Greek central banker urges government on bailout reforms

Sat Jan 2, 2016 6:01pm GMT

ATHENS | BY GEORGE GEORGIOPOULOS

Greece's central bank chief has urged the leftist-led government to implement bailout reforms agreed with the country's lenders, warning that backtracking would entail risks the economy could not withstand.

Prime Minister Alexis Tsipras' ruling coalition, which has a majority of just three seats in parliament, faces tough pension reforms that will test his resolve to carry out measures demanded by international creditors.

Fed and Greece Could Defy the 2016 Bears

18 DEC 22, 2015 2:00 AM EST

By Mark Gilbert

Bloomberg

One of the pitfalls of market-watching, whether for professional strategists or journalistic scribblers, is a tendency to accentuate the negative. (I'm ignoring sell-side equity analysts, whose preordained bullishness is largely indifferent to the economic backdrop.) Gloom, doom and misfortune are more interesting than cheerful optimism. And I'm as guilty as the next financial soothsayer.

But it's often a good idea to try to take an opposing view, no matter how compelling the evidence for pessimism is (here's an excellent roundup of worries from Dave Collum, who combines a passion for markets with his day job as professor of organic chemistry at Cornell University). So here are my two outside bets on what could go right on the biggest financial issues that we're carrying into 2016:

Turkey Moves to Clamp Down on Border, Long a Revolving Door

By TIM ARANGODEC. 22, 2015

The New York Times

IZMIR, Turkey — The Turkish Coast Guard has stepped up nighttime patrols on the choppy, wintry waters of the Aegean Sea, seizing rafts full of refugees fleeing war for Europe and sending them back to Turkey.

Down south, at the border with Syria, Turkey is building a concrete wall, digging trenches, laying razor wire and at night illuminating vast stretches of land in an effort to cut off the flow of supplies and foreign fighters to the Islamic State.

Tighter Borders in Europe Create Migrant Bottleneck in Greece

Athens struggles to cope with thousands of new arrivals blocked from moving north

The Wall Street Journal

By NEKTARIA STAMOULI and  STELIOS BOURAS

Dec. 22, 2015 4:04 p.m. ET

5 COMMENTS

ATHENS—Greece is steadily shifting from being the main gateway for migrants into Europe to becoming the continent’s bottleneck, as new arrivals run up against tightened borders to the north.

Already struggling with its long debt crisis and economic depression, Greece risks finding itself unable to cope with the tens of thousands of migrants at risk of being marooned here this winter. Some are staying in temporary government shelters, others are sleeping rough.

Understanding Greece's Year In Crisis

A new film takes a close look at the first few months under the country's new leader.

 12/21/2015 01:02 pm ET | Updated 14 hours ago

Angeliki Kougiannou

HuffPost Greece

ATHENS, Greece -- According to filmmakers Paul Mason and Theopi Skarlatos, Jan. 25 marked the start of a financial war. That day, Greeks handed a massive election victory to Alexis Tsipras, the young and charismatic leader of the left-wing Syriza coalition.

In the months that followed, Greece went through a crippling financial crisis that brought the country to the brink of bankruptcy and close to an exit from the eurozone. After months of tense negotiations, the Greek government and its troika of lenders -- the European Commission, the European Central Bank and the International Monetary Fund -- finally agreed to a third international bailout for the country in exchange for economic reforms and a tough new round of austerity.

Is Russia still a key world power?

By James Nixey

Russia and Eurasia Programme head, Chatham House

BBC

Whether Russia, one of 15 successor states to the USSR, which broke up in 1991, is still a genuine world power in 2015 is open to question.

It remains the world's largest country and the largest oil producer

It retains its permanent seat on the UN Security Council (one among five)

Its nuclear arsenal (in Cold War times one of five countries, but now one of nine) has been progressively modernised

Sustained increases in defence spending have brought it close to its goal of escalation dominance in local and regional war

Greece Suspends Legislative Package After Concerns From Creditors

Law aimed at mitigating effects of austerity won’t be voted on by lawmakers until after Christmas

The Wall Street Journal

By NEKTARIA STAMOULI and  VIKTORIA DENDRINOU

Dec. 17, 2015 11:53 a.m. ET

1 COMMENTS

ATHENS—Greece suspended a legislation package on Thursday with social benefits aimed at mitigating the effects of the financial crisis on the most vulnerable following concerns by the country’s international creditors, according to Greek government officials.

The government was hoping that the bill would sweeten the pill for the Greeks who have suffered the most from the successive waves of austerity and appease its lawmakers, who were forced to approve another round of unpopular economic measures on Dec. 15.

What I learned about Greece’s year from hell

POLITICO gets an exclusive look at a new documentary that charts Syriza’s journey from election euphoria to grim austerity.

By  JAMES BLOODWORTH  12/16/15, 5:30 AM CET

Greece’s radical left party Syriza swept to power in January on a fiercely anti-austerity ticket. Hordes of left-wing activists from across Europe booked cheap flights and descended on Greece in order to show solidarity with the new government.

Less than nine months later, the foreign leftists had returned home and the anti-austerity euphoria had dissipated. Meanwhile, Greek Prime Minister Alexis Tspras, leader of Syriza, had gone from being the face of hope to yet another harbinger of grim austerity.

So what happened in the interim? Quite a lot, actually.

Greece Scores Another Bitter Victory

Analysis DECEMBER 16, 2015 | 18:38 GMT

STRATFOR

Editor's Note: Greece is a country in crisis. Facing financial, political and social uncertainty, Greece's ruling Syriza party has cut a deal with the European Union that should keep the Greek economy afloat at least for the time being. However, further measures to appease Athens' creditors could create political discord, if not violence, in Greece. The situation is precarious, and it is very possible that the agreement will collapse. Stratfor is logging the latest developments in this crisis update.

Late Dec. 15, the Greek Parliament approved a package of measures that will allow the country to receive 1 billion euros (about $1.1 billion) in bailout funds. The measures include legislation authorizing the sale of bad business loans from local banks to foreign investors and a new pay scale for civil servants. It was another bitter victory for the government of Prime Minister Alexis Tsipras, probably the last in a year in which the ruling Syriza party had to approve a series of controversial policies to secure funding from the country's creditors.

Tsipras did manage to preserve his thin majority, as the 153 lawmakers from the ruling party and its junior coalition partner voted in favor of the package. In addition, the reforms were not particularly controversial, and the Eurogroup will probably decide in the coming hours that Greece deserves to receive the next tranche of the bailout. But unfortunately for the Greek leader, his government will have to pass even more controversial measures in January.

The most important aspect of the Dec. 15 package is what was not included. Plans to partially privatize the national power grid operator, the Independent Power Transmission Operator, were postponed until 2016. A controversial plan to eliminate subsidies for farmers has also been repeatedly postponed since Greece first signed a bailout agreement with the Eurogroup in July, both out of fear of massive protests from a particularly noisy sector of the population and because many representatives in the legislature hail from agricultural regions.

More important, in January the Greek Parliament will have to vote on a plan to overhaul the country's pension system to cut spending by almost 2 billion euros next year. Because pensions are one of the last safety nets remaining in Greece, this is far from a minor issue. In a country where unemployment affects at least a quarter of the active population (the figures are twice as high among the youth), entire families depend on pensions from their parents or grandparents. In November, the Greek Parliament passed legislation making it easier for banks to evict families that are behind on mortgage payments. The new regulations still protect a significant number of households and will probably not be fully enforced, but they represent even further erosion of Greece's already weak safety nets.

Finally, Greece is facing an increasingly complex migration crisis. There was a significant spike in the arrival of asylum seekers from the Middle East in 2015, which forced Athens to spend extra funds to provide food and shelter for some of the migrants. For most of the year, Athens benefited from the fact that these men and women wanted to move on to Northern Europe rather than stay in Greece. The situation began to change in recent weeks, when several countries along the Balkan route started building fences and bolstering border controls to reduce the influx of immigrants. Making matters worse, Brussels forced Athens to accept a Frontex (the European Union's border agency) operation on Greece's northern border.

The European Union recently signed a deal with Turkey to prevent people from entering Greece, but the impact of the agreement has yet to be seen. Greece's main fear in the coming weeks is that people will still try to enter the country but will have a harder time leaving. This would not only increase Athens' financial burden but, more important, increase the likelihood of anti-immigrant violence in the country.

In principle, a Grexit will be less likely in 2016 than it was in 2015 because Athens is already in a bailout program and does not face a particularly pressing calendar of debt maturities. Capital controls are already in place, and parliaments in the eurozone do not have to hold any votes related to Greece. However, Greece's ruling Syriza party controls a tenuous majority of only three seats in the Parliament, meaning that even a small rebellion among the lawmakers could topple the government. In addition, because the recession, high unemployment and the immigration crisis are far from over, street protests and episodes of violence — which have been relatively rare since Syriza won the election in January — will become more frequent.

Greece mounts late push to assure EU before migration summit

Tue Dec 15, 2015 3:08pm EST Related: WORLD, GREECE

ATHENS | BY RENEE MALTEZOU

Reuters

In a last-minute drive to assure European Union partners that it is getting to grips with a mass influx of refugees, Greece released aerial photographs on Tuesday of new registration centers for migrants on its northern Aegean islands.

The move is part of Athens' efforts, ahead of an EU summit starting on Thursday, to rebuff criticism by Germany and other EU governments that it has done too little to manage the flow of hundreds of thousands of people arriving on its shores.

14 Airports in Greece to Be Privatized in $1.3 Billion Deal

By NIKI KITSANTONIS

DEC. 14, 2015

The New York Times

ATHENS — Greece’s leftist-led government on Monday signed its first major privatization deal, granting a German company the right to lease and manage more than a dozen regional airports.

The contract, worth 1.2 billion euros, or $1.3 billion, is part of an effort to privatize state assets and adopt economic changes demanded by international creditors under Greece’s €86 billion bailout program. Some other measures are under debate in the Greek Parliament and are scheduled for a vote Tuesday night.

Greece, lenders strike deal to unlock further bailout funds

Fri Dec 11, 2015 8:34pm GMT Related: BUSINESS

ATHENS | BY ANGELIKI KOUTANTOU AND LEFTERIS PAPADIMAS

Reuters

Greece and its international lenders have struck a deal on the latest set of reforms needed for Athens to receive 1 billion euros (£722 million) in further bailout aid, Finance Minister Euclid Tsakalotos said on Friday.

The reforms relate to a new privatisation fund, a shake-up of the power sector, and how to open up the market for non-performing loans. Parliament will vote on the bill next week, Tsakalotos said.

Greece signs major privatisation deal with Germany's Fraport

Mon Dec 14, 2015 11:15am GMT Related: BUSINESS

ATHENS/BERLIN

Reuters

Greece's leftist government on Monday signed its first big privatisation deal with German airport operator Fraport (FRAG.DE), awarding it a 1.2 billion euro (£868 million)contract to lease and manage 14 regional airports.

Privatisations have been a key condition of Greece's international bailouts since 2010. But Athens has raised only about 3.5 billion euros from state asset sales so far versus an original target of 50 billion euros due to bureaucratic delays and lack of political will.

Greece expected to push through remaining reforms on Tuesday: euro zone

Sun Dec 13, 2015 11:15pm GMT

BRUSSELS

Reuters

Greece has accomplished more than half of the reforms agreed with euro zone creditors to get the next, 1 billion-euro tranche of bailout loans and is to legislate the remaining steps on Tuesday, a senior euro zone official said on Sunday.

Greece Reaches Deal With Creditors on Next Portion of Financial Aid

Reforms to include overhauls to banking sector, design of a privatization fund, partial privatization of power grid operator

By NEKTARIA STAMOULI

Dec. 11, 2015 3:44 p.m. ET

The Wall Street Journal

ATHENS—Greece and its international creditors reached a deal on Friday on a new set of economic overhauls the government must implement to receive the next slice of €1 billion ($1.1 billion) in financial aid.

“We have reached a deal on this round,” Greek Economy Minister George Stathakis told reporters after the latest round of negotiations.

What China Can Learn From Greece

By SERGEI GURIEVDEC. 9, 2015

The New  York Times

As a political economist, I make my living studying the impact of politics on economics. My friends and co-authors who are political scientists focus on how economics affects politics. Which is more relevant in real life? Do countries with bad politics suffer from poor economic outcomes because bad economic policies are driven by bad politics? Or because persistent economic difficulties make reasonable politics hard to sustain?

Every year offers examples of both kinds. The year 2015 was no exception, producing two very important stories: Greece and China. Both are dramatic and multifaceted.

EU, creditors put Greece finances under the microscope

In Brussels, eurozone finance ministers are reviewing Greece's progress on implementing lender-ordered austerity measures. In Athens, center-left Prime Minister Alexis Tsipras is exhibiting ostentatious self-confidence.

http://www.dw.com/en/eu-creditors-put-greece-finances-under-the-microscope/a-18900920

Deutsche Welle

From the Greek government's point of view, everything is going according to plan - maybe better. Early Sunday, the parliament in Athens passed an austerity budget for 2016 , enshrining tax hikes and spending cuts worth billions. The forecast for Greece to return to growth after mid-2016 are good, Prime Minister Alexis Tsipras said during the budget debate. And Greece's major banks were even recapitalized with fewer government subsidies than initially planned.

Sunday's bad news appeared in the German weekly Welt am Sonntag, which reported that Greece was trailing far behind on enacting the austerity demanded by its international creditors, calling the country a ship with no captain. That provoked an unusually harsh response from the prime minister's press office: The "diehard and unrepentant enemies of Greece" continue to rely on "disinformation and speculation."

Greece Expected to Miss 2016 Privatization Target

The agency has repeatedly missed its targets and been hit by series of resignations since it was formed

The Wall Street Journal

By NEKTARIA STAMOULI

Updated Dec. 8, 2015 12:44 p.m. ET

2 COMMENTS

ATHENS—Greece is likely to miss its privatization target next year, the head of Greece’s privatization agency said Tuesday, even as the agency prepares to make progress on nine asset sales in the next twelve months.

Under the terms of a new bailout agreement signed earlier this year, the Hellenic Republic Asset Development Fund aims to raise €3.7 billion ($4 billion) from asset sales in 2016 and another €1.3 billion in 2017.

Turkey says has duty to protect soldiers in Iraq after Baghdad ultimatum

Mon Dec 7, 2015 7:56am EST Related: WORLD, TURKEY, IRAQ

ISTANBUL/ERBIL | BY DAREN BUTLER AND ISABEL COLES

Turkey said on Monday it had a duty to protect its soldiers around the Islamic State-controlled city of Mosul in Iraq and that they were there simply on a training mission, after Baghdad ordered the immediate withdrawal of its latest deployment.

Turkey sent hundreds of forces to a camp in the Bashiqa region of northern Iraq on Thursday. It described it as a routine rotation in an existing training program to help Iraqis retake Mosul from Islamic State, and said the troops were there to ensure the safety of the Turkish military trainers.

The situation in Greece is a lot worse than it looks

 Reuters

Paul Taylor, Reuters

ATHENS (Reuters) - After a tumultuous year of two elections, a referendum, a default, a bank shutdown, capital controls and a tidal wave of migrants, it's amazing that Greece is still standing, like the Parthenon towering over Athens.

Yet the visitor's first impression is not of a country in deep depression in the eighth year of a recession that has shriveled economic output by more than 25 percent and put one in four people out of work.