weakening their currencies but with nobody else tied to their failure. Spain and Portugal could form an “Iberian euro” and might very well be joined by other small economies who, while reasonably disciplined, find the current euro too strong, perhaps Slovenia, Slovakia, Malta and Ireland. Belgium is a special case; it has very little fiscal discipline but benefits enormously from being at the center of the expanding EU empire – on balance it would probably find its Imperial revenues enhanced by remaining a member of the stronger euro.

The remaining euro members – Austria, Finland, Germany, Luxembourg, the Netherlands, and Estonia – would form a relatively compact, well-managed core of members for a strong euro, probably appreciating by 10-15% initially against the Iberian euro and remaining strong against it thereafter. Other strong East European economies with good fiscal discipline, like Latvia and Poland, would eventually join this core, as might Sweden and Denmark, but weaker economies like Bulgaria and Romania would probably never do so.

So that’s the probable final score – two separate euros, one stronger one weaker, both fairly well managed, with France and Italy remaining independent as befits their large size and poor fiscal management. Greece, Cyprus, Britain and a few East European countries would remain part of the EU but no longer aspire to membership of a common currency.

(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations—8% versus 46.5%, according to recent research. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)

Martin Hutchinson is the author of “Great Conservatives” (Academica Press, 2005)—details can be found on the Web site www.greatconservatives.com and co-author with Professor Kevin Dowd of “Alchemists of Loss” (Wiley—2010). Both now available on Amazon.com, Great Conservatives only in a Kindle edition, Alchemists of Loss in both Kindle and print editions.

Views are as of August 20, 2012, and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector.

Federated Equity Management Company of Pennsylvania

[TrueMacedonian]

Greece general strike again lol

http://www.businessweek.com/news/2012-11-05/rehn-seeks-to-lock-down-greek-debt-deal-next-week

Greece Faces Cliffhanger Vote as General Strike Begins

By Patrick Donahue and Marcus Bensasson on November 06, 2012

Greece headed for a cliffhanger vote on austerity measures needed to keep the bailout on track as a 48-hour general strike began and European officials squabbled over the timing of a deal to unlock rescue funds.
European Union Economic and Monetary Affairs Commissioner Olli Rehn, speaking at a meeting of Group of 20 finance chiefs in Mexico City, said yesterday that a deal must be made at a meeting of EU finance ministers in Brussels on Nov. 12. A European G-20 official, speaking before Rehn and on condition of anonymity, cast doubt on the prospects for that deadline, saying officials may fall short.

Greece is under pressure to make more efforts to rein in its budget deficit and deregulate the economy. While German Chancellor Angela Merkel last month travelled to Greece to signal her willingness to keep Greece in the euro, the country is still struggling to hit its debt reduction targets amid a combination of Greek political resistance to more cuts and economic collapse.
“We need to have a common view on how to reduce the debt burden by the 12th of November,” Rehn told reporters. “I’m confident that we will be able to reach that common view.”

Fast-Track Approval

Greece has received 240 billion euros ($307 billion) in aid pledges from the EU and the International Monetary Fund since 2010. The parliament’s finance committee today agreed to fast- track a bill of austerity measures and economic reforms submitted by Prime Minister Antonis Samaras’s government late yesterday.

Lawmakers must ratify the bill for Greece to ensure speedy payment of the next bailout tranche and avoid bankruptcy, Finance Minister Yannis Stournaras told the committee today. The package will raise the retirement age and make further cuts to wages and pensions.

“Chances are that the bills will pass, in our view,” Citigroup Inc. economists Giada Giani and Juergen Michels wrote in a report to investors yesterday. Should they not pass a Greek exit from the euro “will come back on the agenda. If Samaras’ government is not able to get the bills through parliament, this is likely to change the recently more supportive stance from Greece’s creditor countries, especially Germany.”

Internal Dissent

Samaras must face down dissent within his three-party coalition to get the measures approved, with the Democratic Left party’s lawmakers saying they won’t vote for the bill because of proposed changes to labor law that among other things will cut wages for public workers. Unions began a 48-hour general strike today to protest against the measures, which will be voted on as soon as tomorrow and followed by another vote on the 2013 budget on Nov. 11.

More than 35,000 Greeks marched in central Athens to demonstrate against the new wave of cuts. There have been no arrests or reports of violence, Police spokesman Takis Papapetropoulos said.

As G-20 finance ministers and central bankers warned euro- area leaders not to delay pledged policies aimed at resolving the three-year-old debt crisis, policy makers in the 17-member single-currency bloc are working to repair Greece’s finances and forge closer European banking cooperation.

German Finance Minister Wolfgang Schaeuble said after the meeting that the EU won’t have an operational bank-supervision body before 2014, as the crisis is resolved “step by step.”

Global Growth

“It’s not going to happen quickly, but it has to work,” Schaeuble told reporters yesterday in Mexico City. Officials at the meeting didn’t speak in detail about Greece, Schaeuble said.

The G-20, which diluted budget-cutting commitments out of concern that U.S.-led austerity would choke already-fragile global growth, lauded the European Central Bank for unveiling a bond-purchase program to stabilize the single currency. At the same time, political decisions must be implemented, the G-20 said.

Rehn hailed Europe’s determination to do “whatever it takes” to stabilize the currency, saying that a banking union would be followed by a centralized bank-resolution mechanism -- and then a “genuine” economic and monetary union.

“We expect that these actions will lead to a gradual recovery, but somewhat later than previously expected,” Rehn said.

Debt Sustainability

The European official who questioned the Nov. 12 target and spoke on condition of anonymity because the negotiations aren’t public said next week’s Brussels meeting will be a step in the process. A package deal has to include both prior actions by the Greek government on fiscal and economic measures and an agreement from creditors on filling the country’s finance gap and making debt sustainable. A list of options is being reviewed, the official said.

“We would need a combination of elements,” Rehn said.

Separately, Spanish Economy Minister Luis de Guindos said in Mexico City yesterday that his government will make a decision on asking for a bailout when it’s ready. He said he didn’t come under any pressure from G-20 officials.

To contact the reporters on this story: Patrick Donahue in Mexico City at [email protected]; Marcus Bensasson in Athens at [email protected]

To contact the editor responsible for this story: James Hertling at [email protected]

[TrueMacedonian]

This is excellent watching them implode lol

[TrueMacedonian]

Draghi open to ECB rate cut, done helping Greece

http://www.reuters.com/article/2012/11/08/us-ecb-rates-idUSBRE8A70VS20121108

Draghi open to ECB rate cut, done helping Greece

By Eva Kuehnen

FRANKFURT | Thu Nov 8, 2012 2:18pm EST

FRANKFURT (Reuters) - The euro zone economy shows little sign of recovering before the year-end despite easing financial market conditions, European Central Bank President Mario Draghi said on Thursday, leaving open the possibility of an interest rate cut in the months ahead.

But after keeping rates on hold on Thursday, Draghi said the ECB cannot do much more to help Greece with its debt burden and gave Spain none of the assurance it wants that ECB bond buying will lower its borrowing costs.

"The ECB is by and large done," Draghi told his monthly news conference when asked what the bank could do for Greece.

The euro zone is grappling to find a formula to make Greek debt sustainable, with Germany and the International Monetary Fund at odds over the need for governments and the ECB to take a "haircut" on Greek bonds they hold to make the numbers add up.

The ECB agreed earlier this year to hand over to euro zone governments profits on its Greek bonds but has refused to take a hit on the value of the paper, saying that would be "monetary financing" which it is prohibited from doing.

The ECB held its main rate at 0.75 percent, deferring any cut while it waits for a cue to use its new bond-purchase plan. That wait may be prolonged after Spain completed its 2012 funding at affordable rates on capital markets on Thursday.

A Reuters poll had given an 80 percent chance the ECB would hold its main rate, but most of the 73 analysts polled expect it will be cut to a new record low of 0.5 percent within the next few months.

Draghi said ECB monetary policy is "very accommodative". He declined to comment when asked whether markets were right to expect a rate cut next month and said the policymaking Governing Council had not discussed what it would do next year.

[TrueMacedonian]

Greece cancels Christmas as austerity measure lololol

http://www.thedailybeast.com/articles/2012/11/08/greece-cancels-christmas-as-austerity-measure.html

Greece Cancels Christmas as Austerity Measure
by Barbie Latza Nadeau Nov 8, 2012 1:57 PM EST

Greece votes to cancel Christmas, along with all other paid holidays for public servants—but European financial leaders say its austerity triage might be too little, too late.

Just after midnight last night in central Athens, Greece’s Parliament voted to cancel Christmas and Easter, along with all other paid holidays, for public servants.

The legislators also voted to cap salaries at the Bank of Greece at €5,000 a month—around $6,400 in U.S. dollars—meaning that even the country’s most highly-trained financial workers will take home less than $3,800 after taxes. They voted to hike the retirement age from 65 up to 67, and to cut pensions for those already retired by 15 percent. Pay for military personnel and other civil protection servants will be slashed by as much as 35 percent, and judges’ salaries will be shaved by a third. Nearly 2,000 civil servants will lose their jobs in January 2013 if they can’t be transferred to other positions, and then some 6,000 more will lose their jobs every three months until the public sector payroll is manageable.

Not surprisingly, perhaps, many Greeks did not support the omnibus austerity bill, and nearly 100,000 angry demonstrators marched on Syntagma square outside Parliament to make their voices heard. Their rage was bolstered with Molotov cocktails, petrol bombs, and glass bottles. When things got out of hand, Greek police dusted off their water canons and blasted the angry crowds. Over 100 protesters were arrested and a dozen people were injured.

In many ways, Greece was once again debating—both in Parliament and on the streets—whether to stay in the euro zone or to finally give up trying to please the Troika, the trio of international moneylenders made up of the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) who control more than $300 billion in bailout payouts for the debt-stricken nation. Before the vote, Greek Prime Minister Antonis Samaras appealed to the 300-strong Parliament, saying that they were deciding not just how to tighten the burgeoning budget and wrestle the growing debt, but whether to stay in the euro club at all. “Today we are voting,” Samaras said, “on whether Greece will remain a member of the euro or return to international isolation, collapse into bankruptcy, and go back to the drachma.”

At one moment during the Parliamentary debate, things became almost as tense inside the building as they were outside. A legislator, desperate to shave a few thousand euro off the budget, proposed cutting salaries for Parliamentary workers who had been exempt in previous incarnations of the package. In what lawmakers called an impromptu protest that could have led to complete chaos, the workers helping facilitate the vote stopped in their tracks and threatened to walk off the job. Greek Finance Minister Yannis Stournaras nixed the idea and scratched Parliamentary worker benefits from the list of proposed cuts, allowing the vote to continue.

In the end, the austerity measure passed 153 to 128, with 18 crucial Parliamentarians in Samaras’s now-very weak coalition abstaining from the vote. Samaras immediately expelled the rebel legislators from his team and spun the passing of the tough austerity package as “a large, decisive, and encouraging step towards recovery and better days for Greece. ”

[TrueMacedonian]

Considering the news stories out of modern Greece today I will happily add all the bad news onto this one topic so we all have future refereneces to what an absolute dingy toilet bowl this country really is.

http://espn.go.com/olympics/story/_/id/8606785/greece-budget-cuts-affect-olympic-team-funding

Greece cuts Olympic funding

ATHENS, Greece -- Greece's Olympic Committee says deep funding cuts in the 2013 state budget will hamstring sports federations -- less than a decade after hosting the 2004 Games.

Committee officials say federations will be unable to function next year when their share of state funding will shrink to about $19 million from $44.6 million in 2012.

That represents a 75 percent cut from 2009, committee deputy chairman Sakis Vassiliadis said a news conference on Thursday.

"We had been prepared for a gradual adjustment, but now we have to cope in two months," he said. "I don't think any (of the federations) will be able to handle it and this will be the final blow."

Debt-crippled Greece has approved harsh spending cuts to secure vital international bailouts.

[TrueMacedonian]

http://www.huffingtonpost.com/mohame...b_2094748.html

Really Depressing Numbers Out of Greece
by Mohamed A. El-Erian CEO and co-CIO, PIMCO
Posted: 11/08/2012 4:01 pm

We should feel a mix of great sadness and heightened concern upon seeing the latest unemployment numbers out of Greece.

According to the data released today, the official unemployment rate rose to a stunning 25.4% in August, setting a new record. More alarming, the jobless rate for 15- to 24-year-olds is 58% -- 58%! And there is reason to believe future employment reports will be even worse.

This is a distressingly sad situation.

While the informal sector can alleviate some of the pressure, it provides only limited relief given the scale and scope of the country's enormous unemployment crisis -- one that speaks to widespread misery while suggesting a high probability of a "lost decade" for Greece (we are already three years into the country's crisis) AND a "lost generation."

The fabric of any society risks enormous tearing if such joblessness persists. Already, Greece is subject to waves of social unrest, some of which have been quite violent. Only yesterday, TV screens were full of images of rioting citizens in the streets of Athens.

No wonder Greek popular rejection is at extremes not seen before in recent European history; and it is encompassing economic, financial, political and social dimensions.

Some observers even believe that we are close to the point where the Greek government could lose control of the country's management. And as the experiences of Egypt and Tunisia have shown, do not underestimate what a grass root youth movement can achieve -- especially with social media greatly facilitating large-scale mobilization and coordination.

In view of the harmful consequences for so many people persisting for so long, I would absolutely love to be find some hopeful aspects to the Greek numbers. And I have tried really hard.

Yet looking closely at the detailed data and what Greece and its European neighbors are doing about them, it is hard to be positive. And my deep mix of sadness and concern is not helped by the fact that Greece, while certainly an extreme case, is not the only European country with a severe joblessness problem. Upwardly trending youth unemployment rates have already gone above 50% in Spain, and 35% in both Italy and Portugal.

This Greek tragedy looks certain to be with us for a long time to come.

Mohamed El-Erian is the CEO and Co-CIO of PIMCO, which oversees nearly $1.8 trillion in assets and runs the Pimco Total Return Fund, the largest bond fund in the world. His book, "When Markets Collide," was a New York Times and Wall Street Journal bestseller, won the Financial Times/Goldman Sachs 2008 Business Book of the Year and was named a book of the year by The Economist and one of the best business books of all time by the Independent (UK).

Cross-posted from CNBC.com.

[TrueMacedonian]

http://www.thedailybeast.com/articles/2012/11/08/greece-cancels-christmas-as-austerity-measure.html

Greece Cancels Christmas as Austerity Measure
by Barbie Latza Nadeau Nov 8, 2012 1:57 PM EST

Greece votes to cancel Christmas, along with all other paid holidays for public servants—but European financial leaders say its austerity triage might be too little, too late.

Just after midnight last night in central Athens, Greece’s Parliament voted to cancel Christmas and Easter, along with all other paid holidays, for public servants.

The legislators also voted to cap salaries at the Bank of Greece at €5,000 a month—around $6,400 in U.S. dollars—meaning that even the country’s most highly-trained financial workers will take home less than $3,800 after taxes. They voted to hike the retirement age from 65 up to 67, and to cut pensions for those already retired by 15 percent. Pay for military personnel and other civil protection servants will be slashed by as much as 35 percent, and judges’ salaries will be shaved by a third. Nearly 2,000 civil servants will lose their jobs in January 2013 if they can’t be transferred to other positions, and then some 6,000 more will lose their jobs every three months until the public sector payroll is manageable.

Not surprisingly, perhaps, many Greeks did not support the omnibus austerity bill, and nearly 100,000 angry demonstrators marched on Syntagma square outside Parliament to make their voices heard. Their rage was bolstered with Molotov cocktails, petrol bombs, and glass bottles. When things got out of hand, Greek police dusted off their water canons and blasted the angry crowds. Over 100 protesters were arrested and a dozen people were injured.

In many ways, Greece was once again debating—both in Parliament and on the streets—whether to stay in the euro zone or to finally give up trying to please the Troika, the trio of international moneylenders made up of the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) who control more than $300 billion in bailout payouts for the debt-stricken nation. Before the vote, Greek Prime Minister Antonis Samaras appealed to the 300-strong Parliament, saying that they were deciding not just how to tighten the burgeoning budget and wrestle the growing debt, but whether to stay in the euro club at all. “Today we are voting,” Samaras said, “on whether Greece will remain a member of the euro or return to international isolation, collapse into bankruptcy, and go back to the drachma.”

At one moment during the Parliamentary debate, things became almost as tense inside the building as they were outside. A legislator, desperate to shave a few thousand euro off the budget, proposed cutting salaries for Parliamentary workers who had been exempt in previous incarnations of the package. In what lawmakers called an impromptu protest that could have led to complete chaos, the workers helping facilitate the vote stopped in their tracks and threatened to walk off the job. Greek Finance Minister Yannis Stournaras nixed the idea and scratched Parliamentary worker benefits from the list of proposed cuts, allowing the vote to continue.

In the end, the austerity measure passed 153 to 128, with 18 crucial Parliamentarians in Samaras’s now-very weak coalition abstaining from the vote. Samaras immediately expelled the rebel legislators from his team and spun the passing of the tough austerity package as “a large, decisive, and encouraging step towards recovery and better days for Greece. ”

[TrueMacedonian]

http://www.reuters.com/article/2012/11/08/us-ecb-rates-idUSBRE8A70VS20121108

Draghi open to ECB rate cut, done helping Greece

By Eva Kuehnen

FRANKFURT | Thu Nov 8, 2012 2:18pm EST

FRANKFURT (Reuters) - The euro zone economy shows little sign of recovering before the year-end despite easing financial market conditions, European Central Bank President Mario Draghi said on Thursday, leaving open the possibility of an interest rate cut in the months ahead.

But after keeping rates on hold on Thursday, Draghi said the ECB cannot do much more to help Greece with its debt burden and gave Spain none of the assurance it wants that ECB bond buying will lower its borrowing costs.

"The ECB is by and large done," Draghi told his monthly news conference when asked what the bank could do for Greece.

The euro zone is grappling to find a formula to make Greek debt sustainable, with Germany and the International Monetary Fund at odds over the need for governments and the ECB to take a "haircut" on Greek bonds they hold to make the numbers add up.

The ECB agreed earlier this year to hand over to euro zone governments profits on its Greek bonds but has refused to take a hit on the value of the paper, saying that would be "monetary financing" which it is prohibited from doing.

The ECB held its main rate at 0.75 percent, deferring any cut while it waits for a cue to use its new bond-purchase plan. That wait may be prolonged after Spain completed its 2012 funding at affordable rates on capital markets on Thursday.

A Reuters poll had given an 80 percent chance the ECB would hold its main rate, but most of the 73 analysts polled expect it will be cut to a new record low of 0.5 percent within the next few months.

Draghi said ECB monetary policy is "very accommodative". He declined to comment when asked whether markets were right to expect a rate cut next month and said the policymaking Governing Council had not discussed what it would do next year.

[EricTheRed]

While I realize that Greece's economic crisis may amuse many of you in this forum, due to the issues between our countries, bear in mind that Macedonia and macedonians aren't able to gain anything from it. Between 2008 and today there has been no major political shift from the international players about the issue between the 2 countries(instead, the US stopped pressuring greece like they did in 08). And I dont believe that macedonia has enough political influence to make the Big Powers change their mind (neither does greece ofc).

Even if a total economic collapse occurs in Greece and we leave the eurozone(something that would cost far more for France,Germany etc than bailing us out, so highly unlikely), Macedonia will still gain nothing economically(on the contrary, greek investments would just vanish, leaving lots of people unemployed) or even politically(greece would still matter relatively more to the big powers, for geographical reasons alone).

My point is that gloating over greece's woes does not promote the macedonian cause at all.

After all, Macedonia is a sovereign country, just declare the IA null and void, dont join EU/NATO, abandon the admittedly silly ''constitutional name'' and name your country as you please. Greece would do nothing more than complain.

You see, the problem lies within Macedonia, your politicians are the biggest obstacle to your cause, not Greece.