Greece Wins Pledge for Debt Relief as IMF Bows to Euro Plan - by Ian Wishart, Corina Ruhe, Nikos Chrysoloras

Greece’s creditors reached a preliminary accord to ease the country’s debt burden but left the important details to be hammered out after Germany’s federal election next year.

At a meeting of euro-area finance ministers in Brussels that ended early Wednesday, and paved the way for a 10.3 billion-euro ($11.5 billion) aid payout, the International Monetary Fund retreated from its hard-line stance for concrete and generous measures on Greece’s debt, allowing creditors to announce a “breakthrough” despite giving no figures or real commitments.

"It seems very much like an agreement of convenience more than anything else,” Peter Rosenstreich, head of market strategy at Swissquote Bank told Bloomberg TV. “Greece needed the money now -- they were already behind on payments. Europe really needed to show a stable hand” before the June 23 referendum on whether the U.K. should stay in the European Union, he said.

Read more: Greece Wins Pledge for Debt Relief as IMF Bows to Euro Plan - Bloomberg

Belgium: Tens of thousands march against Belgian austerity reforms in Brussels

 ens of thousands of people took to the streets of Brussels on Tuesday, opposed to the free market policies of the centre-right government.

The austerity reforms will see cuts to public services, a real wage cut of 2% , enforced flexibility in the weekly hours worked and a reduction in pensions as well as a raising of the pension age.

“Today we have roughly a comfortable pension, but tomorrow are they going to do the same that they did to the Greek pensioners, that is cutting it by 20% and then another 20%?” said one protester.

Trade unions say the planned reforms cut into the foundations of Belgium’s welfare state.

A small number of protesters clashed with police, throwing rocks. At least one policeman and several demonstrators were injured

More demonstrations and national strikes are planned in the coming months.

Read more: Tens of thousands march against Belgian austerity reforms in Brussels | euronews, brussels bureau

The ECB Grants Debt Relief To All Except Greece "for the time being" - by Paul De Grauwe

It looks like Greece may get some debt relief. There is as yet no certainty about this because some German politicians continue to conduct rear-guard battles to prevent it. What is certain, however, is that all Eurozone countries, with the exception of Greece, have been enjoying debt relief since early 2015. That may seem surprising to the outsider. Some explanation is necessary here.

As part of its new policy of ‘quantitative easing’ (QE), the ECB has been buying government bonds of the Eurozone countries since March 2015. Since the start of this new policy, the ECB has bought about €645 billion in government bonds. And it has announced that it will continue to do so, at an accelerated monthly rate, until at least March 2017 (Draghi and Constâncio 2015).

By then, it will have bought an estimated €1,500 billion of government bonds. The ECB’s intention is to pump money in the economy. In so doing, it hopes to lift the Eurozone economy out of stagnation.

I have no problems with this. On the contrary, I have been an advocate of such a policy (De Grauwe and Ji 2015). What I do have problems with is the fact that Greece is excluded from this QE programme. The ECB does not buy Greek government bonds. As a result, the ECB excludes Greece from the debt relief that it grants to the other countries of the Eurozone.

How is this possible? When the ECB buys government bonds from a Eurozone country, it is as if these bonds cease to exist. Although the bonds remain on the balance sheet of the ECB (in fact, most of these are recorded on the balance sheets of the national central banks), they have no economic significance anymore.

Each national treasury will pay interest on these bonds, but the central banks will refund these interest payments at the end of the year to the same national treasuries. This means that as long as the government bonds remain on the balance sheets of the national central banks, the national governments do not pay interest anymore on the part of its debt held on the books of the central bank

Read more: he ECB Grants Debt Relief To All Except Greece

EU Sanctions Controversy: Commission Considering Fines To Punish Spain And Portugal Budget Deficits - by Jess McHugh

he European Union's administrative arm will begin procedures to sanction Spain and Portugal for failing to do enough to cut their budget deficits, EurActiv reported Wednesday. Both countries were hit especially hard by the 2008 economic crisis and have struggled to recover in the nearly eight years since.

A continentwide economic crisis in 2008 sunk the euro and sent national deficits and unemployment soaring. Spain and Portugal — among other nations, such as Greece and Ireland — exchanged European cash bailouts for austerity measures like tax hikes and budget slashing.

While Spain and Portugal have exited the bailout program, high deficits persist. Sanctions could be issued over the Stability and Growth Pact of the European Commission, created two decades ago, which stipulates each member state must keep government budget gaps below 3 percent of gross domestic product (GDP). That figure was 5.1 percent in Spain and around 4.4 percent in Portugal by the end of 2015.

Spain has done its best to reduce its deficit in a short period of time and should not be penalized for some shortcomings, according to its prime minister. “Just four, five years ago, we were a big problem. You need to look at how Spain was then and how we’re leading growth now,” Prime Minister Mariano Rajoy said earlier this month, Bloomberg reported. “No one can call into question Spain’s fiscal efforts.”

The fine could be as high as 0.02 percent of each nation's GDP, or billions of euros in the case of Spain and in the hundreds of millions in Portugal, but sources close to the case said that sum will likely be much lower. The move is more symbolic, as Spain and Portugal would be the first member states to be punished by the Stability and Growth Pact despite other countries — including France and Germany — having violated it.

"There is a chance that the Commission could recommend sanctions and at the same time recommend that they are reduced to zero percent," one official told Reuters.

Read more: EU Sanctions Controversy: Commission Considering Fines To Punish Spain And Portugal Budget Deficits

Greece: Workers walk out in Greece in protest over austerity measures before parliament

Strikers at rush hour in Greece. That was how many decided to hold their own vote on the austerity measures before parliament.

The metro shut down at peak time and suburban trains will not run for 24 hours.

Some public service workers have walked out while pharmacists are also on strike angered at plans to de-regulate their profession.

“Unfortunately it is no longer in our hands anymore – that is it’s no longer in the people’s hands. Through necessity we, or they will pass the reforms in parliament and we will bear the burden,” said one woman while another added:

“We will wait. Just one person can not fix a country in five months which has been destroyed for years. We had defaults again and again, this didn’t just happen yesterday.”

Wednesday brought the now familiar scenes with queues outside cash machines across the country while the banks remain closed.

Later on Wednesday it’s expected pensioners will stage a protest while public workers are set to hold a separate demonstration.

Read more: Workers walk out in Greece in protest over austerity measures before parliament | euronews, world news

Greece says NO to austerity demands by Wall Street dominated financial sector and their IMF brainchild

The Greek No Vote has shown the rest of the EU that democracy is what counts and not the dictatorial rule of the Wall Street dominated global financial markets and its brainchild the IMF.

It will hopefully only hasten Europe's need to take a more independent route on a variety of issues, presently controlled by Trans-Atlantic financial and political forces.

Europe must choose for Greece, after all, aren't they one of us?
EU-Digest

Greece close to minimum agreement deal with creditors, says deputy PM - by Nick Fletcher and Helena Smith

Greece could seal a deal with its creditors in early May, its deputy prime minister said on Wednesday, as the country prepared a new list of reforms and the European Central Bank provided more support to its beleaguered banks.

But Yannis Dragasakis warned it was likely to be only a “minimum agreement” to unlock the delayed funds Greece needed to avoid default. He said: “Now we are going to a minimum agreement with actions that can be taken immediately. But [in the long-term] not just any solution will suffice. The solution has to be viable. After the interim agreement a long discussion about the debt, primary surpluses, investment and growth will follow.”

A eurozone official told Reuters time was running out to reach a deal about releasing the emergency funds, which amount to €7.2bn (£5.2bn), since the country needed to begin negotiating a third bailout agreement before the current programme runs out at the end of June. Otherwise it faced the prospect of default or having to leave the eurozone. He said: “We are not talking about weeks any more, we are talking about days.”

If the latest Greek proposals were approved, eurozone finance ministers could endorse the deal at their next meeting on 11 May. Greece’s creditors – the European Union, ECB and the International Monetary Fund – are demanding economic reforms in exchange for more bailout cash.

Read more: Greece close to minimum agreement deal with creditors, says deputy PM | World news | The Guardian

Greece: Eurogroup sends Greeks back to their homework "and considers Greek Finance team amateurs"

The Eurogroup finance ministers meeting in Riga has ended with a unanimous call for Greece to speed up its economic reforms if it wants its financial aid to continue.

Discussions between Greece and its international partners about ways to save the economy need to lead to a “global accord” say the FinMins, who also express “worry” about what they call the new government’s limited progress.

“A comprehensive and detailed list of agreed reforms is needed as a basis for a successful conclusion of the current review.

We are all aware that time is running out. Too much time has been lost in the past two months and this is therefore clear that these discussions need to make significantly more progress,” said Eurogroup President Jeroen Dijsselbloem.

Reportedly more than one minister at the talks expressed frustration with the Greek economic team in Riga and in particular Finance Minister Varoufakis for an approach one participant described as “amateur”.

Read more: Eurogroup sends Greeks back to their homework | euronews, economy

Greece: Putin says:"Greece did not come to Russia with hat in hand"

There had been speculation that Mr Tsipras would seek Russian aid to ease Greece's debt crisis, and to counter pressure from its creditors in the EU.

Mr Putin said Russia would consider loans to Greece for big joint projects, potentially in the energy sector.

But analysts say Russia's own economic woes mean any help would be limited.
Greece's new government is embroiled in negotiations with the EU and IMF to unblock a bailout package and could run out of funds within weeks.

Russia was among Greece's leading trade partners before sanctions on its energy industry and Greece's own economic difficulties reduced trade between the two countries by 40%.

Read more: Putin: Greece did not seek financial aid from Russia - BBC News

Greece optimistic on deal with euro zone next week

Greece is optimistic about reaching a deal on economic reforms with its euro zone peers early next week, unblocking urgently needed funding, its economy minister said on Thursday.

After talks with EU leaders including German Chancellor Angela Merkel in the past week, Athens said it would present a package of reforms to its euro zone partners by Monday in the hope of unlocking aid and avoiding bankruptcy.

"I believe that at the beginning of next week we will have an agreement on the package of reforms the Greek government is proposing, and on the funding of the country," Economy Minister George Stathakis told Antenna TV.

He did not specify when the list would be sent.

The reforms are a sensitive issue for Prime Minister Alexis Tsipras's leftwing government, which came to power in January pledging to end austerity.

It is not clear whether they will include measures agreed by the previous conservative-led government, such as privatizations and pension reforms.

Euro zone authorities have said Athens, which has been kept afloat by EU/IMF bailouts worth 240 billion euros since 2010, will not get any further aid until the reforms are approved by the bloc's finance ministers.

A source familiar with Greece's financial position told Reuters on Tuesday Athens would run out of money on April 20 without new cash.


Read more: Greece optimistic on deal with euro zone next week | Reuters

Greece- EU crisis talks end with Greek reform pledge - "but patience of EU could be running out"

Greek Prime Minister Alexis Tsipras assured European Union creditors at late-night crisis talks in Brussels that his leftist-led coalition would soon present a full set of economic reforms in order to unlock cash to stave off bankruptcy.

After two months of mounting frustration on both sides since Tsipras was elected with a mandate to end years of austerity imposed by creditors’ conditions, the three-hour meeting on the sidelines of an EU summit was requested by Tsipras to break an impasse that risks seeing Athens stumble out of the euro zone.

But while a joint statement by the EU institutions spoke of a “spirit of mutual trust” and Tsipras said he left feeling more optimistic, German Chancellor Angela Merkel stressed no money would be released before Athens implements budget measures and other reforms that it has so far been reluctant to consent to.

Note EU-Digest: patience in the EU could be running out if Greece is not able or willing to understand that their economy is completely riddled as a result of a top heavy and overpaid civil service sector, corruption at every level, a tax system which does not work and a government which believes they can "call the shots" on the rest of Europe. Greece better wake-up and smell the roses.

Read more on Greece Europe - EU crisis talks end with Greek reform pledge - France 24

Greek Drama: Après nous, le déluge. "Italy, Spain to follow if Greece exits eurozone", says Greek defense minister

How to glue this old Vase again?

Greece's Defense Minister Panos Kammenos has said his country's exit from the eurozone could be followed by Italy, Spain and even Germany. Kammenos' interview comes amid lack of progress in Greece's bailout plan.

"If Greece explodes, Spain and Italy will be next and then at some point, Germany. We therefore need to find a way within the eurozone, but this way cannot be that the Greeks keep on having to pay," Kammenos told Bild.

Instead of a bailout, Greece needed a debt "haircut" like the one Germany's creditors had to accept in 1953, Kammenos proposed. He also argued that Berlin should pay World War II reparations to Athens. "All European countries have been compensated for crimes committed by Nazis, except for Greece," Kammenos said, referring to the gold Nazi soldiers brought back from Athens during the war.

The defense minister also accused Germany of "interfering" in its domestic affairs. His criticism was aimed at German Finance Minister Schäuble, who earlier warned of a "Grexident" which could push Athens out of the euro.

"I don't understand why he turns against Greece every day in new statements. It's like a psychological war and Schäuble is poisoning the relationship between the two countries through that," he said.

Note EU-Digest: Instead of blaming everyone else Greek officials should realize and admit that the reason they are in trouble is because of their own mismanagement of the country:They lied about their financial figures in order to join the euro-zone, they have out of control corruption, their civil servants are over payed and receive more perks than those in any other EU nation, the Greek tax system does not work and some of the richest people in Greece never pay any taxes, and last but not least, work ethic certainly is not one of the greatest assets of the Greek labor force. .

Read more: Italy, Spain to follow if Greece exits eurozone, says Greek defense minister | News | DW.DE | 14.03.2015

Greek government heads towards confidence vote - by YANNIS BEHRAKIS

Hopes are rising that Greece and its creditors will hammer out a compromise deal to extend its bailout programme, warding off the immediate threat of a default.

The European Commission is rumoured to be proposing a six-month extension to Greece’s existing bailout program.

According to the MNI news service, the EC might also ease up on Greece’s budget surplus targets, from 4.5% of GDP to 1.5%-2%. That’s much closer to Alexis Tsipras’s own targets.
Nothing’s official yet.

Read more: Greek government heads towards confidence vote -- live updates | Business | The Guardian

Greece’s anti-austerity drive gets boost from Washington

Greece’s new government received welcome support from US President Barack Obama on Sunday for its efforts to loosen austerity programmes amid tough rhetoric from its European creditors.

The leftist government of Prime Minister Alexis Tsipras is in a race against time to secure greater leeway from its European partners as it seeks to deliver on a campaign pledge to reverse the belt-tightening measures stifling Greece's economy.

Its European charm offensive got a much-needed boost from across the Atlantic on Sunday as the White House warned that imposing tough austerity programmes on Greece could backfire on its creditors. When asked about the situation in Greece, Obama said the crisis-hit country would not deliver an economic recovery unless the government is allowed to pursue growth through fiscal stimulus.

"You cannot keep on squeezing countries that are in the midst of depression," the US president told CNN. "At some point, there has to be a growth strategy in order for them to pay off their debts to eliminate some of their deficits."

Obama said the Greek economy was in "dire need" of reform but warned that drastic changes were tough to implement in a struggling economy. "It's very hard to initiate those changes if peoples' standards of living are dropping by 25 percent. Over time, eventually, the political system -- the society -- can't sustain it," the US leader said.

Read More Business - Greece’s anti-austerity drive gets boost from Washington - France 24

Greece economy: Merkel rules out more debt relief

German Chancellor Angela Merkel has ruled out cancelling any of Greece's debt, saying banks and creditors have already made substantial cuts.

But Mrs Merkel told the Die Welt newspaper she still wanted Greece to stay in the eurozone.

Greece's left-wing Syriza party won last weekend's election with a pledge to have half the debt written off.

Its new finance minister has refused to work with the "troika" of global institutions overseeing Greek debt.

The troika - the European Commission, European Central Bank and International Monetary Fund - had agreed a €240bn (£179bn; $270bn) bailout with the previous Greek government.

Read more BBC News - Greece economy: Merkel rules out more debt relief

EU - People power in Hungary as protesters stage huge anti-government rally - "a medicine that can be applied everywhere in Europe"

They say they are demonstrating for democracy and against poverty. Thousands of Hungarians have staged an anti-government rally in Budapest, piling further pressure on Prime Minister Viktor Orban.

His conservative Fidesz party won a new term with a two-thirds majority last year.

But its support has waned amid protests by civic groups. “Everyone is in a difficult situation,” one demonstrator told euronews.

“They could be fired from work, with no contracts for their company and no chance to bid for public contracts.”
Perceived political corruption was denounced by many taking part.“The civil organisations say they don’t want to establish a political party because the parties have discredited themselves,” a woman told us.
“The people do not trust them.”

Accused of authoritarianism and getting too close to Russia, the premier has already been forced to back down from plans to tax Internet use.

 Read more: People power in Hungary as protesters stage huge anti-government rally | euronews, world news

Belgium: Wage Cuts And Austerity Have Come To Belgium

Today, trade unions in Belgium are organising a general national strike. This will come on top of 3 days of regional strikes as well as a national manifestation, all of which have been massively followed up by workers over the past month. Moreover, the trade union leadership is considering to continue with such actions in the new year. For Belgium, with its tradition of social dialogue, this is rather unheard of and to see similar intense trade union action one has to go 20 years back.

Belgian workers have however every reason to be upset. The conservative government, having taken up power recently, is applying an austerity program of such depth that it reminds one of the brutal austerity policies that have been pursued in in many other European member states. Policies that have triggered the long European recession of 2011-2012. The total austerity package proposed amounts to some 11 billion euro or close to 3% of GDP.

Looking at the measures that are in the pipeline, both workers and unemployed people will face austerity from the cradle to the grave. There are cuts in childcare benefits, substantially increased childcare costs and (higher) education fees as well as swinging cuts in the educational budget and public services in general. Next year, workers will be forced to undergo a real wage cut of 2% while collective bargaining on wage increases is outlawed for the coming two years. Unemployment benefit systems are being hollowed out in many different ways and at the end of their active life, workers will have to work longer (to the age of 67) before being entitled to (reduced) pensions.

In all of these measures, the pressure is on wages while income from capital is not touched at all. On the contrary! On top of the 2% imposed cut in real wages comes a huge reduction in employer social security contributions. Business will enjoy a transfer of 4 billion euro or more than 1% of GDP.

Read more: Wage Cuts And Austerity Have Come To Belgium

ECB: Mario Draghi defends ECB as anti-austerity protests rock Naples -- by Graeme Wearden

If you want to seriously annoy a top policymaker, tell them people feel they’re doing a bad job.

Mario Draghi’s most animated moment in today’s press conference (coverage starts here) came when he was asked to comment on the protests that have been taking place in Naples today.

His passionate defence of the ECB’s role in the crisis – look at our interest rate cuts, our liquidity measures – suggests that the sight of his fellow Italians holding banners declaring “Block the ECB” and “Job insecurity, poverty, unemployment, speculation. Free us from the ECB!” may have hurt him.

Draghi urged critics to remember the situation in 2011 and 2012, when “the financial system seemed on the verge of collapsing”.

Read more: Mario Draghi defends ECB as anti-austerity protests rock Naples -- business live | Business | The Guardian

EU - Economy: Greece prepares to wave goodbye to troika

Greece has had many judgement days over the last year but the latest meeting of the troika could be one of the last.

Inspectors from the EU, ECB and the International Monetary Fund have been gathering to review the country’s progress on economic reforms, and our correspondent says it could be the final gathering if Greece ends its loan dependence.

“The International Monetary Fund is the big thorn in the side of the Greek government that wishes this to be the last time they visit Athens for an audit. With the primary surplus steadily above target, Greece will try to stay away from needing further IMF help. But there’s a long way to go before a definitive decision is made,” said Symela Touchtidou.

Athens has had its successes; besides a primary budget surplus, unemployment has dipped slightly from its record high of 28 percent in June, although it remains among Europe’s highest. Crucially, its economy is set to grow in 2014 after a six-year recession.

The Greek government also remains hopeful after announcing a series of tax relief measures this month for the first time after four years of austerity. The troika will looking to see if the government can compensate for those cuts.

Read more: Greece prepares to wave goodbye to troika | euronews, economy

Europe Is Ill - Changing Course Towards A Social Europe - by Reiner Hoffmann:

Joseph Stiglitz, who won the Nobel Prize in 2001 for his work on how markets work inefficiently was once asked about his opinion on austerity measures. “It reminds me of medieval medicine,” he said. “It is like blood-letting, where you took blood out of a patient because the theory was that there were bad tumours. And very often, when you took the blood out, the patient got sicker. The response then was more blood-letting until the patient very nearly died.” He drew the conclusion: “What is happening in Europe is a mutual suicide pact!”

Jospeh Stiglitz is right. The manner in which the crisis is dealt with is likely to be of far-reaching significance to Europe and to the rest of the world. Therefore, it’s about the correct decision on the future direction: On the one hand a Europe based on the logic of commerce and competition or on the other hand a Social Europe that tackles the crisis in solidarity and does not leave the young out in the rain when the going gets tough!

I believe that even the Germans do not live on an isolated island of the blessed. We cannot remain indifferent to how the people in those countries who are affected the most by the crisis are suffering. In the long term, things will only go well for us if they are going well for our neighbours too.

Undoubtedly, we do not need an over-regulated EU which wants to ban the serving of olive oil in dipping bowls or wants to regulate the physical appearance of fruit and vegetables. 

What we need are better regulated financial markets and we need banks which serve the real economy and are useful for industry. We do not need banks rewarding managers with substantial cash-bonuses for short-term gains, filling up balloons with air and then letting it out again – and getting the European taxpayer to pick up the bill.

Ten Eurozone countries have committed to introducing the proposed European Union financial transaction tax (FTT) by 2016. The FTT and the step towards the creation of a European banking union are major developments for dealing with the current problems. However, it’s not enough! We need further EU action on combating tax avoidance and tax evasion. A competitive approach to cutting company taxes we cannot and will no longer afford in Europe.

What worries me is that little discussion appears to focus explicitly on the costs of economic crises in terms of human lives. The crisis management strategy adopted by politicians, comprising austerity mandates and cuts in wages, pensions and welfare payments, has not only led to a downward spiral in economic terms, but is also having a devastating impact on citizens. Social risks are increasing and individuals and families are under constant worry. 

Unemployment – particularly among the young – is sky-high, living standards are falling and signs of the crisis range from soup kitchens in Athens to Portugal’s crowds protesting in the streets against austerity.

If unemployment was a country it would be, with 19,2 million inhabitants, the fifth biggest in the EU. In the US, Greece, Italy, Spain, the UK and elsewhere in Europe there were more than 10,000 additional suicides from 2007-2010, a figure that is over and above historical trends, with the largest rises concentrated in the worst performing economies. 

Greece is in the middle of a public health disaster: HIV, TB, and malaria epidemics will now cost more to control than they would have been to prevent. An increase in infant and child mortality was observed in Portugal. In Italy, the education system is falling down. In about half of Italian school buildings, including universities, pieces of plaster are falling off the ceiling, water penetrates walls and floors are giving way. And the youth unemployment rate in Spain has increased to over 50 percent.

The European election results clearly reveal that Europe is ill (to steal the title of an essay by Perry Anderson in the London Review of Books). The symptoms of this illness are apparent – but what can we do to bring Europe out of intensive care? To relief Europe from the consequences of the neoliberal arbitrariness and lack of commitment?

Special weight must be given to German politics. The coordinates in the new grand coalition have shifted from centre-right to centre-left. This is an important change of direction. The grand coalition is marginally more pro-European and less keen on forcing austerity onto the Eurozone.

There is a big difference between therapeutic fasting and strangulation of the patient. The one contributes to recovery the other leads in the best case to a coma. Andreas Fischer-Lescano, Professor at the Centre of European Law and Politics (ZERP) at Bremen University presented a legal opinion on the EU’s austerity policy. According to him, the EU’s austerity policy is unlawful.

Read more: Reiner Hoffmann: Changing Course Towards A Social Europe