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Wednesday, December 19, 2012

Greek ETF, national bank shares gain on improved outlook, credit upgrade


Greek ETF, national bank shares gain on improved outlook, credit upgrade
MarketWatch (blog)
S&P cited the “determination” of the euro zone to support Greece's membership and the Greek government's commitment to fiscal and structural adjustments as reasons for the six-notch upgrade. Also higher on Wednesday were prices on Greek government ...


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Greece faces 'make or break' year


Greece faces 'make or break' year
Financial Times
Next year will be “a make or break” year for Greece's future as a member of the eurozone, the country's finance minister has said, warning Europe's leaders that Athens still faces “the possible risk” of crashing out of the currency bloc. “We can make ...

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Greek finance minister wins breathing space


Greek finance minister wins breathing space
Financial Times
Yannis Stournaras has won a much-needed breathing space after five months of non-stop negotiations with the troika of officials from the European Commission, European Central Bank and International Monetary Fund overseeing Greece's second ...

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Greek America Foundation launches relief drive


Greek America Foundation launches relief drive
Kathimerini
Project Hope for Greece is a new initiative launched by the Chicago-based Greek America Foundation in response to the hardship faced by crisis-hit Greeks. The aim of the campaign is to raise awareness and funds in support of charities and nonprofit ...


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S&P upgrades Greece's credit rating


RT

S&P upgrades Greece's credit rating
RT
Amid the continuing downward economic spiral, Standard & Poor's ratings agency has upgraded Greece's credit grade to a B-, the highest since June 2011, although the bonds are still at junk status. The backing of the Eurozone countries to keep Greece ...


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Greek Bonds Rally After S&P Upgrade

Greece's bond market got two reasons to rally as a ratings upgrade was followed by news that the European Central Bank would again accept Greek government debt as collateral.

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Charlemagne: All hope not lost




THE doom merchants are eating their words. Greece has not left the euro. The currency has not collapsed. And neither seems likely in 2013. Willem Buiter of Citigroup has revised his odds on “Grexit” down from 90% to 60%. This week S&P, a ratings agency, even raised Greece’s credit rating by six notches to B-. Yet the pessimists did not overestimate the euro’s problems, so much as underestimate the political will to do enough to stop a euro break-up—even if not enough to repair its structural flaws.The European Union’s Maastricht treaty created a single currency without a single state. Each country was meant to be responsible for its own budget and economic policies with rules (often ignored) to stop them running up too much debt. There were to be no bail-outs, either overt (by members) or covert (by the European Central Bank). Yet gradually cleaning up fiscal messes has become more of a collective endeavour. If it were in Dante’s Inferno, the euro would have moved from the eighth circle (the penultimate one), when flatterers are immersed in excrement, to the third, where foul stuff rains down on gluttons. Salvation is still a long way off.It helps that...


READ THE ORIGINAL POST AT www.economist.com

Greek bond yields at 21-month low


Deutsche Welle

Greek bond yields at 21-month low - FT.com
Financial Times
Greek bond yields fell to the lowest since March 2011 after Standard & Poor's lifted its assessment of Greece's credit rating by six notches, citing the “strong determination” by European policy makers to keep the country in the eurozone. The price of ...
Greek credit rating raisedPhiladelphia Inquirer
S&P boosts its Greek credit rating | News | DW.DE | 18.12.2012Deutsche Welle
S&P upgrades Greek credit rating and sets outlook to stableTelegraph.co.uk
BBC News
all 409 news articles »

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Debt Crisis: ECB approves Greek debt as collateral, while protestors flood ...


Telegraph.co.uk

Debt Crisis: ECB approves Greek debt as collateral, while protestors flood ...
Telegraph.co.uk
Greek anti-riot policemen stand in front of protesters demonstrating in front of the parliament building during one of the many strike marches of 2012. 14.25 Meanwhile, in a win for the Italian government, it can now tax real estate owned by the ...

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Central bank step is move toward normalization as Greece regains credit rating


Central bank step is move toward normalization as Greece regains credit rating
Washington Post
FRANKFURT, Germany — The European Central Bank says it will once again accept Greek government bonds as collateral for loans to banks. The move is important because parking such bonds with the ECB in return for loans is an important way for ...

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ECB Eases Greek Banks' Access to Cash as Reform Efforts Rewarded


Yahoo!7 News

ECB Eases Greek Banks' Access to Cash as Reform Efforts Rewarded
Bloomberg
The European Central Bank acted to ease Greek banks' access to funding by accepting the country's bonds in exchange for cash for the first time since July. The Frankfurt-based ECB said today it will take debt instruments issued or guaranteed by the ...
ECB restores use of Greek bonds as collateralMiamiHerald.com (registration)
ECB opens path to cheaper funding for Greek banksYahoo!7 News
Euro crisis: Greek debt now ECB-eligibleIFR Asia
4-traders -Focus News
all 112 news articles »

READ THE ORIGINAL POST AT www.bloomberg.com

Greek public sector cutbacks trigger strike


Deutsche Welle

Greek public sector cutbacks trigger strike - US News and World Report
U.S. News & World Report
Most Greek public servants have strong legal job guarantees, in contrast to the private sector, which has seen huge job losses that have helped push the national unemployment rate above 26 percent. The new pay cuts, starting Jan. 1, will be generated ...
Greek public sector workers strike over reformsReuters
Eurozone crisis live: Greek public sector workers hold anti-austerity strikeThe Guardian
State Suspensions Trigger Greek StrikeNPR
Deutsche Welle
all 173 news articles »

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ECB restores use of Greek bonds as collateral


IFR Asia

ECB restores use of Greek bonds as collateral
Huffington Post
FRANKFURT, Germany — The European Central Bank says it will once again accept Greek government bonds as collateral for loans to banks. The move is important because parking such bonds with the ECB in return for loans is an important way for ...
ECB Eases Greek Banks' Access to Cash as Reform Efforts RewardedBloomberg
UPDATE 1-ECB lifts funding ops collateral ban on Greek debtReuters
Euro crisis: Greek debt now ECB-eligibleIFR Asia
4-traders -Focus News
all 90 news articles »

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Greek Retailers to See Christmas Sales Slide as Recession Bites


Greek Retailers to See Christmas Sales Slide as Recession Bites
Bloomberg
Greek retailers will see Christmas and New Year-related revenue decline 18 percent as business is blighted by the country's fifth year of recession, the National Confederation of Hellenic Commerce said. Nationwide spending on food and gifts will fall ...

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Ratings agency hands Greece an upgrade


euronews

Ratings agency hands Greece an upgrade
euronews
Ratings agency Standard and Poors has raised the credit rating on the country's sovereign debt. Athens is now on “B-minus” instead of selective default. The agency praised the Greek government's efforts to rein back its spending. Experts have described ...


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Dan Loeb's Third Point hedge fund makes $500m profit from Greek bonds


Telegraph.co.uk

Dan Loeb's Third Point hedge fund makes $500m profit from Greek bonds
Telegraph.co.uk
Mr Loeb has reportedly sold a large part of a $1bn position in Greek debt that soared in value in the wake of the buy-back deal unveiled by Athens on Monday. The trade will stand out as one of the most audacious bets on the eurozone debt crisis so far.

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Greece hit by public sector strike


Aljazeera.com

Greece hit by public sector strike
Aljazeera.com
Greece's other major union, the private sector union GSEE, said it would hold a three-hour stoppage in solidarity and join the march through the streets of central Athens. The Communist-affiliated PAME group was expected to hold a separate rally.
State suspensions, salary cuts trigger strike in GreeceFox News
Greece government given a boost but workers remain unhappyeuronews
ATHENS, Greece: State suspensions trigger Greek strike - Business Breaking ...MiamiHerald.com (registration)

all 154 news articles »

READ THE ORIGINAL POST AT www.aljazeera.com

Greek credit rating raised


Telegraph.co.uk

Greek credit rating raised
Philadelphia Inquirer
"The stable outlook balances our view of eurozone member states' determination to support Greece's eurozone membership and the Greek government's commitment to a fiscal and structural adjustment against the economic and political challenges of doing ...
Greek bond yields at 21-month low - FT.comFinancial Times
Greek Bonds Rally to Post-Restructuring High After S&P UpgradeWall Street Journal
S&P upgrades Greek credit rating and sets outlook to stableTelegraph.co.uk
Deutsche Welle
all 400 news articles »

READ THE ORIGINAL POST AT www.philly.com

Standards and Poors says Greece is stable


New Europe

Standards and Poors says Greece is stable
New Europe
“The outlook on the long-term rating is stable, balancing our view of the government's commitment to a fiscal and structural adjustment against the economic and political challenges of doing so,” the agency underlined. In the same time, Bloomberg ...
World's best performing bond market of 2012The Age

all 88 news articles »

READ THE ORIGINAL POST AT www.neurope.eu

President Demetris Christofias has brought Cyprus to this sorry state | Alexander Apostolides

Christofias may rail at bankers over Cyprus's bailout, but it was bad governance that let to the country's rapid deterioration

Cyprus should be receiving approximately €17bn from the so-called troika in January, subject to a series of measures that introduce austerity while leaving questions of reform unanswered. This breaks down as follows: €1bn is set to cover the government budget deficit; €6bn is earmarked to rollover short-term debt since the current government refused to borrow long-term (hoping for better interest rates in 2013); and €10bn is needed for the troubled banking sector to be in compliance with ECB requirements on capitalisation.

Although the bailout is far smaller in absolute terms than other eurozone packages (the current tranche given to Greece is far larger), the bank bailout looms large and President Demetris Christofias, who is not running for re-election, rails that this is the bankers' fault, singling out in particular, the former head of the Cypriot central bank, Athanasios Orphanides.

Cyprus reached this sorry state surprisingly rapidly, and despite his protestations, Christofias's government bears most of the blame. First, Christofias wields significant power with very limited constraints. He could and did made decisions without asking parliament, his finance ministers or the former governor of the central bank. He has the right to do this, but it is now mainly his decisions that led us to this crisis: the president's inability to listen to advice was a key factor in the rapid deterioration of Cypriot finances.

His decision to store rather than destroy weapons bound for Hezbollah and confiscated by Cyprus led to the weapons exploding in 2011, taking down the largest Cypriot power station. The large increases in the cost of generating electricity are preventing the recovery of the small business sector, which comprises most of the economic activity in Cyprus. While the president could not predict that the weapon containers would blow up, he must take responsibilty for the decisions made in relation to the economic sector. These have had depressingly predictable results.

Cypriot banks were heavily exposed to the Greek market, in particular to Greek government debt. When the Marfin Laiki bank (now the bank that needs a bailout the most) announced in 2009 that it was moving its central offices to Greece, thus making it subject to Greek rather than Cypriot regulator jurisdiction, Christofias rushed to support the bank president in the bank's disagreement with the central bank governor. The political pressure paid off: the bank stayed and now it requires €3bn of government aid to remain as a going concern.

Close to half of the bank bailout is related to the decision to haircut Greek government bonds at an EU level. The president could have vetoed a resolution on the haircut until Cypriot bank losses were integrated in the Greek financial sector bailout. This measure alone would perhaps ensure the current viability of the banking system. Cyprus was locked out of international markets because of the banking system viability fears, so the government successfully arranged a €2.5bn loan from the Russian government. Yet the loan was spent on regular government expenditure rather than being used to safeguard the banking sector.

In addition, the decision by the current government to move the debt issuance and monitoring department from the central bank to the ministry of finance meant that debt management became political. The then finance minister, Charilaos Stavrakis, borrowed only short-term in order to avoid austerity measures, and €6bn is needed today as a result of that decision. More worryingly this government, like all governments before it, decided to bestow patronage, despite the economy taking a nosedive. In 2009, government expenditure rose by 7.8% even though revenues fell by 8.5%. Despite a sluggish recovery, government expenditure only fell in 2011 when Cyprus entered a double-dip recession: this irresponsible spending led to an unsustainable funding gap which the government created.

As well as the above there are significant and long-term failures of governance that neither this nor any other government of Cyprus has ever attempted to tackle. Here all Cypriot stakeholders have a share of the blame as they all took part: parliament, business, bankers, unions and political parties. The government, health and education sectors are bloated by low-productivity workers, made worse by the fact that the incentive system within government is broken. The payout system of public wages has no relationship to the economic cycle, adding a tremendous strain on government finances in a recession. The largest government union is not working on purely democratic principles, and its stance has made it very difficult for any government to correct a system in desperate need of reform.

The cosy nexus of bank executives and big business produced uncompetitive market outcomes and were allowed to get away with unfair practices by the broader political spectrum. In the end the government of President Demetris Christofias will go, but the long-term failures of governance will remain. That is what Cyprus will need to tackle in order to be competitive again.

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S&P's Greek Upgrade Could Mean More Diverse Investment in 2013


S&P's Greek Upgrade Could Mean More Diverse Investment in 2013
Wall Street Journal (blog)
For the euro zone's guardians, the year is ending in a fashion they could scarcely have hoped for when it began. Back then, talk of a euro breakup was perhaps more mainstream that it had ever been. Once the preserve of Anglo-Saxon curmudgeons and ...

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