Greece to face European Commission economic scrutiny

[Savonarola]

So if they go into receivership does the country go back to Turkey? 

Greece to face European Commission economic scrutiny 

Prime Minister George Papandreou is seeking support for austerity measures
Greece will face the most stringent monitoring of any European Union country as it attempts to balance its finances over the next few years.

The news came as the European Commission confirmed its support of Greece's plans to reduce its deficit.

EU economic commissioner Joaquín Almunia also launched an infringement procedure to ensure Greek authorities report reliable budgetary statistics.

Greece's deficit is more than four times higher than eurozone rules allow.


ANALYSIS

Jonny Dymond, BBC Europe correspondent
The concern in Brussels is not just that Greece might need to be bailed out, but also that financial markets' nervousness about Greece might spread to other euro-economies in trouble.

So the commission is recommending acceptance of Greece's plan to cut its deficit - but also the most extensive intrusion into a member state's economy that the EU has known.

Few in Brussels appear to believe that the Greek government will hold to its promises to slash the deficit unless it is being pushed hard by euro partners.

And after long years of dodgy statistics from the Greek authorities, the EU is insisting on a direct role in the monitoring of Greece's recovery plan.

Progress reviews

Mr Almunia welcomed the additional fiscal measures taken by Greece.

He said: "We consider that the programme is ambitious, and that the programme in terms of targets is achievable.

"We are endorsing the Greek programme. But at the same time we know that the implementation of the programme is not easy. It is difficult. This deserves support."

However, Mr Almunia acknowledged that tackling the debt was difficult politically and complex technically.

He said that EU officials would monitor carefully the efforts of the Greek programme and would demand extra action if it was not on track to meet the deficit goals.

EU economic ministers will next meet on 16 February. Provided they accept the commission's recommendations, new deadlines will be set for Greece to review progress with officials.

It will have to submit a first report on 16 March, with a second deadline on 16 May.

Nigel Cassidy, the BBC's Europe business reporter, said the reliability of Greece's budgetary statistics was a long-standing issue.

"This was the problem before. Everybody here in Brussels knew Greece was not being very honest with its economic figures but nobody did anything about it," he said.





Fear of contagion

Greece is struggling with its worst economic crisis since joining the euro in 2001.

It has one of the smaller economies in the European Union, but it is being watched closely because of the doubts financial markets have in it.

 
The stability of the euro may be determined by events on the streets of Athens

Its long-term deficit cutting plan aims to reduce the budget shortfall, currently 12.7%, to less than 3% by 2012, but many people in Brussels and beyond remain sceptical.

There are other bigger economies in the eurozone that face the same deficit problems and the fear of contagion is high.

Prime Minister George Papandreou has urged the public to support his programme of tough austerity measures, which includes increases on fuel duty and a public sector pay freeze.

However, public sector workers are planning a strike next week.

'No way out'

Mario Levis, Professor of Finance at Cass Business School, said it was going to be very challenging for the government to achieve its targets.

"To bring the deficit down in the next three years is extremely difficult. Increasing taxes is not enough. They have to increase productivity," he said.

And he added that more may need to be done to get the public on board.

"I think Greeks will appreciate, if it's fully explained to them, the severity of the situation. There's no way out.

"But the prime minister has said there's widespread tax evasion in the public sector... [and] there are not enough measures being announced yet to cut down on tax evasion."

Assuming that Greece can't cut its deficit; what does that actually mean for the Euro?

[Viking]

How does California compare to Greece?

[alfred russel]

You know you've screwed up your finances when you are being called in front of a commission that includes Italians.

[alfred russel]

How does California compare to Greece?

Believe it or not, California isn't that bad off--at least by this sort of analysis. It would be in the bottom half, but toward the middle, of US states. The problem is that California has a constitution that requires a supermajority to raise taxes--which the minority republicans are steadfast against and can effectively veto--a democratic majority that is politically unable to deeply cut spending, and a constitutional requirement to balance its budget.

[Savonarola]

Solidarity!

Greeks strike amid debt crisis 


European countries are pressuring Greece to step up its efforts to reduce its national debt [Reuters]

Greece has been hit by a fresh wave of strikes as European Union ministers put pressure on the debt-ridden nation to toughen its deficit-reduction plan.

Customs officials and finance ministry employees began a walkout on Tuesday to protest against measures taken by the government in an attempt to pull the country out of its economic crisis.

"The government measures will further cut our salaries, we have already lost 10 per cent of our income in the past two years due to wages freezes," Apostolos Papantonis, treasurer at Greece's customs employees federation, said.

Last week, civil servants walked off the job for 24 hours in protest against the government's plans to freeze wages, gather more taxes and overhaul the pensions system.

Tuesday's action came as European finance ministers meeting in Brussels warned Greece that it would have to prepare tougher budget cuts if its current programme fails to reduce the national deficit from 12.7 per cent to 8.7 per cent this year.

'Not enough'

Anders Borg, Sweden's finance minister, described the situation as "urgent".

"What we have seen so far is not enough. We need more steps when it comes to taxes and ... expenditure, if they [Greece] want to build credibility in the market," he said.


EU countries that use the euro currency have pledged to help Greece if it cannot repay its debts, but want Athens to make big spending cuts first.

There are fears that a Greek default could spark a wider European debt crisis and threaten other governments' ability to borrow money.

Jean-Claude Juncker, Luxembourg's finance minister, said if it is shown that Greece is not on course to meet it deficit-reduction targets then the eurozone would vote on whether tougher action was needed.

But the measures already announced by the Greek government, including higher taxes, increases to the average retirement age and a freeze in public salaries, have already been met with opposition from the public.

Tim Friend, Al Jazeera's correspondent in Brussels, the Belgian capital, said it would be important for EU ministers and Greece to strike a balance over the measures.

"The social dimension of this on the ground in Greece is enormous.

"The EU is very conscious of this and they obviously have to strike a balance between making sure the Greek economy gets back on track, but at the same time not alienating the public to such an extent that the government ... finds itself in the midst of an even deeper political crisis.

"But it's going to be very, very tricky because they're not just talking about reducing this huge deficit ... they're also talking about big structural changes to the whole of the Greek economy," he said.

A series of further strikes are already being planned, with the country's two largest umbrella unions declaring a general strike for next Wednesday, and fuel lorry drivers threatening to strike this week.

Tuesday's strike by customs officials, which will affect imports and exports, could also lead to container pile-ups at ports and border crossings and affect petrol distribution across the country.

[HisMajestyBOB]

So if they go into receivership does the country go back to Turkey? 

Why do you hate Turkey so much? 

[Savonarola]

So if they go into receivership does the country go back to Turkey? 

Why do you hate Turkey so much? 

I've borne them a grudge since the White Witch tried to turn my brother against me with promises of Turkish Delight.

[Tamas]

Overgrown numbers of state employees ruining a country? Say it isn't so!

Where is all the "capitalism is a dead-end" talk now, ha?

Fucking socialists

[Hansmeister]

How does California compare to Greece?

Believe it or not, California isn't that bad off--at least by this sort of analysis. It would be in the bottom half, but toward the middle, of US states. The problem is that California has a constitution that requires a supermajority to raise taxes--which the minority republicans are steadfast against and can effectively veto--a democratic majority that is politically unable to deeply cut spending, and a constitutional requirement to balance its budget.

Rubbish, California already has one of the highest tax rates in the country, so that is complete nonsense.  If California had simply kept spending at inflation plus population growth over the last decade they would have a large surplus.  The problem is that the State exists for the benefit of the state employees, not the people.  Lavish pay increases combined with huge defined benefit increases make the gov't too expensive to afford.  We now live in a two-class society, those in gov't get everything: absolute job security, extremely high salaries, and humongeous benefits.  The rest of society gets to pay for the luxury of the few through taxes.  this is a relative new development over the last decade but will end with a lot of strife.

I still have a hard time believe just how lavish my pay and benefits are compared to much of the private sector, and I'm not even an officer.  My pay, once adjusted for differences in taxation for the military, is about $82,000 - and that doesn't include the value of all my benefits from pensions to health care and VA home loan benefit (or my $300 dollar a month day care subsidy).  I'm probably making more than your average MBA graduate.

[Barrister]

Rubbish, California already has one of the highest tax rates in the country, so that is complete nonsense.  If California had simply kept spending at inflation plus population growth over the last decade they would have a large surplus.  The problem is that the State exists for the benefit of the state employees, not the people.  Lavish pay increases combined with huge defined benefit increases make the gov't too expensive to afford.  We now live in a two-class society, those in gov't get everything: absolute job security, extremely high salaries, and humongeous benefits.  The rest of society gets to pay for the luxury of the few through taxes. 

[Monoriu]

The Greeks are striking because of a pay freeze when their country is on the brink of bankrupcy?  My pay was cut 4 times in the past 7 years, and my government's coffers are overflowing, with hundreds of billions in cash and US bonds and stocks. 

[Agelastus]

The Greeks are striking because of a pay freeze when their country is on the brink of bankrupcy?  My pay was cut 4 times in the past 7 years, and my government's coffers are overflowing, with hundreds of billions in cash and US bonds and stocks.

Monoriu, they are Greeks.

Your people invented "work ethic"; they invented "nude statue". Why are you surprised?

[Maximus]

Besides EU troops are unlikely to massacre the strikers and charge their families for the bullets. At least not yet.

[Razgovory]

Looks like someone bombed the JP Morgan offices in Greece today.

[Admiral Yi]

Looks like someone bombed the JP Morgan offices in Greece today.

  It would be kind of cool if Greece went in to full blown public employee revolt.