Tagged: Greece crisis

Greece struggles to relieve fuel shortage as truckers defy Athens’ orders

Deutsche Welle | 31.07.2010

Greece mobilized military vehicles and vessels Saturday to provide the country with fuel, medicine and food as an ongoing trucker strike left the country crippled and its motorways littered with abandoned cars. Armed forces worked around the clock to supply airports, power plants and hospitals. Most filling stations around the country remained closed, meanwhile, as truckers entered their sixth day of strikes, defying an emergency government order to return to work.

Opening up road freight industry

Greece’s 33,000 protesting truck and fuel-tanker owners walked off the job on Monday to protest against the creation of new trucking licenses after the government stopped issuing new permits 40 years ago. Athens says the move will help liberalize the freight sector and open the industry to more competition by September, a key part of the reforms outlined in the 110 billion euro ($144 billion) European Union/International Monetary Fund bailout for the debt-ridden country. Financial analysts have stressed that opening up Greece’s closed professions, which also include architecture and law, are essential to revitalizing the country’s economy. "It is even more important than fiscal stabilization because it is the operation of the market which is hindered," said Yannis Stournaras of the Athens-based IOBE think tank. "When these markets open, GDP will be much higher," he added.

Truckers fight for the value of their permits

Truckers say the plan is unfair to existing operators, as it would devalue their initial investment; many have paid up to 300,000 euros to buy their permits, and would not be able to recoup this amount when they retire. Strikers continue to defy the emergency back-to-work order the government issued Wednesday, citing public health risks

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ANALYSIS – Greek budget goal too ambitious as austerity hits

Reuters | Fri May 28, 2010 | 9:50pm IST

Academy of Athens Greece will likely miss its budget deficit target for this year as recession wreaks havoc on construction firms and small businesses, leading to lower tax receipts and higher social spending. Research firm Capital Economics expects the deficit to shrink to about 9 percent of GDP from 13.6 percent in 2009, short of an 8.1 percent target set out in Greece’s bailout deal with the International Monetary Fund and the European Union. "While Greece will make significant inroads into its deficit, there remains a strong chance that it will miss its 2010 deficit target," said Capital Economics analyst Ben May. Greece this month received the biggest bailout in financial history, with the IMF and the EU pledging 110 billion euros ($134.8 billion) in 2010-2013 to save the country from default. In return, the debt-laden nation promised to ram through deficit cut measures of a total of 45 billion euros over the same period to narrow its budget gap by an unprecedented 11 percentage points of GDP, to below an EU ceiling of 3 percent.

But early budget figures suggest the planned deficit cut of more than 20 billion euros in 2010 is too ambitious due to an economic contraction seen at 4 percent of GDP, the country’s deepest recession since 1974. "I think the Greek government’s chances of implementing the deficit target this year is 30 percent," said Diego Iscaro, London-based analyst with IHS Global Insight. "This reflects risks both on the tax revenue and on the spending side." Gross tax receipts between January and April rose 6 percent year-on-year, far below an 11 percent target. The finance ministry said on May 25 it had fired 20 heads of regional tax offices for missing their collection targets. "It’s already whispered in finance ministry corridors that the deficit won’t fall below 9.5 percent this year" said George Romanias, an economist with Greece’s main labour union GSEE. 

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Second firm withdraws drugs from Greece over cuts

BBC News | Sunday, 30 May 2010 | 11:09 GMT

Another Danish pharmaceutical company has withdrawn products from Greece in protest at the government’s decision to cut the prices of medicines by 25%. The Leo Pharma Company says it is suspending sales of two popular drugs because the price reductions will cause job losses across Europe. The Greek government is struggling with a debt crisis. It has condemned as unfair the action of Leo Pharma, and another Danish company, Novo Nordisk.

Supply embargo?

The decision by Leo Pharma to suspend distribution of an anti-blood-clotting agent and a remedy for psoriasis takes Greece one step closer towards an all-out boycott by medical suppliers. Kristian Hart Hansen, a senior director of the company, said the 25% price reduction would encourage similar moves in other countries with large debt problems such as Ireland and Italy. He warned that unless the company took action, there would job losses across Europe, including Denmark where the company is based. Earlier this week another Danish company, Novo Nordisk, withdrew sales of its state-of-the-art insulin product from Greece for the same reason. Leo Pharma claims it is owed 244m euros ($300m; £207m) in unpaid bills by the Greek state.

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Global stock markets see sharp falls

BBC NEWS | Tuesday, 25 May 2010 | 8:37 GMT

Global stock markets fell heavily on Tuesday over continued fears about the debt problems in the eurozone. In early trade in Europe the FTSE 100 in London was down by 2.60%, Germany’s Dax index was 2.34% lower, while in France the Cac 40 index slid 2.74%. It came after shares in Asia had seen sharp falls. Stocks in South Korea and Japan had been affected as North Korea reportedly went on to military alert. Japanese stocks fell by 3.1%, and shares in South Korea fell by 2.7%. In London, the FTSE 100 has fallen by more than 10% in little more than a month after hitting a 22-month high in April.

Regional tensions

Earlier in Asia, Australian shares fell by 3%, Taiwanese stocks were down 3.23% and the wider MSCI measure of Asia-Pacific shares outside of Japan fell by 3.6%. Shares in Hong Kong, Singapore, Indonesia, China, India, Thailand and Malaysia all fell too. There were reports in South Korea that North Korea had told its military to prepare for war, but only if the South attacks it first. Tensions in the region have been growing since international investigators blamed the North for torpedoing and sinking a South Korean warship in March, killing 46 sailors.

‘Toxic cocktail’

Other factors increasing pessimism among investors were the weekend rescue of Spanish bank Cajasur by Bank of Spain, only the second time the central bank had saved a regional lender. "The toxic cocktail 

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World stocks turn down, euro hit again

Reuters | Mon May 24, 2010 | 4:46pm IST

World stocks failed to hang on to early gains on Monday, falling as Wall Street looked set for losses, and the euro took another hit, dropping more than 1 percent against the dollar. Global stocks as measured by MSCI were down 0.3 percent, adding to last week’s 4.8 percent loss on worries about a slowing global economy and stresses in the euro zone. Emerging markets stocks were up 0.4 percent, but well off their daily highs. They lost 7.6 percent last week. European trading was thin due to a religious holiday, but most markets were open. The FTSEurofirst 300 turned down as Wall Street futures pointed to losses at the open. It was down 0.5 percent.

"There’s a general risk aversion and there has generally been a move to liquidate positions," Martin Fraenkel, Credit Agricole’s global head of comnmodities and energy, told a Reuters summit in London. Equity markets have been battered recently, first by a fear that some European countries, notably Greece, were heading for a default on their sovereign debt and then due to doubts about the impact of a debt rescue package on growth prospects. Jun Kato, senior manager for investment at Shinkin Asset Management, said while the euro zone’s fiscal trouble was still in focus, "wariness about its impact on the global economy seems to be spreading". Year-to-date, all major broad stock indexes are in the red, although U.S. equities are generally outperforming. This is a reaction both to a flight from Europe and growing signs of U.S. economic recovery.  

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William Hague ‘vindicated’ by euro warning

BBC NEWS | 2010/05/23 | 12:29:34 GMT

Foreign Secretary William Hague has said the euro is "in crisis" but it is not in the UK’s interest for countries to pull out of the single currency. Mr Hague said the weakness of the euro, caused by the debt crisis across Europe, "vindicated" his warnings about the currency when he was Tory leader. But he said he took no "comfort" from the current situation and nations must work hard to reduce their deficits. David Cameron says it is in the UK’s interest for the euro to stabilise. Speaking in Germany on Friday, the prime minister said financial stability in the eurozone – the UK’s largest trading partner – was vital, although he said he would oppose giving any extra powers to EU institutions to try and shore up the euro.

‘Financial confidence’

German Chancellor Angela Merkel has said the prospect of the debt crisis in Greece spreading across Europe has put the future of the euro at risk – although EU countries have agreed billions of pounds of rescue funding. Mr Hague said "the language of crisis" was already present in efforts to deal with the worsening situation. "Well, there is a crisis – of course there is a crisis," he told the BBC’s Politics Show. "We don’t want the euro to be in crisis. I am a long-standing opponent of the Britain joining the euro, but we don’t want the euro to collapse or countries to pull out of it because of course that kind of crisis is very bad for Britain and affects financial confidence across the board."  

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EU ministers seek better economic crisis response

BBC News | Friday, 21 May 2010 | 21:07 GMT

crisis response EU finance ministers have agreed for the need to be tougher on member states’ budgets in the wake of the Greek debt crisis. And following criticism that Europe did too little, too late to defend the euro, they pledged to react quicker and more efficiently in future. At the first meeting of a new EU economic taskforce, they agreed new sanctions were needed to enforce rules. Countries that break deficit limits could lose EU money or voting rights.

‘Draw lessons’

The meeting in Brussels comes at the end of another week of turmoil on the markets as European countries grapple with the aftermath of the debt crisis in Greece. The euro fell to its lowest level for four years against the dollar in the last few days and share markets have seen big sell-offs. With additional concerns about the level of debt in Spain, Portugal and other countries, the fear has been that the crisis could harm the wider European economy. Herman Van Rompuy, European Council president, said member states had agreed four main objectives:

  • greater budgetary discipline
  • to look for ways to reduce the divergences in competitiveness between member states
  • to establish an effective economic crisis management mechanism
  • to strengthen economic governance to be able to act quicker and in a more co-ordinated and efficient manner to deal with any future economic crises   

He said the meeting was "only the start of the process" of putting these policies in place, but that "there was a strong political will among the European Union finance ministers". Finance ministers would now start work 

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