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The troika does not believe the tears

14 May 2011 / 18:05:47  GRReporter
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After disappointing the global markets, its own voters and the leaders of euro zone, the government of George Papandreou broke the hearts and the supervisory troika. Representatives of the Greek lenders who are in Athens since Tuesday clearly stated to the Finance Minister George Papaconstantinou, they no longer believe in the future time that ministers in the cabinet use when reporting the status of the reforms. The troika, led by the representative of the International Monetary Fund Poul Thomsen doubted that the cost of public sector will be confined within the promised 16 billion euros and have asked the Interior Minister Yannis Ragoussis a  moratorium on appointments, cancellation of the practice of transferring employees from one government job to another and lay offs of specific people with names and addresses.
    Supervisors designated as groundless and unjustifiable the amount of 56 billion euros, which the Greek Government provides as pensions and healthcare. Experts openly questioned the sincerity of social minister Louka Katseli in reducing it to the agreed 45 billion euros and requested a new pension reform, cutting of the additional pension payments and of the compensation for hazardous labor, a mass denial of collective labor contracts and their replacement with operational and individual ones, and sharp reduction of the costs in healthcare.
    The troika, however is most suspicious, towards the tax policy of the socialist government and its privatization plans, which were characterized as "too optimistic". Ie unreal. The financial experts were quite suspicious also towards the sustainability of the Greek banks and were satisfied with saying just one fact and one reality - capital continue to flow out of Greek banks, and they are still waiting and not proceeding to mergers.
    To what extent Poul Thomsen and his associates are correct, show also the figures. For the first three months of 2011, capital for the amount of 10.4 billion euros have been withdrawn from the domestic banks. According to the data provided by the Bank of Greece in late March the assets of the Greek banks were 199.2 billion, ie they had a 3.7 billion less than in February. Private accounts have decreased the most - by 3.5 billion euros, which experts explain with the declining in incomes and the rising unemployment. People not only can not save, but also "eat up" the money saved in the past. The more the country's economy deteriorates, the more deposits will decrease. The total value of deposits in Greek banks is 244.4 billion euros for the first quarter, or 9.1 percent less than the deposits 1 year ago.
    These days, the Governor of Central Bank of Greece George Provopoulos gathered for an official dinner his colleagues from the commercial banks in the country, which was accompanied by lively discussions on how to stabilize the financial system in Greece. To the already mentioned problems, we must add also the continuous decrease in the ratings of the banks by the agencies Moody's and Standard & Poor’s. Their shares have fallen down so much that they dragged behind them also the Athens stock index, which fell below the psychological barrier of 1400 points and was formed just over 1355 points.
    A year ago just after signing the financial Memorandum between Greece and the European Commission, European Central Bank and the International Monetary Fund GRReporter explained What's wrong with the arithmetic of the Greek equation?. A year later the situation remains the same. The German Die Welt Online directly stated that the Greek figures shocked Europe and they expect the necessary suspension of international aid to Greece. The publication claims that for 2011 the Greek debt will be 157.7 percent of the GDP or 13 per cent more than agreed with the troika. According to the Memorandum it must be 145 per cent of the GDP. And in 2012 it will reach 166.1 percent of the GDP and will be 17 percent higher than expected, which is 149 per cent. What would it mean to Greece a suspension of the international aid? A few months ago Poul Thomsen explained it during his last press conference in Athens: "This would mean that overnight Greece will cancel its budget deficit". With all the ensuing political, economic and social upheavals.
    For an end of this article I chose for you a few titles of our articles from one year ago:

A start of the privatization of the railway and water supply companies

Series of mergers will leave only two private banks on the Greek market
Greece loses around €9 billion from tax evasion
The drama of the Greek Public Power Corporation: “To privatize or not to privatize”
Greece Will Not Return to the Drachma, the Government Confirmed

    All these titles and their associated articles sound so current that they could be written today. Do you understand why Mr. Thomsen and his troika can not tolerate any longer the future time of the Ministers of George Papandreou? Do you understand how much things have changed in Greece for a year? The answer I leave to you.

 

Tags: economic crisis foreign debt GDP troika Memorandum Greek banks eurozone
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