Tag Archives: Greek Parliament

Athens – Social Meltdown

Here’s a short documentary on the social repercussions of the Greek crisis and an attempt to understand the rise of violence, but also of solidarity in Greece. It’s made by Ross Domoney, a colleague and friend from the UK who did not parachute himself to Greece for a couple of days but spent several months in Athens.

Athens: Social Meltdown – Greek subtitles from Ross Domoney on Vimeo.

Heil malaka, heil!

Amidst continuing incidents of racist violence in Greece and in the absence of photographic documentation of it, there is a higher need for illustrating relative articles in different ways. These recent nazi-related illustrations by Manos Symeonakis are a great example.

Trivia: Did you know that Ancient Greek architectural, clothing and coin designs are replete with single or interlinking swastika motifs? It was then called Gammadion, i.e. a symbol made of the Greek letter Gamma (Γ). See here for a start.

Manos’ blog, where you can see more of his great work, is here.

Sub-humans

Here’s one of the first speeches by Golden Dawn at the newly formed Greek Parliament. The speaker is the party’s spokesman Ilias Kasidiaris. It’s very sad to see what the political discourse in this country has ended up to.

Greece leaning more and more to the Left

I just read an interesting opinion poll that tells some of the developments in post-election Greece. It’s main element is that SYRIZA’s popularity has grown in less than a week since the elections. The poll was carried out by MARC and I found it here. So here are the numbers accompanied by some comments of mine.

SYRIZA’s leader, Alexis Tsipras.

SYRIZA’s popularity, according to the poll, is now standing as high as 23,8%, the highest the party has enjoyed since its birth. In the recent elections, SYRIZA scored 16,78% of the votes. The rise in popularity can be attributed to the fact that an alternative government (other than PASOK and New Democracy) seemed possible after Sunday’s results. In addition it’s possible that the continuation of the small-party political games that PASOK and New Democracy have been playing for the past two decades have radicalized people a bit more. If SYRIZA had a more clear and realistic plan to get out of the crisis then this rise would definitely have been bigger.

According to MARC’s poll, New Democracy comes second in preference with 17,4% (they won the elections with 18,85%) and PASOK is down to 10,8% (from a mediocre 13,18% in the elections). Independent Greeks gather 8,7%, the Communist Party of Greece (KKE) 6%, Golden Dawn 4,9% and the Democratic Left has 4,2%.

LAOS, the Green Party, Creation Again, Democratic Alliance and Action Party are all below the 3% threshold needed to enter the Greek Parliament.

An interesting aspect of this poll is this rare question that was added to the questionnaire: If you knew the result in advance, which party would you vote for?

Now, in a linear time world, it might look a bit absurd to ask this question unless voters have access to the technology of time travel. However, the results support my comment a couple of paragraphs above which is that many Greeks have never until now believed that a leftist government could be possible, especially through elections. Almost two generations grew up watching PASOK and New Democracy rotating in power.

Hence, 23,2% of those asked replied that they would vote for SYRIZA. The people who got afraid of SYRIZA’s rise in the elections (and of the possibility of a leftist government) were much less than what I would personally expect. This can be seen in the 19,6% of the interviewees who answered that, if they knew the result of the elections, they would vote for New Democracy (i.e. only 0,75% more than what New Democracy actually received in Sunday’s ballot boxes). Funnily, or tragically for some, PASOK would be voted only by 12,5% (as if the PASOK voters themselves wished a greater defeat of their party which got 13,18% in the recent elections). Another interesting fact is that some people did indeed get scared of the rise of extreme rightist Golden Dawn, especially after this week’s publicity which included a Golden Dawn press conference where one of their members asked journalists to stand up when their leader would appear in the press room. Speaking of it, here’s the video from the press conference, including the leader’s fiery speech, all with english subtitles:

So, the people who would vote for Golden Dawn, If they knew the elections’ result in advance, were down to 5,9% (from 6,97% that they got in the elections).

There were a few more questions but they are a bit dull and I can’t be bothered. I’ll just go and take a nap now.

Up in the air

An interesting moment from yesterday’s session at the Greek Parliament. George Mavrikos, an MP with the Greek Communist Party (KKE), throws the draft Memorandum (No2) towards Greek Finance Minister Evangelos Venizelos after a heated debate.

George Mavrikos returns the draft Memorandum No2 to Evangelos Venizelos

Venizelos stood up and started shouted a prophecy. “The image of Mr. Mavrikos doing this act will be shown by the international media around the world. He is humiliating the country. He is exposing the country to risk. You won’t drive the country into a state of soviet-style socialism, twenty years later “.

PSI Athens

An illustration by Manos Symeonakis for ekathimerini and Inside Greece blog.

"CSI ... PSI Athens" by Manos Symeonakis

Did the trial of Papandreou begin?

It seems that the investigation on the alteration of Greek Statistics (in 2010) has bumped into some sort of political involvement. The case began last September after the complaint of Zoe Georganta, a professor of Econometry at the University of Macedonia (Thessaloniki) & a member of ELSTAT (the Greek Statistical Authority), who said that the 2009 deficit was artificially augmented. She underlined that in November 2010 ELSTAT accepted pressures from Eurostat and produced a higher number for the country’s 2009 deficit, at 15,4% instead of 12-13% which was the real number. The goal was to make it politically more feasible to pass further economic reforms (cuts in salaries & pensions as well as taxes).

Financial prosecutor Grigoris Peponis

Financial prosecutor Grigoris Peponis has collected testimonies from 17 people who were involved in the case. His conclusion was included in the letter accompanying the case file on its way to Greece’s Supreme Court (Areios Pagos, the descendant of ancient Areopagus). In this letter Peponis says that there is evidence concerning criminal offences (under the Law on Ministerial Responsibility) by members of the the Greek government. He also wrote that in the testimonies there is explicit reference to an augmentation and an arbitrary determination of the 2009 public debt. The blame for this, according to the testimonies submitted to Mr. Peponis, is targeting the then Prime Minister, members of his government and the respective Finance Ministers.

After the Supreme Court, the case file will be transferred to the Greek Parliament which will decide on possible political responsibilities. In other words, this could be the beginning of a Special Investigative Committee and, if responsibilities are found, a Special Court for George Papandreou and his administration.

The names of those who testified were also made publicly available. Mr. Peponis had also invited current ELSTAT chairman, Andreas Georgiou, to testify but the latter did not provide a sworn testimony. In addition, George Papaconstantinou, Finance Minister during the examined period, rejected any claims against himself. In a public statement, he concluded that “there is an attempt to penalize the truth about the grave situation Greece was in 2009“. Mr Papaconstantinou is now Greece’s Minister for the Environment.

Politics, media and pimps

Yesterday the socialist party leader and ex-Prime Minister, George Papandreou, made another confusing move. Attending PASOK’s political council, he stated that he will quit politics by not setting himself as a candidate for PM in the next elections and either for the leadership of his party. Paradoxically Papandreou suggested that the Socialists’ internal election to chose their leader should take place after the general elections. Which means that Papandreou will lead the party in the elections but, in case of a victory, he is not going to be the Prime Minister.

Funnily, that wasn’t the most interesting part of his speech. Among other things, he made a short account of his administration and accused the Lambrakis Media Group (DOL) of undermining his government. The reason for DOL’s behaviour, according to Papandreou, was that the former prime minister had advised the National Bank of Greece not to lend the media group 10 million euros. As he said, the issue shouldn’t have reached him in the first place and, after being informed that DOL didn’t satisfy the economic criteria for the loan, he instructed NBG not to proceed in the lending.

DOL’s chairman, Stavros Psycharis, replied immediately to the accusation with this short announcement.  “It’s true that DOL asked for a loan from the National Bank of Greece, of which it is a customer for the past 90 years. The National Bank rejected the request officially. Unofficially they told us that it was not approved by the Prime Minister’s office. It’s obvious that any intervention from banks against newspapers which don’t satisfy government interests, is a fascist mentality. Obviously, when power is lost, memory is lost too, even for very recent events. The PASOK leader-in-retirement is kindly requested to state the circumstances under which we met for the last time at the Prime Minister’s office and the reasons for which we were asked to enter the building through the back door. He should also say who asked what from whom!”

This is the beautiful and prudent world of Greek politics and media, an interwoven set of business and political interests which, for decades, were serving one another forming the so-called establishment. Of course, he was not the first Prime Minister who ever said such a thing publicly. Back in 2004, his predecessor, Kostas Karamanlis, gave his famous speech on Greece’s five “pimps” who were thought to undermine his project. An article of that day describes the event in a very detailed way and I found it twice interesting to read it under today’s circumstances in Greece.

“We will not allow five pimps and five interest groups to push us around… They can easily be dealt with,” Karamanlis told a gathering of about 30 of his party’s members of Parliament in a Monastiraki restaurant best known for its kebab and ebullient owner and namesake, Bairaktaris. The meeting on Wednesday, in which generous portions of food and wine are said to have been consumed, was a private affair. It was, of course, not as private as a chat in his home or office, meaning that what was said could find its way into the public domain. And so the next day Karamanlis’ purported declaration had been leaked to the media. The government commented half-heartedly that the prime minister does not use such language and actually confirmed the gist of what he had said.

In a country where politics never sleep, where words are cheap and where memorable and colorful statements become slogans, Karamanlis’ purported words soon took on a momentum of their own. It was not only as if he had actually used these particular words at the dinner at Bairaktaris but as if he had declared them in full view of the public. He could, of course, always deny paternity but the statement will stick to him and will be part of his legacy. What now remains to be seen is what he meant by this statement. But what is even more significant is whether this signaled the start of a clash of titans or whether it was a verbal flare sent up into the dark sky to illuminate public life for a while before disappearing into the sea of grand, meaningless gestures.

On the surface, the meaning of the declaration is clear. Karamanlis was telling his troops that they should be ready to kick some enemy butt as part of an irresistible force.

Here you can read more about that event. In the meantime, a question instead of an epilogue. If the ruling elite is the pimp, who are the whores?

 

Now I know what they did last summer

I just read a detailed account of the backstage negotiations during last Spring and the dramatic, for the EU and especially for Greece, months that followed. It’s a must read for anyone interested. It is the product of a Wall Street Journal investigation, based on more than two dozen interviews with euro-zone policy makers. It reveals how the currency union floundered in indecision—failing to address either the immediate concerns of investors or the fundamental weaknesses undermining the euro. The consequence was that a crisis in a few small economies turned into a threat to the survival of Europe’s common currency and a menace to the global economy. Enjoy the reading. It’s long, even though slightly reduced by me, so go get some coffee and a couple of cigarettes.

At a closed-door meeting in Washington on April 14, Europe’s effort to contain its debt crisis began to unravel.

Inside the French ambassador’s 19-bedroom mansion, finance ministers and central bankers from the world’s largest economies heard Dominique Strauss-Kahn, then-head of the International Monetary Fund, deliver an ultimatum.

Greece, the country that triggered the euro-zone debt crisis, would need a much bigger bailout than planned, Mr. Strauss-Kahn said. Unless Europe coughed up extra cash, the IMF, which a year earlier had agreed to share the burden with European countries, wouldn’t release any more aid for Athens.

The warning prompted a split among the euro zone’s representatives over who should pay to save Greece from the biggest sovereign bankruptcy in history. European taxpayers alone? Or should the banks that had lent Greece too much during the global credit bubble also suffer?

The IMF didn’t mind how Europe proceeded, as long as there was clarity by summer. “We need a decision,” said Mr. Strauss-Kahn.

The dispute at the Washington meeting divided two of the Continent’s grand old men, both of them born in 1942 and both among the fathers of the euro.

Wolfgang Schäuble, Germany’s ascetic and irascible finance minister, understood the IMF’s ultimatum. The euro zone would have to draw up a second bailout package for Greece by summer, just a year after a loan deal for €110 billion, or $140 billion.

But this time, Mr. Schäuble said, “We cannot just buy out the private investors” with taxpayer money. That would reward reckless lending, he said, and it would never get through an increasingly impatient German parliament. Greece’s bondholders would be required to lend more money, Mr. Schäuble proposed, rather than take payment for their bonds at maturity.

Jean-Claude Trichet, the urbane French head of the European Central Bank, warned against forcing bondholders to put in more money, which would effectively delay repayment. “This is not a good way to go in a monetary union,” Mr. Trichet said. “Investors would avoid all euro-area bonds.”

Mr. Trichet, in the twilight of a 36-year career as a finance official, feared that if Greece didn’t honor its bond debts on time, the implicit trust that kept credit flowing to many weak euro-zone governments would shatter. More countries and their banks would lose access to capital markets, in a chain reaction with incalculable consequences.

The April meeting ended inconclusively.

Meanwhile, the cost for fixing Greece was rising. The Athens government’s budget deficit was stuck at a stubbornly high level.

Italian and Spanish borrowing costs were still affordable and stable. The yield on Spain’s 10-year bonds hovered around 5.3%; on Italy’s, around 4.6%.

The debate over making bondholders contribute to the new funding package for Greece—known as private-sector involvement, or PSI—divided euro-zone countries.

Germany had allies. In the Netherlands and Finland, new governments had promised voters they wouldn’t pay for problems in less-frugal Mediterranean countries. Breaking those promises would risk rebellions in parliament.

But France joined the ECB in resisting burden-sharing by bondholders. France’s banks had lent more heavily than Germany’s to Greece and other indebted euro nations, and France fretted about a Lehman Brothers-style banking-system meltdown. Italian officials also feared that a precedent for losses in Greece would scare investors away from Italy’s bonds.

Three weeks after the Washington gathering, on Friday, May 6, panic erupted. German news weekly Der Spiegel reported that Greece was thinking of leaving the euro zone, with policy makers heading to a secret meeting that night in Luxembourg.

The report was half-right. There was a meeting, but Greece was staying put.

Inside a country chateau, top euro-zone officials told Greece’s finance minister they expected deeper austerity and faster reforms in return for a new aid package.

Then Mr. Schäuble said he wanted to discuss how bondholder burden-sharing would work. The usually smooth-mannered Mr. Trichet lost his patience. “I want to put my position on the record,” he said: “I don’t agree with private-sector involvement, so I won’t take part in a discussion about the practicalities.” He stormed out.

Mr. Trichet’s assent was vital. If the ECB were to stop accepting Greek bonds as collateral for its lending to banks on the grounds that the bonds were in default, then Greece’s banks, which were stuffed full of their government’s bonds, would quickly run out of cash and collapse. That would radically drive up the cost of a rescue.

In Greece, a new wave of mass strikes and demonstrations was starting. Protesters, angry about Europe’s imposition of extra spending cuts and tax hikes, clashed with police in front of the Athens parliament in the biggest and most violent protests in a year.

Spanish and Italian bond prices remained stable. But Europe was at a dangerous impasse over Greece.

Many euro-zone governments hoped Mr. Strauss-Kahn could find a way to relax the IMF’s summer deadline. The IMF chief was due to discuss the matter with German Chancellor Angela Merkel in Berlin on May 15, and with euro-zone finance ministers in Brussels the next day.

Mr. Strauss-Kahn couldn’t attend. Police in New York pulled him off his Paris-bound flight and charged him with sexually assaulting a hotel chambermaid. (The charges were later dropped, and prosecutors said they doubted the maid’s reliability.) An aide phoned Ms. Merkel at her central-Berlin home that Saturday and told her the news. The astonished chancellor responded with a German idiom that translates roughly as: “You couldn’t make this up.”

The IMF sent a lower-ranking official to Brussels in his place who had no latitude to deviate from the IMF’s deadline.

In Athens, meanwhile, a tent city of the “Indignant” protest movement—a groundswell of anger at the country’s impoverishment—sprang up outside parliament. Spain’s bond prices began to wobble as investors worried that other countries might also face debt restructuring.

On June 1, Mr. Schäuble’s deputy, Jörg Asmussen, presented a German plan at a meeting of finance officials in Vienna, at the Hofburg palace of the former Habsburg emperors. It involved pressuring Greece’s bondholders to swap their Greek debt for new IOUs that would come due far in the future. That would cut the amount of European taxpayer funding Greece would need.

After a meal in a palace banquet hall, the officials quarreled into the wee hours.

For the ECB, Mr. Trichet’s deputy Vitor Constâncio, of Portugal, denounced the German plan as “dangerous.” Credit-rating agencies would declare Greece to be in default on some of its debts—a so-called selective default. In that case, Mr. Constâncio warned, the ECB would refuse to accept Greek government bonds as collateral, dealing a death blow to Greek banks. France, Italy and Spain all supported Mr. Constâncio.

Germany’s Mr. Asmussen shot back with a threat of his own. Europe needed Germany’s money to fund a new program of Greek loans. “Without private-sector involvement,” he said, “there will be no program.”

Greece was descending into chaos. Embattled premier George Papandreou’s slender majority in parliament was fraying. On June 15, a swelling demonstration in Athens’s central square veered out of control.

Alone in his office, Mr. Papandreou phoned the parliamentary opposition leader and offered to make way for a national-unity government. Talks broke down, and the Greek government limped on badly wounded.

Even Ms. Merkel had some doubts about her finance ministry’s hard-line insistence that Greece’s bondholders take a loss. On June 17, she discussed a softer plan with French President Nicolas Sarkozy: a gentleman’s agreement under which Greek bonds would be honored but the bondholders would volunteer to buy new ones.

Mr. Schäuble pushed back. The veteran conservative politician was Berlin’s biggest supporter of the European dream, but he was also the keeper of Germany’s purse. He was determined to make banks share the burden with German taxpayers, and he didn’t trust them to keep a gentleman’s agreement.

When finance ministers met again on June 20, Mr. Schäuble pushed harder. Greece’s bondholders should be told not merely to accept a delay in repayment, he said, but also to forgive some Greek debt—a so-called haircut.

As Greece’s economy moved toward free fall, its debts were soaring beyond the country’s ability to pay, the Germans and their northern allies argued. Mr. Trichet and the southern countries resisted. Talks dragged on for hours. The ministers knew they couldn’t leave without some agreement.

They tried to please everyone: Greece would get more aid. Bondholder losses would be substantial, to placate the Germans, Dutch and Finns. But as the ECB insisted, they would avoid pushing Greece into selective default.

Investors knew you couldn’t have it both ways. As the threat of a Greek debt restructuring sank in, Southern Europe’s bond markets grew volatile. Spain’s 10-year bond yield rose above 5.6%. Italy’s reached 4.9%.

Greece’s parliament debated the extra austerity measures that Europe demanded. Central Athens erupted in violent protests. Anarchist youths tore up chunks of paving stone and threw them at riot police, who fired back with tear gas and stun grenades. Café parasols burned.

Europe hadn’t resolved how to keep Greece afloat. The IMF—whose demand for a decision had set off the whole argument—softened its ultimatum. IMF officials said they were satisfied that Europe would sort out some kind of new bailout, and wired Greece its summer aid payment on July 8.

It wasn’t enough to calm markets. Spain’s bond yield hit 6.3%. Italy’s rose to over 5.8%. Such borrowing costs, if sustained, would make it hard for both countries to rein in their debts.

The selloff in bond markets forced leaders to call an emergency summit for July 21.

Determined not to let the summit pass without an agreement, Ms. Merkel invited the French president, who objected to the German push for bondholder losses, to Berlin. The pair and their advisers met for dinner in the German chancellery the night before the meeting.

Few of them had time to touch the duck breast and vegetables on their plates as they searched for a compromise. Finally, Mr. Sarkozy said he would accept the private-sector involvement—if Ms. Merkel dropped her resistance to giving the euro-zone bailout fund broad new powers to buy debt of weak countries directly and move to protect such countries as Spain and Italy from bond-market contagion. Ms. Merkel agreed.

One more person needed to sign off. Ms. Merkel phoned Mr. Trichet at his Frankfurt office. He took the last Lufthansa flight to Berlin and arrived at the chancellery around 10 p.m.

Reluctantly, Mr. Trichet gave his OK. But he set conditions. Governments would have to insure Greek bonds against default so that the ECB could continue to accept them as collateral. And they would have to make plain that no other euro country but Greece would have its debts restructured.

The trio’s deal was both complicated and vague. Their staffs had little time to flesh out details before the next day’s summit in Brussels. As leaders trickled into the European Union’s boxy headquarters, Ms. Merkel faced a challenge to placate the euro zone’s south, which thought private-sector involvement was dangerous, and its north, which thought it didn’t go far enough.

When the leaders assembled at the sprawling summit table, Ms. Merkel admitted that the specter of bondholder losses was causing market unrest. But, she said, some Greek debt relief was essential. Without it, the bailout’s tough austerity conditions—made tougher by Greece’s missing its budget goals—would be seen as unbearable.

“If Greece had met its program parameters in April,” she snapped, “that would have helped.”

All 17 euro nations had to agree to private-sector involvement. But presented with a calculation that the plan would reduce Greece’s debt by only about €19 billion out of more than €350 billion total, Dutch Prime Minister Mark Rutte balked. If it’s only €19 billion, he said, “I’m out. I need more.”

Finnish premier Jyrki Katainen also complained. His parliament wanted collateral in exchange for more Finnish lending to Greece. “No collateral, no agreement from me,” he said.

Mr. Sarkozy was peeved. “All our parliaments can cause problems,” he said.

Then it was Slovakia’s turn. Prime Minister Iveta Radičová was fighting to keep her coalition together over aid for Greece—a richer country than her own. Adding more powers to the bailout fund “would be suicide,” she said.

Greece’s Mr. Papandreou pleaded for help. “If we can’t solve even Greece, we won’t be seen as being able to solve anything else,” he said.

Hours later, the leaders had a communiqué. To appease the holdouts, it left key points broad and noncommittal, offering the possibility of collateral to Finland and describing the complex bondholder deal in a few strokes, vague language that would return to haunt the bloc.

Officials struggled to explain the new Greek bailout and the bondholder losses. Amid the confusion, Mr. Rutte dispensed muddled numbers. Bank analysts put out flawed reports.

Investor confidence faltered as it became clear that Europe’s compromise achieved the worst of all worlds. Greece would be pushed into a historic default—the first time in nearly 60 years that a developed, Western country wouldn’t honor its debts. But the default was so small that Greece was still left with a crushing debt burden.

And then official Europe went on vacation: Ms. Merkel to the Italian Alps, Mr. Sarkozy to the French Riviera.

Bondholders didn’t. They went on a rampage.

This article was written by Charles Forelle and Marcus Walker. Stephen Fidler, David Gauthier-Villars, Sudeep Reddy and Brian Blackstone contributed to it.

Wall Street Journal also produced this documentary, called “Europe at the Brink” in which WSJ editors and reporters examine the origins of Europe’s debt crisis and why it spread with such ferocity to engulf much of the continent and threaten the entire world.

Teargas in the Parliament

Most Greek demonstrations usually end up in fron of the Greek Parliament. Sooner or later the riot police starts spraying people with tear gas after the usual and occasionaly suspicious scuffle between anarchists and the police. In the past year I have heard a lot of people shouting “Try throwing ONE tear gas canister inside the Parliament to let them know how it feels!”. Well, this is how it would look like…