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  • The euro debate Greece is not having | MacroPolis
    values in terms of a real dollar What s the dollar got to do with it Is it more intuitive to make a graph comparing the relative buying power of a Euro and also the buying power of wages income in different EU countries I m also very curious why this large difference in buying power of the Euro doesn t immediately vanish due to trade of goods or a financial carry trade Which are the mechanisms that sustain this difference Are German wages too low and is this what is depressing prices What is the effect of the different interest rates And which are the types of policies that can correct for the forces of imbalance What does QE do Would it make sense to increase VAT in Germany and lower it in Greece to move towards balance How irresponsible is it that the German government insists proudly on its black zero deficit It seems absurd to realise that a Greek working in Germany sending money home gets taxed by 30 higher price levels in Greece vs Germany It seems as absurd that somebody exporting goods from Greece would get a 43 lower price in Germany the difference is even so large that these two percentages are clearly different Reply to this post 11 Jan 2014 22 18 Posted by LVM The internal devaluation rationale is that in the absence of the currency devaluation which automatically makes everything produced domestically cheaper to the outside world you suppress domestic demand with the aim of reducing imports and correcting the trade balance This is simply wrong internal price domesticprice importedprice or the nontradedprice tradedprice the aim is not to suppress domestic demand reduced imports are just a side effect but the aim is to reduce the price levels of domestic services and products The artificially high margins in domestic prices and their underlying wages especially in the state sector that have occured during the boom now have to drop down again so that domestic products are prefered to imported goods again And this is totally independent from the exchange rate The REAL EFFECTIVE EXCHANGE RATE can be calculated for any region or even village just by looking at real domestic costs and price levels in relation to real costs and price levels of the foreign trading partners which could just be the next village Exchange rates are just monetary values and do not have a long term effect A forced nominal devaluation of a new domestic currency in Greece would even start a vicious circle again and a lower pressure on the needed reforms So this whole text shows again that anybody in the world wants to convince anybody else of any nonsense as long as it seems prudent And Mr Henkel in Germany does the same Perhaps I am of the same kind too Reply to this post 15 Jan 2014 22 02 Posted by limit less LVM Bravo You are 100 correct The issue with Greece is that taxes

    Original URL path: http://www.macropolis.gr/?i=portal.en.the-agora.640 (2016-04-27)
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  • Ladies and gentlemen, please fasten your seat belts | MacroPolis
    Central Bank has nipped in the bud talk of Greek bonds maturing next year with a value of about 10 billion euros being rolled over to cover Greece s financing gap Furthermore the indications are that discussions about more debt relief as agreed at a Eurogroup meeting last November will be put off until after May s European Parliament elections Samaras now faces going into these elections after having broken his no new measures pledge and failed to deliver the debt relief he also promoted All of this raises questions about the troika s stance Having seen two governments fizzle out since 2010 two close and acrimonious elections in 2012 the surge of a neofascist party a shaky governing coalition and a narrowing parliamentary majority one has to wonder what else needs to happen before there is a show of political sensitivity from Greece s lenders We should be clear though that this is not a case of Greece needing a dose of leniency or charity It simply needs an injection of fairness and reason The ECB for instance has dismissed out of hand as monetary financing Greece s proposals for a series of bond rollovers next year when the bank has shown a much more open mind in similar cases involving other countries The apparent decision to delay discussions on debt relief until after May s European elections also suggests double standards The trigger for these talks taking place should have been confirmation that a primary surplus has been achieved at the end of the year European officials suggested a couple of weeks ago that confirmation from Eurostat due in April would be needed first Now it appears there will be another delay Lastly the request for more fiscal measures comes after the troika rejected Greece s intention to include in its primary surplus for this year profits from the Hellenic Financial Stability Fund even though it is part of the general government budget Greece s lenders have also expressed concern about tax revenues and social security contributions being lower than expected The latter is a particular irony given that one could argue that the economic policy pursued in Greece over the past three years in agreement with the troika has directly contributed to tax and social security revenues suffering The view from the troika and particularly from the eurozone seems to be that if Greece needs a third bailout which looks increasingly likely then for this to be politically acceptable in the lender countries the package will have to be as small as possible and subject to high conditionality However what is politically acceptable for Greece s eurozone partners is not necessarily something that is palatable in Athens We will only agree on a new bailout package if it is not accompanied by new measures Greek Finance Minister Yannis Stournaras told Kathimerini in an interview adding that the government would accept making savings through structural reforms Maybe this will turn out to be a storm in a teacup

    Original URL path: http://www.macropolis.gr/?i=portal.en.the-agora.423 (2016-04-27)
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  • You've heard the Greek crisis myths, now here are some truths | MacroPolis
    Greek programme has been to improve the country s export performance by a process of internal devaluation and changing the economic model from one that was consumption based to one that is export oriented In the press conference that followed Finance Minister Yanis Varoufakis s recent visit to Berlin his German counterpart Wolfgang Schaeuble pointed to rising exports as one of the signs that the Greek programme is working However the Hellenic Statistical Authority ELSTAT shows that Greek exports fell by 1 4 percent last year One of the most comprehensive accounts on the performance of Greek exports is a report by the Organisation for Economic Cooperation and Development at the end of 2013 It is striking that the report found Greek exports were being held back in part by some of the policies the troika implemented with the intention of assisting them The share of Greek exports has been declining since 2008 and most of it is attributed to a sharp decline in services mostly in maritime transport due to the slow pace of global trade and oversupply in the shipping sector since 2010 Equally up to 2013 tourism revenues were badly hit by political uncertainty and certain eurozone partners questioning the country s euro membership which peaked in 2012 Competitiveness in prices which the troika aimed to achieve through a sharp internal devaluation by the deregulation of the labour market has not materialised even though in just 3 years Greece corrected all the labour cost competitiveness that was lost in the 2000 2009 period With Greece s exports concentrated in low tech products high tech exports are only 28 percent of exports against a 50 percent OECD average price competitiveness is of significance The lack of price adjustment compared to labour costs in parts reflects higher indirect taxes and public service charges as a result of the fiscal consolidation effort Greece is undertaking The report finds that indirect tax increases pushed the cumulative effect of consumer price inflation by 6 25 percentage points between 2010 and 2012 If public service tariffs are also included the cumulative price push up is 9 5 percentage points The nature of the Greek economy which is dominated by small and medium sized enterprises SMEs is also one of the factors that meant the price adjustments did not take hold The OECD finds that 60 percent of the turnover is in the hands of SMEs compared to 40 percent for the European average while Greek SMEs are half the size of the European SMEs The weight of fixed costs that has been growing since the crisis started is affecting the capacity of small firms to adjust their profit margins Doing business is impeded by rising non labour related costs resulting from difficult or expensive access to bank credit supplier cutback of credit long waiting times for VAT refunds from the state and delays in payments by customers in many cases the state itself The OECD stresses that even in sectors that have been liberalised firms are forced to operate in very unfavourable macroeconomic conditions and the liquidity drain in the economy is impeding the entry of new players that will apply competitive pressures and push prices down The economic devastation experienced in Greece over the last five years is pushing some of those who have insist that the programme has been an equivocal success to clutch at straws The policies followed to improve export performance should not be one of them Myth Greece has to keep to its commitments Truth Over the last couple of weeks European officials have been quick to stress that the new government needs to stick to the commitments made by the previous coalition Until now Greece has abided by its bailout commitments At times this has happened with great reluctance or much delay but fiscal targets have been met and reforms legislated As mentioned before whether much of this legislation regarding structural reforms has been implemented to full effect is open to question but the troika ultimately approved the disbursement of each loan tranche until last September when the most recent review began and failed to result in an agreement leaving 7 2 billion euros in instalments dangling In fact the OECD has found that Greece has been at the international forefront of structural reforms over the last few years Commitment though is a two way street and Greece would be within its rights to accuse its eurozone partners of failing to live up to their commitments to Athens On November 27 2012 the Eurogroup agreed to provide further debt relief to Greece once it achieved a primary surplus The relevant extract from the common statement on that day reads States will consider further measures and assistance including inter alia lower co financing in structural funds and or further interest rate reduction of the Greek Loan Facility if necessary for achieving a further credible and sustainable reduction of Greek debt to GDP ratio when Greece reaches an annual primary surplus as envisaged in the current MoU conditional on full implementation of all conditions contained in the programme Despite this commitment and even though Greece achieved a primary surplus in 2013 a year ahead of schedule no measures on further debt relief were offered The previous government was told at the end of 2013 to wait until the primary surplus was rubber stamped by Eurostat in March Then it was told to wait until after the European Parliament elections in May Then it was told to wait until after the completion of the troika review that began last September Greece s lenders attempted to cover their reluctance with the fig leaf of claims that Greek debt was on a sustainable path Ex Prime Minister Antonis Samaras must be vexed at hearing his former counterparts talk about commitments because one of the main reasons he finds himself out of office today is that the Eurogroup did not live up to one of the key pledges it made to him Instead

    Original URL path: http://www.macropolis.gr/?i=portal.en.the-agora.2268 (2016-04-27)
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  • Greece's ultimate sacrifice for stability | MacroPolis
    that were 50 percent longer than those given to Greeks for the same crimes Baltakos who describes himself as an anti Communist insisted last month that a provision foreseeing the immediate deportation of migrants making false claims against police be included in a new immigration code A recent Wall Street Journal article reported that during a meeting in December 2012 with Kostis Papaioannou the head of Greece s Human Rights Committee Baltakos claimed the government was not interested in the rights of foreigners Immediately afterwards Papaioannou sent a letter to Samaras and his coalition partners describing how Baltakos had told him that he was intentionally doing nothing to help the committee s work including its efforts to ensure Greece lived up to its international obligations Papaioannou described Baltakos s behaviour as unbecoming of the position to which you have assigned him We should also wonder why several dozen criminal cases including murders involving Golden Dawn had piled up in Public Order Minister Nikos Dendias s drawer before they were sent to prosecutors and why this happened only after the extremist party caused trouble on Samaras s home patch at the Second World War memorial at Meligalas and the murder of rapper Pavlos Fyssas The question now is whether these and other policy decisions were driven by a warped ideology that has no place in a European Union country The importance of these matters leaves the prime minister with some very uncomfortable questions to answer about the company he keeps even now that Baltakos has departed from the government This is not a problem limited to one man but has to do with an overall perception of Greek democracy and society The other key issue in the Baltakos affair is the dismissive way in which he and Kasidiaris spoke about Greece s judicial system Setting aside the laughable claim from Kasidiaris that his party is being persecuted for its politics and not prosecuted for its criminal actions the two men referred to the judiciary as if it were just another rotten part of the public administration where a phone call to the right person could get a probe started or a case dropped This contempt for one of the pillars of the country s democracy makes it easy to understand why the judiciary continues to be one of Greece s greatest weaknesses The content of the edited conversation we have seen so far epitomises why Greek institutions lack fairness transparency and efficiency This in turn raises doubts about the coalition s ability to truly see through structural reforms Can this process which requires the overhaul of the public administration and rebuilding of its institutions be trusted to a government in which the prime minister s top aide sees judges as puppets Is it any wonder that Amnesty International condemns Greece s police force as having a culture of impunity entrenched racism and endemic violence or that the country treats migrants and refugees abysmally as described by Medecins Sans Frontieres this week

    Original URL path: http://www.macropolis.gr/?i=portal.en.the-agora.1085 (2016-04-27)
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  • Where did all the money go? | MacroPolis
    back over 30 billion euros worth of debt in the second debt reduction initiative of 2012 To support its banks from the losses incurred in the PSI and the rapidly deteriorating loan portfolios as a result of the deep crisis which saw non performing loans soaring from 8 percent to 34 percent Greece borrowed another 48 2 billion euros for bank recapitalisations resolutions and the restructuring of the banking sector An amount of 11 6 billion remains unused and could form the precautionary line of the eurozone after the end of the European side of the current programme The combined amount of the three initiatives reached 94 billion euros more than a third of the total financing needs Greece started repaying last year the IMF loans supplied during the Stand By Arrangement of the first programme A total of 9 1 billion euros was paid back by the end of 2014 Greece also had to participate in the paid in capital of the European Stability Mechanism to the tune of 2 3 billion euros The breakdown of how the programme funding was allocated clearly illustrates the crisis management strategy Greece s lenders opted for Eurozone leaders with the reluctant agreement of the IMF made a conscious decision to use almost two thirds of their taxpayers money as they like to refer to it to service the debt which they refused even to reprofile at the beginning of the crisis when it was essential and could have given Greece a chance of recovery To protect the integrity of the eurozone the strategy has left Greece with a massive pile of debt and a quarter of the economy gone still unable to stand on its own feet It is this very debt and the pretence of key decision makers to present it as sustainable that keeps the country in a vortex of ongoing political instability fiscal crises troika fall outs and economic uncertainty It is the magnitude of the surpluses required to maintain this sustainability pretence that in spite of the most phenomenal fiscal consolidation in ferocity and speed Greece is still required to find savings in the volume of billions If the intention of eurozone leaders and institutions was indeed to keep their boots on Greece s neck due to the failings of its political class as the ex US Treasury Secretary Tim Geithner claimed in his book they have achieved their goal Now they need to be open about their own crisis management decisions and answer the uncomfortable question Where did all the money go Follow Yiannis YiannisMouzakis Sources European Commission table 11 http www macropolis gr resources toolip doc 2014 04 25 ec mou2 review 4 25 apr2014 pdf European Commission annex 4 http www macropolis gr resources toolip doc 2013 09 13 ec mou1 review 3 february 2011 pdf European Commission Box 4 and table 19 http www macropolis gr resources toolip doc 2013 09 13 ec mou2 march 2012 pdf IMF tables 4 and 5 http www

    Original URL path: http://www.macropolis.gr/?i=portal.en.the-agora.2080 (2016-04-27)
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  • Agora | MacroPolis
    other matters while also offering readers the opportunity to express their opinions As always those who fail to respect the sanctity of this forum will not be allowed to share in its benefits Greece and the euro The flight of Icarus If some of the myths that are perpetuated about the Greek crisis are to be dispelled then it s vital that we improve our understanding of the factors that contributed to the current economic collapse Read more 29 October 2012 By Nick Malkoutzis 0 Comments Categories Greece 229 Politics 155 Economy 154 Latest Comments 26 Apr 2016 Unfortunately Greece has no longer an elected government It makes no dif Dean Plassaras 22 Apr 2016 The biggest misconception about the IMF is that it s US controlled It s Dean Plassaras 14 Apr 2016 But Merkel and Schauble like Tsipras Why are you fighting it Dean Plassaras 6 Apr 2016 Bottom line Greece is part of an uber incompetent Europe unable to solv Dean Plassaras 5 Apr 2016 Well Tsipras is Tsipras he was probably led on by someone to make a tan Stavros Delakezas Popular Posts 20 Nov 2013 The euro debate Greece is not having Yiannis Mouzakis 21 Oct 2013 Ladies and gentlemen please fasten your seat belts Nick Malkoutzis 20 Feb 2015 You ve heard the Greek crisis myths now here are some truths Yiannis Mouzakis Nick Malkoutzis 5 Apr 2014 Greece s ultimate sacrifice for stability Nick Malkoutzis 5 Jan 2015 Where did all the money go Yiannis Mouzakis Archive October 2012 1 January 2013 2 May 2013 3 April 2013 1 June 2013 1 July 2013 2 March 2013 1 September 2013 4 October 2013 6 November 2013 8 December 2013 8 January 2014 8 February 2014 7 March 2014 5 April 2014 6 May

    Original URL path: http://www.macropolis.gr/?i=portal.en.the-agora&month=10&year=2012 (2016-04-27)
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  • Agora | MacroPolis
    s deficit figure for 2009 thereby justifying Greece s EU IMF bailout signed in May 2010 and its drastic austerity measures Georgiou vehemently denies the charges Read more 28 January 2013 By Nick Malkoutzis Yiannis Mouzakis 0 Comments Categories Greece 229 Economy 154 13 Jan 2013 Greece s labour market is austerity s biggest casualty By Yiannis Mouzakis Greece has the potential to attain by 2020 a GDP in the region of 330 billion euros and a place in the G20 wrote the editor of a popular weekly newspaper in Greece over the weekend This would require Greece to miraculously add 150 billion euros to its economy by the end of the decade at the same time as the 20th economy in the G20 experiences a depression similar to the one Greece has gone through in recent years Leaving this unlikely scenario aside the tone of the editorial captures the efforts during the festive period to change the narrative of the country s future prospects Read more 0 Comments Categories Greece 229 Economy 154 Latest Comments 26 Apr 2016 Unfortunately Greece has no longer an elected government It makes no dif Dean Plassaras 22 Apr 2016 The biggest misconception about the IMF is that it s US controlled It s Dean Plassaras 14 Apr 2016 But Merkel and Schauble like Tsipras Why are you fighting it Dean Plassaras 6 Apr 2016 Bottom line Greece is part of an uber incompetent Europe unable to solv Dean Plassaras 5 Apr 2016 Well Tsipras is Tsipras he was probably led on by someone to make a tan Stavros Delakezas Popular Posts 20 Nov 2013 The euro debate Greece is not having Yiannis Mouzakis 21 Oct 2013 Ladies and gentlemen please fasten your seat belts Nick Malkoutzis 20 Feb 2015 You ve heard the

    Original URL path: http://www.macropolis.gr/?i=portal.en.the-agora&month=1&year=2013 (2016-04-27)
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  • Agora | MacroPolis
    wrong There isn t a Greek in the world who doesn t hope he will be proved right Read more 31 May 2013 By Yiannis Mouzakis and Nick Malkoutzis 0 Comments Categories Greece 229 Economy 154 30 May 2013 Honey I shrunk the Greeks By Yiannis Mouzakis The IMF without any hesitation admits that the main beneficiary of that May 2010 so called Greek bailout was not Greece itself but the eurozone as it gave the opportunity to French and German banks to get paid in full and unload their large exposure to Greek debt from their books on the official sector and European taxpayers Read more 0 Comments Categories Greece 229 Europe 104 Economy 154 30 May 2013 Consensus conviction and the anti racism bill By Nick Malkoutzis Prime Minister Antonis Samaras certainly presented himself as a leader with convictions when he took over New Democracy following the party s disastrous showing in the 2009 general elections Although less than four years have passed since then it seems like light years away Read more 0 Comments Categories Greece 229 Politics 155 Latest Comments 26 Apr 2016 Unfortunately Greece has no longer an elected government It makes no dif Dean Plassaras 22 Apr 2016 The biggest misconception about the IMF is that it s US controlled It s Dean Plassaras 14 Apr 2016 But Merkel and Schauble like Tsipras Why are you fighting it Dean Plassaras 6 Apr 2016 Bottom line Greece is part of an uber incompetent Europe unable to solv Dean Plassaras 5 Apr 2016 Well Tsipras is Tsipras he was probably led on by someone to make a tan Stavros Delakezas Popular Posts 20 Nov 2013 The euro debate Greece is not having Yiannis Mouzakis 21 Oct 2013 Ladies and gentlemen please fasten your seat belts Nick

    Original URL path: http://www.macropolis.gr/?i=portal.en.the-agora&month=5&year=2013 (2016-04-27)
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