|Tuesday, 19 June 2018|
Athens News Agency: Daily News Bulletin in English, 12-03-20
From: The Athens News Agency at <http://www.ana.gr/>Tuesday, 20 March 2012 Issue No: 4026
 Prime minister in FT interview: Return to growth rates in less than two yearsThe Greek economy will return to positive growth rates in less than two years, prime minister Lucas Papademos said in an interview with the Financial Times appearing on Sunday, adding that the country is more than halfway to economic recovery.
"I am convinced that we are more than halfway along the path to economic recovery - although the fiscal consolidation process will last longer. Positive growth rates should be achieved within less than two years down the road," the Greek premier said.
He said that "over a period of time the positive effects of the programme on economic activity will gradually become visible", noting, though, that "in the short term we are still experiencing negative side effects: the continuing recession and the rising unemployment to very high levels. However," if the programme is complemented with some additional policy measures, it should be sufficient - if implemented effectively - to break what you call a downward spiral and to start a virtuous circle of structural reform, increasing activity and faster fiscal consolidation," Papademos said.
He noted, however, that "it's important to highlight what the first programme has achieved so far because reality is much better than the image".
"First, with regard to fiscal consolidation, in two years the primary budget deficit was reduced by 8 percentage points of GDP. This is the largest average annual fiscal consolidation that has taken place not only in the EU but among OECD countries. Second, with regard to competitiveness gains, in two years 2010 and 2011 - and before the far-reaching labour market reforms that we are introducing now in the context of the second programme - the country gained competitiveness equal to about a half of the competitiveness lost vis-a-vis euro area partners in the nine years before. Third, according to the latest OECD Going for Growth report, Greece is listed as number one in terms of overall responsiveness to reforms," the premier explained.
He added that a negative aspect of the programme was its short-term economic side-effects: "The weakening of economic activity and the increase in unemployment were greater than initially expected. I think this happened for three reasons. First, there have been implementation gaps, particularly with regard to the growth-enhancing reforms. Second, the external environment turned out worse than initially expected. Third, a major factor has been the reduced confidence and the increased uncertainty over the past year-and-a-half. That has not only affected consumption demand and investment activity, but it also had a major bearing on the banking system, because it encouraged outflows of deposits, therefore compounding the shortage of liquidity that the banking system faced."
Papademos was optimistic, however, that if confidence is restored "we can move into a virtuous circle".
"I'm not saying this will happen in the next few months, but provided the policies are implemented fully then there is good reason to believe the economy will start gradually recovering in the second half of next year (2013)," the Greek premier opined.
He said that what has been accomplished recently - adoption of a new economic programme for 2012 to 2014, approval of a second financial package and the restructuring of public debt - "should play an important role in gradually reducing uncertainty and boosting confidence among the Greek people and in the markets".
"The key element to restoring confidence will be to implement the new programme in a timely and effective manner. At the same time, it would be helpful to address the short-term negative side effects of the adjustment programme by complementing it with policy measures that can help support economic activity and employment over the short and medium term," he said, noting that implementation of such growth-enhancing reforms and their effect on the economy take time.
Asked if a further restructuring of the Greek debt might be needed at some point, the premier was firm that "the full and effective implementation of the new economic programme should eliminate such a possibility".
"We will do whatever is needed to ensure that this was the last restructuring of Greek sovereign debt," Papademos said.
 Cabinet meeting focuses on Development ministry omnibus billThe Development ministry's omnibus bill on facilitating the business environment and providing incentives to boost growth were the focus of the cabinet meeting on Monday.
The bill, expected to be tabled in Parliament on Tuesday evening, will also have clauses included concerning the Finance ministry's jurisdiction regarding the activation of predictions of the new memorandum, as well as of the Justice ministry regarding the way a personal company will be created and function.
Another bill of the Infrastructures ministry that will include clauses on the deregulation of the taxi profession, the arrangement of issues for the so-called Digital Dividend, telecommunications issues and clauses regarding the issues of various ministries will be presented for ratification at a new cabinet meeting on Wednesday.
 'We succeeded in giving country a window of opportunity', Venizelos tells cabinet meetingNewly-elected PASOK party president and outgoing government vice president and Finance Minister Evangelos Venizelos, addressing the cabinet meeting on Monday, in which he participated for the last time under the present government, said that "what is most important is that we succeeded in giving an opportunity, a window of opportunity to the country" and added that "the crisis is not over, the crisis is present, but the prospect is appearing now."
Venizelos thanked "personally" Prime Minister Lucas Papademos "for the trust, for the cooperation, for the struggles we waged together and for the common experiences we have obtained."
He further said that the four months of cooperation in the framework of the government under Papademos have shaped a strong personal relation of mutual trust and respect: "We fought, we struggled, we negotiated very hard and in the name of the government and the Hellenic Republic we achieved what all are aware of, the reduction of the public debt by 105 billion euros, by 50 percentage points of GDP," he said.
 Venizelos to be replaced on Tuesday, following election as PASOK leaderGovernment Vice-president and Finance Minister Evangelos Venizelos will be replaced as a member of the government on Tuesday, sources said after his meetings with Prime Minister Lucas Papademos and President of the Republic Karolos Papoulias on Monday.
Following his formal election as PASOK party leader during an internal election by the party base on Sunday, in which he was the only candidate, Venizelos was originally expected to resign from his ministerial post during his meeting with Papademos on Monday.
During this meeting, he pledged to fully support the government to the best of his ability and underlined that the fight to save the economy had been crowned with success.
Papademos congratulated him on his election as PASOK's president and said he looked forward to their close cooperation in Venizelos' new capacity.
PASOK's new leader had met Papoulias earlier in the day and afterward stressed that he is prepared to do anything demanded of him by "national duty" in his new position, in order to make citizens feel secure.
He also chaired his last meeting at the finance ministry, during which he issued final instructions that ministry officials must not relax "the effort to protect the prospects and income of the jobless and those on low pensions, because citizens want the sacrifices fairly distributed".
Venizelos underlined that the targets he had set were achievable and expressed his thanks to all those that supported him during Sunday's election process.
"The country needs strong political leadership, that is realistic, progressive, sensitive and decisive and the citizens know how to choose the faces and a strong leadership team," he added.
 Venizelos received by president after election to PASOK helmOutgoing Finance Minister Evangelos Venizelos, who became PASOK party's leader on Sunday in an internal election in which he ran unopposed, on Monday met with Greek President Karolos Papoulias.
In exiting the presidential mansion, Venizelos, who also served as a government vice-president in the current interim Papademos government, said he will do his utmost for the national good and for "citizens to again feel secure."
He also noted that the "centre-left", in colouring his party's affiliation, retains a "central role in political developments" in the recession-plagued country.
"The country needs a strong political direction; realistic, progressive, sensitive and decisive," he said.
Venizelos replaces George Papandreou as the party leader, five months after the latter resigned as prime minister amid the worst economic meltdown in recent memory.
 PM praises Venizelos in wake of latter's resignation as FinMinPrime Minister Lucas Papademos on Monday congratulated newly elected PASOK party president Evangelos Venizelos for the "sincere cooperation" they enjoyed, as he said, in statements opening a Cabinet's session.
The prime minister announced that Venizelos submitted his resignation from the post of vice president and finance minister and praised the work he performed with success, as he said, under difficult conditions.
"We had valuable cooperation in the implementation of economic policy and excellent cooperation ... The Greek economy is moving on a more stable ground and is entering a new phase of positive prospects," he said.
The prime minister further cited "difficult decisions with painful consequences for a large part of society; essentially, however, for the country's stability and position in the eurozone."
On his part Venizelos, in his last participation in the Papademos Cabinet, thanked Papademos for his praise and said: "We negotiated under difficult conditions and we must not reduce our efforts to achieve the targets that we have set."
 Papandreou hands over PASOK leadership to VenizelosOutgoing PASOK president George Papandreou on Monday officially handed over the reins to the party to his successor Evangelos Venizelos. The handover followed an internal election involving 'grass roots' PASOK supporters held on Sunday, with Venizelos as the only and uncontested candidate.
According to a party announcement, a total of 236,151 'members and friends' of PASOK cast a vote in the party election on Sunday and 97.44 percent of the votes cast were for Venizelos. There were also a total of 1,384 spoilt votes and 4,662 blank votes. The election was open to anyone, whether they were Greeks or foreigners, provided they paid 2.00 euro and displayed some form of identification.
"It is a new start for both of us. I wish Vangelis Venizelos every success," Papandreou said at PASOK's headquarters on Ippokratous Street as he handed over to Venizelos. He also pledged his support as an ordinary citizen and member of the party and expressed his conviction that Venizelos' contribution as party leader would be "decisive".
According to the former premier, a good course for PASOK was the foremost of three fundamental conditions for Greece's progress, stressing that the party was a "pillar of stability".
The second condition was that people realised that changed was something that had to be brought about by each person individually, starting with themselves, while the third was the political direction of Europe, where he expressed hope that more progressive governments would arise, starting with elections in France.
Commenting on the elections held within PASOK on Sunday, he said the participation was an expression of people's need to have a voice and showed PASOK's innovativeness in establishing such processes.
Venizelos, on his party, thanked Papandreou for his contribution and "the simplicity of his messages yesterday and today and his willingness to stand at the side of PASOK's new leadership."
He noted that ordinary citizens had on Sunday given PASOK a lesson in stamina, hope and prospects through their participation in the internal elections and again expressed his gratitude to those that had supported this effort.
"We must reorganise the country and assure the citizens that the same mistakes, the same slips will not be repeated and we will never again live through the same negative experiences," he emphasised.
PASOK's new leader stressed that this was the time "when the crisis meets hope" and an opportunity that had to be grasped to refound the party, the country and Europe.
Noting that Europe was currently "monochrome, conservative and with slow reflexes," Venizelos nevertheless stressed that it was only framework in which to create progressive correlations.
He also promised to support the presidency of the Socialist International in all its initiatives as PASOK leader.
 Venizelos retains PASOK Parliamentary repsIn a letter to Parliament President Philippos Petsalnikos on Monday, PASOK's new president Evangelos Venizelos informed him that he had retained the same Parliamentary representatives as his predecessor George Papandreou, re-appointing the MPs Petros Efthymiou, Christos Protopapas and Manolis Bedeniotis in the same positions.
Meanwhile, the head of PASOK's Parliamentary group Vassilis Exarchos officially informed Petsalnikos with a letter of Venizelos' election as the new party leader.
 Ex-PM says Socialist Int'l, holding seminars in his plansFormer prime minister and ex-PASOK party leader George Papandreou on Monday greeted reporters at the party's headquarters with statements on his future plans.
Papandreou said he was considering the prospect of hosting conferences, seminars and events on democratic leadership.
He said the issue of democratic leadership and political leadership is particularly germane in the era of globalisation and the Internet.
Papandreou also said he will continue his participation in the Socialist International, a political grouping of which he is president and the sole candidate in an upcoming election.
 Samaras: Majority gov't ND's goal in upcoming electionsNew Democracy party leader Antonis Samaras on Monday reiterated that the party's target in the upcoming elections is an absolute majority, speaking during a meeting with former deputies, many of whom will be candidates again on ND's ballots.
Samaras explained that the first memorandum is different from the second, as regards the benefits it foresees for the country. ND and Samaras, personally, were opposed to the first Memorandum brought to Parliament by the then Papandreou government. However, ND officially supported the second Memorandum negotiated by the current Papademos government, although several ND MPs voted against the plan and were subsequently expelled from the party.
Samaras on Monday also stressed that conditions in 2012, which necessitated a change in his stance, are also different.
Finally, he again rejected the prospect of any post-election co-governance (with speculation mostly citing PASOK), stressing that a strong majority government is necessary for the country to be ruled effectively.
 PM Papademos to meet New Democracy party leader Samaras on TuesdayPrime Minister Lucas Papademos will be holding a meeting with New Democracy party president Antonis Samaras at the Maximos Mansion on Tuesday afternoon.
 Communist Party planning nationwide protests during vote on new loan agreementThe Communist Party of Greece (KKE) has invited its supporters to turn out for protest rallies throughout the country against the new agreement for bailout loans to Greece, which is due to be passed by Parliament on Tuesday.
Organised around the central slogan "No to the loan agreement, we will not live in chains", KKE intends to hold a central protest at Syntagma Square opposite Parliament at 6:30 p.m. that will be addressed by KKE General Secretary Aleka Papariga. Another major rally is scheduled to begin at 7:00 p.m. at the Venizelos statue in the northern Greek city of Thessaloniki.
In an announcement, KKE stressed that the planned measures "are returning the working classes and the popular masses to the Middle Ages for the profits of capital and the salvation of its operating mechanisms," condemning the people to live in poverty and their children to survive without jobs or on salaries of just 400 euro.
 LAOS leader challenges ND, PASOK counterparts to televised debatePopular Orthodox Rally (LAOS) party leader George Karatzaferis on Monday challenged the heads of the two main parties, PASOK and main opposition New Democracy, to a televised debate "in order to clear up everything that happened at the [prime minister's offices] in the crucial month of February".
Speaking on the private radio station 'Real FM', he accused the leaders of the two larger parties of trying to "muddy the waters" with the support of the EU-IMF troika.
He stressed that both ND and PASOK were in the "same, terrible position" in terms of the elections, with little to choose between them, since both parties had signed the written commitment demanded by the IMF that they would not pursue any policy other than that outlined in the Memorandum for the bailout loans to Greece for as long as they were in politics.
Karatzaferis also attacked opinion poll firms and suggested that they were manipulating the figures, noting that his party's popularity began to wane from the moment he pulled out of the coalition government.
In other statements, LAOS' leader expressed his disagreement with the seamen's strike and underlined that sea transport was a key factor in the economy's recovery.
 Tsipras meets with British MPs, unionistsCoalition of the Radical Left (SYRIZA parliamentary alliance) leader Alexis Tsipras met on Monday with a delegation of MPs and trade unionists of the Left wing of the British Labour Party, and also with representatives of the "We are all Greeks" movement.
Tsipras said alter that Europe is not only the austerity policies, nor (German chancellor Angela) Merkel, (French president Nicolas) Sarkozy and the leaderships that impose the Memorandums that bring the peoples to their knees. "Europe is also the peoples themselves, who struggle, demand, and express in every way their solidarity with the people of Greece," he said.
On his talks with the British MPs and trade unionists, Tsipras said that their campaign of solidarity with the Greek people "is balm in these hours in which we are fighting to dispute the Memorandum and these agreements that our bring society to its knees and devastating democracy, not only in Greece but in all of Europe," Tsipras said.
 Five expelled PASOK MPs to join Democratic Left partyThe accession to the Democratic Left party of five independent deputies, expelled from PASOK, is expected to be decided by the party's central committee on Tuesday, which will convene in the afternoon specifically for this purpose.
They five are Yiannis Amiridis, Yiannis Miheloyiannakis, Ilias Theodoridis, Cetin Mandaci and Giorgos Papamanolis.
The recommendation will be made by the party's president Fotis Kouvelis.
 Ex-minister says new loan contract 'danger' for countryLouka Katseli, the head of the newly established Social Accord party, on Monday said the new loan contract, which is being discussed in a relevant Parliament committee, is "dangerous" for the country, adding that it does not cover Greece's needs but only the needs of the creditors.
In parallel, invoking predictions by the Swiss UBS bank, the former minister said international markets have already made the country's default official.
 New loan contract receives majority vote in Parliament com'tA relevant Parliament committee on Monday ratified, by majority (PASOK and New Democracy MPs) the new loan contract, as debate will be completed on Tuesday with a vote by the Parliamentary plenum.
Alternate Finance Minister Filippis Sahinidis said that with the successful completion of the "most important and biggest part of the PSI, and the 30-year repayment profile of the debt, which the new bonds will have, for the first time positive prospects are being created for the country for a return to growth."
 Welfare fraud estimated at 111 million euro a year, based on census dataWelfare benefits fraud may have cost the state nearly 111 million euro in 2011 alone based on a census of benefit recipients that ended on March 16, Health Minister Andreas Loverdos said on Monday.
"There arises a saving of 111 million euro from the initial phase. During the second phase of the census, when the beneficiaries are examined by the Centre for Certifying Disability, the savings are expected to reach 230 million euro," Loverdos said in a meeting with hospital directors.
The minister noted that 36,294 of the registered beneficiaries failed to present themselves for the census - specifically, 203,998 beneficiaries presented themselves as opposed to 240,292 that received benefits. This meant that benefits spending would be reduced from 941,289,609 euro in 2011 to 830,650,500 euro in 2012, a saving of 110,639,109 euro.
Loverdos gave examples, noting that of 125,368 registered recipients of a benefit for severe disability in 2011, only 108,200 turned up for the census and the remaining 17,168 are assumed to have been receiving the benefit illegally. Similarly, nearly half of those receiving benefits for unprotected minors failed to participate in the census.
Areas where the divergence from the census data was greatest were Thessaloniki and Iraklion, Crete, while in Pieria the number of people receiving benefits for blindness that presented themselves for the census was actually smaller than the number that didn't.
The census was carried out between February 1 and March 16 this year in order to create a nationwide register of benefit recipients and a map of the frequency of disabilities by area, both to check the benefits given and to preclude cases of people drawing benefits in two different areas.
Deputy Health Minister Markos Bolaris stressed that the state will stop paying benefits to those that did not register in the census and the files on those suspected of drawing the benefits illegally will be sent to a public prosecutor for further investigation, while those that received the sums might be asked to return them. He also noted that a jump in welfare and disability benefits was recorded in 2010, in the year of local government elections.
 Deputy FM Dollis to represent government at White House March 25 anniversary ceremonyNEW YORK (AMNA - P. Panagiotou)
Deputy Foreign Minister, responsible for Overseas Hellenism issues, Dimitris Dollis will represent the government at the established annual ceremony that will be held at the White House on Thursday March 22.
During the ceremony, United States President Barack Obama will refer to the longstanding messages of the Greek Revolution of 1821 and the "common values" uniting the two countries, reiterating Greece's contribution to American democracy, as well as the contribution of the Greek American community as a "bridge" between the two countries.
After the ceremony at the White House, Dollis will attend the open reception to be hosted by ambassador Vassilis Kaskarelis at the Greek embassy in Washington to honour the March 25 national anniversary.
 Education ministry postpones plans for changes to highschool systemPlans to reform Greece's education system in the last three years of highschool, including the current system for university entrance examinations, are to be postponed and left for the government that emerges after the next elections, close aides of the new minister George Babiniotis said on Monday afternoon.
The news was leaked just hours after Babiniotis' statement that a draft bill on the proposed reforms, which was initiated two years earlier and had continued with a convergence of views between the two largest parties and a third party, was now "mature".
According to the minister's aides, however, the draft bill might be mature but there was not enough time for the current government to pass the measures since there were other priorities that had to be dealt with.
 BoG Gov: Greece opened new, more promising chapterGreece has opened a new and more promising chapter after the successful completion of PSI and the signing of a new lending agreement, but much work still needed to be done to win the war, while there was no room for complacency in order to complete all large structural reforms in the country, Parliament President Filippos Petsalnikos and Bank of Greece Gov. George Provopoulos agreed on Monday.
"The central message of the report is that after the successful completion of PSI and the signing of a lending agreement, the country opens a new chapter, more promising this time. But we must always remember that more hard work is necessary to win the war. We won, however, a significant battle. And that could give us more optimism over the work we have to do in the future," the central banker told after presenting the bank's monetary policy report to Parliament president.
"This report is very significant to us all and of course the signing of the lending contract offered a big respite," Petsalnikos said, stressing it was the sacrifices of the Greek people that led to this result.
Strict implementation of a new economic program is the most crucial parameter, which also will determine its success, the Bank of Greece said in its monetary policy report for 2011-2012. The central bank forecasts that economic recession in the country will reach 4.5 pct this year, the unemployment rate will surpass 19 pct of the workforce and the inflation rate will around 1.0 pct on average in 2012.
The Eurogroup's decision of 21 February 2012 was the latest and most important step in a series of actions taken by our European partners and the IMF to provide financial support to the Greek economy, the Bank of Greece said in its report. These actions are tangible proof of our partners' determination to avert a Greek default, in light of the continuous deterioration of the country's public debt dynamics over the past two years in a context of deep recession. The agreement of 21 February confirms this determination and, in conjunction with the successful completion of the PSI, creates a new operating framework for the Greek economy in the years ahead. Its main elements are:
? A reduced loan burden as a result of the debt write-down, the maturity lengthening and the lowering of the interest rates on the loans extended to Greece after May 2010 and on the loans to be extended now.
? Ensured financial support, since the Greek economy has no market access.
? A consistent and detailed programme of fiscal consolidation, based on expenditure reduction and the broadening of the tax base, as well as a specific timetable for privatisation and structural reforms in the public sector and in product and labour markets.
? Our European partners' concrete assurance that they stand ready to provide the Greek government with technical assistance for the effective implementation of reforms.
The programme's primary and ultimate objective, as expressly formulated in the Memorandum of Economic and Financial Policies and in the Memorandum of Understanding on Specific Economic Policy Conditionality adopted by the Greek Parliament on 12 February 2012, is economic growth, with three intermediate goals: fiscal consolidation, the restoration of competitiveness and the strengthening of the financial sector.
The goal of fiscal consolidation is to achieve a return to a primary surplus by 2013, with the primary surplus reaching 4.5 percent of GDP by 2014, so that a gradual reduction in public debt can begin, supported by privatisation. Structural reforms in the public sector will help both to reduce the fiscal deficit and to foster economic growth.
The goal of restoring competitiveness is, via a series of structural reforms, to encourage investment and export activity, ultimately contributing to employment growth.
Finally, the goal of strengthening the financial sector is expected to help support credit expansion and the provision of liquidity to the economy, thus supporting economic activity.
This policy mix is intended to bring about the start of the recovery in the course of 2013 and to put in place the conditions for sustainable growth thereafter. A high degree of certainty about the sustainability of growth is perhaps the key factor for public debt also to be deemed sustainable.
Since the first Memorandum was signed in May 2010, there has been progress, as fiscal consolidation has made significant headway and structural reforms, which addressed long-standing weaknesses, have been implemented. However, performance in both areas -although not negligible- fell short of expectations. The policies pursued failed on the whole to convince that they would ultimately succeed, due to a lack of resolve to carry the reforms through and the absence of a clear determination to press forward in areas where we had faltered in the past. It was not adequately realised that new policy choices were absolutely necessary and would have to be made even without the Memorandum. As a result, reforms were perceived as dictated by our creditors, and not as necessary choices that could no longer be postponed without inviting dire consequences. This undermined the effectiveness of the policies that had begun to be implemented and fuelled uncertainty about whether the ambitious goals that needed to be pursued would be achieved. This amplified the negative effects of fiscal consolidation on domestic demand, exacerbated the recession and intensified the unemployment problem. The recession, in turn, made the deficit and debt targets more difficult to reach, thereby undermining confidence further.
As confirmed by recently released data:
? The recession in 2011 turned out to be deeper than initially forecast, with the annual decrease in GDP reaching 6.9 percent. The cumulative drop in GDP over the four years 2008-2011 was 13.2 percent, while the drop between the fourth quarter of 2007 and the fourth quarter of 2011 amounted to 17.2 percent.
? In 2011 the number of the unemployed has exceeded one million, total employment decreased by 6.8 percent and the average unemployment rate rose to 17.7 percent.
? The state budget deficit, in spite of the adoption of continuous fiscal measures and following a number of upward target revisions on account of the recession and delays, came to 10.6 percent of GDP, i.e. to a level slightly below (by ? 76 million) the latest revised target.
" The primary deficit of the ordinary budget was ? 18 million higher than in 2010.
" Budgetary slippages created the need for additional measures and necessitated the revision of fiscal targets for 2012.
? There had been strong early indications of almost all of the above outcomes, which worsened expectations and forecasts, as well as assessments of debt sustainability; thus, the possibility of default re-emerged with intensity.
? Heightened political uncertainty, right before the formation of the coalition government, worsened the situation further; this contributed to calling into question the decisions of the 26 October 2011 Summit. The issue of Greece's exit from the euro area and a disorderly default now featured in public debate.
The formation of a new government opened up a window of opportunity and was a determining factor in negotiations leading to the agreement of 21 February 2012; this agreement brought to a halt the ruinous course towards which the country had started to slide. This outcome was the most convincing proof of how important consensus and political collaboration are in the light of the historically unprecedented challenges we are facing.
Following the agreement of 21 February 2012 and provided that the conditions of the programme are met on an ongoing basis, euro area Member States (through the European Financial Stability Facility) and the IMF will provide an additional official support of up to ? 130 billion until 2014. In addition, all Member States have agreed to an additional retroactive lowering of interest rates on the Greek Loan Facility so that the margin amounts to 150 basis points. Furthermore, the Greek authorities have reached a common understanding with private sector creditors on the general terms of their participation in the restructuring of Greek debt. This common understanding provides for a write-down of 53.5 percent on the nominal value of holdings to be paid back to creditors. The private sector's response to Greece's debt exchange offer recorded on 8 March was overwhelmingly positive and it is now assessed that the contributions from both the private and the official sectors will help bring Greece's public debt ratio down to below 117 percent of GDP in 2020 (compared with an initial target of 120.5 percent) and keep it on a sustained downward path thereafter. Even though the projected debt-to-GDP ratio remains high, what is important is that the new arrangements arrest the adverse debt dynamics, which under the present circumstances of deep recession would certainly have given rise to an extremely difficult situation.
The adoption with a strong majority of the loan agreement and the laws required for implementation by the Greek Parliament is the first positive development worthy of note. However, the success of the programme will hinge critically on its consistent implementation. Serious difficulties and problems obviously exist and need to be addressed. The bottom line, however, is that the goals are feasible and the programme can succeed.
Bringing the economy back to positive growth rates as soon as possible is the key to ultimately attaining the targets set. Recovery and creating the conditions for sustainable growth are indeed the road to a faster reduction in the debt and deficit and to an improvement in expectations. At the same time though, fiscal consolidation is a prerequisite for growth. As shown by international experience, no country with recurrent high deficits and cumulating large debt has ever achieved sustainable growth. Nor, of course, can there be growth with the threat of a default looming on the horizon. Therefore, restoring confidence in the Greek economy is also a prerequisite for growth. Insofar as the stabilisation programme proceeds smoothly and the necessary reforms are carried out, the country's growth prospects will improve. That is, both the fiscal and the structural measures of the programme must be implemented concurrently and effectively, so as to avert any negative side-effects.
A sustainable reduction in the deficit and the public debt requires attention to be given to the breakdown of consolidation into spending and revenue measures as well as their individual components. Expenditure cuts tend to be much more effective than revenue increases (tax hikes); just as it is advisable, on the expenditure side, to refrain -as much as possible- from cutting back on investment expenditure and, on the revenue side, to refrain from imposing tax measures that discourage saving or negatively impact on supply. At the same time, it is important to speed up the implementation of measures -at almost no budgetary cost- that can stimulate demand and economic activity. Such measures encompass "quick-yielding" structural reforms, such as the reduction of red tape and the administrative burden (which deter investment and obstruct exports), the opening-up of closed professions and the provision of consultancy and guidance to businesses (especially export-oriented ones), as well as other measures to strengthen public and private investment and to support the supply of credit to the private sector.
There is considerable potential at hand, which - if systematically tapped - would help accelerate the recovery. This potential includes:
? Increasing the absorption and efficient utilisation of funds available from the EU, especially for programmes directly aimed at boosting entrepreneurship and creating jobs for the unemployed. Decisions to this effect were recently announced by the Prime Minister after his meeting with the President of the European Commission on 29 February 2012. The use of funds from the National Strategic Reference Framework (NSRF), as well as the securing of funding from international organisations such as the European Investment Bank, involve the development of new financing tools; these tools could help to finance the reactivation of certain large public investment projects (e.g. motorways construction) as well as investments in the energy sector.
? The specific policy directions for growth and employment adopted by the European Council of 1-2 March 2012.
? The significant reduction in unit labour costs anticipated for 2012-13, which, in conjunction with projected price developments, leads to a major improvement in cost competitiveness, thereby contributing to an increase in exports and to import substitution. Specifically, it is estimated that by the end of 2012 the Greek economy will have regained two-thirds to three-quarters of the cumulative competitiveness loss recorded during 2001-2009, with the remaining loss likely to be regained some time in 2013. Moreover, the Report contains a projection that the current account deficit will fall from 9.8 percent of GDP in 2011 to roughly 7 percent of GDP in 2012 and should continue to decline in the following years.
? Improving the ability of banks to adequately finance the economy (after the implementation of the decision of 21 February 2012 and the recapitalisation and restructuring of banks).
? The realisation of the Helios Project for exporting solar energy to Germany and other Western European countries, which could lead to substantial investment and job creation. More generally, the faster implementation of policies for renewable energy utilisation and generation, and the exploration of possible underwater energy sources.
? Speeding up privatisation and the programme for the utilisation of public property; this would bolster both confidence and public revenue and create opportunities for foreign direct investment and the transfer of technology. The initial inflow of foreign capital as a result of privatisation could be followed by much larger second-round inflows -in total, perhaps even more than double the initial inflows- through a multiplier process arising from the additional investment needed to maximise the yield of the initial investment and potential positive externalities accruing to other businesses and sectors.
As stated in the Report, the recession is expected to continue in 2012 and -according to provisional projections- the average annual decline in GDP will be of the order of 4.5 percent, total employment will decrease by roughly 3 percent and the average annual unemployment rate will exceed 19 percent. In the course of 2013, however, it is expected that the economic recovery will begin (even though the average annual rate of change in GDP will be slightly negative, at around -0.5 percent), while both the decline in employment and the rise in the rate of unemployment may be halted. Moreover, inflation will continue to trend downwards in 2012, with average annual HICP inflation projected to reach 1 percent or lower and core inflation likely to be slightly negative (average annual level of around -0.1 percent). In 2013, under certain assumptions, HICP inflation is expected to ease further to around 0.5 percent, while core inflation will remain negative (at around -0.2 percent).
Greek banks came under increasing pressure in 2011 and in the first months of 2012. They continued to face a substantial withdrawal of deposits by businesses and households (approximately ? 35 billion in 2011) and the impairment or ineligibility of the collateral they could use for obtaining liquidity from the Eurosystem (following the downgrading, first, of the country's credit rating, and, then, their own). Support in the face of these pressures was provided not only through the monetary policy operations of the Eurosystem, but also through emergency liquidity assistance from the Bank of Greece. A positive effect on liquidity, through the creation of eligible collateral, also stemmed from the broadening of the bank bond guarantee scheme under the package for supporting liquidity in the Greek economy (Law 3965/2011).
At the same time, the deepening of the recession made it more difficult for businesses and households to service their debt obligations on time, worsening the quality of loans across all categories, particularly consumer loans. The ratio of NPLs to total loans at end-September 2011 reached 14.7 percent, up from 10.5 percent at end-December 2010, with a further rise expected for end-December 2011. Additionally, the contraction of banking operations as a result of the economic downturn led to a further decline in banks' operating profits (i.e. net interest and fee income). A limited positive effect on results came from the small -considering the magnitude of the challenges- cutback in costs. In the first nine months of 2011, operating expenses fell by 7.4 percent for banks and by 5.1 percent for banking groups, year-on-year. A further rationalisation of operating costs is imperative. 2012 is expected to be a critical year for shaping the banking system to face up to the new economic environment. Greek banks will be required to fully overhaul their business plans, so as to be able to meet the increased challenges posed by the recession, and to strengthen their capital bases considerably by the end of the third quarter of 2012.
Increased transparency (following the diagnostic exercise), together with recapitalisation and restructuring of the banking sector, are expected -especially if accompanied by a general improvement in sentiment- to lead, at first, to a stabilisation of deposits and, subsequently, to their gradual return. These measures are also a necessary condition for Greek banks to progressively regain access to the global money and capital markets. Once banks have strengthened their capital bases and improved their capacity to attract savings and obtain market funding, it is to be expected that the supply of bank credit will evolve more favourably. Generally speaking, improved economic activity and reduced fiscal risk will encourage banks to increase the supply of credit and will stimulate the private sector's demand for credit. At the same time, banks will be able to gradually reduce their reliance on Eurosystem funding for liquidity support.
 Ships docked at ports as seamen launch rolling 48-our strikesShips remained docked at ports throughout Greece on Monday morning as seamen launched rolling 40-hour strikes in all vessel categories.
The initial 48-hour strike runs through 6:00 a.m. Wednesday, by the executive committee of the Panhellenic Seamen's Federation (PNO) will convene at noon Tuesday to decide a second 48-hour strike.
Meanwhile, groups of "strike guard" seamen were patrolling the port in Piraeus, while seamen were also gathered at the Aghios Dionyssios pier.
President of the Panhellenic Union of Merchant Marine Seamen (PENEN) president Antonis Dalakogiorgos reiterated that none of the seamen's demands requiring immediate solutions had been met during a PNO meeting on Saturday with new development, competitiveness and shipping minister Anna Diamantopoulou and labour and social security minister George Koutroumanis -- after which seamen decided to go a head with their strikes as planned -- and, as for the problems that could arise to local communities as a result of the strike, he said that the solution is in the hands of the government.
The biggest reactions to the seamen's strike have been on the island of Crete, where local producers said they are livid and determined to protect their products and, according to sources, will gather on Tuesday at the Heraklion port.
According to sources, farmers have asked that one ship will set sail every two or three days so that their perishable products will not spoil.
Also taking part in the PNO mobilisations are the employees at the Seamen's Pension Fund (NAT) and the Seamen's House, who have said they will stage takeovers of the two buildings as of Monday.
Cruiseships and cargo ships transporting containers are allowed to enter the port of Piraeus only with the escort of navigation boats.
Meanwhile, National Confederation of Hellenic Commerce (ESEE) president Vassilis Korkidis on Monday called on the PNO to suspend its rolling strikes.
"Greek commerce once again appeals to the PNO, despite their just demands, to restrict the announced rolling strikes and allow ships to conduct their routes normally from Tuesday night, to and from the islands in order to transport the perishable produce," Korkidis said.
 BoG revokes licences of 3 small cooperative banksThe central Bank of Greece (BoG) on Monday revoked the licences of three small cooperative banks.
The BoG said that the operation licences of the Achaia, Lamia and Lesvos-Limnos cooperative banks have been revoked, as it considers necessary to subject these banks to the reorganisation measures provided under Law 3601/2007" given that despite repeated efforts the taking of measures to restore their sustainability has not been possible.
Under the provisions of the law, the relevant procedures for finding a caretaker for the deposits in the banks, which total 300 million euros, and their transfer to another bank.
According to the BoG, interest has already been expressed by commercial banks that have branches in those regions.
 HATTA, UK tour operators urge urgent action to promote Greek tourism abroadHATTA - the Hellenic Association of Travel and Tourist Agencies - in cooperation with three UK tour operators and travel agencies - ABTA (Travel Association), AITO (Association of Independent Tour Operators) and FTO (Federation of Tour Operators) - have sent an open letter to the Greek premier, top government ministers and members of the EC-ECB-IMF "troika", urging them to "save" the image of Greece in the UK market.
HATTA said the letter with the three UK federations underlines the seriousness of the situation and the necessity to take urgent action.
The three UK federations stressed that Greek authorities must urgently take specific actions for the release of money needed to promoe Greece in foreign markets, stressing that the country is a safe destination and has a great deal to offer to every tourist.
They also stressed that Greek officials must launch an ad campaign jointly with tour operators as well as hire a public relations company to help overturn a prevailing view that Greece is not a safe destination. The UK operators noted that unless there is an immediate response, they will be forced to cancel bookings to Greece.
 Volotea low-cost airline launches Thessaloniki-Venice direct flightsThe Spanish low-cost airline Volotea will launch direct flights between the northern Greek city of Thessaloniki and the Italian city of Venice (Marco Polo Airport) on June 2, with two weekly itineraries.
The flights will be conducted every Tuesday and Saturday, and Volotea representative Alfons Claver told a press conference in Thessaloniki on Monday that the northern Greek capital is an important destination, while what makes the airline stand out is its direct flights, competitive prices and good services.
The target of the Barcelona-based airline is to transport a total 19,800 passengers from Thessaloniki to Venice and vice-versa in a single season, and achieve airplane capacity of 80 percent.
Volotea runs a fleet of 125-seat Boeing 717s. Ticket reservations may be made through the airline's website www.volotea.com.
 1.5 million Greek urban residents 'interested' in return to farming, survey showsMore than 1.5 million Greeks living in the major urban centres of Athens and Thessaloniki have expressed an "interest" in returning to the countryside and taking up farming as a way of making a living, Deputy Agricultural Development and Foods Minister Yiannis Drivelegas said on Monday.
In statements during the signature of the first contracts for the lease of public land in Central Macedonia for use by farmers and livestock breeders, he said this was discovered in a survey conducted that the ministry that is due to be presented in the next few days.
Other officials noted that the process to lease state land for farming began 20 weeks ago and that every Thursday there would be new posts of land available for lease on the website of the agency in charge of payment, control and providing information on Community aid OPEKEPE. The same officials said they had already received 4,000 applications for leases and hoped to have leased up to 10,000 plots of agricultural land amounting to 10,000 hectares by the summer.
Drivelegas noted that the ministry currently owned more than 1.1 million hectares of land, of which roughly 0.8 million were forest and the remainder was potential farming land. The precise amount of ministry property had never been fully recorded but a recent law called for creating an OPEKEPE database that would also help in creating a land register.
As a result of the land leases signed on Monday, 14 young, unemployed people from Thessaloniki that were leased plots ranging from 3,500 square metres to 10,000 square metres are destined to start a new life as farmers, many of them having studied agricultural science. The leases are for five years and the price of the lease is set at 5.0 euro for 1000 square metres of land per year.
 Autohellas Hertz reports lower 2011 resultsAutohellas Hertz on Monday said its consolidated after tax profits totaled 13.4 million euros in 2011, from 14.4 million euros in 2010, reflecting cost-control measures and changes in the tax regime. The company said its 2010 were boosted by the sale of an affiliated company.
Consolidated turnover totaled 172.7 million euros in 2011, from 169.8 million euros in the previous year, with long-term car leasings falling steadily because of a deep economic recession in the country, although short-term lease contracts grew reflecting a record tourism year in 2011.
EBITDA totaled 77 million euros, while Autohellas Hertz said its investment program progressed smoothly and consolidated cash reserves totaled 91 million euros. The company expects a further domestic decline and a significant worsening in the used car market to negatively affect its 2012 results.
 Bussiness Briefs-- The Bank of Greece (BoG) on Monday reported lower profits in 2011 and said announced it would pay a 0.84 euros per share dividend to its shareholders.
-- The head of the Association of Greek Cooperative Banks on Monday tried to reassure the public over their deposits with the three cooperative banks whose licenses have been revoked by the Bank of Greece.
-- Greece's merchant marine fleet fell 4.1 pct in January this year, compared with the same period in 2011, after a decline of 1.6 pct recorded in January 2011, Hellenic Statistical Authority announced on Monday.
-- The Greek manufacturing sector is losing job positions more rapidly than any other sector of the economy, with job losses totaling 17.1 pct in the fourth quarter of 2011, compared with a 7.0 pct rate in the primary sector and a 6.4 pct decline in the third sector of the economy.
-- The National Bank of Greece on Monday announced a plan to cut 15 pct of the salaries of all executives, from general manager position upwards, a part of a cost-cutting plan.
 Stocks extend rally for fifth dayStocks continued moving higher for the fifth consecutive session at the Athens Stock Exchange on Monday, with buying activity focusing on bank shares ahead of a recapitalization process of Greek banks amid expectations that some banks might be able to raise the necessary new capital on their own.
The composite index of the market rose 1.57 pct to end at 776.79 points, with turnover, however, remaining a disappointing low 64.356 million euros. The Big Cap index jumped 2.55 pct, the Mid Cap index ended 1.89 pct higher and the Small Cap index eased 0.25 pct. Media (8.94 pct), Utilities (5.15 pct), Banks (5.06 pct) and Telecoms (5.02 pct) were top gainers, while Food (1.66 pct) and Travel (1.58 pct) suffered losses.
Marfin Popular Bank (14.34 pct), Eurobank (8.82 pct), PPC (7.54 pct), Hellenic Postbank (6.52 pct), National Bank (6.20 pct) and Hellenic Telecoms (5.02 pct) were major gainers among blue chip stocks, while OPAP (1.76 pct) and Coca Cola 3E (1.73 pct) were the only decliners.
Broadly, advancers led decliners by 84 to 62 with another 25 issues unchanged. Fieratex (26.32 pct), Naftemporiki (26.09 pct), Progressive (23.53 pct) were top gainers, while Hatzioannou (23.08 pct), Motodynamic (21.48 pct) and Euroholdings (20 pct) were top losers.
Sector indices ended as follows:
Oil & Gas: +1.91%
Personal & Household: +1.40%
Raw Materials: +0.57%
Travel & Leisure: -1.58%
Food & Beverages: -1.66%
Financial Services: +1.27%
The stocks with the highest turnover were National Bank, OTE and Bank of Cyprus.
Selected shares from the FTSE/ASE-20 index closed in euros as follows:
Alpha Bank: 1.48
Public Power Corp (PPC): 3.85
HBC Coca Cola: 14.74
Hellenic Petroleum: 5.35
National Bank of Greece: 2.57
EFG Eurobank Ergasias: 0.93
Bank of Piraeus: 0.40
 Greek bond market closing reportA revival of turnover was the news of the day in the domestic electronic secondary bond market, after almost a year of inactivity, with turnover totaling 15 million euros of which 14 million euros were sell orders and the remaining 1.0 million buy orders. The 11-year bond yielded 17.52 pct, up from 17.23 pct on Friday, with the Greek Bund yielding 2.03 pct, while the yield spread rose to 15.49 pct.
In interbank markets, interest rates were mixed to lower. The 12-month rate was 1.49 pct, the six-month rate 1.14 pct, the three-month rate 0.84 pct and the one-month rate 0.45 pct.
 ADEX closing reportThe June contract on the FTSE 20 index was trading at a discount of 1.47 pct in the Athens Derivatives Exchange on Monday, with turnover shrinking further to 13.686 million euros. Volume on the Big Cap index totaled 4,390 contracts worth 6.834 million euros, with 16,250 open positions in the market.
Volume in futures contracts on equities totaled 44,170 contracts worth 6.852 million euros, with investment interest focusing on Cyprus Bank's contracts (15,375), followed by National Bank (10,051), MIG (382), OTE (1,203), PPC (1,625), OPAP (405), Piraeus Bank (1,238), Alpha Bank (10,601), Marfin Popular Bank (701), Mytilineos (563), Hellenic Postbank (485), ATEbank (471), GEK (309) and Ellaktor (187).
 Foreign Exchange rates - TuesdayReference buying rates per euro released by the European Central Bank:
U.S. dollar 1.334
Pound sterling 0.840
Danish kroner 7.547
Swedish kroner 9.010
Japanese yen 111.38
Swiss franc 1.224
Norwegian kroner 7.663
Canadian dollar 1.323
Australian dollar 1.263
 Fair on TuesdayFair weather and northerly winds are forecast in most parts of the country on Tuesday, with wind velocity reaching 3-6 beaufort. Temperatures will range between 3C and 22C. Fair in Athens, with northerly 3-4 beaufort winds and temperatures ranging from 7C to 21C. Same in Thessaloniki, with temperatures ranging from 6C to 19C.
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