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Historic decisions for Greece and the Eurozone

Following a marathon negotiating session of European Council on the 26th of October in Brussels, Heads of State and Government of the Eurozone member states agreed on a comprehensive set of measures which reflect their unwavering determinationto overcome together the current difficulties and to take all the necessary steps towards a deeper economic union commensurate with their monetary union.
In particular on Greece, there was an agreement that should secure the decline of the Greek debt to GDP ratio with an objective of reaching 120% by 2020. It also includes a voluntary contribution by private creditors, amounting to a nominal discount of 50% on notional Greek debt. Additionally, a new EU-IMF multiannual programme financing up to € 100 billion will be put in place by the end of the year, accompanied by a strengthening of the mechanisms for the monitoring of reforms implementation.
“The debt is absolutely sustainable now,” Papandreou told a press conference, earlier today, after the meeting of euro zone leaders.
“Greece can now settle its accounts with the past, once and for all. […] We can claim that a new day has come for Greece, and not only for Greece but also for Europe,” the premier added.
Primeminister.gr: Papandreou press conference after the euro summit (in Greek); European Council President: Remarks by Herman Van Rompuy following the meeting of the Euro Summit & Statement by President Barroso
(GREEK NEWS AGENDA)

Greek Exports Rise to Over 10% of GDP

Exports account for more than 10% of Greece’s Gross Domestic Product (GDP), or more than €20 billion on an annual basis, recording a 13% growth rate, according to the Panhellenic Exporters Association.
In a report over export trends in the January-August period, the Association estimates that Greek exports grew by 11% (€18 billion) last year, while the Organisation for Economic Cο-Operation and Development (OECD) has revised upwards its projections for a 9.4% growth rate, from an initial 6%.
Presenting the report, the Association Chairwoman Christina Sakellaridi said the figures “confirm the importance of exporting business activity in the effort towards the recovery of the Greek economy.”

 Greek exports -excluding oil products- surpassed €20.5 billion in the September 2010-August 2011 period, an increase by 13.3% compared to the previous 12-month period. The August export figures represent a 32% rise in fuels and oil products, a 42.5% increase in confidential products, a 15% rise in machinery/transport, a 13% increase in industrial products.
(GREEK NEWS AGENDA)

Hellas:from Tourism to World Heritage

» “Kalimera”…It’s a Way of Life

“Kalimera”…the Greek word for ‘good morning’ is the new slogan for the advertising campaign of the Greek National Tourism Organization and Ministry of Culture and Tourism.

The 2010 campaign was unveiled by the Deputy Minister of Tourism Angela Gerekou on March 8, and is based on a redesigned pattern of previous campaigns with the addition of the well-known greeting in the Greek language.
The campaign will be available through the renewed portal of Hellenic Tourism Organisation at the web address www.visitgreece.gr.
Kathimerini Daily: ‘Kalimera’ is the country’s new tourism motto    

» A Popular Tourist Destination

Greece is the fourth most popular tourist destination in the European Union for 2010, according to a new Eurobarometer survey on “The attitudes of Europeans towards tourism.”
The EU Eurobarometer poll unveiled on March 8 shows that tourism is one of Europe’s most important service industries, accounting for 5% of Europe’s GDP and 6% of employment. Greece is the fourth most attractive tourist destination, after Spain, Italy, and France. 
European Commission: Tourism-Upbeat Prospects for 2010 Season  

» “Med Diet” to Be Recognised by UNESCO 

The town of Koroni in Messinia Prefecture will represent Greece in an initiative put forth by four Mediterranean countries to have the “Mediterranean Diet” recognised by UNESCO as a cultural heritage of humanity. 
Koroni from Greece, Cilento from Italy, Soria from Spain and Chefchaouen from Morocco will join forces to ask the UN Educational, Scientific and Cultural Organisation (UNESCO) to include the diet to its World Heritage List.
(GREEK NEWS AGENDA)

Government announced austerity plan

» PM: “Sacrifices will Bear Fruits”

The government announced yesterday an additional set of measures bound to slash the double-digit public deficit.
Speaking yesterday at a Cabinet meeting, Prime Minister Papandreou said that the emphasis is now shifting to what the European Union will do. 
The new measures aim at bringing into public coffers some €4.8 billion, amount which corresponds to 2% of the country’s GDP.  

» Pay Cuts

In particular, the new measures include a 30% pay cut of public sector’s supplements allocated annually, and a 12% across the board cut of public servants’ benefits. Moreover, subsidies to public entities and their social security funds will be reduced by 10%.
Any additional remuneration in the public sector will be trimmed by 50%, and compensation for overtime work will shrink by 30%.

Executive bonuses in the public sector will be abolished and the Public Investment Budget will be curtailed by 5% (€500 million). As of 2011, the ratio for public sector hirings will be one for every five retirees.

» Taxation

VAT is expected to rise at all cases by an average 1% to 2% and an extra levy on fuel, cigarettes, liqueur and luxury products will be imposed.
A one-off tax of 1% on personal incomes above €100.000 will also be introduced, together with a 15% rise in taxation of offshore companies’ real estate property.
Kathimerini daily: Further Cuts and Tax Hikes Announced
(GREEK NEWS AGENDA)

EU backs up Greece

(GREEK NEWS AGENDA) The European Union yesterday, in a joint statement by the Heads of State or Government, agreed to take determined and coordinated action to safeguard financial stability in the euro area, and expressed full support for the efforts of the Greek government and their commitment to do whatever is necessary to get the country’s public finances in order.
European commission chief Jose Manuel Barroso said that the statement was intended to end speculation that Greece would require a bailout package, while adding that “the Greek government believe they do not need financial support.”
Addressing a press conference at the end of the informal summit in Brussels and referring to this agreement to assist Greece, Prime Minister George Papandreou said:

“our partners assessed and ascertained our will to change, we convinced them, following our great efforts, and it is necessary for us to continue. We will succeed.”
Greece is aiming to reduce its deficit by 4 % of GDP this year, largely through cuts in public spending and an increase in taxes. However, Papandreou said that he would not hesitate to adopt more measures if it becomes necessary.
Council of the European Union: Agreement to support Greece; Kathimerini daily: EU offers help but no specific money pledge

PM Papandreou meeting with French President Sarkozy

(GREEK NEWS AGENDA) Prime Minister George Papandreou flew to France yesterday, for talks with French President Nicolas Sarkozy – on an array of issues, focused mostly on economic matters – ahead of today’s European Council meeting.
After his meeting with the French president, Papandreou stated that the Greek government is committed to taking all necessary measures to fix Greece’s public finances.
 “We are ready to take any measures in order to cut public deficit to 8.7% of GDP in 2010 from 12.7% in 2009 and to meet the commitments the government has undertaken in its Stability and Growth Programme.”
Besides the pressing deficit and credit crisis burdening Greece, Papandreou said issues dealing with the Balkans, the Cyprus problem, climate change and even Europe’s position on the international stage were discussed.
Kathimerini daily: Premier talks tough but EU may offer help; Youtube.com: Greek prime minister in France for debt talks

Eurozone Focuses on Greece

(GREEK NEWS AGENDA) Greece has failed to take the necessary measures to cut its fiscal deficit, according to the directions offered last spring by the EU Council, the European Commission (EC) announced on Wednesday, before recommending that the country be placed under excessive deficit procedure of Article 104(8) of the Treaty of Maastricht.

Responding to this, Finance Minister George Papaconstantinou said that the government is determined to restore the credibility of its macro-economic statistics and reduce its large fiscal deficit.In its autumn forecasts, released last week, the EC sees Greece’s budget deficit remaining above 12% of GDP through 2011 – at 12.2% in 2010 and 12.8% in 2011. “We do not share the EC’s projections that see the deficit over 12% in the coming years. This projection was made without taking into account the change in policy,” said Papaconstantinou, who believes he can lower the budget deficit to below 10% next year. “We are changing policy and this will be reflected in the next budgets,” he said.
Kathimerini daily:Eurozone concerned about Greece

Greece in ECOFIN: Adding Numbers Up

(GREEK NEWS AGENDA)   Minister of Finance George Papaconstantinou participated at the European Council Economic and Financial Affairs meeting in Luxemburg (October 19-20).  The minister acknowledged that the budget deficit for 2009 will creep up to 12.5% of GDP, a figure which has been also confirmed by the Bank of Greece.  One third of this significant increase can be attributed to the economic crisis – GDP contracted by 1.5%, investment dropped by 20%, tourism by 15% and shipping revenue by 20%.  The rest can be equally attributed to expenditure excesses, as well as the revision of the way by which the deficit is measured.  Papaconstantinou is ready to negotiate a three-year extension for deficit curbing with the possibility of a further one-year extension.  “The first step is to decrease the deficit to a single digit figure” for 2010, said the minister. The government has pledged to present the Commission with a revised three-year Stability and Growth Programme (2008-2011).Thirteen out of sixteen countries of the eurozone will be put under EU deficit supervision. The European Commission estimates that public finances for all eurozone members will begin to recover by 2011 at the latest.  European Commission: Driving the European Recovery 

Bank of Greece: Long-Term Reform Plan

(GREEK NEWS AGENDA)  Fiscal restructuring and the “need to apply long-term policy measures that would cure chronic imbalances and structural weaknesses” of the economy should be top priority for Greece, Bank of Greece (BoG) Governor George Provopoulos said on Monday (16.2). Presenting the central bank’s report on monetary policy, Provopoulos said that economic growth will slow to 0.5% this year, inflation will fall to 1.8% or lower, while the current accounts deficit is projected to fall below the 14.5% of GDP it reached in 2008 and to start climbing again along with the economy’s recovery. The central banker stressed that Greece’s fiscal deficit must fall below 3% of GDP this year with the aim of falling to zero by 2012.

The Prospects of the Greek Economy

(GREEK NEWS AGENDA)     Addressing institutional investors in London (February 10-11), Economy and Finance Minister Yiannis Papathanassiou presented the prospects of the Greek economy. Papathanassiou stressed that the government’s economic policy remains absolutely focused on controlling and further reducing the fiscal deficit and repeated that the state projection of the 1,1% growth rate is realistic and therefore the deficit can be reduced to below 3% by 2011. From 7.5% of the GDP since 2004, the fiscal deficit has this year dropped to 3.7%. Concerning other fiscal indices, Papathanassiou said that expenditure will be contained and the aim is to save €500 million for 2009. Overall, 35% of the amount needed to consolidate and pay for the country’s needs for 2009 has by now been easily secured. Referring to the increased spreads detected in state bond market, Papathanassiou pointed out that Greece managed to overcome the adverse climate. He further commented that the burden of  spreads derived to some extent from an ambience created by unjustified rumours concerning the viability of the euro currency, the Greek economy’s course, or Greece’s and other countries’ future in the eurozone. Ministry of Economy and Finance: Speech of the Minister of Economy And Finance on the prospects of Greek economy & Update of the Hellenic Stability and Growth Programme 2008-2011 (January 2009) ; Greek News Agenda: Ecofin Discusses European Economies; Bloomberg: Greek Minister Says Bond Spreads Not Justified as Debt Shrinks

Greece’s Economy Surpasses Eurozone Peers

(GREEK NEWS AGENDA)   Greece’s economic growth slowed to 3.1% year-on-year in the third quarter, showing it was braving the global slowdown better than most of its euro zone peers thanks to continuing domestic consumption, data showed on Friday. While the euro zone slipped into recession, Greece’s economy grew by 0.5% quarter-on-quarter according to available data. Eurostat said the Greek economy grew by 3.1% in the third quarter, in a report published on Friday. GDP growth in the Eurozone was 0.7%, while in the EU-27 growth was 0.8% and in the US GDP growth was 0.8%. Slovakia (7.1%), Czech Republic (4.7%) and Cyprus (3.5%) recorded the highest growth rates, while Latvia (-4.2%), Estonia (-3.3%) and Italy (-0.9%) recorded negative growth rates. Economic growth in Greece was up 0.5% in the third quarter, compared with the second quarter, while in the Eurozone and the EU-27 growth rates fell by 0.2%, respectively. Meanwhile, the National Statistics Service (NSS) reported that economic activity in the July-September period was characterised by a decline in investments and mainly by a drop in building activity. Consumer spending growth also eased, while imports also fell.   The NSS said the Gross Domestic Product (GDP) grew by 3.1% in the third quarter compared with the same period last year, after a 3.6% growth rate in the second quarter and a 3.2% growth rate in the first quarter of the year. Eurostat News Release – Euroindicators: Euro area and EU 27 down by 0.2% (14.11.2008)  Forbes: Greece growth slows but outpaces most euro zone peers (14.11.2008); Athens News Agency: Greek economy grew by 3.1 pct; Secretariat General of Information: World Media on Greece – Politics, Business and Current Affairs: Greek economy grows by 3.1% in third quarter  Ministry of Economy and Finance: Economic Data and Reports

Bank of Greece Annual Report

(GREEK NEWS AGENDA)  Bank of Greece Governor Nicholas Garganas, in his annual report of the economy released yesterday, forecasts continuous growth of the economy at higher rates than the rest of the eurozone, albeit at a slower pace. The country’s 2008 GDP growth forecast is revised downwards at 3.5% from a previous estimate of 3.7% in February. The slow down, as well as the inflation rate expected to rise to 4% this year from 3.4% previously, are inevitable and are due primarily to higher oil prices. The report also attributes these trends to higher pay rises and the presence of cartels in many markets. The Governor said the Central Bank favours mergers and acquisitions in the banking sector and called on banks to improve the quality of their portfolios, and on households to make careful appraisal of their ability to repay loans before borrowing. Garganas also welcomed the recent reform of the social security system.  Continue reading