Showing posts with label Greece. Show all posts
Showing posts with label Greece. Show all posts

Wednesday, November 7

Experts: Greece riskier for investors as Syria

The associated press, staff
London-world markets may believe that the taxes that the purse of the companies of the world breathe any easier are the worst of the financial crisis in Europe after three turbulent years, but those.

An annual overview of finance directors from global business consultancy BDO finds that the crisis over too much government debt in Europe as one of its main concerns remain - so much is considered Greece to invest a riskier place and founded in Syria as a war-torn.

Only Iran and Iraq are riskier than Greece bankruptcy and a possible euro exit than avoid the struggles to convince that it deserves a bailout loans also its international creditors.

"CFOs always carefully from southern Europe, parts of which they see now as risky as the politically unstable countries of the Middle East, always", said Managing Director Martin Van Roekel BDO.

Greece is not the only country in the 17-country group, the top 10 riskiest countries euro in the survey used in investing. Spain, which economy with one, longstanding relationship with Latin America already in the euro zone no. 4 No. 7.

This retention of finance directors, in particular from fast-growing economies such as Brazil and China, invest in the indebted countries of Europe goes to the heart of the financial crisis. A majority of these countries depends on recovery of the private sector strengthened to fill links by government spending cuts in the investment gap.

While countries like fight, Greece and Spain, to convince that they good places to invest, are other international business of prosperierende. Despite the recent signs of a slowdown others considered China the most attractive country for expansion, closely followed by the United States such as Brazil, India, Germany, and 10 of the countries are also in the top UK ripe for expansion.

Overall, the survey by BDO found that CFOs around the world find it difficult for transactions abroad. As well as an uncertain global economy citing increased regulation and increased competition.

Van Roekel also said he is "surprised" that have more financial directors do not have the high debt from countries outside Europe's concerns, especially in Japan and the United States

Although Japan's debt amounting to approximately twice as large as its economy is, the country has managed to avoid, too many investors concerns stirs up, because most of his self-financed own pension funds.

The United States that has the advantage that the dollar, the global reserve currency, problems of its own and the winner of the presidential election who it is, will soon with the "fiscal cliff" beat around - a package of huge tax increases and spending cuts will be automatically introduced if the various parts of the Government a budget agreement is not.

BDO of surveyed 1,000 CFOs of medium-sized companies currently planning foreign investment.

Wednesday, September 5

Germany force Greece day of reckoning

Editor's Note: this article was to reflect the release of the country, Jean-Claude Juncker represents and add the first name of the German Finance Minister, corrected.

After a short, late summer break are German officials set, drag the bolts back onto Greece, increase the prospects that Athens would leave the euro zone and one cause painful shock to the world economy.

In the last round of talks in Berlin this week to the Greek Prime Minister Antonis Samaras lobbying for a two-year extension of the deeper spending cuts and tax increases when he meets with German Chancellor Angela Merkel, French President Francois hollande and the Luxembourg Prime Minister Jean-Claude Juncker, that the euro-zone finance ministers meet directs.

German officials, but over the weekend, that is, expired time made it clear for the Greek Government. Exclude a different Greek rescue package, said Sunday, German Finance Minister Wolfgang Schauble that Athens only to deal with the economic pain still.

"There can be no help - we do not yet a new (rescue) program," Schauble in Berlin said a public meeting. "There are limits."

But several election rounds of budget cuts have left Greek officials with their own limits. After two years of contraction shrinking Greek economy by more than 6 per cent per year. Previous rounds of budget cuts caused massive, sometimes violent, demonstrations and upended the careers of politicians which they adopt.

The Greek Government must not money, a massive due before year's end to repay a pile of debt. The latest bailout deal, set up by the European Union and the International Monetary Fund have come under Greek officials budget cuts in the next two years EUR 11.50 billion ($14 billion). Those cuts alone represent more than 5 percent of falling gross domestic product of the country.

The pain in addition to facilitate cuts Athens wants two more years expected to cut its budget deficit to below 3% of GDP, of 9.3 percent this year. But more time means more money. Greece bailout extend by two years and another 20 billion euros ($ 24 billion to $60 billion) in addition to the €130 billion ($157 billion) is already paid or obligated, according to estimates by some euro-zone officials and economists costs would.

But the German public has no desire to send more of their savings to Athens after Greece has shown little to no progress in reviving the economy and slowing growth as also Germany. As Europe's largest economy-accounting about 30 percent of gross domestic product in the eurozone-is a German popular support for any Greek aid package of crucial importance.

"I have always said that we help the Greeks, but we can not responsibly throw money into a black hole,", said Schaeuble, reflecting a widely felt atmosphere with German voters.

Now German officials decided after dozens of peaks and repeated failed bailout plans, apparently, that time of reckoning for the countries of the euro area, the issued to free and took too many debts, according to Michael Crofton, CEO has arrived from Philadelphia Trust Co.

"they go hard stand against the euro," he told CNBC. "If you, if you don't do what you said that you do not pay the Piper to do if you do not cut on your budget and your economies impose abstinence, then you'll be gone."

Greece departure from the common currency may once unthinkable, near the city.

It would force almost certainly Athens euro to default on much of its debt, which is now about 160 percent of its annual economic output. European Governments and banks, which own about two-thirds that debt would have to write off much of it probably.

With each failed attempt to find a viable solution, stop Greece into the euro area weakened membership. Recently, did European officials more than just think about Greece departure from the common currency.

Europe's Central Bank contingency plans for the possible financial shock began bracing for the prospect, if Greece out is forced. Under the plan, reported over the weekend by Germany's per mirror magazine would that set up which is governing a firewall, debts, bonds of other struggling eurozone countries such as Spain and buy on Italy, setting interest rates on these bonds of threshold values rose.

Such a move could deter speculators from the pressures which would add to prices to a level that larger economies that contribute to the view access over a debt "Infection" included on Europe's core pain. Central bankers have also some form of bank deposits insurance panic withdrawals by private individuals and small businesses to curb whereas drawn.

"I think we are pretty well prepared a Greek exit," said Chris Watling, CEO of Longview economics. "This is something which the European Heads of State and Government have thought about it for two years." The bottom line is that the Greek numbers are not huge. "I think that it is very containable at this stage."

Containable, perhaps, but it will be, not totally painless operation for the financial markets and banking systems after a top official of the European Central Bank.

"A payout of Greece would be manageable," Jorg Asmussen said two German newspapers over the weekend. But "A withdrawal would be not so neat as some imagine." It would be associated with a lower growth and higher unemployment and very expensive. In Greece, all over Europe, and Germany also. "

Gillian Tett, editor-in-Chief of the financial times United States, explains how cost-cutting measures are expected to growth in the euro area cripple and whether Greece will leave the euro.

Tuesday, July 3

Oil slips to $83 on fading optimism on Greece close

The price of oil slipped to $83 a barrel Monday close as optimism about the results of elections to the Greek has been overshadowed by continuing concerns over ongoing debt crisis in the euro zone, in particular in Spain.

By early afternoon in Europe scale was on oil for July delivery 75 cents $83.28 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose to pay 12 cents to $84.03 in New York on Friday.

94 Cents on $96,67 a barrel on the ICE Futures in London futures market, Brent crude delivery was August.

In Greece, the conservative New Democracy Party released the a bailout business, agreed supported the country this year, to win enough votes Sunday to form a coalition Government with another pro-bailout.

Investors had been bracing for a victory by parties, the favored rejection holding austerity measures necessary to ensure that the rescue money flow, a move that traders fear could be a financial crisis in Europe and beyond spark.

"In the short term, the markets are confident that the result will be Greece some space to breathe," said strategist Sean Darby Jefferies group. "But in the longer term investors can be not assured that the political upheaval is over."

Despite the cheers for Greece, investors pushed returns in Spain over 7% who had to request a year for 10 years bonds, a level as untenable and of which Greece, Portugal, and Ireland international rescue operations.

"In view of the fact that the (Greek) Government is, that likely push for a relaxation of the cost-cutting measures... the prospects for Greece far from certain is, especially since the debt crisis in Spain and is potentially Italy spill over", so the analysts at JBC energy in Vienna.

First, the Greek election results increased the euro, which helped to underpin oil prices early in the session. A weaker US dollar makes traded resources in dollars, such as oil cheaper for investors with other currencies. Euro, but fell to $1.2623 of $1.2637 late Friday in New York.

This week, investors will be closely meet Central Bank, mainly by the US Federal Reserve on Thursday one just want to identify decision-makers stimulus measures to increase with the growth of the world economy for signs.

In focus are also talks in Moscow between the Iran and six global powers who find common ground over the Islamic Republic's nuclear program. Led by the United States, have introduced several countries instead of oil sanctions against Iran, one of the world's most important suppliers, especially for parts of Europe and Asia.

"Because the risk premium has now completely eliminated the price of oil is likely to respond by you if the talks scheitern as it would more strongly upwards, when a breakthrough was achieved," said a report from Commerzbank in Frankfurt am Main.

In other energy trading, heating oil was up 1.47 cents to $2.6318 per gallon gasoline future 1.7 cents lost $2.6840 per gallon. Natural gas gained 2.8 cents to $2.495 per 1,000 cubic metres.

Friday, March 16

Fitch downgrades Greece on debt swap plan

ATHENS — Fitch cut Greece's long-term ratings on Wednesday to its lowest rating above a default, becoming the first ratings agency to make the widely expected downgrade after the country announced a bond exchange plan to ease its massive debt burden.


It said Greece would be designated as having technically defaulted after the bond exchange is formalized, but the new bonds would be give and new rating.


All three big ratings agencies -- Fitch, Moody's and Standard & Poor's -- downgraded Greece in July when an initial debt swap plan was unveiled and have warned that losses for private creditors would trigger a temporary default.


As expected, Fitch said it was downgrading Greece to "C" from "CCC," and would follow up with further downgrade to a "restricted default" when the bond swap is completed.


It will then reassess the country's ratings when new bonds are issued as part of the debt exchange.


"It would come out to a low, speculative grade rating," Fitch analyst Paul Rawkins told Reuters on the ratings after the reassessment, noting that rating would factor in the country's economic prospects and new debt profile.


He added that the current process of downgrades was largely procedural, following the path laid out by the agency in June. Ratings, which give an estimate of the capacity of a creditor to repay its debt, usually serve as a guide to investors.


Euro zone finance ministers agreed a 130-billion euro rescue plan for Greece on Tuesday to avert a messy default, including a bond swap to shave 100 billion euros off Greece's debt burden.


Bondholders will take losses of 53.5 percent on the nominal value of their Greek bonds as part of the swap, with actual losses put at around 74 percent in real terms.


The European Central Bank fas agreed to a complex plan to ensure Greek bonds can still be used as collateral in its lending operations whilst in the process of being swapped.


Greece will take a loan from the European Financial Stability Facility (EFSF) which will come in the form of EFSF bonds. Those bonds will passed to ECB and put into a special account incase there are any losses on collateral during the short window of the bond swap.


Copyright 2012 Thomson Reuters.

Monday, March 5

Stocks tumble amid fears over Greece

Stocks tumble amid fears over Greece
John Moore / Getty Images


Traders work the floor of the New York Stock Exchange.


By msnbc.com news services


Stocks tumbled Friday as the most recent flare-up in Greek negotiations for a financial bailout package put the S&P 500 on track to snap a three-day winning streak.


The Dow Jones industrial average was lately down over 100 points.


Workers in Greece went on strike to oppose fiscal reform measures requested by the European Union and International Monetary Fund, as Greek Finance Minister Evangelos Venizelos said the nation needs to reach a decision within days on accepting the terms of a bailout.


Stocks rose modestly on Thursday to push the S&P up 7.5 percent for the year after an apparent deal was reached between Greek parties on reforms, leaving equities primed for a pullback.


"They want some binding resolution that some subsequent Greek government is going to be committed to enforcing, and I can understand the reticence of EU officials for wanting this," said Phil Orlando, chief equity market strategist, at Federated Investors, in New York.


"Given the fact we've got a seven-percent rally in six weeks and a twenty-five percent rally in four months, it's perfectly reasonable that we should have a little bit of pause here."


European shares fell as the request for further cuts in Greece put the deal in jeopardy.


Adding to the dour tone, China's imports fell in January, the most since the depths of the financial crisis, raising concerns demand may be wilting more than previously thought, even accounting for shutdowns over the Lunar New Year.


Data from the U.S. Commerce Department showed the monthly trade gap for December swelled to $48.8 billion as goods imports climbed to the highest level since July 2008.


Shares of professional networking service LinkedIn surged after it reported full-year results that beat expectations.


Chinese e-commerce group Alibaba plans to take private its Hong Kong-listed unit, two sources familiar with the matter said, as part of a complex deal that would strengthen founder Jack Ma's control and give key stakeholder Yahoo cash and a direct stake in one of Alibaba's operating businesses.


Shares of Arch Coal dropped after it posted fourth-quarter results that missed analysts' expectations and said its 2012 volumes will fall by more than 5 million.


As earnings season moves into its final weeks, 339 companies in the S&P 500 have reported results through Thursday morning, with 63 percent topping analyst expectations, according to Thomson Reuters data, tracking below recent quarters through this stage of the earnings season.


Reuters contributed to this report.

Saturday, February 18

Greece plays game of chicken over bailout

ATHENS — Greece let yet another deadline slip on Monday for responding to painful terms for a new EU/IMF bailout as patience in Brussels wore thin over drawn-out negotiations among its feuding political leaders.


Failure to strike a deal to secure the 130 billion euro ($170 billion) rescue risks pushing Athens into a chaotic debt default which could threaten its future in the euro zone.


Panos Beglitis, spokesman of the PASOK socialist party, said on Sunday that leaders of the three parties backing technocrat Prime Minister Lucas Papademos' government had to give their responses in principle by noon (5 a.m. ET).


However, a government official denied that the parties had been given an ultimatum to respond on Monday.


Asked whether the parties had to respond in time for a Euro Working Group meeting of finance ministry officials in Brussels, the Greek official said: "No, there is no deadline."


He said the entire Greek side had to agree terms of the rescue, which would be the second for Athens since 2010, with international lenders before the next meeting of the Eurogroup of euro zone finance ministers.


"The only deadline is to have a staff agreement for the second bailout and the agreement of the political leaders before Eurogroup," said the official, who requested anonymity.


No date has yet been set for the Eurogroup meeting, although it is expected this week.


In Brussels, frustrated EU officials said Greece was already in "overtime" after failing to clinch an agreement at the weekend on a package including wage and pension reductions, job cuts and tougher tax enforcement measures.


"It will be very bad if there is no white smoke from Athens today," said one euro zone government source.


"We have already missed deadlines. In order to prepare the fresh tranche of money and reschedule debt in the first half of March, a whole series of technical steps must be taken. We need a decision now to put the mechanism of rescheduling in place."


Beglitis said the deadline had merely slipped to Tuesday due to the changing timetable of euro zone meetings.


Leaders of PASOK, the conservative New Democracy and the far-right LAOS party - who may face an angry electorate in parliamentary polls as soon as April - still have to agree on unresolved problems.


These include labor market reform and shoring up domestic banks. Greece needs the bailout money by March to meet big debt repayments but tempers are rising in the European Union over what it sees as Greek dithering on implementing reforms.


Bank hopes
Papademos said after five hours of talks on Sunday that party chiefs had agreed measures including wage cuts and other reforms as part of spending cuts worth 1.5 percent of gross domestic product.


Hopes rose on Monday that they had also made progress on recapitalizing domestic banks, which are up to their necks in Greek government bonds now worth a fraction of their face value.


Greek bank stocks were up 8.8 percent at midday on hopes that lenders would be recapitalized without being nationalized after a debt swap under the latest bailout deal, which will radically cut the value of their bond holdings.


"Banks are concerned with the way they will be recapitalized, so that they remain independent ... It seems it will be done through a combination of instruments, which will reduce the risk of their nationalization," said Natasha Roumantzi, head of analysis at Piraeus Securities.


The euro fell broadly on investor concern that the parties had yet to sign off on the terms of a new bailout with a deadline imminent, keeping alive the risk of a messy default which could rock the currency bloc. The single currency slid by 0.6 percent to stand at $1.3070.


Talks on the bailout have dragged on for weeks.


Worn down
Greeks have been worn down by a deep recession, now in its fifth year, and wave after wave of austerity measures imposed under the first bailout.


Alarmed by the prospect of yet more budget cuts, Greece's two main trade unions said they would call a 24-hour strike for Tuesday in protest against policies they say have only driven the economy into a downward spiral.


"Despite our sacrifices and despite admitting that the policy mix is wrong, they still ask for more austerity," Ilias Iliopoulos, secretary general of public sector union ADEDY, told Reuters.


ADEDY and its private sector sister union GSEE, which will join Tuesday's strike, represent about 2 million workers or roughly half the country's workforce.


Leftist and communist-affiliated groups will rally at around 11 a.m. ET on Monday to march to parliament.


With Greece facing 14.5 billion euros of debt repayments in March, a bill it cannot meet without further bailout funds, the stakes could not be higher.


Officials have emerged increasingly despondent after each round of talks, complaining that the troika of European Central Bank, European Commission and International Monetary Fund was refusing to yield on demands to cut the minimum wage, axe holiday bonuses and fire public sector workers.


New Democracy and LAOS in particular have staunchly opposed further wage and spending cuts, arguing they risk precipitating an even deeper recession and imposing more pain on Greeks.


The slow progress has angered Greece's European partners. Euro zone officials say finance ministers told Greece on Saturday it could not go ahead with an agreed deal to restructure privately held debt until it guaranteed it would implement reforms.


"There is a great sense of frustration that they are dragging their feet," one euro zone official said.


Copyright 2012 Thomson Reuters.

Monday, November 21

Greece gambles on referendum for new debt deal

ATHENS, Greece — Taking a huge political gamble, Greece's prime minister announced Monday that his debt-strapped country will hold a referendum on the new European debt deal reached last week — the first such vote in 37 years.


Prime Minister George Papandreou appeared to take many lawmakers by surprise by saying that a hard-bargained agreement that took months for Europe's leaders to hammer out will be put to a public ballot.


He gave no date or other details on the proposed referendum, which would be the first in Greece since 1974, when the monarchy was abolished by a landslide vote months after the collapse of a military dictatorship.


"This will be the referendum: The citizen will be called upon to say a big 'yes' or a big 'no' to the new loan arrangement," Papandreou told Socialist members of parliament. "This is a supreme act of democracy and of patriotism for the people to make their own decision ... We have a duty to promote the role and the responsibility of the citizen."


The move allows Socialist lawmakers — who have been vilified by an increasingly hostile public during months of strikes, sit-ins and violent protests over rounds of austerity measures — to pass the responsibility for the country's fate to the Greek people themselves.


Finance Minister Evangelos Venizelos, a constitutional law professor, said the referendum was called after opposition parties repeatedly failed to side with the government in negotiations between Greece and other eurozone members.


"Greece is living through a drama, from which it must be released by asking the people to express its will," Venizelos told parliament.


"Each citizen will make his own decision, with responsibility, in a process that will provide a national sense of relief and recovery."


Later he told private Antenna television: "It is very clear: The new agreement will be submitted to parliament for approval and then submitted to the judgment of the Greek people ... the Greek people can of course say 'no' but must bear in mind the consequences of that decision."


Venizelos indicated the referendum would be held early next year, after weeks of complex negotiations to finalize details of the new agreement.


The new debt deal aims to seek 50 percent losses for private holders of Greek bonds and provide the troubled eurozone member with €100 billion ($140 billion) in additional rescue loans.


Papandreou's government has seen its majority reduced to just three seats in parliament and its approval ratings plummet amid harsh austerity measures that are sending the country into a fourth year of recession in 2012.


The EU statistics agency Eurostat estimated in a report issued Monday that unemployment in Greece reached 17.6 percent in July — even higher than the Greek estimate for that month of 16.5 percent.


"This is just the latest twist in the unfolding Greek tragedy," said Sony Kapoor, managing director of Re-Define, a London-based think tank.


"With an irresponsible opposition that is promising Greek voters the moon, it is very difficult to see how this referendum could be won under the ongoing gut-wrenching austerity."


Eurozone countries struggled for months to overcome their differences before reaching the Oct. 26 agreement — the second broad agreement reached in four months — and it is likely to cause major concern for EU officials.


Germany's Finance Ministry noted late Monday that "the summit of the eurozone's heads of states and governments last Wednesday formulated clear expectations. Accordingly, the second aid package for Greece shall be finalized by year's end."


"At the moment we are all working on this with high intensity," it said in a statement.


But it declined to comment directly on the ballot, saying "the announcement of a referendum is a development in Greece's domestic politics on which the (German) government has no information yet."


British Foreign Secretary William Hague said the referendum was "a matter for the Greeks."


"Every country needs to have their own domestic political approach to the problems ... The consequences of a 'yes' or 'no' vote are something that will have to be debated in Greece," Hague told Channel 4 News.


"We look to all the countries in the eurozone to honor the agreements they have entered into."


In Greece, opposition parties accused the government of calling the vote to save its teetering government, threatened by growing dissent from Socialist dissenters.


"The prime minister is trying to buy time," said Costas Gioulekas of the conservative New Democracy party said. "We want clear solutions. And a clear solution is obvious: Elections."


Under Greece's constitution, a referendum requires approval by parliament before it is officially declared by the country's president. Gioulekas would not say whether his party would back a "yes" vote.


Support for the Socialists has eroded so much that anti-government protesters forced authorities Friday to cancel an annual military parade to honor World War II veterans, causing deep embarrassment to the government.


__


Elena Becatoros from Athens, Juergen Baetz in Berlin, Gabriele Steinhauser in Brussels and Jill Lawless in London contributed.


Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Monday, November 14

Greece prime minister struggles to form coalition

ATHENS, Greece — Greece's prime minister struggled Saturday to form a temporary coalition government in the near-bankrupt country, extending a political deadlock threatening billions in international rescue funds.


In an impassioned plea to parliament late Friday, George Papandreou agreed to step aside as premier if necessary to help hammer out a coalition, offering to include the conservative opposition party — a possibility swiftly rejected by its leader.


"The last thing I care about is my post. I don't care even if I am not re-elected. The time has come to make a new effort ... I never thought of politics as a profession," he told parliament before the vote in the early hours of Saturday.


Papandreou said a new coalition government would need four months to secure the new €130 billion ($179 billion) rescue agreement and demonstrate the country's commitment to remaining in the eurozone.

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"Cooperation is necessary to guarantee — for Greece and for our partners — that we can honor our commitments," Papandreou said at a meeting Saturday with President Karolos Papoulias, hours after his Socialist government narrowly survived a confidence vote.


"I am concerned that a lack of cooperation could trouble how our partners see our will and desire to remain in the central core of the European Union and the euro."


But Papandreou's plea was snubbed by conservative opposition leader Antonis Samaras.


"We have not asked for any place in his government. All we want is for Mr. Papandreou to resign, because he has become dangerous for the country," Samaras said in a televised address. "We insist on immediate elections."


Samaras was due to meet the president at 1:00 p.m. (1100GMT) Sunday.


Frustrated with Greece's protracted political disagreements, the country's creditors have threatened to withhold the next critical €8 billion ($11 billion) loan installment until the new debt deal is formally approved in Greece.


Greece is surviving on a €110 billion ($150 billion) rescue-loan program from eurozone partners and the International Monetary Fund. It is currently finalizing a second major deal: to receive an additional €130 billion ($179 billion) in rescue loans and bank support, with banks agreeing to cancel 50 percent of their Greek debt.


Midway through his four-year term, Papandreou was forced by his austerity-weary Socialist party into seeking cross-party support after he abandoned a disastrous proposal to hold a referendum on a new European debt deal — which prompted havoc on world markets and anger from creditors.


Papandreou's popularity has been battered by two years of punishing austerity, causing crippling strikes, violent protests and sharp drop in living standards for ordinary Greeks who face repeated rounds of tax hikes and cuts in pension and salaries.


Late Friday, Papandreou won a confidence vote in the Socialist-led parliament on a pledge that he was willing to quit and form a caretaker coalition.


But he insisted an immediate election would paralyze government and endanger the new rescue deal.


The conservative snub left Papandreou with limited options: negotiating with conservative splinter groups and independents to attract consensus, and possibly invite respected non-politicians to join the effort.


"(Papandreou) will not resign immediately and he cannot resign before there is a new government. What remains to be seen is how flexible he will be in seeking a different governmental makeup," Ilias Nicolacopoulos, a prominent political analyst told AP television.


"There will be a tough game of poker."


The Associated Press and Reuters contributed to this report.

Sunday, October 30

'This has destroyed us': Protests cripple Greece

 ATHENS, Greece — With no warning, a few dozen students blocked a major avenue in central Athens, marching slowly up the middle of the street to make sure motorists couldn't get through. Tempers frayed, horns honked.


A driver revved his engine, swerved suddenly and charged up the sidewalk, narrowly missing a woman who jumped out of the way in alarm.


The scene during a student demonstration this week reflected the increasing irritation and despair felt by many Greeks, weighed down by a financial crisis that has led to repeated strikes and demonstrations as the government desperately tries to avoid a default.


"It's a catastrophe. This has destroyed us," said Nikos Trovas, who runs a parking garage just off Syntagma, the large square outside Parliament that has become the focus of protests. "The roads shut every day. So we just sit around here with the employees, looking at each other with no work to do."


It is a curse for those who live or commute to the center of the Greek capital, once a vibrant showcase of what many hoped was a dawn of economic prosperity.


As the chanted slogans faded and the last shreds of stinging tear gas wafted away Wednesday after a demonstration during a civil servants' strike, business owners took stock of the damage to their operations — and wondered how much longer they could keep going.


'Long-term' consequences
Trovas said his monthly turnover was down 40 percent compared to last year — when the financial crisis had already begun to bite in Greece. The main problem, he said, was that demonstrations were often marred by clashes between rock-throwing youths and riot police.


"The consequences are long term. When people see the violence they're afraid to come into the city center with their cars," he said.


The Greeks whose livelihoods lie downtown don't know who to blame: the government, which says there is no option but to cut spending and raise taxes to secure international loans, or the protesters, who can't stand their leaders.


Stores and coffee shops hastily roll down steel shutters — installed over the last few years after repeated riots saw storefronts smashed again and again — for every large demonstration.


"You lose euro1,000 ($1,300) a day on a strike or demonstration day. We soldier on without hope," said Constantinos, opening the doors of his coffee shop just off Syntagma Square after the main demonstration. He asked that his surname not be used out of concern that his cafe could be targeted.


And it's not just motorists who are avoiding the center. In the popular shopping district behind Syntagma, more and more shops now stand vacant, "to let" signs plastered across their windows.


"For 200 days out of 365, we can't work," said clothes shop owner Georgia Brezati, whose store stands near the popular tourist area of Plaka. "The center shuts down all the time, and nobody's doing anything about it. I can't be taxed for 365 days a year but only work for 100."


'Neighborhood of devils'
As shops and restaurants stand vacant, Brezati said she has seen a steady decline in the area she has worked in for the past 30 years.


"There's terrible insecurity. And we have a huge problem near Syntagma now. A place that used to be known as the 'neighborhood of angels' has turned into the 'neighborhood of devils," she said, noting the general decline of the area, with petty criminals, beggars, homeless people and drug addicts increasingly apparent as businesses shut down.

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Customers are scarce. Brezati sat at a table outside her shop slowly sipping a small coffee as passers-by glanced at the leather jackets and fur coats in her storefront, but didn't stop in.


"Our clients don't come to buy any more," she said. "They come to sell their furs and leather coats, because they need the money to pay their electricity and water bills."


Since May 2010, Greece has been dependent on a euro110 billion ($146 billion) international bailout from other eurozone countries and the International Monetary Fund to remain solvent and the government has struggled to meet the conditions of the rescue funds.


Several rounds of spending cuts and tax hikes have cut deep into the incomes of average Greeks as the country struggles through its third year of recession, with the economy projected to contract 5.5 percent of gross domestic product this year.


Unemployment has spiraled to above 16 percent, with the young most severely affected.


European leaders agreed in July on a second euro109 billion ($145 billion) bailout as it became increasingly clear that the measures weren't working as well as had been expected.


But now the Socialist government and international creditors are disputing the details of that bailout.


And each quarterly review of the country's reforms — required for Greece to get the next installment of bailout loans — invariably comes with yet more austerity measures. Many blame the government for failing to tackle the problems effectively.


"This government doesn't work," said Brezati. "It's like they sold us a fur and we found out it was a fake."


Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Sunday, October 23

Greece to miss deficit target imposed by lenders

ATHENS, Greece — Greece won't meet 2011-2012 deficit targets imposed by international lenders as part of the country's bailout, the Finance Ministry said Sunday.


The country's deficit this year is expected to reach 8.5 percent of gross domestic product, or €18.69 billion ($25.2 billion) — higher than the targeted €17.1 billion ($23.1 billion), which would have been 7.8 percent of GDP, the ministry said.


Greece has been reliant since May 2010 on regular payouts of loans from a €110 billion ($150 billion) bailout from other eurozone countries and the International Monetary Fund. It was granted a second €109 billion package in July, but details of that deal remain to be worked out.


The Finance Ministry said the missed target was because of a deeper-than-expected recession, with the economy contracting by 5.5 percent instead of the 3.8 percent estimate made in May. It implied the deficit could even exceed this level by the end of the year unless all new austerity measures were implemented.


"The final estimate for a deficit equal to 8.5 percent of GDP can be achieved, if there is a proper response by the state authorities and the citizens themselves, on whose stance the country's financial ... and social future depends," the announcement said.

Story: Stocks get brief US relief but Greece fears linger

The announcement reflects the government's frustration with tax collection, which they blame on tax inspectors' lax performance, and its fear that citizens, angry at seeing their wages shrink and, at the same time, having to pay an increasing amount of one-off taxes, would refuse to pay.


There are already widespread calls not to pay a property surcharge, to be included in the next batch of state electricity company bills, despite the fact that delinquent payers are threatened with having their houses disconnected from the grid. The government hopes that revenue from the property levy will raise about €2 billion ($2.7 billion) in 2011 and a similar amount in 2012.


The 2012 budget is projected to reduce the deficit to €14.68 billion ($19.82 billion), or 6.8 percent of GDP, up from the 6.5 percent target agreed with Greece's lenders. Excluding serving Greece's debt, the budget is projected to have a primary surplus of €3.2 billion, or 1.5 percent of GDP, meaning that Greece's debt will stop growing, as a percentage of GDP.


The Cabinet also decided up to 28,000 public sector employees will be placed on "reserve" — that is, suspended with reduced pay, by the end of 2011.


The program falls short of the 30,000 reduction demanded by Greece's creditors and, with few exceptions, it is actually an early retirement program on full pensions. Those affected will be paid a fraction of their actual salary for a period of one to two years, but will be able, at the same time, to hold jobs in the private sector, if they can find them.


"The approved proposal is the result of lengthy and difficult negotiations with (the lenders) who insisted that placing employees on reserve should have been a step towards firing them and not an early retirement" program, government spokesman Elias Mossialos said.


The government expects savings of €300 million from the plan in 2012.


The cabinet committed itself to reducing civil service jobs by 150,000 within four years.


© 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Tuesday, October 11

NYU's Roubini: Greece should default, leave euro

Luca Bruno / AP

Greece should start an orderly default, voluntarily leave the euro zone and return to its former currency the drachma in order to avoid a “vicious cycle of insolvency, low competitiveness and ever-deepening depression,” economist Nouriel Roubini said in a column published in the Financial Times Monday.

Roubini, a professor at New York University’s Stern School of Business who gained renown for accurately calling the housing bubble, said other potential options for helping the debt-stricken country -- including a weakening of the euro, a reduction in Greek unit labor costs or a rapid deflation in prices and wages -- are impractical and likely won’t work.

The process of defaulting and leaving the euro zone would be “traumatic,” Roubini said, but “a return to a national currency and a sharp depreciation would quickly restore competitiveness and growth, as it did in Argentina and many other emerging markets which abandoned their currency pegs.”

Fears that Greece may default on its sovereign debt and leave the euro zone have grown in recent days. Euro zone countries are becoming frustrated that the nation appears unable to meet the fiscal targets set out under its international bailout.

A poll of economists released by Reuters Friday showed that, while Greece will likely default on its debt within a year, there is only a one-in-five chance it will leave the euro zone.

The Reuters poll of more than 50 economists across Europe gave a 65 percent chance Greece would default. Half of the poll’s respondents said Greece would likely default within 12 months.

Monday, October 10

Stocks hit as Greece tries to convince creditors

LONDON — Stocks took a hammering Monday as Greece struggled to convince international creditors that it can meet its debt obligations in return for more bailout cash to avoid running out of funds as soon as next month.

Even though Prime Minister George Papandreou canceled a trip to the United States and the Greek cabinet came up with fresh austerity measures over the weekend, investors remain concerned that Greece will not get its hands on the €8 billion ($11 billion) due from last year's€110 billion ($150 billion) bailout.

On Friday, eurozone finance ministers in Poland decided to delay authorizing the payout to Greece until early October. At risk is not only the installment from the 2010 rescue package but also a second bailout for Greece worth €109 billion ($149 billion).

"(The Poland meeting) seemed to highlight the level of disunity amongst those that have the authority to deal with the problem," said Louise Cooper, markets analyst at BGC Partners. "The slow machinations of the political class are just not keeping up with the economic and financial reality on the ground."

Greece's finance minister, Evangelos Venizelos, is due to host a teleconference later Monday with the country's international creditors: the European Commission, the European Central Bank and the International Monetary Fund. His task is to convince them that Greece is doing enough to warrant the release of the next batch of bailout cash.

While investors keep a close watch on the internal debate in Greece, they are also monitoring developments in Germany after Chancellor Angela Merkel's government suffered a big electoral defeat in Berlin, which shut out her Free Democratic party coalition partners from a regional parliament.

Amid the uncertainty and after strong gains last week, stocks started the week in retreat.

In Europe, Germany's DAX closed down 2.8 percent at 5,415.91 while France's CAC-40 fell 3.0 percent to 2,940. The FTSE 100 index of leading British shares ended 2.0 percent lower at 5,259.56.

In the U.S., the Dow Jones industrial average was down 1.5 percent at 11,342.09 while the broader Standard & Poor's 500 index fell 1.4 percent to 1,199.46.

Aside from Greece, the other main focus in the markets this week is Wednesday's monetary policy decision from the U.S. Federal Reserve. There are growing expectations that the central bank will introduce some new measures to help boost the U.S. economy, which has seen growth slow down sharply this year. However, most analysts think the Fed will fall short of announcing another monetary stimulus program, given that inflation levels remain relatively elevated.

"Many still expect some sort of central bank assistance to be announced at this week's Federal Reserve meeting, but the ongoing concerns over a Greek default are likely to overshadow this unless there is some sort of firm reassurance that this can be avoided," said Ben Critchley, a sales trader at IG Index.

With stocks under pressure, the dollar garnered some support against the euro through its supposed status as a safe haven asset in times of financial volatility. The euro, which has shed a large chunk of last week's gains after the failure of European finance ministers to unveil anything dramatic with Greece, was 0.3 percent lower at $1.3647.

"The dollar has started the new week on a firm footing, with financial markets somewhat uncertain about the next steps in the European debt market crisis," said Nick Bennenbroek, head of currency strategy at Wells Fargo Bank.

Earlier in Asia, Hong Kong's Hang Seng index plunged 2.8 percent to 18,917.90, while South Korea's Kospi index fell 1 percent at 1,820.94. China's main index in Shanghai ended 1.8 percent lower at 2,437.79.

Japanese financial markets were closed Monday for a national holiday.

In the oil markets, prices tracked equities lower — benchmark oil for October delivery was down $2.17 at $85.79 in electronic trading on the New York Mercantile Exchange.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Tuesday, August 16

Greece suffers new credit downgrade

ATHENS, Greece standard and poor's on Wednesday relegated Greek Government bonds at the lower end of junk-s status, reduction of the country with debts crippled credit rating of 2 notches on CC, with a negative Outlook.

The international rating agency said that a proposed restructuring of Greece would be EUR 109 billion ($157 billion) by default on selective heavy debt burden under a second international bailout deal. Both have said the same thing much other major rating agencies.

A standard and poor the statement also said the possibility of a future Greek standard is likely remain high.

Under the debt relief deal, which met last week in Brussels take the bailout banks and other private investors some 50 billion € ($ 72 billion) to the until 2014 by Exchange of Greek bonds with lower interest rates or easily keeping them for new par value lower

"Standard and poor's came to the conclusion that the proposed restructuring of the Greek government debt would amount to a selective default under our rating methodology" the rating agency said. "We see the proposed restructuring as a"distressed Exchange"because of public declarations of European policy, it is probably to losses for commercial creditors lead."

On Monday rating agency of Moody's downgraded Greece of three notches and earlier warned that it will almost inevitably be the country in standard is - according to the new rescue package are taken into account.

There was no immediate comment from Athens. Respond to Moody's downgrading, Government spokesman Elias Mossialos it had said, was "no practical value," argue that domestic creditors can now count on secure lines of credit.

He also proposed that Greece should cancel his subscription to international rating agencies.

Greece brush with standard will use first humiliating for a country function. But the immediate practical consequences of the evaluation for Greece should be limited.

The overriding fear that because of the bad rating, already fighting Greek banks, the European Central Bank emergency liquidity would be frozen operations was for weeks.

However, last week euro area found a way to this threat promised, temporarily 35 billion € ($ 50 billion) deposit with the ECB used to enhance the creditworthiness of non-performing bonds as collateral by the Greek banks, was lifted up to the standard assessment guide.

Crucial for Greece and Europe as a whole international swaps and Derivatives Association, a trade association, said the new rescue deal is not expected payment of bond insurance-trigger, because private sector involvement is voluntary.

Earlier Wednesday, appointed Greece, BNP Paribas, Deutsche Bank and HSBC act as dealer manager for a voluntary private sector participation scheme under the second financial security.

Cleary Gottlieb Steen and Hamilton LLP was appointed you international legal advisor, while Lazard Freres of the financial adviser will be.

Under the voluntary plan, banks and other large private investors be swap Greek bonds for new securities with longer maturities.

Copyright 2011 associated press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Tuesday, August 9

Fitch: Greece default values, but the hope of 'Window'

Athens/LONDON - rating agency Fitch declared that Greece as a result of a second bailout in temporary standard would be, said the Athens respite had bought it.

But the Agency required to Greece give a higher, "low speculative-grade" assessment had been exchanged after its bonds and said Athens had some hope of combating their debt, which most economists still expect to obtain a deeper restructuring in the future.


An emergency summit of Heads of State and Government of the 17-nation area agreed a second rescue package Thursday with an additional 109 billion euros ($157 billion) of government money, as well as a contribution from private sector of bond holders are expected to total about EUR 50 billion by mid 2014.

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Under the bailout of Greece that 110 billion euro from the European Union and the International Monetary Fund a restructuring plan in May last year completed, banks and insurance companies are voluntarily to help Athens swap their Greek bonds for longer maturities at lower prices.


"Fitch holds the type of participation of the private sector... limited default event represent one", said David Riley, Director of sovereign ratings at Fitch.


"The decline in interest rates and extending the maturities potentially offers but Greece window again solvency, despite the enormous challenges that it is for you," he said.


The Summit agreed the region Rescue Fund, the European facility for financial stability are allowed to buy bonds in the secondary market, when the European Central Bank, which is deemed necessary to cope with the crisis.


There can be also for the first time States preventive credit lines before they are closed by credit markets and Governments give money to the recapitalisation of banks, both movements which Germany earlier this year blocked.


As part of the package the euro-zone leaders a temporary standard made detailed provisions for the limitation of damage-the first in the 12-year history of the euro.


"It is a great breath of relief for the Greek economy and this on gradually on the real economy passes" reporters Greek Finance Minister Evangelos Venizelos. "But this does not mean that we can relax our efforts."


Among other steps agreed the Guide to terms of bailout loans to Greece, to facilitate Ireland and Portugal; Terms be extended cut now around 3.5 per cent to 15 years of 7.5 and interest of 4.5-5, 8 per cent.


It doubts remain about whether the plan went, but far enough to not only Greece debt sustainability, assure Ireland, Portugal and other highly indebted countries.


The package was "more than expected, but not enough to give us sleep comfortably", said Barclays economists. They were disappointed that the European Heads of State and did not agree Government, to extend a euro-zone Rescue Fund.


The advanced EFSF role is to prevent that larger States of the euro area such as Spain and Italy of markets because of fears a weaker country excluded by default.


Sufficient resources, so far, but the burden could rise significantly. A preventive credit line for a large country like Italy could more than 500 billion euros over several years as a whole, overwhelming the EFSF current 440 billion euros.


Debt
French President Nicolas Sarkozy said on the Summit agreed debt of Greece would measures by 24 percentage points of GDP by about 150 percent today.


Remain still a colossal debt for an economy deep in recession with no way to a competitive devaluation.


In addition, the figures are based on what analysts say optimistic projections for growth and returns from a sweeping privatization program.


"Our estimates of Greek debt/GDP ratio will fall around 25 percentage points more than 5 years as a result are these measures but still a whopping 120 percent in 2016, even on the assumption that the full 50 billion privatization be implemented measures," said analysts at JP Morgan.


"We therefore believe that spreads (bond) to expand, scattered again short coverage and reality sinks."


Euro brushed close to a two week high prices for Greek, Irish and Portuguese bonds jumped, and the cost of insuring their debt fell Friday. But traders said that expectations of a larger restructuring on the street were visible.


The European leaders promise a "Marshall Plan" to help the European public investment, to revive the Greek economy can help, although details were thin.


Agencies standard & poor's and Moody's are likely to rating Fitch example to follow, because banks and insurance companies write the value of Greek bonds to around 20 percent, with perhaps more casualties are expected to follow.


"We have long held, that the most likely result for Greek bondholders would she would followed first by a larger at a later date a small haircut." "Greece a real chance they give have likely a write down close to 65 percent, to", said Gary Jenkins, head of fixed income research on development.


The Summit accord was based on a common position by hand by Merkel and Sarkozy in late-night talks in Berlin Wednesday with the Jean-Claude Trichet of President of the ECB.


The ECB has drawn and it signaled standard was prepared to let Greece temporary – so long as it was strictly a one-time.


But Fitch said that similar creditors private participation in future help for Ireland and Portugal would expect, if she had stabilized its finances, not until 2013.


Many economists believing the only way out of the euro zone debt crisis in the long run may be closer integration of the national Steuerpolitiken--for example a common euro-zone countries loans and issuance of bond guarantee one common euro-zone, to finance all countries. Germany has this against.


Sarkozy, is to at least looking more radical reforms.


He said that to improve the governance of the block, "our vision of the future of euro area highlight." would make proposals by the end of August France and Germany


Merkel said that she would allow no Union of automatic transfers from wealthier poorer States. "This will not happen ever I believe", she told a press conference.


Copyright 2011 Thomson Reuters.

Monday, August 8

Greece gets new bailout with the private sector help

Brussels - eurozone heads of State and Government on Thursday agreed to return, which will provide a massive new bailout Greece - but make it likely the first euro country to standard - and radically new funds, make rescue of Monetary Union so that they to act pre-emptively if crises develop.

Euro-zone countries and the International Monetary Fund Greece is a second rescue mission in the amount of €109 (billion $155), giving more than EUR 110 billion granted a year ago.

Banks and other private investors are of either Greek bonds that hold them, to exchange them for new with lower interest rates or selling bonds overwhelm back after Greece at a low cost some 50 billion euros (71 billion dollars) to the help the bailout.

"For the first time since the beginning of this crisis, we can say that the policy and the markets together, come", said President of the European Commission Jose Manuel Barroso.

The initial reaction of markets and analysts was cautiously positive. Euro, strong on expectation of who together had edged up further to gain 1.2 per cent against the dollar.

The "Summit conclusions surprise by their size and range," Marie Diron, Senior Economic Advisor for Ernst & young, said in a note. "The measures imply a more important and huge support from the EU private sector." "Serve all politically acceptable measures."

The euro zone is secure any new Greek bonds to banks with guarantees, if business "selective default" is seen by rating agencies, which in General is expected. If the agencies make true their warning, Greece will be the first euro country to ever in default - probably only for a short period of time.

Agreements provide new Greek debt guaranteed helps one of the largest obstacles contribution of the private sector to the to overcome the new Greek bailout. It means that the Greek banks continue to can the European Central Bank liquidity. Without this support quickly Greek banks would collapse.

In the bond-rollover or swaps, the new Greek bonds to banks would long durations of up to 30 years and low prices, according to the Institute of international finance, the group that have private sector creditors. The French President Nicolas Sarkozy estimated that prices would average 4.5 per cent.

Heads of Government agreed also the new eurozone rescue loans with an interest rate of 3.5 percent and an average maturity of at least 15 years of Greece type. The maturities up to 30 years and have an additional grace period of 10 years.

"I think this is extremely important, ensure the Greece debt sustainability," said Barroso.

In addition to the new aid for Greece reconditioned the heads of State and Government also their bailout Fund gives him which makes countries intervene before they are in the fully hits crisis mode.

The changes are a big change, especially for Germany, which had blocked such a move this year. You show how the euro area is concerned, that the debt crisis from small countries such as Greece, Ireland and Portugal to large as Spain or Italy could spill over. The financial capacity of the Eurozones would probably overwhelm full rescue operations for these countries.

To avoid that she ever in this position, the EFSF a "precautionary principle program," can offer for struggling countries such as short-term lines of credit. These credit lines could be very useful for Italy and Spain, if they ever experienced a funding squeeze, whereby investors support is available, if it will work closely.

She could start also makes it easy to Ireland and Portugal money again on the financial markets increase, once run out their own recovery programmes.

The EFSF will not support yet they recapitalisation of banks in countries which was rescued, able, during a banking crisis without in a complete program, typically massive cuts and economic reforms required to force that. This can make it easier for some to contact countries before market panic has reached its peak.

On top of that, an investor sell-off pressure can pull out the eurozone under certain circumstances which experience EFSF bonds in the secondary market, countries buy. This was a role that had reluctantly, fulfills the ECB until a few months ago when it his bond purchase program in the midst of growing frustration with heads of State and Government slowly include efforts to the crisis gave up.

Heads of State and Government said, Portugal and Greece get even lower interest rates on its bailout loans, but stressed that there will be involvement of the private sector in their support programmes not.

"Participation of the private sector Greece and Greece is only limited," said EU President Herman van Rompuy.

__

Don Melvin, David McHugh, and Sylvie Corbet contributed to this article.

Copyright 2011 associated press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Monday, July 11

Banks take aid plan taken to thrash out Greece

By Paul Taylor and Alex Chambers

Meeting contribute LONDON/PARIS (Reuters) - international banks and insurance companies on Wednesday to a plan for the private sector to Greece bailout efforts, fears grow that will derail the proposal taken to thrash out.


The Institute of international finance (IIF)-lobby group said that it will lead the meeting of private sector of creditors.


It must be resolved, such as a business by rating agencies without it is as a default value, be maintained and employ such as accountants.


A lot must still be done and meet Wednesday are not critical, said multiple sources.


"It is a process." The new French Finance Minister said today that it will take weeks, in the summer. It is complex. It overnight can be resolved, ", said one French private sector source in the talks involved."


He said, there was hardly a single "one size fits all solution", but rather several options are given the number of different holders and stakeholders.


"The problem is so complex that we need more time," added a German banking industry source.


French banks, large holders of Greek Government bonds have voluntarily renewing Greek bonds proposed, recorded at maturity. Bondholders would reinvest at least 70 percent of the proceeds of bonds due to the end of 2014 in new 30-year Greek debt.


A new proposal, said the financial times, sweetened more attractive for Greece, will meet on Wednesday, lowering the interest rate and increase the share of debt, specifically would submitted for rollover in the French plan.


The interest rate would come up at less than 5.76% instead of the range of 5.5-8, 0 percent originally proposed, the FT.com report said.


Politicians and Bankers Trust last week expressed, the French proposal would not trigger a standard, but rating agency standard & poor's said on Monday that losses to the holders of debt, most likely make it Greece a "selective default" evaluation would include.


The S & P statement comes from the makers of the EU as "A message to the plan does not, it ditch review", an EU source said.


"The French plan not obvious political reasons will be left because Member States have to give something to their national parliaments", said the source.


The IIF said on Friday that banks supported proposals to support the Greece and were under a small number of options taking into account. Creditors now trying information hammer.


A meeting with some banks was in an informal discussion to resolve problems, people familiar said the matter on Tuesday in Paris held.


There is also concern you that the private sector, the goal of get can of 30 billion euros (42.6 billion$) trigger from the plan, if a device is private sector contribution proposed 2 billion euros.


She made major pension funds, hedge funds and insurance companies as well as the French source said banks, including it.


According to Reuters data, there are 82.6 billion euro of Greek Government bonds until the end of 2014 due.


The European Central Bank and other central banks of the euro area an estimated 25 billion euros of that debt keep left over 58 billion in private hands. But not all creditors participate.


France's new Finance Minister Francois Baroin said he would go to Berlin on Thursday, the second Greek bailout with his German colleague Wolfgang Schauble to discuss.


"The target date at the end of summer (for an agreement) during the month of September," said Baroin.


Clarity about the treatment of France plan always remains to get a key issue dynamics, it said.


How to move too far from market prices on a wide range could lead to an impairment, but too small a step would it too costly for Greece.


The IIF, representing insurance companies and other financial companies and banks, including BNP Paribas, Deutsche Bank, HSBC and Societe Generale, is coordinating international banks to consensus about the participation of the private sector of in a bailout debt-ridden Greece plays an informal role.


Wednesday meeting will be chaired by Charles Dallara, Managing Director of IIF. It is part of a series of meetings that the IIF is coordination, see in tandem with technical discussions since an IIF meeting in Rome a week ago.


(Reporting by Alex Chambers, markets IFR, London;) Paul Taylor in Paris; Additional reporting by Steve Slater in London, Julien Toyer in Brussels, Philipp neck trick in Frankfurt am Main and Jean-Baptiste vey in Paris; (Editing by Hans-Jurgen Peters and David Hulmes)


Copyright 2011 Thomson Reuters.

Saturday, July 9

NYT: S & P says that Greece in default risk is

Greece risks be assessed in the on its debt obligations, if banks are forced to bear part of the pain, said standard & poor's Monday, suggesting that current proposals for the rescue of the euro zone may be reconsidered most vulnerable Member States.

In particular said S. & p a by the French Government and proposed banking plan "requiring debt restructuring could private sector in a way that we would view as an effective standard," in a statement.

The impact of Greek default would be felt all over the world. The country's debt of 330 billion euros may not be large enough, set off to a new financial crisis, but once the precedent of the euro zone had been set by default, investors would probably the debts of the other members are fighting, including giving up Portugal and Spain.

Alarming is to have the Western banks, including the giant of Wall Street, a tower of credit default swaps built - in the main insurance - the debt of these countries and the costs of payment up to in a standard-would be enormous. While the French and German banks have the most direct exposure to the Greek debt, it is American banks and insurance companies, which has the largest commitments to cover the payments to the guests with SWAps.

Identification of the credit rating agencies standard would have to E.C.B. impose discounts, known as hairdressers, on the Greek debt, which has accepted it as collateral. She would hold more financial pain on banks causing that debt.

Euro-zone finance ministers agreed over the weekend to Athens with funding of EUR 8.7 billion to provide, or $ 12.6 billion from 110 billion euro bailout agreed last year to help the Greek Government function through the summer. The view is attributable to a short-term standard of new aid.

But the Finance Ministers, how a second rescue mission reportedly € up to 90 billion estimated, to keep the country running until 2014, if it is to be hoped that Greece can return to the credit markets.

The sensitive issue of sharing the pain with the private sector suggests that the discussion of the second bailout for months could continue.

French President Nicolas Sarkozy announced June 27, French banks under which banks the most income of establishments which due until the year 2014 to new Greek reinvest securities would Greek debt had agreed to a plan.

"If it voluntary," Mr. Sarkozy said at the time "it would be considered as a standard-sized danger of an increase in the crisis."

Roles on some of the Greek debt agreed operations to Germany's largest banks.

But standard & poor's said Monday that it "" certain types of debt Exchange and similar restructuring as equivalent to a default views: If a transaction is considered a "tortured instead of purely opportunistic" and if it results in "get less value than the promise of the original securities investors."

It was said that both conditions seems on the French proposal.

S. & p. Greece long-term rating CCC, has cut already deep in the junk-e-region.

European officials are anxious that setting from one of said standard, Gilles Moec, an economist at Deutsche Bank in London, to avoid, since that could lead to a crisis in relations with the European Central Bank.

The E.C.B, which itself holds has billions of euros of Greek debt, said it could accept only, the participation of the bondholders any restructuring it would be "completely voluntarily."

The Central Bank - which has Greece help by buying its debt on the secondary market - "do not want to endanger his record, more public", said Mr Moec. "It's one thing to say she will accept Greek Government bonds, it is another thing, something in its balance sheet, which ceased to be paid, the definition is the standard."

"It means not the Greek securities does not want to be paid", he said, adding: "the E.C.B. in would be able to accept it if the final structure was relatively healthy." "One thing that does not want the E.C.B. is any violation of his right to the security to decide, that takes it."

This article, "S. & p. Bank warns plan would cause Greek default," originally in the New York Times appeared.

Copyright © 2011 New York Times

Thursday, June 30

Greece seals deal on strict plan: sources

Greece won the approval of a team of EU IMF inspectors to its new strict five-year plan on Thursday to charges committed, said another round of taxes and expenditure cuts, with knowledge of the talks.

"We have a business", one of the sources said.

Another source close to the negotiations said the few remaining technical details would be completed on Friday.

Finance Minister Evangelos Venizelos resigned Socialist Government on Thursday Greece lower the minimum threshold for income tax on 8,000 euros per year, the tax on fuel oil and would a unique solidarity tax on income of between 1 and 5 per cent to impose.

Greeks, seething cuts after two years of belt-tightening in anger to news that pending transaction respond would include the around 3.8 billion euros ($5.4 billion) in new tax increases and expenditure.

Coming via a 10-15 percent reduction on pensions and wages over the past one and a half years, the raft is new average earnings of Venizelos announced measures to further 3-4 percent, cut analysts said.

People on the streets of Athens, that network marketing have protested for weeks in the Government plan by 2015 savings of 28 billion euros, were angry at the measures, which she said to fight once again failed the rampant tax evasion and corruption.

"These measures not fair." A restaurant owner in Central of Athens said Kostas Batsoulis, 37, "Shop owner, who pay their taxes are handled the same way as those who do not know what looks like a cash register,".

"It would be released 10,000 civil servants better, instead of the 1 million private sector employees who are sacrificed to now", he added.

Trade unions and political parties were also quickly slam measures, say that slapping more and more taxes on the middle class by no means was an economy to kick-start that plunged into the deepest recession in 37 years.

"These people have lost their minds," said Ilias Iliopoulos, Secretary-General of ADEDY Union public sector. "These measures are the same people even poorer make beat."

Trade unions have announced nationwide strikes for Tuesday and Wednesday, when the half plan to the Parliament, and to huge protests in Athens and other cities.

Syntagma Square outside Parliament, where protesters against the new wave have strict for weeks was the thousands gathered in the streets Thursday, beating drums and blowing whistles their protest remained but peaceful.

Stathis Anestis, spokesman for the largest Trade Union Federation GSEE, said that the measures were particularly unfair, because they no longer seen as the root of most of the chronic problem of tax evasion, Greece fiscal evil.

He said "This hypocrisy finally needs to stop in Greece". "Declared the rich doctor who sees 20-30 patients per day, an annual income of €5,000 per year and of workers, nothing to hide who is asked to drag the country out of crisis?"

Venizelos, said a number from 1 to 5 percent "Solidarity tax" will be beaten on the annual income of 12,000 euros, independent will be taken with a levy of 300 euros and heating fuel tax as also will increase.

Analysts said that for the average annual Greek income of about 20,000 euros, that means a 700-800 Euro loss, not to mention heating costs and the tax on self-employed persons.

Michalis Mihalides, 33, a press distribution worker has a 3-month-old baby, said his family spending already had to cut, which were very basics to the rounds to come and the new measures to protest him spurring on the streets.

"What bothers me more than anything else is that those figures should be paid is not once again," he said. "It is crazy, me because this crisis is not my fault." "I don't steal."

The main conservative opposition new democracy party, which the 110 billion IMF/EU bailout deal that stored against Greece before the bankruptcy last year, said that the measures will further drive the economy into recession.

"Venizelos deal can be divided into three words: tax, taxes, taxes!" Also those to earning the 570 euros a month. "The measures is still painful and ineffective, battered the middle class and the poor to do," said Ioannis Vroutsis, a spokesman for the new democracy.

Copyright 2011 Thomson Reuters. Click for restrictions.

Tuesday, June 28

The EU Greece gives ultimatum: more cuts for help

Luxembourg - euro zone Finance Ministers gave Greece two weeks Monday to approve more spending cuts and tax his ragged finances in order rises in exchange for another EUR 12 billion in emergency loans, piling pressure on Athens, to get.

After two days of crisis talks effectively asked Minister Athens, saying the Greek Government, Parliament and society in General had an ultimatum until July 3 to approve a new austerity package, includes the privatization measures to secure the release of the next tranche of EU/IMF assistance.


Greece is the next tranche risks defaulting on its debts, the fifth edition of 110 billion euro ($ 155 billion) of loans agreed shared with Athens in May 2010, in a timely manner.

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"The approval of the Greek Parliament is absolutely necessary and will get it in time, so we can take a decision on 3 July," Jean-Claude Juncker, the Eurogroup of Finance Ministers said 17 euro zone Chair.


"It's clear that sustainable (Greek) is the debt, but the debts are only sustainable if Greece has met his obligations that agreed with the troika", he told reporters, on the European Union, the International Monetary Fund and the European Central Bank.


Greece appointed new Finance Minister, Evangelos Venizelos, a statement shortly before Juncker said, that he would try to ensure that the program already revised strict may be approved by 28 June.


"Priority is, a clear relationship of trust, to stabilize the situation, a withdrawal of the fifth rate have to develop," Venizelos said. "The political time is compressed much were." "Every day is of extreme importance and therefore we can waste no hour make."


To their ability to deal with problems in the euro area, the Ministers shoring also rubber stamped an agreement, the effective lending capacity of the current bailout Fund to increase the EFSF guarantees EUR 440 billion by increasing.


And they said that creditor status European stability mechanism, which is not preferred permanent crisis fund, which will replace the EFSF of June 2013 might have, if it facilitates loans of Greece, Ireland and Portugal, a change that concerns among private creditors about its structure.


Athens on watch
In Athens masses of anti-austerity, protesters gathered on the square outside Parliament, but it no new arguments were with the police. Power workers began a strike and power outages in parts of the country were expected.


The highly unpopular ban plans to produce the other 6.5 billion euros in fiscal consolidation this year and 28 billion by 2015 and 50 billion euros from the sale of State property debated Greek legislators in Parliament.


On Sunday, Prime Minister George Papandreou called on the nation to accept steps that certainly in the short term will make it more difficult life for most citizens.


"The consequences would one be violent bankruptcy or exit from the euro immediately catastrophically for households, banks and the credibility of the country," said Papandreou at the beginning of debate confidence to his new crisis Cabinet.

Story: Greek debt tsunami could banks reach us

While some financial experts in Greece protests die down and expect to be approved the package Finally, said a Greek newspaper the EU Greece had mistreated on Monday.


Blaming "the stupidity of the Europeans," wrote the newspaper Eleftherotypia in an editorial:


"Today it is threatened too little whore Europe." If the euro 17 users don't understand that to save their business they need to a Federation, the euro will collapse, and with it half of its economy. "


New inspections
Financial leaders from the Group of seven industrialized nations held an emergency of Conference on Sunday night, worried about the possible impact on the global financial markets if Greece were to standard and Canada Finance Ministers she said they discussed all of the other on Monday.


Inspectors the EU and the IMF a further visit to Athens of this week-do, only a Inspektion-said after-to examine, which wants to make the country on the plan, Olli Rehn, the EU Monetary Affairs Commissioner, it changes.


In Athens impose a time limit, he said Juncker already had an extraordinary meeting of Finance Ministers of the eurozone for July 3 If the payment of EUR 12 billion being accepted - if Greece keeps his side of the transaction.


Weakening of the euro against the dollar on the outskirts on Monday and the cost of insuring Greek and Italian debt against default rose, i.e. it mirrors the increasing risk of infection of indebted eurozone Greek problems.


Moody's rating agency said on Friday that it would downgrade Italy Aa2 rating in the next 90 days is about Greek crisis of could derail Italy's lukewarm recovery given.


While it seems likely that Athens finally the next tranche, as well as a further emergency loan program of around 120 billion euros by the end of 2014, the result is preserved only for Greece buy has more time-the possibility of debt restructuring in the longer term or even a part of its debt not gone away.


After their meeting in the early morning hours of Monday Declaration which say one euro-zone Ministers ready, having a second package of loans for Greece, despite the country's misguided debt goals in the first package have been collected.


, Until mid-July sets out more official loans a contribution by private investors, which is expected, includes the second package, and for the first time that you volunteer purchases new Greek bonds such as existing to tires.


Euro-zone officials have told of Reuters new plan expected that Greece in end of 2014 to finance and provide up to EUR 60 billion fresh official loans EUR 30 billion from the private sector and 30 billion euros from privatizations,.


In an attempt to gain the cooperation of the ECB, which would cause each schema, which opposed to rating agencies, to declare Greece in default, the Minister said that the private sector debt rollover to avoid even a limited or "selective" standard.


Copyright 2011 Thomson Reuters.

Monday, June 27

Europe pressures on strict plan Greece

ATHENS - Europe kept the pressure on Greece to push forward with a painful austerity program on Wednesday after Athens cleared the first hurdle in avoiding a sovereign default.

European leaders congratulated Prime Minister George Papandreou on surviving a confidence vote but clearly wanted to keep the government's feet to the fire in the more difficult next stage - implementing reforms rejected by many of the population.

"There is no alternative." We have a plan, now it's time to act on it, it's time to implement it there is no alternative. "There is no plan B," European Commission spokeswoman PIA Ahrenkilde-Hansen told a news conference.

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Chancellor Angela Merkel, leader of EU paymaster Germany, said Greece must more aggressively to privatize state-run firms and boost tax revenues. She said the confidence vote what an important step but Greece must now push through the reforms European Central Bank President Jean-Claude Trichet, head of a new finance super-watchdog, said warning lights were flashing red on the euro zone debt crisis. "The message." "is that it is the most serious threat to financial stability," he said in Frankfurt.

Worryingly for Brussels and for markets, divisions again emerged among EU policymakers over how to involve private creditors in the next phase of the rescue, with Merkel telling lawmakers there was only limited support for Germany's position that the banks must do their bit.

Any suggestion that Government are forcing banks to help finance the bailout could be viewed by credit rating agencies as a Greek default or restructuring. That could trigger further catastrophic debt downgrades and suck in Europe's other weak economies.

Cabinet approves reforms
The Greek cabinet on Wednesday approved draft legislation spelling out details of its new five-year austerity plan, which will now be submitted to parliament on Friday. The thousands of demonstrators chanting their anger on Tuesday night during the confidence vote illustrated widespread public opposition and the big challenges still facing the government.

Papandreou aims to get parliamentary approval for the package of spending cuts, tax hikes and state asset sales by June 28, and to implement it by July 3, to secure 12 billion euros ($17 billion) in funding from the European Union and IMF.

Without the aid, Athens will plunge into default next month, sending shock waves through the global financial system.

Urging the cabinet to approve the draft, Papandreou told them: "We are in a continuous, tough negotiation with our partners... the international environment is tough." "It is unstable and often nervous."

But Slovak Prime Minister iveta Radicova said Greece would struggle to pass the measures by the end of June. "I am the afraid that, in the conditions as they are set today, it will be hardly possible to pass in the Greek parliament," she told reporters.

EU leaders meeting in Brussels on Thursday and Friday to discuss the next steps in supporting Greece although Merkel said she expected no concrete decision on more funding until Athens approved the package.

The leaders are expected to make a political commitment to go on funding Athens for the next 12 months to convince the IMF to release the next tranche of loans in early July, once the fiscal package is implemented.

The euro rose on hopes that the immediate threat of market chaos could be avoided. But the gains were short lived as traders remained worried about politicians' will to implement harsh austerity measures against fierce resistance from the Greek public, and doubtful of Greece's ability to reduce its debt burden without some form of restructuring.

"It's not over," one trader said.

Years of misery
A Reuters survey of European economists indicated that fellow euro zone periphery states Portugal, Ireland and Spain as well as Greece all faced years of economic misery from dismal growth and painful unemployment.

The forecast for Greece what for practically no growth next year against on IMF prediction of 1.1 percent.

The government won the late-night confidence motion by 155 to 143 with two abstentions after all of Papandreou's Socialist Party deputies voted solidly with the government, signaling they had been brought into line after earlier dissent.

But despite European and IMF calls for unity behind the reforms, all opposition deputies voted against. More than 20,000 protesters chanted insults outside parliament during the vote.

With unions bristling for a fight and much of the public outraged by new austerity measures as Greece suffers its worst recession for 37 years, implementing any reforms will be tough.

Workers at state-controlled power utility PPC continued a strike for the third day in opposition to a planned sale of part of the company. "Various parts of Athens suffered brief power cuts on Wednesday."

"Within the parliament there is no problem at all, the real problem is in society," said Costas Panagopoulos of pollster ALCO. "There's a lot of disappointment in the Greek society, there's a lot of anger and there's no hope at all." "The new minister of finance and the government...have to offer some hope otherwise I cannot see how the government could remain stable."

The new mid-term plan envisions raising 50 billion euros by selling off state firms and includes 6.5 billion in 2011 fiscal consolidation, almost doubling existing measures that have helped extend a deep recession into its third year.

Most analysts remain skeptical that Greece will be able to passed its vast public debt pile of 340 billion euros, 1.5 times its annual economic output and more than 30,000 euros for each of its 11.3 million people, even if the reforms are implemented.

Mohamed El-Erian, head of PIMCO, community you the world's biggest bond fund, said he expected debt to Greece to end up defaulting on its.

"For the next three years, we re going to see different economies work out different problems." "For European economies, especially Greece, it would be through default," he said.

But for now, both markets and European policymakers are willing to give Greece the benefit of the doubt.

"Although this clearly is not going to be a long-term fix, investors see this as a chance that the can will be kicked further down the road," said David Dietze, Chief investment strategist at point view financial services.

New Finance Minister Evangelos Venizelos, to attempt to answer a key grievance of protesters, told parliament the government's top priority would be to build a fair tax system.

He is expected to drop plans for an increase in fuel tax and for a special levy on real estate, instead targeting the self-employed - who are widely believed to be amongst the worst tax evaders - while lowering the burden on low-paid employees.

Euro zone officials have told Reuters the plan for the new bailout, meant to extend Greece's year-old 110-billion-euro deal and fund it into late 2014, would feature up to 60 billion euros of fresh official loans, 30 billion euros from the private sector, and 30 billion euros from privatizations.

Copyright 2011 Thomson Reuters. Click for restrictions.

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