Greek Finance Minister Evangelos Venizelos submitted on Friday the budget plan, which would provide the course of the country before PSI program and objectives on revenue, expenditure and deficit after the haircut of 50%. In the afternoon, the budget plan will be presented to the Troika senior officials, who arrive in Athens to meet with Prime Minister Lucas Papademos and FinMin Evangelos Venizelos. The General Index of Athens Stock Exchange recorded a 2011 low on Friday, while the net trading turnover marginally exceeded €27 million. In a weak session, the General Index moved into negative territory throughout the trading session with intraday losses of 2.02%, recording a 20-year low. It finally ended down 1.68% at 712.63 units, a 2011 low. Cumulative losses for week amounted to 5.69%. Although Greek banks attempt to keep on positive grounds, the banking index ended at the session low (281.19 units) with losses of 3.71%. Banks lost 15.72% for the week. The growing concern, which reflected daily in the bond markets by increasing borrowing costs, has minimized any positive dynamics created by the agreement of Greek political parties, said Beta Securities in a report, adding that the domestic market moves more and more aligned with the foreign bourses. On Friday, approximately 46.57 million units of total value €36.37 million traded. Excluding a transaction for a 3% stake in MIG of total value €9.24 million, net turnover stood at €27.13 million. A total amount of 78 shares moved downwards, 60 rose and 137 remained unchanged. Marfin Popular Bank and MIG topped FTSE20 with profits of 1.44% and 1.14% respectively. Viohalco rose by 0.99%, while Piraeus Bank and Coca Cola 3E posted minor profits of 0.46% and 0.08% respectively. Ellaktor and PPC remained unchanged. On the other hand, Hellenic Postbank and Titan suffered the heaviest pressures with losses of 8.74% and 6.08%, while National Bank and Alpha Bank fell by 4.76%. Eurobank’s losses also exceeded 4%, while OPAP, Bank of Cyprus and Hellenic Telecoms declined by 3.63%, 3.38% and 2.37% respectively.
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Sunday, November 20, 2011
Greek Finance Minister Evangelos Venizelos submitted on Friday the budget plan, which would provide the course of the country before PSI program and objectives on revenue, expenditure and deficit after the haircut of 50%. In the afternoon, the budget plan will be presented to the Troika senior officials, who arrive in Athens to meet with Prime Minister Lucas Papademos and FinMin Evangelos Venizelos. The General Index of Athens Stock Exchange recorded a 2011 low on Friday, while the net trading turnover marginally exceeded €27 million. In a weak session, the General Index moved into negative territory throughout the trading session with intraday losses of 2.02%, recording a 20-year low. It finally ended down 1.68% at 712.63 units, a 2011 low. Cumulative losses for week amounted to 5.69%. Although Greek banks attempt to keep on positive grounds, the banking index ended at the session low (281.19 units) with losses of 3.71%. Banks lost 15.72% for the week. The growing concern, which reflected daily in the bond markets by increasing borrowing costs, has minimized any positive dynamics created by the agreement of Greek political parties, said Beta Securities in a report, adding that the domestic market moves more and more aligned with the foreign bourses. On Friday, approximately 46.57 million units of total value €36.37 million traded. Excluding a transaction for a 3% stake in MIG of total value €9.24 million, net turnover stood at €27.13 million. A total amount of 78 shares moved downwards, 60 rose and 137 remained unchanged. Marfin Popular Bank and MIG topped FTSE20 with profits of 1.44% and 1.14% respectively. Viohalco rose by 0.99%, while Piraeus Bank and Coca Cola 3E posted minor profits of 0.46% and 0.08% respectively. Ellaktor and PPC remained unchanged. On the other hand, Hellenic Postbank and Titan suffered the heaviest pressures with losses of 8.74% and 6.08%, while National Bank and Alpha Bank fell by 4.76%. Eurobank’s losses also exceeded 4%, while OPAP, Bank of Cyprus and Hellenic Telecoms declined by 3.63%, 3.38% and 2.37% respectively.
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Budget 2012: Recession At 2.8%, Targets Primary Surplus
Greece targets to record a primary surplus in 2012 for the first time amid conditions of 5-year recession.
Greek government is committed to reduce the deficit to 6.7%of GDP pre PSI and to 5.4% of GDP (€11.427 billion) after PSI, against 9% of GPD (€19.683 billion) in 2011.
A primary surplus of 1.1 of GDP (€2.4 billion) is targeted in 2012, against deficit of 2.1% in 2011.
The general government debt in 2012 after the PSI program will be 145.5% of GDP, compared with 161.7% of GDP in 2011.
These objectives are based on a very large increase in net revenue, despite the recession. Net revenues are expected to increase by 6.1%, amounting to €54.5 billion. The budget plan provides a huge increase of 217.6% in property taxes, from €1.1 billion to €3.6 billion.
The budget provides a surge of unemployment rate from 11.9% in 2010 to 15.4% and 17.1% in 2011 and 2012 respectively. The recession intensifies, revised at 2.8% against estimate of 2.5%.
Investment will continue to decline in 2012 by 4% compared to 2.9% in 2010, while private consumption will reduce by 4.1%.
The government΄s budgetary strategy for 2012 is based on the following pillars:
• Implementation of Medium Term Financial Strategy Framework 2012-2015.
• Continuing to implement the necessary structural and institutional reforms.
• Improving the tax and insurance system.
• Acceleration of the privatization program.
• Further restructuring of the public sector (mergers / shutdowns).
"For the first time in the last decades, the Greek parliament is called upon to discuss and ratify the general budget... under conditions of great crisis and pressure," said Finance Minister Evangelos Venizelos. "The budget is a work tool to exit the crisis."
A further gap of €1 billion in revenue was recorded in the last month, while the special tax property, which targeted €1.7 billion, is under increasing dispute.
Greece hopes for a big gain from the PSI program in 2012. It considers that it would reduce the deficit by €3 billion due to the interest relief.
The gross benefit is €4.5-5 billion, while the remaining amount would be sufficient to support the pension funds and other bondholders.
Unemployment is unknown quality. If it continues to grow at this pace, then the burden caused to pension funds and the Manpower Employment Organization would be unbearable.
The exit from the recession is delaying. Now it is estimated to occur at the end of 2013. In October, Greece estimated recession of 2.5% in 2012, but this estimate has been revised to 2.8%, the private sector is called to pay additional revenue measures of €5 billion.
FRANKFURT (Dow Jones)--An agreement between the Greek government and private bond holders will likely cause a selective default on Greek sovereign debt, the managing director of the Institute Of International Finance said Friday.
"We are not worried about a selective default, which will last a matter of days, but won΄t trigger a CDS event," Charles Dallara, head of the banking industry΄s most important trade group, said on the sidelines of a conference in Frankfurt, pointing to credit default swaps.
Dallara added that he hopes to reach a basic agreement with the Greek government by the end of this year.
Some analysts fear that a debt swap, in which private investors abate some of their Greek sovereign debt holdings, could trigger a credit event or a financial meltdown. The IIF agreed on behalf of bondholders last month to implement a 50% reduction in the nominal value of Greek bonds, via a ΄haircut΄.
The IIF represents the interests of more than 400 financial institutions and has played a key role in negotiating the terms of Greece΄s debt haircut, the exact terms of which are being hammered out by the IIF, bondholders, and Greek officials.
In an interview with The Sunday Telegraph the London Mayor hit out at Mr Cameron's call for the European Central Bank to deploy a "big bazooka" - effectively printing money - to help bail out the stricken economies in the south of the continent.
Mr Johnson also attacked plans, backed by the British government, for the 17 eurozone countries to share closer fiscal links, making them more unified on tax and spending.
"What I don't think you can do, is just pretend that you can create an economic government of Europe, effectively run by Germany," the Mayor added.
He described the replacement of elected leaders in Greece and Italy with governments led by technocrats as "completely mad" and warned that if the rest of the EU went ahead with a plan to impose a "Tobin" tax on financial transaction, even without British participation, it would be seen as a "hostile act" because it would still hit so many deals in the City of London.
Mr Johnson also outlined his own "orderly" solution to the crisis - which was miles away from anything suggested by any member of the British government.
Francis Maude, the Cabinet Office minister, vowed to make it much easier for private sector companies to do business with the government - including speeding up the process by 40 per cent and publishing online details of £50billion of potential future contracts.
Mr Maude said: "We need to make things better for business in the UK – the current system isn't working.
"UK-based suppliers are finding themselves excluded, opportunities for growth are missed due to the public sector's timidity and carrying out a procurement in the UK costs over twice as much as in France.
"This is wrong from every point of view."
Ed Balls, the shadow chancellor, said: "With consumer and business confidence slumping now for a year and getting worse, businesses are crying out for a plan for jobs and growth from this government."
* David Cameron is inviting groups of Tory MPs to Downing street for lasagne suppers as he seeks to rebuild relations with his party after last month's Commons rebellion in a vote on staging a referendum on Britain's membership of the EU.
A No 10 source said: "It is important to take your party along with you at all times."
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