Greek leader asks Germany for 'more room to breathe'

Samaras merkel
BERLIN -- Greek Prime Minister Antonis Samaras met with German Chancellor Angela Merkel on Friday in an effort to win two more years to meet his country's budget-deficit targets, but Merkel insisted that Athens stick to its stated commitments.

Facing a restless electorate that is hardening its opinions toward Greece, Merkel said Germany was prepared to help Athens remain in the 17-nation Eurozone. But she added that any renegotiation of Greece's bailout terms should wait until next month, when the so-called troika composed of the European Commission, European Central Bank and the International Monetary Fund is set to issue a progress report on Greece's economic and financial reforms.

In advance of his visit to Berlin, Samaras went on the offensive in the German media, saying in interviews that Greece simply needed "more room to breathe." In order to qualify for its next round of international aid, Greece must make about $14 billion in cuts by 2014. The center-right Samaras, who heads a shaky coalition government that was elected in June, said his country needs until 2016 because of its steep economic downturn.

But patience in Germany is wearing thin with Greece's continual failure to meet deadlines. After Friday's meeting with Samaras, Merkel reiterated her stance that "Greece is a part of the Eurozone, and I would like Greece to remain part of the Eurozone." But facing tough elections next year for a third term in office, she added that she "made clear in the talks that we of course expect from Greece that the commitments that were made be implemented, that deeds follow words."

Many in Merkel's center-right coalition haven't ruled out the possibility of a Greek exit from the euro. Even her finance minister, Wolfgang Schaueble, who has said he also does not want Greece to leave the euro, is setting up a working group to consider the possibility, the Financial Times Deutschland reported.

On Saturday, Samaras flies to Paris where he is likely to hear a similar message from President Francois Hollande. Merkel and Hollande met in Berlin on Thursday over a private dinner and afterward presented a unified front on the euro crisis and Greece's need to fulfill its pledges.

ALSO:

Iran's isolation lifts for gathering of anachronistic alliance

German lawmakers work on legislation to protect circumcision 

Norway mass killer Anders Behring Breivik is found guilty, declared sane

-- Renuka Rayasam

Photo: Greek Prime Minister Antonis Samaras and German Chancellor Angela Merkel at a news conferece in Berlin on Friday. Credit: Stephanie Pilick / EPA


Greek leader pleads for more time to implement reforms

Greek Prime Minister Antonis Samaras launched a high-gear diplomatic offensive aimed at buying his country more time to implement reforms demanded by increasingly impatient European creditors
ATHENS -- With the Greek economy seizing up and the specter of sovereign default still looming, Prime Minister Antonis Samaras on Wednesday launched a high-gear diplomatic offensive aimed at buying his country more time to implement reforms demanded by increasingly impatient European creditors.

Samaras was set to meet with Prime Minister Jean-Claude Juncker of Luxembourg, the head of the 17-nation Eurozone and the most influential European policymaker to visit Greece since an election in June put Samaras at the head of a shaky conservative-led coalition government.

Although Juncker has frequently sympathized with Athens' struggle to jump-start its sputtering economy -- just last week, he lashed out against renewed speculation that Greece might be forced out of the euro -- it remained unclear whether he would support Samaras' plea for more time to make deeper austerity cuts.

Two previous governments have failed to comply with the terms of two multibillion-dollar bailouts given Greece by its European peers and the International Monetary Fund, which have so far spared this debt-laden Mediterranean nation and the rest of the Eurozone from the potentially catastrophic effects of a Greek bankruptcy.

Officials in Athens hope Wednesday's talks will build up positive momentum for crucial meetings Samaras is scheduled to hold later this week with German Chancellor Angela Merkel and French President Francois Hollande in Berlin and Paris, respectively.

Under the latest bailout deal, Greece has to deliver at least $14 billion in added budget cuts to keep its emergency loans flowing. The loans help Athens pay state salaries and pensions, among other expenses.

But now in its fifth year of deep recession, the Greek government says it needs a bit of a breather.

"All we want is a bit of 'air to breathe' to get the economy running and to increase state income," Samaras told Germany's Bild newspaper. He added that the request did not automatically mean that Greece needed more money from its creditors.

The conservative leader, who opposed the tough terms of the first bailout while in the opposition, stitched together his ruling coalition on the basis of a pledge to temper austerity with growth-oriented policies and to win an additional two years to fulfill Greece's commitments to its international lenders. The current deadline is 2014.

But Merkel and leaders in other Northern European nations have balked at any talk of giving Greece more leeway or more money. Analysts say Samaras faces a tall order in trying to convince them otherwise.

"This will be a very hard sell for the Greek government," Megan Greene of Roubini Global Economics wrote in a recent analysis. "A relaxation of fiscal targets would require additional funding for Greece, but asking the Bundestag to approve more bailout money ... is an absolute non-starter.”

ALSO:

A walk in the park divides Israeli mayors

Novartis patent case in India seen as crucial for generic drugs

Amid drug war, Mexico homicide rate up for fourth straight year

-- Anthee Carassava

Photo: Greek Prime Minister Antonis Samaras, shown in Athens in July. Credit: Aris Messinis / AFP/Getty Images


Deepening recession heats up talk of Greece exiting Eurozone

European Central Bank President Mario Draghi

When the euro hit wallets and bank accounts on New Year’s Day a decade ago, champagne and fireworks greeted the Europeans' embarking on what was touted as an irrevocable course for prosperity and economic integration.

GlobalFocusOver the years, though, as the economies of Greece, Spain and other Eurozone nations became mired in debt, expectations of a happy commune of affluence have given way to thoughts of breaking off the laggards to save the herd. What the Economist and other journals have referred to as a kind of "Hotel California that you can never leave" now looks to some to be exactly the hellish trap evoked by the Eagles in their 1970s ballad.

Greek officials disclosed this week that their economy shrunk 6.2% from April through June and that unemployment is close to 24% and rising. The shaky coalition government, confronted by strikes and protests against earlier austerity measures, has yet to identify the last $5 billion or so in budget cuts it must make to qualify for the next tranche of bailout funds due in September.

The bad news came as little surprise to the Eurozone’s better-off members, Germany first among them, which have complained for months that Athens has repeatedly failed to demonstrate the will to pare its bloated government payroll and get serious about collecting taxes.

A delegation of the so-called troika of creditors -- the European Commission, the European Central Bank and the International Monetary Fund -- visited Athens last month and is expected to issue a critical report on the Greek balance sheet in September. That has shifted the conversation from whether Greece will exit the Eurozone to how many other common currency users might follow.

Even Greek analysts have become dubious of the country’s prospects for living up to the commitments made to get triple-digit billions in bailout funds. They have been issuing gloomy forecasts of an inevitable Greek exit -- or Grexit, as it has come to be called -- perhaps preparing the public for an eventual return to the drachma.

“The political system once more showed how counterproductive it is. Instead of designing a workable state, it tries to reproduce the one that already exists,” the Greek daily Kathimerini’s columnist Paschos Mandravelis groused Monday. In his analysis, titled “On another planet,” he accused the government of protecting well-connected allies and unproductive state jobs.

A week ago, Greek Finance Minister Yannis Stournaras said the government was still looking for about a third of the $15 billion in cuts to the 2013-14 budgets demanded by the troika in exchange for vital cash infusions. Debt inspectors are due back next month for a final review of whether Athens has gotten its finances in order, a judgment expected to be negative unless the government forces through deeply unpopular budget cuts and privatization plans in the final few weeks.

Elsewhere in the common currency club, the mood has changed from one of steadfast commitment to keeping the 17-nation Eurozone intact to mounting resignation that at least Greece will have to go.

Athens’ potential departure "has long since lost its horrors," German Economy Minister Philipp Roesler told ARD television recently. Luxembourg Prime Minister Jean-Claude Juncker, who chairs Eurozone finance ministers’ meetings, observed last week that a Greek exit would be “manageable.” On Monday, when German Chancellor Angela Merkel returned from a hiking vacation in the Italian Alps, she was confronted with even more dismissive comments by her coalition partners.

“An example must be made of Athens that the Eurozone can also show teeth,” Markus Soeder, Bavarian finance minister and member of a conservative sister party to Merkel’s Christian Democratic Union, told the Bild am Sonntag newspaper. He contended that Germany can ill afford to keep bailing out spendthrift euro members and that “further help to Greece is like pouring water into the desert.”

In the Economist cover story this week, a mock memo to Merkel on a possible Plan B advises her to consider two options to her current course of scrambling to hold the Eurozone together. One envisions Greece's departure, which alone could cost the euro area $398 billion in debt write-offs and transitional aid. The other scenario, in which Portugal, Ireland, Cyprus and Spain would also leave, could cost the rump Eurozone $1.4 trillion but halt the slow bleeding of bailouts to the struggling periphery, the respected London-based publication calculated.

Charles A. Kupchan, a professor of international affairs at Georgetown University and former European affairs director on the National Security Council under President Clinton, attributes the growing Grexit talk to an emerging consensus among economists that Athens' departure is a question of when, not if.

"Behind the scenes the European Union is making preparations for a Greek exit to contain the damage," he said of the latest assessments of the Eurozone's integrity.

Grexit would be manageable because of Greece's small economy and the fact that its finances are unlikely to ever meet Eurozone standards, Kupchan said. But he sees other departures as potentially destabilizing for the whole monetary union experiment.

"When you start talking about the Spanish or the Portuguese or the Irish leaving, that's a new ballgame," he said. "That's not a controlled exit of a member or two; it's a complete overhaul of the Eurozone."

ALSO:

Bombings in Afghanistan kill dozens of people

France's Hollande pledges order after rioting erupts

U.N. relief official arrives in Syria to assess fighting's impact

Follow Carol J. Williams at twitter.com/cjwilliamslat

Photo: Mario Draghi, president of the European Central Bank, has pledged to do whatever it takes to protect the euro common currency. But mounting debts and persistent recession in some of the peripheral countries of the Eurozone have turned the conversation to managing the departure of Greece, instead of preventing it. Credit:  Hannelore Foerster / Bloomberg


Greece rounds up thousands of immigrants in weekend sweep

Immigrantsgreece

Greek police arrested more than 1,000 immigrants and detained thousands more in a massive weekend sweep that comes as the strapped nation has increasingly soured on hosting foreigners.

The vast roundup in Athens was jarringly named Xenios Zeus -- after the Greek god known as the patron of hospitality. Police stopped and detained 6,000 immigrants, out of whom 1,600 were arrested for illegally entering Greece and sent to holding centers, according to the Associated Press. Greek media reported that similar sweeps are in the works for other cities.

Leftist political parties slammed the crackdown as an assault on human rights that had fostered fear and racism, while the extreme right Golden Dawn party accused the government of not actually sending anyone back to a home country, merely holding a “badly organized PR stunt,” Athens News reported.

Public Order and Citizens' Protection Minister Nikos Dendias defended the roundups as necessary to keep Greece from unraveling, arguing that the country faced the biggest “invasion” since the influx of the ancient Dorians thousands of years ago. Dendias had earlier claimed that "unbelievably high" numbers of immigrants were involved in crime, according to Greek news reports.

As for naming a roundup after the god of hospitality, Dendias reportedly told Greek media that the name was fitting because immigrants were living in miserable conditions, crammed into decrepit apartments after being conned by smugglers into thinking that they would be able to get jobs.

“Now they will return to their home countries. ... It's the best thing that could happen to them,” Dendias was quoted by the Kathimerini newspaper.

Continue reading »

Confidence teetering in Eurozone, economists warn

German Finance Minister Wolfgang Schaeuble and Treasury Secretary Timothy Geithner
It's been more than two decades since the Iron Curtain fell and Europeans embarked on an ambitious mission to build a powerful economic, political and social union in place of the Cold War divide. And for more than two decades, Germans have been footing most of the integration bill.

GlobalFocusCompassion fatigue set in long ago among the continent's most prosperous people, and the mounting costs of keeping the Eurozone intact a decade after the common currency was introduced have all but exhausted Germans' generosity toward their needy neighbors.

In this summer of economic discontent that is rattling financial markets worldwide, commitment to the 17-nation Eurozone has been a hard sell for German politicians whose constituents see only more expense and uncertainty with the wobbly fiscal union. Investors, too, seem to have increasing doubts about the euro's future and European Union leaders' ability to forge a viable plan for managing collective finances.

All eyes are on the European Central Bank this week following the vow of its president, Mario Draghi, to do whatever is necessary to keep Spain and Italy in the Eurozone despite skyrocketing interest costs for servicing their massive debts. The bank is constrained by European Union treaty provisions from loaning money directly to governments, and Germany has staunchly opposed proposals for funneling bank funds to needy member states through mechanisms meant to provide strictly supervised bailouts, not to bankroll loans.

The ECB “is ready to do what it takes to preserve the euro. Believe me, it will be enough,” Draghi assured investors last week, bringing about a short-lived reprieve in the interest rates demanded by lenders for 10-year bonds to finance Spanish and Italian debt.

"After Draghi's comments, expectations are quite high that the central bank will take action Thursday. But at the end of the day, the ECB cannot solve this problem," said Keith Savard, senior managing economist at the Milken Institute in Santa Monica.

The ECB can fiddle with collateral requirements and the refinance rate for some short-term relief, but what is needed to restore confidence in the euro is coordinated fiscal strategy and collective guarantees that new loans will be repaid, Savard said. It will take years, he noted, to execute the necessary legislation and treaty revisions once agreement is reached, which appears far from imminent as Germany and other Northern European euro users resist exposing their own good credit to the dodgy finances of some of their neighbors.

Uri Dadush, director of the international economics program at the Carnegie Endowment for International Peace in Washington, sees some progress -- "glacial," he said -- toward stabilizing the euro since May, when Greeks voted out the political coalition committed to the euro. Greeks managed to seat a pro-euro government in a second election in June, but they have yet to adopt the belt-tightening measures needed to get vital bailout funds due in August.

"There is urgency -- you see this in the volatility of the markets. But is catastrophe imminent? I don't think so. People know the ECB is there and, when push comes to shove, that the ECB will intervene," said Dadush.

Despite the barriers to direct lending to governments by the central bank, Dadush said it has managed to buy up at least $246 billion in government bonds at below-market interest for heavily indebted euro countries.

"Rules are there to be broken once the politicians decide this is what needs to be done," he said.

German resistance may also be broken, if the crisis escalates and threatens to further damage the market for Germany's cars, technology and other exports, said Fabian Zuleeg, chief economist at the European Policy Center in Brussels.

He is critical, though, of the German government's failure to make a strong case to its citizens about the benefits of preserving the currency union and moving forward with deeper financial integration.

"It's not a very positive way of engaging your citizens when you are scaring them into a situation where you say they don't have a choice," Zuleeg said.

All three economists interviewed Tuesday observed that Washington could help stabilize the euro if it were to buy the bonds of struggling states, demonstrating confidence in the currency that would inspire China, Japan, Brazil and other big economies to do likewise. They also agree there is virtually no chance that will happen, given the United States' own debt issues and a presidential election underway.

U.S. Treasury Secretary Timothy F. Geithner in effect confirmed Tuesday that the euro crisis would be left to the Europeans to resolve.

"This is completely within their financial ability to solve," Geithner said at a Los Angeles World Affairs Council event, although he  acknowledged that the politics of the problem may be a more difficult sell.

ALSO:

Flight from Aleppo, Syria: Bodies, shelling and chaos

Arafat's widow files lawsuit to press for probe into his death

More than 600 million people affected by latest blackout in India

-- Carol J. Williams in Los Angeles

 

Photo: German Finance Minister Wolfgang Schaeuble, left, meets Monday with U.S. Treasury Secretary Timothy Geithner at a vacation home on the North Sea island of Sylt, where they discussed the outlook for tackling the Eurozone debt crisis. During a Los Angeles visit Tuesday, Geithner made it clear that the euro woes were a matter for Europeans to resolve. Credit: Philipp Guelland / Associated Press


Greek athlete loses Olympic dream over online chatter

Voula Papachristou

A Greek triple jumper lost her spot in the Olympics on Wednesday after tweeting what she later called an "unfortunate and tasteless joke" about Africans in Greece.

Voula Papachristou had been pilloried for joking Sunday on Twitter, "With so many Africans in Greece, at least the mosquitoes of West Nile will eat home food!" The Democratic Left party called publicly for Papachristou to be ousted from the Olympic team, slamming her tweet as racist.

Papachristou also retweeted videos and postings from Golden Dawn, an extreme right party that got an unexpected boost in Greek elections this year, winning 7% of the vote. The party, whose symbol resembles a swastika, is virulently opposed to immigration and has been denounced for thuggish tactics.

As her Twitter joke drew more and more attention, the Hellenic Olympic Committee announced Wednesday that Papachristou had been "suspended after her comments that go against the values and ideals of Olympism." She had not yet arrived in London for the Games, it said.

American company Procter & Gamble said on Twitter that it was cutting off its association with Papachristou after the committee's decision. "Her comments don’t reflect the opinions of P&G," it said.

Papachristou had brushed off criticism at first before issuing an apology Wednesday. "I am very sorry and ashamed for the negative responses I triggered, since I never wanted to offend anyone, or to encroach human rights," she wrote on Facebook, apologizing to fellow athletes and her coach.

Continue reading »

Creditors arrive in Greece for crucial inspection

Antonis-samarasThis post has been updated. See the notes below for details.

ATHENS -- With doubts flaring anew over Europe's ability to  solve its deepening debt and currency crisis, Greece’s international creditors returned to Athens on Tuesday for an inspection that could determine if the near-bankrupt nation remains within the shared European currency.

Recession-ravaged Greece is being kept afloat by emergency loans from its European peers and the International Monetary Fund. Two bailout packages worth a total of about $300 billion have come with strict conditions that the country drastically overhaul the economy, sell state monopolies and slash excessive public spending, including about 150,000 jobs from the bloated state sector.

Officials from the IMF, the European Commission and the European Central Bank — together known as the troika — have warned Athens that bailout funds would be cut off if Greece's newly elected government did not deliver on lagging reforms.

“The Greek authorities are very much aware of the need to catch up the lost time and of the urgency of acute action to deal with the challenge that the country faces,” European Commission spokesman Antoine Colombani said ahead of the visit, which follows a courtesy call the troika paid just after the government was installed.

[Updated 11:35 a.m., July 24: European Commission President Jose Manuel Barroso is also due for high-level talks in Athens on Thursday, the first such visit by the European Union’s executive chief since the Greek crisis surfaced in 2009.]

On Monday, the value of companies listed on the Athens Stock Exchange plunged by about $1.8 billion as investor fears over Europe’s debt crisis intensified. Markets are losing confidence in financially ailing Spain, the fourth-largest economy in the 17-nation Eurozone, and speculation is surging that Athens will not be able to deliver on its austerity pledges.

Greece’s month-old, conservative-led coalition hopes to win over skeptical investors with pledges to jump-start the economy with a massive push in privatizations and quick closure of money-losing state organizations.

[Updated 11:35 a.m. July 24: On Tuesday, Prime Minister Antonis Samaras vowed to yank Greece out of its recession within 18 months despite increasingly gloomy forecasts predicting that the economy will wane by 7% this year alone. He also reiterated calls to seek a deal with international bailout creditors “as soon as possible” allowing more flexibility in implementing austerity moves.]

But creditors want Athens first to deliver on a promise of about $14 billion in additional budget cuts that are expected to pile more pain on crisis-plagued Greeks.

As of Monday night, pundits and politicians conceded that the government was still struggling to identify about $2.4 billion of those cutbacks.

“We have a couple of days to go,” a senior government official said on condition of anonymity because of his proximity to the talks. “The prime minister is expected to meet the lead inspectors on Friday and present them with the full plan by then."

The official declined to say whether Prime Minister Antonis Samaras would make an official request to delay implementation of the austerity cuts by two years, a key campaign pledge that helped vault him to power after elections last month.

Failure to win the inspectors’ approval could halt disbursement of about $38 billion in rescue funds to Greece, the biggest installment since the small Mediterranean nation lined up the first of two rescue packages in 2010. Greece needs the money to keep paying its bills, state pensions and salaries.

Leftist opponents accused the government of sticking to a failed program of continued austerity cuts.

“There is no point in meeting the troika,” Alexis Tsipras, leader of the hard-left Syriza Party, said. “Implementing additional austerity measures will be insane. It will lead us to bankruptcy and out of the euro.”

ALSO:

Spain's borrowing cost hits record; Greece worries grow

Legal ivory? Idea floated as elephant poaching hits new highs

Attack on NATO supply trucks in Pakistan kills driver, injures another

-- Anthee Carassava

Photo: Greeck Prime Minister Antonis Samaras speaks to his conservative party lawmakers in Athens on Tuesday. Credit: Thanassis Stavrakis / Associated Press


International inspectors arrive in Athens for economic review

Greek inspectors
ATHENS — After months of political paralysis, international debt inspectors returned to Athens on Thursday to assess how much progress — if any — cash-strapped Greece had made in grueling attempts to fix its faltering economy.

Their report card, experts say, could further test the euro, a shared currency system already battered by recurring debt crises across Europe. It is also likely to make or break Athens’ bid to soften  austerity cutbacks creditors want Greece to observe but which many Greeks, in the midst of the country’s deepest recession in modern history, deem unbearable.

The visiting inspectors from the European Commission, International Monetary Fund and European Central Bank took to their task swiftly.  Arriving 20 minutes ahead of schedule and flanked by squads of stern-faced financial experts, the inspectors plowed through press mobs in central Athens to meet with Finance Minister Yannis Stournaras, just 40 minutes after he took the oath of office.

Stournaras, a socialist-minded economist who helped usher in the euro to Greece a decade ago, agreed to take the finance post after conservative Prime Minister Antonis Samaras’ first choice, banker Vassilis Rapanos, pulled out days after his appointment, citing health reasons.

No officials statements accompanied the first round of 90-minute talks. Nor were there any indications of how long the inspectors would remain in Athens surveying state ministries, poring over the details of a fiscal reform plan that Greece has agreed to follow in return for two multibillion-dollar bailouts.

“Our overriding mission is one,” a senior government official told The Times. “We want to show our creditors that we mean business,” he said on condition of anonymity because of his role in the negotiations.

With unemployment rising and a five-year recession depressing the economy by an additional 7% this year alone — that’s 2.5 percentage points off creditors’ forecasts for 2012 — crisis-hit Greeks recently voted in favor of austerity, fearful that their country could otherwise be jettisoned from the euro.

Despite the vote, international investors and analysts have mounted increasing warnings in recent weeks that Greece’s prolonged political instability is endangering the country’s fiscal adjustment program.

Bailout targets, they say, have been missed. Budget shortfalls have widened. And Germany, Europe’s paymaster, has struck down any talk of loosening the austerity package. 

With a government finally in place (Samaras himself returned to office Thursday after urgent eye surgery that kept him away from his office for two weeks and forced him to miss a crucial European summit late last month), Athens will seek to roll back low-income wage and pension cuts, and delay some $14.4 billion in agreed spending cuts by two years, to 2016.

In exchange, the new administration is set to pick up the pace of privatizations, persuading crisis-battered Greeks to get rid of prized public monopolies, shed surplus state agencies and accept a rash of unparalleled structural reforms. Without proof of such prior action, creditors could leave Greece without its next slice of $38 billion in bailout funds.

Senior government officials said Samaras was due to detail the government’s economic recovery plan in a keynote policy address in parliament on Friday. Creditors, meantime, remained cautious at best.

“[I am] not in the negotiation or in a renegotiation mood at all,” said IMF Managing Director Christine Lagarde on Tuesday.

ALSO:

British police arrest 6 terror suspects in London

Mystery disease under investigation in Cambodia

Election recount begins at more than half of Mexico polls

— Anthee Carassava

Photo: Newly appointed Greek Finance Minister Yannis Stournaras leaves the office of Greek Prime Minister Antonis Samaras after meeting with him and international debt inspectors in Athens on Thursday. Credit: Louisa Gouliamaki /AFP / GettyImages


EU summit stirs little hope of curing what ails the euro

French President Francois Hollande and German Chancellor Angela Merkel in Paris on Wednesday
Economic gurus have called on the European Union for bold and swift action at its Brussels summit to restore confidence in the euro by creating a banking union and collectively guaranteeing struggling members' wobbly debts.

GlobalFocusBut all indications from the key players in Europe's troubled integration project suggested investors and analysts should curb their enthusiasm, as little is expected to come out of the Thursday-Friday gathering of leaders deeply divided over the path forward.

German Chancellor Angela Merkel reiterated Wednesday that pooling debts and merging banking operations without centralized regulation would be “economically wrong and counterproductive.” Subjecting countries like Germany to the consequences of other euro users' spendthrift ways also raises constitutional issues, she told the German Parliament on the eve of the summit.

“Because I know the expectations and hopes that are pinned on this summit, I will repeat right at the start what cannot be said often enough,” Merkel said. “There is no quick solution and no simple solution."

Her view that bloc-wide structural changes are needed first to stabilize the euro were reflected in a blueprint  issued Tuesday by European Council President Herman Van Rompuy in which the continent's leaders laid out a vision for a "stage-based process" for economic and monetary union. It speaks of "building blocks" and "a working method" to be identified by December for integration that would be accomplished over a decade.

Continue reading »

Liberal economist tapped to spearhead Greek economy overhaul

Greek economist
ATHENS -- Greece’s creaky governmental coalition on Tuesday appointed liberal economist Ioannis Stournaras to spearhead efforts to fix the country's broken economy after its first choice, National Bank of Greece Chairman Vassilis Rapanos, begged off for health reasons following a weekend hospitalization.

Stournaras, a strong supporter of structural reforms sought by international creditors in exchange for continuing to bail out the cash-strapped nation, has been credited with helping Greece enter the Eurozone more than a decade ago.

At least three other candidates were considered before Prime Minister Antonis Samaras, who heads a broad-based left-to-right coalition, opted for what critics called a safe choice: a non-political pick.

“Stournaras is smart, he’s respectable and he embodies the country’s most formidable feat in recent history: Greece’s entry to the euro,” said Yiorgos Kirtsos, a newspaper publisher and political activist.

“Still,” Kirtsos said, “he’s politically expendable, and by picking him, Samaras and his coalition partners ultimately moved to shield their political stalwarts than unleash them to do the work that is expected of them.”

Samaras, himself recovering from urgent eye surgery he underwent over the weekend, was set to meet with his Socialist and euro-leftists alliance partners at his home later Tuesday.

It was not yet clear whether Stournaras would accompany acting Finance Minister George Zanias at the June 28-29 EU summit along with President Karolos Papoulias, who will be filling in for Samaras.

Repeated delays in getting the new government going has exasperated Greece’s European peers and International Monetary Fund creditors. This week, a critical inspection by those lenders was set back for a third time in more than three months. Greece's problems have led to fresh uncertainty over Athens’ ability to fix its faltering economy and continue to use the euro as its currency.

Continued failures could result in international lenders holding off on vital bailout funds. Without such help, finance ministry officials say, Greece would be left unable to pay its bills by the end of July.

ALSO:

Jewish families begin quiet evacuation of West Bank homes

U.N.: South Sudan failed to stop attacks that killed hundreds

Turkey, NATO assail Syria, but no retaliation for shoot-down seen

-- Anthee Carassava

Photo: Newly appointed Greek Finance Minister Ioannis Stournaras talks to reporters while leaving the Greek prime minister's residence in Athens on Tuesday. Credit: Louisa Gouliamaki  / AFP / Getty Images.


Connect

Recommended on Facebook


Advertisement

Times Global Bureaus »

Click on bureau location to view articles

In Case You Missed It...

Video

Recent Posts

Archives
 



Archives
 

In Case You Missed It...