Troubled waters - Greek officials launched a behind the scenes attack on European Union and International Monetary Fund negotiators as talks in Athens over the country's mounting debts appeared to stall. Prime minister Lucas Papademos told aides that a crisis meeting of party leaders would be called as early as Thursday to thrash out a response to an increasingly intransigent negotiating team sent by Brussels, which is demanding severe austerity measures before sanctioning a further €130bn (£109bn) of bailout funds. Papademos, the economist temporarily heading a transition government in Athens, wants party leaders backing his administration to make further concessions to bring talks to a swift end. Papademos and his team of aides returned in sombre mood on Tuesday from a round of talks in Brussels and Frankfurt at the offices of the European Central Bank (ECB), despite relief that a German proposal to install an EU commissioner in Athens, with special oversight of Greek finances, had been quashed. While the rest of Europe reluctantly bowed to the German agenda, Berlin, however, found itself increasingly alone on how to fix Greece. Anger in Athens over leaked German plans last week that Greece should surrender power over its budget to the EU since it was incapable of delivering on its bailout pledges mushroomed into strong criticism from some of Berlin's habitual allies. .... Helle Thorning-Schmidt, the Danish prime minister who has just taken over the EU presidency, said that Brussels would defend Greece against any assault on its democracy, a reference to the German demand for Athens to forfeit control over budget policy. The Austrian chancellor, Werner Faymann, who has been on the German side of the creditor-debtor argument for the past 18 months, was also critical of Berlin. Jean Asselborn, Luxembourg's foreign minister, went further. "It's not in order that German politicians say that we need commissars and that Greece be put under supervision … The biggest country in the EU, Germany, should be more careful."
Access Investments-Building Awareness - European Union-ROMANIA
Wednesday, February 1, 2012
Anger in Athens over leaked German plans
Troubled waters - Greek officials launched a behind the scenes attack on European Union and International Monetary Fund negotiators as talks in Athens over the country's mounting debts appeared to stall. Prime minister Lucas Papademos told aides that a crisis meeting of party leaders would be called as early as Thursday to thrash out a response to an increasingly intransigent negotiating team sent by Brussels, which is demanding severe austerity measures before sanctioning a further €130bn (£109bn) of bailout funds. Papademos, the economist temporarily heading a transition government in Athens, wants party leaders backing his administration to make further concessions to bring talks to a swift end. Papademos and his team of aides returned in sombre mood on Tuesday from a round of talks in Brussels and Frankfurt at the offices of the European Central Bank (ECB), despite relief that a German proposal to install an EU commissioner in Athens, with special oversight of Greek finances, had been quashed. While the rest of Europe reluctantly bowed to the German agenda, Berlin, however, found itself increasingly alone on how to fix Greece. Anger in Athens over leaked German plans last week that Greece should surrender power over its budget to the EU since it was incapable of delivering on its bailout pledges mushroomed into strong criticism from some of Berlin's habitual allies. .... Helle Thorning-Schmidt, the Danish prime minister who has just taken over the EU presidency, said that Brussels would defend Greece against any assault on its democracy, a reference to the German demand for Athens to forfeit control over budget policy. The Austrian chancellor, Werner Faymann, who has been on the German side of the creditor-debtor argument for the past 18 months, was also critical of Berlin. Jean Asselborn, Luxembourg's foreign minister, went further. "It's not in order that German politicians say that we need commissars and that Greece be put under supervision … The biggest country in the EU, Germany, should be more careful."
Subscribe to:
Post Comments (Atom)
15 comments:
I read this blog almost every day and the lunacy of the situation never ceases to amaze me. Entire countries flooded with fiat currency on computer screens, then reduced to destitution when the confidence of ethereal ‘markets’ evaporates.
The solution is apparently to make sure that these countries can continue to pay off their old debts by borrowing money at worse rates than those that got them into debt in the first place.
It beggars belief that there isn’t a mature dialogue about full scale reform of the monetary system in any viable political party in the G7 (at least not one I have heard of or seen).
Roughly what could be expected from the summit, I think. The diplomats did their work ok this time.
1. Well done, Angela Merkel. Two months from introduction to agreement on the fiscal compact, with virtually no support from other large countries and in the face of heavy opposition from economists. Now the thing has to be ratified and get through the inevitable challenge at the constitutional court. Overall, a really classy maneuver.
2. The Budget-Commissar idea sinks like a lead balloon. Also good, german finger-wagging at its worst, and completely inept diplomatically as well.
3. Regarding Cameron, if he had attempted to stop the use of the ECJ he'd have torpedoed the german concept, but looked utterly petty. Mark 1 of the Stability Pact didn't work, because the European Commission lacked any good enforcement mechanism and were overruled by the European Council (in this case, of the Finance Ministers, including Gordon Brown, back in 2003). The Fiscal Compact needs an independent enforcement mechanism, not subject to the typical horse-trading.
4. And regarding british eurosceptics. They're going to do a hysterical turn and make stupid nazi comparisons, whatever had been decided. But the UK hasn't signed up, so they don't get to do their hysterical turn in parliament
Eastern approaches deals with the economic, political, security and cultural aspects of the eastern half of the European continent. It incorporates the long-running "Europe.view" weekly column. The blog is named after the wartime memoirs of the British soldier Sir Fitzroy Maclean.
IT IS A VETO. Why can't you understand it??? The fiscal compact has been agreed because only the Countries that are supporting it can benefit from a European Financial Stability Facility (EFSF) bail out, the compact is setting strict rules on budget, tax, deficit, sanctions,and more money into the EFSF, etc to 'they say' achieve more fiscal unity and sanctions are applied to who is not respecting it. Great Britain vetoed it and also warned 'we will be watching it like hawks' because if it's anyway interfering with the EU regulations we will go through EJC. It's 17 EURO I repeat EUROzone Countries and Countries queuing up to join the Euro. I don't understand what is difficult to understand. It's also a compact not well defined because mainly has been done because Germany doesn't want to put anymore funds in EU without beign sure to get money back. Any questions????
I am a conservative at heart. I always knew Cameron was the heir to Blair. A conniving, self seekng upper class toad. What disgusts me as much is the spineless Conservative Party who could rid of this traitorous toff but does nothing. Shame on them. Let us pray UKIP can make a break through. I shall never vote Conservative again whilst this dangerous buffoon and his ilk determine our fate.
- It's not in Britain's interests.
January 2012 - It's in Britain's interests.
Flip-flop Cameron strikes again... and Miliband wants to shut up, it's his lot that got the UK to this position in the first place by signing us over.
Germany is continuing its push for controls over Athens' budget, despite being rebuffed by Greece and other euro-zone countries at Monday's European summit.
Behind Chancellor Angela Merkel's quest for strict supervision of Greek spending lies growing frustration in Berlin that Greece has failed to meet its deficit-cutting targets or overhaul its economy, which were the conditions of its €110 billion ($145 billion) bailout in 2010.
With Europe set to decide in coming weeks on a second bailout package for Greece totaling over €130 billion, Germany is looking for a way to ensure that Greece meets its part of the bargain
"We're at a crossroads," says an aide to the chancellor. "Greece's implementation has to improve. Even when the Greek Parliament passes laws, nothing changes."
Greeks who believe their government has to learn to live within its means say the Germans have a point, even if Berlin's pressure has been diplomatically clumsy.
"They are right to be frustrated," says George Kyrtsos, publisher of the CityPress newspaper in Athens and a prominent political commentator. Greece's international creditors already are deeply involved in drawing up the country's tax and spending plans, he says, but "the budget that is voted on in Parliament is another thing, and the budget that is actually implemented is something else."
Among the issues that have frustrated euro-zone inspectors is Greece's struggle to reduce its bloated public-sector staffing level. Despite promising last year to lay off 30,000 civil servants, the government so far has removed fewer than 1,000. About 10,000 took early retirement instead, putting an additional burden on Greece's creaking pension system, while the remainder are still in their posts.
Germany is leading a euro-zone push to get the leaders of all Greek political parties to promise in writing that they will carry out the fiscal and structural reforms that will accompany the new bailout program.
That way, Berlin hopes, Greece will stick to its pledges no matter who is in government.
Yet even better implementation of Greece's tough overhauls won't erase the doubts about whether Greece can ever repay its towering debts, or become an internationally competitive economy within the euro zone.
According to Morten Ejrnæs, lecturer at Aalborg University, the increased level of poverty is the result of government policies dictated by the belief that individuals are to blame for being poor.
He said the policies were the result of conscious political decisions to "make the least well-off poorer", and dated back to 1999 with the government of Socialdemokrat PM Poul Nyrup Rasmussen. Those policies were continued during a decade of rule by the centre-right Venstre-Konservative government.
“This is the reason we have seen more and more poor people," Ejrnæs told Kristeligt Dagblad newspaper.
Ejrnæs pointed to the decision by the former governments to introduce less generous forms of welfare benefits, such as reduced kontanthjælp and starthjælp, which used reduced benefit payments as enticement to encourage unemployed people to find work. After coming to power at the end of last year, the Socialdemokraterne-led government abolished these so-called "poverty-inducing" benefits by the centre-left.
Eurostat has used the OECD definition of poverty, which refers to someone who has less than half the amount of disposable income after tax than the average person. In Denmark, you are poor if you have less than 8,450 kroner left each month after tax.
We will have to slow down a little as far as fiscal adjustment is concerned and move faster - much faster - with implementing reforms. Greece must surely continue reducing its budget deficit, but society and political support have their limits and we'd like to make sure that we strike the right balance between fiscal adjustment and reforms.
06.40 Sticking with the eurozone before turning to the many views of Fred Goodwin's de-honouring in this morning's paper, Ambrose Evans-Pritchard spells out what yesterday's eurozone unemployment figures mean for the growing split between a prosperous north and indebted south in the region:
Welcome to Alicante
There is no heating in schools , children are sitting in coats and taking blankets.
They have to take their own toilet paper.
They have no paper to write on
Teachers are clubbing together to buy bread and pate for the children who have no food.
Alicante University has installed extra microwaves so students can warm food up from home.
The que is 1/2hour long.
People are living in cars , they park out side hospitals and garages who let then use the wash rooms.
Many of them have children.
Chemists are not being paid, so some medinces are in short supply.
Town hall works are not being paid.
Legal aid lawyers are not being paid.
On the maternity ward at my local hospital, there is 1 nurse and 1 assistant on night shit, for 24 women.
People are bin watching, they know when supermarkets throw there rubbish out.
The fruit pickers are living in tents at the side of rivers with their families.
Whole families are living on grandmas pension of 400Euros
Need I go on?
And yet the financial wizz kids living in there Manhattan apartments say we need more cuts
The center-left Süddeutsche Zeitung writes:
"Germany stands where it never wanted to stand again after 1945: as the dominant power in the middle of Europe. Its attempts to achieve this with cannons and tanks in the 20th century ended in apocalypses of blood and fire, but that's precisely why that Germany no longer exists.
"No country succumbed to the temptation of nationalism more terribly than Germany; in its collective memory, the crimes it committed across Europe still weigh heavily. True, it is a disgrace to exploit that fact today, even in Greece, whose political parties drove the state to ruin. But it should teach the German government not to confuse firmness with the arrogance of power when it comes to the euro crisis. Because this power is very real, and it is causing fear. The idea to impose an austerity commissioner on Greece was insensitive, as was the demand made by FDP leader Philipp Rösler for 'leadership and monitoring of Greece.'
The operations are part of the European Central Bank's 'TARGET2' network of automatic payments between the national central banks of the Euroland club. The Bundesbank has already provided €496bn (£413bn) to countries in trouble, chiefly Greece, Ireland, Italy and Spain.
"This is reaching the danger point. It is already one and a half times the total budget of the German government," said Professor Frank Westermann of Osnabrück University. "If any of the crisis countries exits the euro or if there is an EMU break-up, the Bundesbank bears extreme risks."
The Bundesbank - the dominant body in the euro system - used to keep a stock of €270bn of private securities (refinance credit) before the start of the financial crisis. This was depleted last year as it sold assets to meet growing demands on the TARGET2 scheme.
Once the debt drama began to engulf the bigger economies, the Bundesbank was forced to borrow money to meet its obligations to offset capital flight, since it refused to sell its stash of gold. It now owes €228bn to German banks.
Bundesbank's official position is that TARGET2 does not increase risk for Germany, but there has been mounting alarm from Germany's IFO Institute and private economists.
The German chancellor is expected to meet with Chinese investors during her visit to Beijing, and officials are hoping that she might persuade them to invest in Europe.
German news magazine Spiegel reports:
A senior government representative stressed in Berlin on Tuesday that "Chinese investments are expressly welcome. They will be sought, used and appreciated" -- both in Germany and in the rest of the euro zone.
It may not be an easy sell. Three months ago, Klaus Regling of the EFSF toured the Far East looking for support, and came away empty handed.
Post a Comment