Greece defaulting on its debt is certain said Bill Gross, manager of Pimco, the world΄s largest bond fund, according to Reuters.
The question was when, not if, Greece would default on its debt said Gross, adding that it was a 50-50 call as to whether or not Greece would end up dropping the euro.
“Actually, I think they would do better, in my opinion, to drop out and then to come back,” he said.
“They basically told the banks to stuff it, to basically take their money and go home. Perhaps Greece should do that, or otherwise they΄re in for a five-, 10-, 15-year period of time of very difficult circumstances.”
(source: Reuters, capital)
Bill Gross: Greece Should Drop The Euro And Come Back
Canadian Central Banker Sees no Problem with Greek Call for Referendum
The leader of Greece made an understandable decision by calling for a citizens’ referendum to decide whether the nation will accept a bailout, Canada’s top banker said during federal testimony on Tuesday.
Mark Carney, governor of the Central Bank of Canada, told the finance committee of the House of Commons that Greek Prime Minister George Papandreou was seeing if public opinion endorsed the measure that was approved by euro zone leaders five days ago in Brussels, Reuters reports.
Worldwide markets were shaken by Papandreou’s call for a referendum, particularly because the European Financial Stability Facility was finalized just late last week. Commodities like precious and industrial metals are down and currencies have reacted wildly.
Two people who were not as receptive to the Greek premier’s call were the leaders of Germany and France, the two top economies of the euro zone.
(source: daniel strading)
Pissarides: Greek Decision to Hold a Referendum Detrimental for Eurozone
Cypriot Nobel economics laureate Christopher Pissarides has said that Greece decision to hold a referendum on its latest rescue plan will prove to be detrimental for the eurozone.
Speaking from London, Pissarides said the new developments created after the Greek government’s decision are much more worrisome for Cyprus’ banking system due to the uncertainty concerning the size of the haircut of Greek Government bonds.
According to Pissarides, a possible no vote on the Greek referendum to be held in late December, would lead the country out of the Eurozone and to a consequent default.
”This decision could cause grave damage to the Eurozone and not only to Greece itself due to uncertainty caused,” Pissarides told CNA.
Describing the deal reached on the Eurozone Summit on October 26 for a new 130-billion-euro rescue package as very good and beneficial for Greece, Pissarides said that Greek Premier George Papandreou announced he would hold a referendum without consulting with the other Eurozone leaders.
”This causes a climate of uncertainty because it is like saying that even if the Eurozone big boys agree on a policy in the Eurozone, which seems to be good, creating a positive note on the markets, suddenly the small state with the big problems says it might not accept it.”
Replying to a question, Pissarides said that Greece should have avoided this decision, given the reaction by other Eurozone member-states and the plunge in the European shares following the decision.
Noting that the Greek Prime Minister should brief his party and the opposition in Greece on the new deal and not announce a referendum, Pissarides wondered ”who could expect that the voting will be cast according to the right criteria, that is, the future of the country.”
Asked whether a rejection of the new deal in the Greek referendum would entail the exit of Greece from the Eurozone, Pissarides said in case of a no vote ”Greece cannot avoid living the Eurozone”.
”I can’t see any other solution. I can’t see the European leaders calling for another Summit in Brussels to work out a solution acceptable by the Greek citizens,” he remarked.
Replying to a question whether Cyprus, exposed to Greek sovereign debt through its banking system, should be more concerned following the Greek government’s decision, Pissarides replied affirmatively, pointing out no one could know the size of the eventual haircut of Greek bonds.
According to rating agencies, the exposure of Cypriot banks to Greek debt amounts to around 165 per cent of the island’s output. European Banking Authority stress tests consider that Cyprus would need an additional capital of 3.6 billion euro to increase the Banks’ Core Tier 1 capital above 9%.
”In case of a no vote in the referendum Greece, would be forced to leave the eurozone and default on its debt, the Greek bond haircut would not be 50% but 100% or in any case above 50%. This is a more serious situation for the banks,” Pissarides noted.
”The latest developments are much more worrisome for our banking system than some days ago because I believed that (German Chancellor Angela) Merkel and (French President Nicolas) Sarkozy would reach to an agreement,” he said, adding ”But now our confidence lies with the Greek voters.”
Invited to comment on the rising tendencies in unemployment in Cyprus and whether this is fueled by the current uncertainty, Pissarides pointed out that recession fuels unemployment, whereas the Cypriot economy has made backward steps, following the huge explosion in a munitions cache last July which crippled the island’s main power station.
Noting that Cyprus could increase state spending to stimulate employment, Pissarides pointed out however that the island could not risk high deficits due to the danger of downgrades by rating agencies.
(source: cna, famagusta-gazette)
Greek Cabinet Backs Papandreou and Referendum
Greek Prime Minister fought off a barrage of criticism to win the backing of his cabinet Wednesday to push ahead with a referendum. Greece’s cabinet voted Wednesday to support George Papandreou’s call to hold a public vote as soon as possible about the latest bailout plan, ministers coming out of the meeting told Mega Channel.
“The referendum will be a clear mandate and a clear message in and outside Greece on our European course and participation in the euro,” Papandreou told the seven-hour cabinet meeting, according to a statement released by his office.
“No one will be able to doubt Greece’s course within the euro.”
Greek government spokesman Elias Mossialos said the referendum would take place “as soon as possible, right after the basics of the bailout deal are formulated”. Greeks will have to decide if they want to participate in a European Union debt bailout deal.
Papandreou’s most immediate hurdle is the parliamentary confidence vote Friday.
APOEL Stun Porto 2-1; Top Champions League Group G
Apoel Nicosia won the Europa League holders, Porto (2-1). Apoel remain top of Group G and move closer to becoming the first Cypriot team to reach the Champions League last 16.
Gustavo Manduca’s goal gave the hosts the three points and sent Cypriots in dreamland just moments after Hulk’s penalty had canceled out Ailton’s first-half finish from the spot.
The two teams had appeared to be heading for 1-1 draw. APOEL first scored in the 42nd when Brazilian striker Ailton Almeida also converted a penalty.
Apoel, rank outsiders before the competition began, lead the group by a point from Zenit St Petersburg with two matches left and a win away to the Russian club on 23 November will send them to the knockout stages and guarantee them top spot.
Watch the video with excerpts from the game:
ΧΑΟΣ: "Liberation" Dedicates Cover to the Greek Drama
French newspaper Liberation makes an extensive report on the Greek economic crisis and what happened to the world’s markets after the Greek Prime minister’s decision for a referendum. The referendum will ask Greeks if they want to participate in last week’s European debt plan.
George Papandreou’s announcement spooked investors, who feared a public vote would jeopardize the carefully-crafted deal.
Sources report that French President Nicola Sarkozy is rather irritated with Mr.Papandreou’s “irrational” decision. He said that Greek Prime Minister’s announcement “surprised all of Europe.”.
International media mostly support Liberation’s cover with articles criticizing Papandreou’s decision for a referendum.
Spiegel surprised Greeks positively with an article -reaction to the Greek PM’s decision titled: Papandreou Is Right to Let the Greeks Decide.
National Geographic Searches For Longevity Secrets in Icaria
Residents of the island of Icaria on average live up to 90 years, which is thrice as much as in the USA. This fact has been enough to gather the attention of a National Geographic team, who visited the island in search of the secrets leading to a long healthy life.
The team of experts found out that cancer, cardiovascular, diabetes and senile dementia incidents are considerably less frequent, since the geographical features of the island require constant physical exercise.
The researchers have also discovered that herbs and the green tea consumption are placed high on the locals’ everyday nutrition list, which result in a low blood pressure. Many of the longevity secrets revolve around the Mediterranean nutrition including fruits, vegetables, fish and olive oil, elements prolonging the estimated duration of life.
Furthermore, the slow pace of life followed by the Icariots is contributing to their well-being. Most of them do not wear a watch, so the concept of time-stress is completely strange to them. Last but not least, the afternoon siesta (sleep) seems to be a powerful weapon against depression.
Greece a Candidate Member of World Heritage Committee
Culture and Tourism minister Pavlos Yeroulanos attended on Monday Unesco’s 36th General Conference that took place in Paris.
At the conference, in which delegations from 190 countries participate, Greece submitted to become members of the Committee of the Global Cultural Heritage. The voter will be held next week (November 7-9). Greece has been a member of the Committee twice in the past, over the periods of 1985-1991 and 1997-2003.
Yeroulanos met on the sidelines of the conference with Unesco’s general director Irina Bokova and discussed about proposals and ways that will further promote the preservation of global cultural heritage within modern-day needs, possibilities, and opportunities.
ASE Records Heavy Losses After PM's Referendum Decision
Athens Stock Exchange recorded heavy losses on Tuesday, after the Greek PM surprised everyone with his announcement of holding a referendum for the resolutions of the Euro Summit of October 26.
Political and economic uncertainty resulted in Greek indices plunging and simultaneously dragging down with them the European and international bourse Intra-day losses of the General Index and the banks reached 7.8% and 14.48% respectively.
“We are entering a period of high uncertainty and political activity behind the scenes. Referendum or national elections appear to be the most possible scenarios”, commented Marfin Analysis.
Banks closed with a fall of 11.3% to 280.47 points. A total amount of 119 shares declined, 29 rose and 128 unchanged. Hellenic Postbank and National Bank suffered the heaviest pressures, posting losses of 16.11% and 14.53%.
Last Lines for Bankrupt Eleftherotypia Daily
Eleftherotypia daily newspaper was founded after the fall of the military dictatorship in 1974 and was one of the leading journalism voices in Greece. That was until today at least.
“The Paper of Journalists”, as its credo goes, has gone bankrupt, according to its publisher’s announcement on Tuesday afternoon. The abrupt end of its issuing came after Alpha Bank denied a new loan to the newspaper. As a result Mrs. Tegopoulou informed everyone briefly on the newspaper issue halt due to severe financial difficulties.
After her announcement, Mrs. Tegopoulou went to her house and directors of the newspaper are visiting her in an attempt of talking her out of halting the newspaper’s issue.
For the past years the newspaper had been in the maelstrom of many financial problems and most of its news writers and editors had been unpaid since July.