Monday, August 27, 2012

Economics News from the Desk of Elena Panaritis, 27-08-2012 ...

The Greek Prime Minister, Antonis Samaras, is expected this week to return back into the fray of domestic policies, after the charm offensive visits to Berlin and Paris, where Mrs. Angela Merkel and Mr. Francois Hollande expressed their support for Greece?s membership in the Eurozone as long as the country meets its commitments to its international creditors.

The French President mentioned that Greece?s position is in the Eurozone without questions, but it has to demonstrate the credibility of its program and the willingness of its leaders to go the whole way. He, also, mentioned that a decision on further rescue aid to Greece would depend on a report to be compiled by the Troika, in the late of September or early October.

The difficult task, this week, for Antonis Samaras is to persuade his coalition partners, Evangelos Venizelos and Fotis Kouvelis about the necessity of the new measures for 2013 and 2014 that have been demanded by the Troika. The Greek Prime Minister and Yannis Stournaras, the Greek Finance Minister, want the new measures, spending cuts and reductions to pensions and benefits, to be voted by late September or early October. On the contrary, Venizelos and Kouvelis, who object to some proposed measures, expressed their opinion that they prefer these measures being approved in chunks, in order to lessen their social impact.

Two days after her meeting with Mr. Antonis Samaras, Angela Merkel sent a warning to allies who believe that the Eurozone will be better off without its weakest link, by mentioning that this is a crucial phase in combat against the Eurozone crisis and everyone should weigh their words carefully. She, also, gave her support the ECB?s President, Mario Draghi, and believes that the European Central Bank?s policies are in line to ensure stable prices in the bloc.

After the Meetings of Antonis Samaras with Angela Merkel and Francois Hollande, some political leaders begun to express their support to Greece. Austria?s Chancellor, Werner Faymann, mentioned that Greece should stick to its agreements with the Eurozone, and in return Greeks should get more time for the payment.

Germany?s Finance and Economy Ministers mention that they are opposed to any easing of the timeframe for Greece. According to their belief, by giving to Greece more time, this would automatically mean giving Greece more money. But, the Greek Prime Minister was quite clear when he said that Greece needs more time but no more cash.

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10 year Bonds

Country

10 years Bond (current)

Greece 24.24
Cyprus 7.00
Portugal 9.46
Spain 6.52
Germany 1.35
Italy 5.72
United States of America 1.68
Australia 3.16
Canada 1.83
United Kingdom 1.52
Japan 0.82

Source:?http://markets.ft.com/RESEARCH/Markets/Government-Bond-Spreads

http://www.ecb.int/stats/money/long/html/index.en.html

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More News

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Greek islands could be sold as country seeks new?revenue

Greek Prime Minister Antonis Samaras, who will take his plea for more time for the Greek economy to Paris and Berlin this week, suggested his government could sell or lease some of the country?s islands to help revive a state-asset sales plan central to receiving international funds?

http://business.financialpost.com/2012/08/23/greek-islands-could-be-sold-as-country-seeks-new-revenue/

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Germany studies costs of Greek exit behind scenes as leaders meet

A working group led by Germany?s deputy finance minister is studying the possible economic impact of a Greek exit from the eurozone, a newspaper reported on Friday, as Chancellor Angela Merkel meet with Greece?s prime minister?

http://business.financialpost.com/2012/08/24/germany-studies-costs-of-greek-exit-behind-scenes-as-leaders-meet-report/

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Spain Deficit Pain Bites Consumers In Prelude To Rajoy Austerity

Spanish Prime Minister?Mariano Rajoy?s austerity drive will intensify this week as a?sales-tax increase tightens the squeeze on consumers whose spending is already plummeting?

http://www.bloomberg.com/news/2012-08-26/spain-deficit-pain-bites-consumers-in-prelude-to-rajoy-austerity.html

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Sources:

http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_18498_25/08/2012_458267

http://www.reuters.com/article/2012/08/26/us-eurozone-idUSBRE87P0AI20120826

Source: http://www.prosperityunbound.com/economics-news-from-the-desk-of-elena-panaritis-27-08-2012/

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