Papandreou Fiddles While PASOK Disintegrates

Former Prime Minister and soon-to-be former PASOK leader George Papandreou

ATHENS – While former Prime Minister George Papandreou was in Costa Rica addressing the Socialist International conference as its leader, the PASOK party he still heads – if only for a while and under constant pressure to quit – and which his father, the late former Premier Andreas Papandreou formed in 1981, is vanishing. Less than three months after he resigned in the wake of 18 months of protests, strikes and riots against austerity measures he implemented to suit demands of international lenders providing rescue loans for the country’s disappearing economy, PASOK has gone from ruling the country to fifth place in a new poll, even behind the marginal Communist party, not a good omen as the party hopes to reclaim the premier’s office when new elections are held to replace a coalition government formed when he quit as the country’s leader.

PASOK has fallen to only 12 percent support, a six percent drop from December, according to a monthly research poll conducted by VPRC for Epikaira magazine. New Democracy, the party that fell out of power in 2009 to Papandreou before it was revealed it had lied about the country’s economy, is at 30.5 percent, virtually the same as the previous month, but far from enough to control the Parliament even if it gains the Prime Minister’s office, setting up a scenario in which there would have to be another coalition government or in which it would have to call yet another snap election in hopes of gaining a majority. That possibility seems remote given that more than one-third of Greeks said they are disgusted with all political parties and will not vote anymore.

The Communist Party of Greece and the Coalition of the Radical Left, or Syriza, would each receive 12.5 percent of the vote if elections were held tomorrow. Both Syriza and the Communist Party declined to join the interim government, but the far Right-Wing LAOS party, which collaborated with PASOK and New Democracy to be involved in the coalition, is now lagging far behind with only 6 percent of the vote. The level of contempt has risen markedly, as interim Prime Minister Lucas Papademos, a former European Central Bank (ECB) Vice-President, has gone from 75 percent support to 8 percent, while 80 percent of Greeks said the country is headed for disaster.

The troubles for Papandreou and PASOK mounted this week when even its own spokesman voted against measures before Parliament to open Greece’s notoriously closed professions which enjoy monopolies and set prices and profits. The Troika of the European Union-International Monetary Fund-ECB had demanded competition be allowed in professions as one of the conditions of providing Greece with a $152 billion rescue package, and a second pending $169 bailout that is being delayed until a deal is worked out with investors, in which they could take as much as 70 percent in losses.

More than 40 PASOK MPs voted against the reform measures they had always supported when the party was ruling, but the polls show their change of heart has come too late to save them or PASOK. The other seven articles of the bill were voted through on principle, paving the way for new tax laws for self-employed professionals, the liberalization of truckers’ and lawyers’ sectors, further cutbacks to the holiday bonuses of pensioners aged over 60, the establishment of a fund to oversee the selloff of state assets, and the abolition or merger of various state bodies.

When Papandreou was in power, he removed deputies from the party if they didn’t vote the way he ordered, but did not act against the open rebellion even as he said he wants to remain the party’s leader until the next elections, which means PASOK might not be even able to field a candidate unless it picks a nominee for Prime Minister who is not the party’s leader, adding to the growing confusion.

Just who would be the party’s leader is even more vexing as the reform measures were introduced by Finance Minister Evangelos Venizelos, who imposed avalanches of tax hikes and pay cuts on Greeks and now is being spurned even within his own party. Another likely candidate for leadership,  Development Minister Michalis Chrysochoidis, became the object of derision when he admitted he hadn’t even read the memorandum of understanding with the Troika when he supported it, even as he has since blasted Papandreou for pushing the package. Chrysochoidis supported the austerity measures even after he said he found out what they were and didn’t criticize Papandreou until the party lost power. A popular T-shirt in Greece makes fun of Chrysochoidis. It reads, “I Didn’t Read the Memorandum,” making him and the party a laughingstock in the eyes of many Greeks.

With the dismantling of the Socialist principles on which the party was founded, and the sense that the party handed over the keys to Greece to the Troika even while most analysts agreed with Papandreou that the country’s bloated public sector was a major reason for the staggering $460 billion debt – even though PASOK and New Democracy created it with generations of packing public payrolls with political hires in return for votes – it now seems PASOK, like Greece, cannot recover.

The newspaper Kathimerini reported that some within the party are debating the option of removing Papandreou from his role as party president before the leadership election due to take place in late March or early April, and in which party members across the country are set to vote. This could be done by MPs calling for a vote of confidence among the party’s parliamentary group. If Papandreou fails to secure the majority of support, he would have to stand down and lawmakers could elect a new leader.

PAPANDREOU AS NERO

“The country is entering its most crucial phase but at PASOK, we are fiddling,” said former Justice Minister Haris Kastanidis, who admitted that Papandreou was not fulfilling his role properly. “I do not know if we will get to the next elections as a united PASOK,” said Deputy Interior Minister Paris Koukoulopoulos. In a further sign of rifts at the highest level of the party, Citizens’ Protection Minister Christos Papoutsis and Health Minister Andreas Loverdos made barbed comments about the stance taken by Chrysochoidis, who has also been critical of PASOK’s policies while in government.

Papandreou is also waiting to see if Parliament will be asked to investigate whether he should face charges in connection to allegations that Greece’s 2009 deficit figure was artificially inflated. PASOK spokesman Panos Beglitis, who is a close ally of Papandreou, suggested that any parliamentary probe into fiscal data should stretch back to 2000, when another Socialist, Costas Simitis, was in power. Simitis recently blasted Papandreou’s tenure, another sign the party is now in open rebellion and Papandreou is powerless to stop it.

The Troika has said unless all members of the coalition government support the terms of the bailouts, including more of the austerity measures that doomed PASOK, Greece might not get more money, without which the country couldn’t pay its workers and pensioners and could slide into a disorderly default, then be forced to leave the Eurozone of countries using the euro as a currency. An editorial in Kathimerini said that could lead to more violence and “bloodshed in the streets.”

New Democracy leader Antonis Samaras, who would be Prime Minister if his party wins the elections – but not control the Parliament – is balking at supporting more austerity measures. But unless he does, Greece will go bankrupt, leaving him with a bereft country, creating a conundrum for him.  Samaras has presented a contradiction,  however, saying he supports the coalition but not all of its policies. He said he wants elections no later than Palm Sunday, April 8, but talks on a write-down of Greek debt with investors have stalled for weeks, and the Troika said no more money will be released until there is a disagreement. Papademos has made no headway in reaching a deal even as the rival parties in his coalition continue to bicker amongst themselves and jockey for a position in the next election.

(Sources: Kathimerini, Bloomberg, Reuters)

New Troika Demands: Firings, Pay Cuts, Slashed Health and Defense Spending

Man in a box: Greece's interim Prime Minister Lucas Papademos

ATHENS – There just seems to be no good news for Greeks these days. Even as a coalition government led by former European Central Bank (ECB) Vice-President Lucas Papademos has stalled in talks to get a second bailout to keep the country from falling into bankruptcy, the Troika of international lenders is demanding more of the same austerity measures that have created a deep recession of 18.2 percent unemployment and the closing of more than 100,000 businesses.
Papademos told the ministers of his temporary government, comprised of holdover ministers from the former ruling PASOK Socialists, their bitter rival conservative New Democracy and the far Right-Wing LAOS party, that the European Union-International Monetary Fund-ECB said no more money will be coming for Greece unless it implements more Draconian measures. Greece is surviving on a first series of $152 billion in rescue loans which have failed to slow the country’s slide toward what most analysts said is imminent default. Papademos is wrangling for a second package of $169 billion and hopes for a write-off of as much as 70 percent of Greece’s debt, but those talks too have stalled and gone nowhere for weeks.
The newspaper Kathimerini reported that Papademos distributed among his ministers a 10-page document that contained the demands being made by Greece’s lenders, that include insistence that the government fulfill prior requirements that failed under former Prime Minister George Papandreou, who resigned on Nov. 11, 2011 after 18 months of protests, riots and strikes against the austerity measures. Greece had accumulated a $460 billion debt caused by generations of needless hires in return for votes for alternate New Democracy and PASOK Administrations.
But the new measures for the continued bailouts are as stinging as the first:

  • The firing of 150,000 public workers by 2015
  • No exceptions to the across-the-board pay structure for civil servants
  • Cuts in defense and health spending
  • The closure of state bodies
  • Cuts in auxiliary pensions which are the last lifeline for many elderly
  • The merging of pension funds into a single entity
  • An increase of 25 percent in property values although Greece has already doubled that assessment
  • An additional 2.2 billion euros in spending cuts this year
  • Quicker privatization of state enterprises and the sale or leasing of state-owned properties
  • Cancelling favorable terms for taxpayers who have made payment arrangements
  • Reduction of social security contributions by 5 percent

There was no mention of a reduction in private sector wages, although the Troika said that salaries should become more flexible. Papademos is due to put the measures in front of the leaders of the three parties in his coalition government when he meets them on Jan. 28 before finalizing the plan with his Cabinet the next day, and then present them at an EU meeting in Brussels on Jan. 30. The Troika has insisted on unanimous support from all members of the coalition, putting New Democracy leader Antonis Samaras in a difficult position as he said he supports the government but not all the policies. But without his approval, the Troika said it will shut off the rescue loans. Papademos is struggling to keep the coalition together in the face of growing public disapproval of his government too.

Karadzic Calls For Carolos Papoulias To Give Evidence on His Case

Former Bosnian Serb leader Radovan Karadzic asked the International Criminal Tribunal for the former Yugoslavia (ICTY) on Tuesday to issue a subpoena compelling the Greek President Carolos Papoulias to give a one-hour interview to Karadzic’s advisor.
According to the former Bosnian Serbian leader, Carolos Papoulias, who had served as Foreign Affairs Minister from 1993 to 1996, would be able to provide the Tribunal with enough evidence proving that Karadzic had not ordered the bombing of Sarajevo’s Markale Market in 1994, which cost the lives of 67 people.
“Because of the religious and historical ties between Greece and the Serbs, President Papoulias was one of the few international interlocutors whom the Bosnian Serbs trusted and with whom they could speak confidentially and candidly,” Karadzic said.
Karadzic claims he has sent many letters to the Greek government asking for an interview from Papoulias but the latter had declined his request.
Karadzic was arrested in 2008 and is detained in the United Nations Detention Unit of Scheveningen, accused of war crimes committed against Bosnian Muslims and Bosnian Croats during the Siege of Sarajevo, as well as ordering the Srebrenica massacre.

Minister of Education Sends "Europe SOS" Letter To Romano Prodi

The Greek Minister of Education sent a letter to the former PM of Italy and former president of the European Commission Romano Prodi, asking for the promotion of a “Europe SOS” initiative that will aim at reversing the financial crisis plaguing the Eurozone countries.
During their earlier phone conversation, Mrs. Diamantopoulou spoke with Mr. Prodi about the crisis affecting Greece and Italy, and pointed out that all EU countries are suffering from the consequences of the crisis.
“The solution and catharsis to this drama we are all going through, and for which each country bears its own responsibilities, will only come through a joint European intervention and through an efficient economic governance model”, among other things, emphasized Mrs. Diamantopoulou.
The debt crisis is not only a Greek problem. It has spread throughout Europe and is affecting the economies of Italy, Spain, Portugal, Ireland, Belgium and lately France. “We need to react now and enhance the voices of important EU leaders by creating a ‘Europe SOS’ movement that will provide us all with new prospects before it is too late. Let’s take action now” wrote Mrs. Diamantopoulou in her letter.

Dimon: The Direct Impact of a Greek Default is Almost Zero

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Jamie Dimon

Τhe impact of a Greek default on American banks is negligible, JP Morgan Chase CEO Jamie Dimon told CNBC on Thursday, and while there are chances of a bad outcome in Europe, he is not concerned about unpleasant surprises in the region.
“The direct impact of a Greek default is almost zero,” Dimon said.
“The effect it has on the global economy will obviously filter down to the American banks too,” he added, but although “there may be a surprise somewhere”, he expressed little concern over such a development.
“There’s a teeny chance of a catastrophic outcome, which is why the muddle-through is the only good strategy. There is no other good strategy,” Dimon said. Not wanting to diminish Europe’s problems, Dimon said Greece, Portugal and Ireland were not the main issue.
(source: CNBC, capital)

Olli Rehn: More Public Money Needed for Greek Bailout

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The European Union΄s top economic official said on Thursday that more public money will be needed to make up a shortfall in a second bailout for Greece, if private bondholders agree to take a share of losses.
Economic and Monetary Affairs Commissioner Olli Rehn told Reuters that euro zone governments and EU institutions would need to make up the difference so that Greece΄s public debt can be reduced to approximately 120 percent of annual output by 2020.
Rehn said he expected Athens to reach an agreement with private sector investors in the coming days on a debt swap, under which private investors would take voluntary writedowns on Greek bonds.
“In fact, we΄re quite close to a deal between the Greek government and the private sector community. I would expect it will be concluded in the coming days, preferably still in January, not February,” he told Reuters Insider television in an interview.
The EU and the International Monetary Fund would then update their analysis of Greece΄s debt sustainability, in order to identify the shortfall that must be made up to reach the agreed 2020 target in light of Athens΄ worsening economic outlook and fiscal performance.
“We are preparing a package which will pave the way for a sustainable solution for Greece, and in that package, yes, on the basis of the revised debt sustainability analysis, there is likely to be some increased need for official sector funding, but not anything dramatic,” Rehn said.
Asked whether the European Central Bank should take a share of the burden by renouncing profits on Greek bonds it had bought at a discount on the secondary market, he said he did not wish to speak on behalf of the ECB.
But the required burden-sharing would depend on decisions made by “the official sector and European institutions.” The ECB is the only European institution which holds Greek debt.
It was the first time a top EU official had spelled out that more public money than the planned 130 billion euros would be required for a second Greek bailout package.
(source: Reuters, capital)

Conservative Opposition In Lead, New Party Gains – Poll

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Greece’s opposition New Democracy Party continued to hold a double-digit lead over the Socialist party, a new opinion poll showed Thursday, while also confirming growing strength in a new left-wing party.
According to a poll conducted for the privately owned Star television channel, the conservative New Democracy Party would garner 21.7% of the vote if elections were held now, against just 11.1% for the Socialist, or Pasok, party.
The same poll showed that the newly established Democratic Left party, led by independent Greek politician Fotis Kouvellis, would receive 8% of the vote, which is well above the 3% threshold needed to enter Parliament.
The results confirm an earlier poll Thursday that showed support for Pasok, which controls a narrow majority in Parliament, has plummeted in the last month.
That poll, conducted for weekly magazine Epikaira, showed that 12% of respondents would vote for Pasok, down from 18% in December.
Elected in a landslide victory in October 2009, the Socialists have seen their popularity plummet to historic lows after two years of harsh austerity measures that Greece has promised in exchange for a EUR110 billion bailout in May 2010.
In November, Pasok formed an interim coalition government with New Democracy and small, nationalist party Laos. It has the task of securing a new bailout for the country before leading it to elections.
(source: Dow Jones)

Venezuelan Ambassador Visits Prefecture of Thessaly

The Ambassador of the Bolivarian Republic of Venezuela to Greece, Mr. Rodrigo Oswaldo Chavez Samudio, has met with the Prefect of Thessaly, Mr. Costas Agorastos, in the latter’s office in Larissa on Wednesday.
According to Mr. Chavez, the meeting aimed to bring the Venezuelan Embassy closer to the Prefecture of Thessaly, and examined the emerging cooperation possibilities especially in terms of education, culture and tourism.
On his part, Mr. Agorastos said that Thessaly is a small-scale Greece, and is, therefore, characterized by all the advantages and the natural beauties that can highlight the region as a unique place to visit in the world.
After the meeting was over, Mr. Chavez said that this meeting was the beginning of a long and consistent cooperation between his country and the Prefecture of Thessaly, as there are numerous ways in which business activities can flourish in the area.
Mr. Chavez pointed out the common cultural elements found between the two countries, and expressed his belief that the current financial crisis should not deprive the Greek people from their sense of hospitality, optimism and good nature.

EU Commission Asks Greece and Cyprus To Comply With EU Landfill Legislation

The European Commission has sent a request to both Greece and Cyprus asking for their immediate compliance with the requirements of the EU landfill legislation.
Landfills that breach the EU waste legislation pose a threat to human health and the environment, a warning which the two countries are called to respond to within the following two months. If they fail to follow the legislation, the cases may be submitted to the EU Court of Justice.
The Greek islands of Zakynthos (National Marine Park) and Corfu (Temploni) are two cases in which Greece is breaching the EU legislation on waste disposal.
Although steps have been made to change the situation, the efforts are slow-paced and have been abandoned lately, with no direct results expected to be seen within the next two years.
In Cyprus, six landfills are still operating against EU legislation.

John Thomas Financial Expands Investment Banking Division

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John Thomas Financial, a full service independent broker/dealer and investment-banking firm located in New York City’s Financial District, today announced the appointment of Avi Mirman as Head of Investment Banking. Mr. Mirman will be based at the John Thomas Financial Wall Street headquarters and will oversee all aspects of investment banking while leading the effort on public offerings, private placements and merger and acquisition advisory work.

Mr. Mirman brings to John Thomas Financial nineteen years of experience in investment banking. Before joining John Thomas Financial, Mr. Mirman was Head of Investment Banking at BMA Securities, where he was responsible for overseeing the entire deal process in addition to cultivating and managing key relationships with clients, service providers and funding sources. Prior to BMA, Mr. Mirman was recruited by GunnAllen Financial to establish a more substantial presence in investment banking, leading his branch to top the firm’s 250 nationwide offices in 2 years. He has closed over $2 billion in transactions over the course of his career to date. Mr. Mirman received his B.S. in Political Science from the State University of New York at Buffalo. Mr. Mirman holds FINRA Series 7, 66, and 79 licenses.

Another noteworthy addition to John Thomas Financial is Russ Steward, who will join Mr. Mirman at the Investment Banking Group as Managing Director. Mr. Steward brings twenty years of investment banking, merchant banking and private equity experience to John Thomas Financial, including several years working directly with Mr. Mirman where he focused on due diligence, financial analysis and valuation of small cap and micro cap companies for capital raises and financial advisory services. Prior to joining with Mr. Mirman, Mr. Steward was a Senior Vice President at SMH Capital, a division of Sanders Morris Harris Group, and worked with middle market companies. Mr. Steward has a Ph.D. in Business Administration from Century University in Albuquerque, NM, an MBA from the Anderson School at UCLA and a BS in Industrial Engineering from Columbia University. Mr. Steward is a CFA charterholder.

“As part of our expansion, and with Avi’s success on both sides of the capital raising spectrum, John Thomas Financial is now able to offer institutional-quality products to high net worth individual investors. We are very proud to have this team and its extensive expertise join the firm, further enabling us to provide greater value to our clientele,” said John Thomas Financial CEO Thomas Belesis.

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About John Thomas Financial

John Thomas Financial, a member of FINRA and SIPC, is an independent broker-dealer and investment banking firm headquartered in New York City’s Wall Street district. Emphasizing a client-centric approach to managing all aspects of its business, John Thomas Financial and its affiliates offer a full complement of retail brokerage, private wealth management, and corporate advisory services tailored to the unique needs of its clients. The firm publishes the Fiscal Liquidity Index a unique daily indicator that looks at government spending and its impact on the financial markets, as well as The John Thomas Financial Economic Outlook, a research report analyzing consumer sentiment, market outlook, credit cycles and dozens of other market influences. For more information on the firm, please visit: www.johnthomasfinancial.com .