Financial Crisis in Greece

[SirGeorge8600]

Greece begins massively firing civil servants.

http://www.csmonitor.com/World/Europe/2013/0426/Greece-starts-firing-civil-servants-for-first-time-in-a-century?nav=87-frontpage-entryNineItem

For the first time in over a century, the Greek government has finally made a rational decision in all this mess and fired the bottom-feeding, debt dwelling workers of the public sectors. So far over 100,000 have lost their jobs now seeking employment in the private sector and many more firings are to come estimated at 180,000 by 2015 if not more.

It's about time...

[The LION will ROAR]

Greece starts firing civil servants for first time in a century

http://macedoniaonline.eu/content/view/23215/46/

Pushed by its European creditors amid its crippling economic crisis, Greece began this week to do something it hasn't done in more than 100 years: fire public-sector workers en masse.

Following weeks of tough negotiations with its lenders – the "troika" of the International Monetary Fund, the European Union, and the European Central Bank – the Greek government started laying off public-sector workers in an effort to implement the austerity that the troika has demanded. The first two civil servants were let go on Wednesday under a new law that speeds up the process – one, a policeman, for stealing debit cards, and the other for 110 days of unexcused absence.

The mass layoffs were announced last week in a televised address by the Greek prime minister himself, Antonis Samaras. Despite the massive unemployment in Greece, the goal of the government has become the laying off of 180,000 civil servants by 2015. “This is not a human sacrifice," said Prime Minister Samaras. “It’s an upgrading of the public sector and it’s one demand of Greek society.”

Samaras though, promised new positions to be created: “An equal number [of employees] will be hired on merit,” he added.
A century without layoffs

Civil servants’ jobs have been protected by a law that dates back to the 1880s, which became enshrined in the century-old Greek constitution. Until that provision became law, each newly elected government would sack the civil servants hired by the previous government to replace them with their own party members, creating civil unrest and a dysfunctional state.

“The logic [behind this law] was that the public administration has to be politically independent, feel secure, and ensure the state’s continuity,” said Dimitris Charalambis, professor of political science at the University of Athens.

Even though the 19th-century law was initially intended to fight nepotism, it caused its own problem: Each successive government hired its own people, adding to a continually expanding civil service without making the public sector any more effective. As a result, the Greek public sector became infamous for being dysfunctional and bureaucratic.

Further, although the law had allowed the firing of civil servants convicted of misappropriation of public funds and other serious crimes or when their jobs are phased out, the civil servants were still guaranteed a right to appeal. The appeal process could take two to three years, during which they were able to remain at work.

The law was changed last November to speed up the appeal process and suspend civil servants charged with crimes. A separate effort today to remove the appeal entirely was blocked by the justice minister as unconstitutional, however.

“[The civil servants], who are charged for disciplinary offenses, have the right to a hearing before the disciplinary council of the civil service and a right to appeal,” says George Katrougalos, professor of law at the Demokritos University of Thrace. “Until the final decision is reached, they cannot be fired.”

But while the law now strengthens the government's ability to fire civil servants, it also makes the workers more vulnerable – a particular problem amid Greece's politically charged economic struggles. This week, for example, a teacher was suspended after he was arrested during an anti-austerity demonstration – a situation more common as of late.

[Risto the Great]

But while the law now strengthens the government's ability to fire civil servants, it also makes the workers more vulnerable – a particular problem amid Greece's politically charged economic struggles. This week, for example, a teacher was suspended after he was arrested during an anti-austerity demonstration – a situation more common as of late.

Ridiculous outcome from a reasonable measure if you ask me.

[TrueMacedonian]

IMF Concedes It Bent The Rules On Debt Relief For Greece

http://online.wsj.com/article/SB10001424127887324299104578527202781667088.html

IMF Concedes It Made Mistakes on Greece
Fund Says It Bent Rules on Debt Relief, but Argues That Bought Time for Europe to Limit the Fallout

By MATINA STEVIS in Brussels and IAN TALLEY in Washington

BRUSSELS—The International Monetary Fund has admitted to major missteps over the past three years in its handling of the bailout of Greece, the first spark in a debt crisis that spread across Europe.
In an internal document marked "strictly confidential," the IMF said it badly underestimated the damage that its prescriptions of austerity would do to Greece's economy, which has been mired in recession for the last six years.

The IMF conceded that it bent its own rules to make Greece's burgeoning debt seem sustainable and that, in retrospect, the country failed on three of its four criteria to qualify for aid.

But the fund also stressed that the response to the crisis, coordinated with the European Union, bought time to limit the fallout for the rest of the 17-nation euro area.

And while IMF officials said the lessons learned would lead them to take a tougher stance in future bailouts, they also said that there was little else the fund could have done at the time.

"If we were in the same situation…we would have done the same thing again," said Poul Thomsen, the IMF's lead negotiator in the bailout talks, referring to its signing on to the deal in 2010 despite the lack of any debt relief.

The Washington-based fund released the document, prepared by IMF staff, on Wednesday after its contents were reported by The Wall Street Journal.

Over the last three years, a number of senior IMF figures, including Managing Director Christine Lagarde, have repeatedly said that Greece's debt level was "sustainable"—likely to be repaid in full and on time.

Yet the document described the uncertainties around the rescue as "so significant that staff was unable to vouch that public debt was sustainable with a high probability."

Two former IMF officials said the fund's chief lawyer, Sean Hagan, repeatedly warned in mid-2010 that the Greek program was bordering on breaking the institution's rules.

The IMF changed its rules in 2010 to allow countries to get "exceptional access" to its credit lines, or much bigger loans than normal.

"What happened at the time, and it's much easier with the benefit of hindsight, is that not all criteria of exceptional access as defined at the time were satisfied," Ms. Lagarde said in a separate interview last week.

"And yet there was a crying need at the time for support," she said. If the IMF hadn't tweaked its rules, "it probably would have meant no IMF support at that time."

She said the review of the fund's experience "will probably lead us to reassessing the exceptions to the exceptional access criteria" and "will certainly lead us to calibrating well how we work with regional financing arrangements."

The IMF is also working to make its debt assessments more rigorous, she said, and will place a higher priority on technical assistance for capacity-building such as banking supervision and tax collection—areas that were of particular concern in Greece.

In contrast to its decision in 2010, the IMF's latest periodic review of how the bailouts are going, also released on Wednesday, said Greece's European creditors may have to consider speeding up the debt relief promised in the second deal, in 2012.

The IMF report said that it had been too optimistic in 2010 about the Greek government's prospects for a return to market financing and its political ability to implement the conditions of its rescue program.

The greater beneficiary of the 2010 bailout wasn't so much Greece as the wider euro zone, the document suggested.

It described the rescue as a "holding operation" that "gave the euro area time to build a firewall to protect other vulnerable members and averted potentially severe effects on the global economy."

The IMF joined forces with the European Commission and the European Central Bank in 2010, forming the so-called troika, to manage Greece's first bailout of €110 billion ($143 billion)—one of the largest international rescues ever.

The three continued to run the country's second bailout as well as the Irish, Portuguese and Cypriot bailouts.

While the fund has been scaling back its new financial commitments to euro-zone economies, it has put up a total of $47 billion for Greece, the biggest loan the IMF has ever made when compared with the size of a country's economy.

While criticizing the delay in restructuring Greece's debt load, the fund conceded that cutting it before 2012 was "politically difficult" because of resistance from some euro-area countries, whose banks held too much Greek government debt.

An immediate restructuring would have been cheaper for European taxpayers, as private-sector creditors were repaid in full for two years before 2012 using the money borrowed by Athens. Greece's debt level thus remained undented, but it was now owed to the IMF and euro-zone taxpayers instead of banks and hedge funds.

The IMF also said its own analysis of the future development of debt was wrong "by a large margin." The fund's debt-sustainability analysis—a critical piece of forecasting—"included stress tests but these turned out to be mild compared with actual outcomes."

The Greek Finance Ministry declined to comment.

Euro-zone officials promised in May 2012 to cut the value of Greece's outstanding debt if Athens lives up to its vow for more budget cuts, higher revenues and a restructuring of the country's broken economy.

The program has a target of cutting Greek debt to 124% of gross domestic product by 2020 and "substantially below" 110% by 2022, from a peak of 175% this year. Euro-zone officials said they expect to review debt restructuring by the beginning of 2014.

In its review Wednesday, the IMF said that it is questionable whether Greece will be able to pay its obligations if it continues to hold unhealthy levels of debt well into the next decade. Debt projections are extremely sensitive to any delays, it said.

"Should debt sustainability concerns prove to be weighing on investor sentiments even with the framework for debt relief now in place, and strong program implementation by the Greek authorities notwithstanding, a more front-loaded approach to debt relief would need to be considered," the fund said.

The issue of the so-called fiscal multiplier—an estimate of how much an economy will contract for every euro in spending cuts or tax increases—has become part of the government's arsenal in its negotiations with the troika.

In talks next week, Greece will ask for permission to cut certain value-added, or sales taxes, arguing that an increase in restaurant taxes, for example, has generated less revenue not more by crimping spending.

Conversely a cut in the tax rate for eateries, the government says, could actually boost revenue by drawing in more diners. So far, however, officials at the European Commission have been cool to the idea.

The commission, which is the European Union's Brussels-based executive, comes in for special criticism in the IMF document.

The report says the commission "tended to draw up policy positions by consensus, had enjoyed limited success with implementing [fiscal conditions]…and had no experience with crisis management."

It adds that the commission focused more on "compliance with EU norms than on growth impact" and "wasn't able to contribute much to identifying growth-enhancing structural reforms."

The commission is the lead EU institution tasked with designing and promoting growth-enhancing and job-creating policies for the entire bloc. The commission declined to comment on the report.

"None of the [troika] partners seemed to view the arrangement as ideal," the paper continued in a section discussing the "unusual" arrangement, noting that there were "marked differences of view within the troika, particularly with regard to the growth projections."

Those growth projections were wildly off the mark but Greece still had to meet the same targets of cutting its deficit, it said. "The fiscal targets became even more ambitious once the downturn exceeded expectations. In addition, the starting point moved."

The paper added that the targets and the underlying macroeconomic projections weren't revised to reflect what was actually happening in Greece for 18 months, until December 2011.

The IMF had originally projected Greece would lose 5.5% of its economic output between 2009 and 2012. The country has lost 17% in real gross domestic output instead. The plan predicted a 15% unemployment rate in 2012. It was 25%.

Slowing the pace of austerity would have helped Greece's economy, but wasn't politically possible, the fund said.

"While earlier adjustment of the targets could have tempered the contraction, the program would have then required additional financing," which neither the IMF nor euro-area governments were prepared to give, the document said.

The paper criticized Greek governments for failing to implement structural economic changes that could have propped up the private sector and said the pain of the adjustment was "unevenly spread across society."

But it said there were few precedents for the size of the spending cuts and tax increases that Greece implemented to hit the targets.

[Phoenix]

I'm sure the IMF will get it right next time greece fucks up...a leopard doesn't change it's spots anymore than a bunch of lazy, criminal fucks decide to go on the straight and narrow.

[Risto the Great]

You'd think the IMF were some kind of benevolent institution. I'd prefer to know why they actually did get involved. In other words, how did they make money out of this. I'm sure they did.

[Dimko-piperkata]

Greece ponders German war reparations



Greece is deliberating whether Germany still owes war reparations stemming from the Nazi occupation in World War II. Despite German reservations, some claims just might be justified. But will they ever come?

According to Deutsche Welle, secret Greek Finance Ministry report is said to have detailed evidence of atrocities and forced loans during the Nazi occupation in Greece in World War II. The weekly newspaper "To Vima" reported that the internal document was compiled by a group of experts who scoured state archives to find relevant material.

The documents reportedly confirm that, in 1960, Germany paid 115 million German marks in reparation payments to victims of the Nazi terror regime in Greece in accord with a bilateral reparation agreement.

From Germany΄s perspective, that payment settled all claims definitively - claims that would have lapsed by now, anyway.

Greecein turn refers to the 1953 London Agreement on German External Debts, a treaty between the Federal Republic of Germany and creditor nations stipulating that payment obligations from World War II were to be deferred until "after the signing of a peace treaty."

Once and for all

But Greek demands are quite justified, argues Hagen Fleischer, a historian and professor emeritus at the University of Athens.
Prof.

"Before 1990, Germany tended to point out [that] it was too soon, because Germany was divided and it was the entire country that had gone to war, not just one half. So the issue was supposed to be canned until Germany was again reunified," Fleischer told DW.

After reunification, however, "Germany΄s response was suddenly, ΄So much time has passed - now it΄s too late," Fleischer says.

The historian doubts the validity of Germany΄s objection that all reparation claims were settled by the 1960 bilateral accord. One must put the reparations of 115 million German marks into context, Fleischer says.

"The Netherlands, which suffered much fewer losses, received a larger amount of money."

Contentious and complicated

The German historian is convinced that the issue of reparations is not yet settled 68 years after the end of World War II. While the Greek Finance Ministry does not list concrete figures, victims΄ associations have suggested reparation payments of 160 billion euros ($209 billion). Quite a few editorial writers come up with significantly higher amounts.

Possible claims include reparations for casualties and material assets as well as compensation for a loan the Greek Central bank was forced to give the Nazi regime in 1942.

It is precisely this forced loan that should be regarded separately from any other claims, Hagen Fleischer suggests.

For "practical reasons", asserting reparation claims is a dead-end street, as no German government would risk such a precedent, Fleischer says. The Greek side would be well-advised to drop those demands and to focus instead on claims pertaining to the occupation loan. After all, he says, the occupiers recognized their loan debt of 476 million reichsmarks and had actually started repayment shortly before the end of the war.

Schäuble: Issue closed

Today, that loan would amount to about seven billion euros without interest, the historian says.

He added German loans after the war generally had a six-percent interest rate, but even at a conservative three percent, Greece could be looking at a three-digit billion sum. The fact that the Nazis recognized the loan is also an advantage for Greece, he says.

The SYRIZA radical leftist party, currently the strongest opposition force in Greek parliament, is determined to put pressure on the coalition government to claim war reparations from Germany.

Party leader Alexis Tsipras says he broached the issue at a meeting in January with German Finance Minister Wolfgang Schäuble, who was quoted last week by the Neue Osnabrücker Zeitung as saying the issue of war reparations was definitively closed years ago.

"Much more important than misleading people with such stories would be to explain and spell out the reform path," he told the paper.

Greek Foreign Minister Dimitris Avramopoulos retorted that there is no relation between the reforms being carried out in Greece and the issue of German reparations. But observers say the reparations issue is clearly related to Greece΄s international financial bailout and Greek anger at Germany΄s EU policies.

SYRIZA parliamentary spokesman Dimitris Papadimoulis told DW that Schäuble is confronting Greeks with the dilemma of "reform or reparations."

No one denies that Greeks must restructure the budget and reform the state, he says, "But that does not change the fact that reparations claims remain in place."

Emotional demands for reparations are not unusual in the Greek media these days: the top-selling Ta Neadaily has even identified what it calls a "cold war" between Athens and Berlin.

http://english.capital.gr/News.asp?id=1796011

let´s go on greece...the macedonian position to sue tataria and ciganistan for their occupation of aegean and pirin macedonia will increase

[DedoAleko]

greece closes public broadcaster ERT

gREECE'S government has announced the immediate closure of public television and radio broadcaster ERT in a move that reportedly affects about 2700 jobs.

"ERT is a case of an exceptional lack of transparency and incredible extravagance. This ends now," government spokesman Simos Kedikoglou said at a press conference.

Kedikoglou said the organisation will reopen at a later stage under a new format and considerably fewer employees.

All current employees, which according to local media number nearly 2700, will be compensated and will be allowed to reapply for a job at the revamped organisation, he said.

People reportedly swarmed to the premises of ERT to show their support shortly after the announcement.

"ERT belongs to the greek people ... It is the only independent and public voice and it has to remain public ... We condemn the government's sudden decision," public sector union GSEE said in a statement.

The union of news editors POESY called on private media to hold an immediate strike.

POESY had condemned the expected closure earlier in the day.

"In order to keep in line with the (EU-IMF creditors), the government is willing to sacrifice public television and radio," the union said in a statement.

The socialist Pasok party and the moderate Democratic Left, junior partners in greece's three-party coalition government, had also expressed their opposition to an immediate closure of ERT when rumours first started circulating earlier in the day.

On Monday, representatives of greece's international creditors from the European Union, International Monetary Fund and European Central Bank began a regular audit of the country's progress in implementing its austerity program and structural reforms.

The reforms demanded of debt-laden greece in return for a bailout include a drastic reduction of the public sector and the merging or closing of public organisations.

izvor: http://www.heraldsun.com.au/news/bre...-1226662184598

[George S.]

IMF Concedes It Made Mistakes on Greece

IMF Concedes It Made Mistakes on Greece

Fund Says It Bent Rules on Debt Relief, but Argues That Bought Time for Europe to Limit the Fallout

By MATINA STEVIS in Brussels and IAN TALLEY in Washington

http://online.wsj.com/article/SB1000...781667088.html

IMF Concedes It Made Mistakes on Greece

BRUSSELS—The International Monetary Fund has admitted to major missteps over the past three years in its handling of the bailout of Greece, the first spark in a debt crisis that spread across Europe.

In an internal document marked "strictly confidential," the IMF said it badly underestimated the damage that its prescriptions of austerity would do to Greece's economy, which has been mired in recession for the last six years.

The IMF conceded that it bent its own rules to make Greece's burgeoning debt seem sustainable and that, in retrospect, the country failed on three of its four criteria to qualify for aid.

But the fund also stressed that the response to the crisis, coordinated with the European Union, bought time to limit the fallout for the rest of the 17-nation euro area.

And while IMF officials said the lessons learned would lead them to take a tougher stance in future bailouts, they also said that there was little else the fund could have done at the time.

"If we were in the same situation…we would have done the same thing again," said Poul Thomsen, the IMF's lead negotiator in the bailout talks, referring to its signing on to the deal in 2010 despite the lack of any debt relief.

The Washington-based fund released the document, prepared by IMF staff, on Wednesday after its contents were reported by The Wall Street Journal.

Over the last three years, a number of senior IMF figures, including Managing Director Christine Lagarde, have repeatedly said that Greece's debt level was "sustainable"—likely to be repaid in full and on time.

Yet the document described the uncertainties around the rescue as "so significant that staff was unable to vouch that public debt was sustainable with a high probability."

Two former IMF officials said the fund's chief lawyer, Sean Hagan, repeatedly warned in mid-2010 that the Greek program was bordering on breaking the institution's rules.

The IMF changed its rules in 2010 to allow countries to get "exceptional access" to its credit lines, or much bigger loans than normal.

"What happened at the time, and it's much easier with the benefit of hindsight, is that not all criteria of exceptional access as defined at the time were satisfied," Ms. Lagarde said in a separate interview last week.

"And yet there was a crying need at the time for support," she said. If the IMF hadn't tweaked its rules, "it probably would have meant no IMF support at that time."

She said the review of the fund's experience "will probably lead us to reassessing the exceptions to the exceptional access criteria" and "will certainly lead us to calibrating well how we work with regional financing arrangements."

The IMF is also working to make its debt assessments more rigorous, she said, and will place a higher priority on technical assistance for capacity-building such as banking supervision and tax collection—areas that were of particular concern in Greece.

In contrast to its decision in 2010, the IMF's latest periodic review of how the bailouts are going, also released on Wednesday, said Greece's European creditors may have to consider speeding up the debt relief promised in the second deal, in 2012.

The IMF report said that it had been too optimistic in 2010 about the Greek government's prospects for a return to market financing and its political ability to implement the conditions of its rescue program.

The greater beneficiary of the 2010 bailout wasn't so much Greece as the wider euro zone, the document suggested.

It described the rescue as a "holding operation" that "gave the euro area time to build a firewall to protect other vulnerable members and averted potentially severe effects on the global economy."

The IMF joined forces with the European Commission and the European Central Bank in 2010, forming the so-called troika, to manage Greece's first bailout of €110 billion ($143 billion)—one of the largest international rescues ever.

The three continued to run the country's second bailout as well as the Irish, Portuguese and Cypriot bailouts.

While the fund has been scaling back its new financial commitments to euro-zone economies, it has put up a total of $47 billion for Greece, the biggest loan the IMF has ever made when compared with the size of a country's economy.

While criticizing the delay in restructuring Greece's debt load, the fund conceded that cutting it before 2012 was "politically difficult" because of resistance from some euro-area countries, whose banks held too much Greek government debt.

An immediate restructuring would have been cheaper for European taxpayers, as private-sector creditors were repaid in full for two years before 2012 using the money borrowed by Athens. Greece's debt level thus remained undented, but it was now owed to the IMF and euro-zone taxpayers instead of banks and hedge funds.

The IMF also said its own analysis of the future development of debt was wrong "by a large margin." The fund's debt-sustainability analysis—a critical piece of forecasting—"included stress tests but these turned out to be mild compared with actual outcomes."

The Greek Finance Ministry declined to comment.

Euro-zone officials promised in May 2012 to cut the value of Greece's outstanding debt if Athens lives up to its vow for more budget cuts, higher revenues and a restructuring of the country's broken economy.

The program has a target of cutting Greek debt to 124% of gross domestic product by 2020 and "substantially below" 110% by 2022, from a peak of 175% this year. Euro-zone officials said they expect to review debt restructuring by the beginning of 2014.

In its review Wednesday, the IMF said that it is questionable whether Greece will be able to pay its obligations if it continues to hold unhealthy levels of debt well into the next decade. Debt projections are extremely sensitive to any delays, it said.

"Should debt sustainability concerns prove to be weighing on investor sentiments even with the framework for debt relief now in place, and strong program implementation by the Greek authorities notwithstanding, a more front-loaded approach to debt relief would need to be considered," the fund said.

The issue of the so-called fiscal multiplier—an estimate of how much an economy will contract for every euro in spending cuts or tax increases—has become part of the government's arsenal in its negotiations with the troika.

In talks next week, Greece will ask for permission to cut certain value-added, or sales taxes, arguing that an increase in restaurant taxes, for example, has generated less revenue not more by crimping spending.

Conversely a cut in the tax rate for eateries, the government says, could actually boost revenue by drawing in more diners. So far, however, officials at the European Commission have been cool to the idea.

The commission, which is the European Union's Brussels-based executive, comes in for special criticism in the IMF document.

The report says the commission "tended to draw up policy positions by consensus, had enjoyed limited success with implementing [fiscal conditions]…and had no experience with crisis management."

It adds that the commission focused more on "compliance with EU norms than on growth impact" and "wasn't able to contribute much to identifying growth-enhancing structural reforms."

The commission is the lead EU institution tasked with designing and promoting growth-enhancing and job-creating policies for the entire bloc. The commission declined to comment on the report.

"None of the [troika] partners seemed to view the arrangement as ideal," the paper continued in a section discussing the "unusual" arrangement, noting that there were "marked differences of view within the troika, particularly with regard to the growth projections."

Those growth projections were wildly off the mark but Greece still had to meet the same targets of cutting its deficit, it said. "The fiscal targets became even more ambitious once the downturn exceeded expectations. In addition, the starting point moved."

The paper added that the targets and the underlying macroeconomic projections weren't revised to reflect what was actually happening in Greece for 18 months, until December 2011.

The IMF had originally projected Greece would lose 5.5% of its economic output between 2009 and 2012. The country has lost 17% in real gross domestic output instead. The plan predicted a 15% unemployment rate in 2012. It was 25%.

Slowing the pace of austerity would have helped Greece's economy, but wasn't politically possible, the fund said.

"While earlier adjustment of the targets could have tempered the contraction, the program would have then required additional financing," which neither the IMF nor euro-area governments were prepared to give, the document said.

The paper criticized Greek governments for failing to implement structural economic changes that could have propped up the private sector and said the pain of the adjustment was "unevenly spread across society."

But it said there were few precedents for the size of the spending cuts and tax increases that Greece implemented to hit the targets.

[makedonche]

The IMF conceded that it bent its own rules to make Greece's burgeoning debt seem sustainable and that, in retrospect, the country failed on three of its four criteria to qualify for aid.

This is my favourite part of the above report, when is somebody going to wake up and reailse that Greece is incapable of looking after itself until it comes to grips with certain realities and stops living in the land of the non existent "Greek Gods", comes back down to earth and embarks on a policy of honesty and transparency?
Even more laughable is that Greece fiddled it's books to get into the EU, fiddled it's books to get more offshore loans through Lehman brothers and then the EU and IMF fiddled their books to give Greece more funding! Absolute financial madness and incompetence at it's very best.

[julie]

um, and when will the west not bail out their pet project made up country of Greece.

International Monetary Fund.

If someone has bad debt and is unable to pay said debt, continue living beyond ones means, at what point do banks lend more money to fund said opulent lifestyle ...they dont.....a bank will not lend to an insolvent person/company/ then why the fark would they lend to a whole country without realising what the ramifications are on the world economy. Pretty screwed up if you ask me

[TrueMacedonian]

Merkel: Greece joining euro was a mistake

http://www.thelocal.de/national/20130828-51637.html

Merkel: Greece joining euro was a mistake
German Chancellor Angela Merkel has said, a month before elections, that struggling Greece should never have been allowed into the eurozone, blaming her political rivals for letting it happen.

She heaped blame for Europe's debt and recession troubles on her centre-left opponents, saying that while in government the Social Democratic Party (SPD) had contributed to creating the causes of the crisis.

"The crisis emerged over many years, through founding errors in the euro -- for example, Greece should not have been admitted into the euro area," Merkel said to scattered applause at a campaign event Tuesday in the northern town of Rendsburg, footage from news channel ntv showed.

The conservative leader reiterated that her predecessor, SPD chancellor Gerhard Schröder, had in 2001 consented to Greece's entry and to weakening the currency bloc's stability pact, decisions she labelled "fundamentally wrong".

Last Saturday, on her whirlwind campaign tour, she had also attacked the Social Democrats, saying: "We don't need to be told by the people who admitted Greece into the euro-area that today we have problems with Greece."

The eurozone crisis and the bill German taxpayers may have to foot for it have become divisive issues in an otherwise lacklustre campaign ahead of the September 22 vote, in which Merkel remains the favourite to lead the next government.

Merkel is still Germany's most popular politician, with a yawning personal approval lead over her SPD rival Peer Steinbrück, in part because she is widely perceived to have steered Europe's biggest economy safely through the eurozone crisis.
While Greece, Spain and other southern countries remain mired in recession with huge unemployment, Germany's export-fuelled economy is projected by the IMF to grow 0.3 percent this year and has a jobless rate of only 6.8 percent.

Finance Minister Wolfgang Schäuble kicked loose the renewed eurozone debate last week when he admitted Greece will need a third international bailout package from next year, after earlier suggesting this was only a possibility.

The SPD immediately seized on the frank comment by the veteran minister, accusing the Merkel government of having sought to mislead voters until after the election about the true costs the German state may face from another bailout.

Challenger Steinbrück -- Merkel's first-term finance minister in a former left-right 'grand coalition' government -- has warned he would seek to pin down her position during their only televised debate Sunday.

He has accused the coalition government of Merkel's conservatives and their junior partners the pro-business Free Democrats of having "distributed sleeping pills and trying to hide the fact that stabilising the eurozone will have a cost".

Steinbrück has advocated greater help and solidarity for southern Europe -- recalling how post-war Germany was aided by its neighbours -- and proposed a modern version of a "Marshall plan", part-financed by a financial transaction tax.

Ex-chancellor Schröder, who lost to Merkel in 2005 elections, accused her government of lying about Greece's problems, speaking at a campaign event last week in which he was backing Steinbrück.

Greece, since the beginning of the debt crisis in 2010, has struck two bailout deals with the EU and the International Monetary Fund, worth a total of €240 billion euros that allowed the indebted country to remain in the eurozone.

Having paid the price with six years of recession and draconian austerity, Greece now still faces a €10-billion financing gap for 2014 and 2015.

Merkel has insisted Germany can only succeed within a strong and globally competitive Europe and has maintained a tough love approach of linking "solidarity with responsibility", providing financial relief in return for painful spending cuts.

[Risto the Great]

Of course they shouldn't have. Publicly. But the Greeks are just another host for the EU cancer to eat from. They own it now.

[Gocka]

Of course they shouldn't have. Publicly. But the Greeks are just another host for the EU cancer to eat from. They own it now.

At least some people get it, but still most dont.

[George S.]

the eu is on a slide when it really goes it will take many contries with her it is kie a united states of europe.the eu is like the revival of the holy roman empire with ten nations.there are more than ten nations but it will fail.