A dívida pública grega e os seus credores (Fonte: Der Spiegel)

FMI admite que a Grécia vai falhar o objectivo da dívida pública abaixo dos 120% do PIB em 2020

Greek debt will be above the target of 120 percent of GDP in 2020, a preliminary report by the IMF showed late on Thursday, and Athens will need more reforms before emergency credit from international lenders can start flowing again.

Excerpts from the International Monetary Fund (IMF) report were presented to the Eurogroup Working Group (EWG) - junior finance ministers and treasury officials who prepare meetings of eurozone finance ministers.

"It is clear that Greece is off track and there is no chance they will cut the debt to 120 percent of GDP in 2020 as envisaged. It will be rather 136 percent, and this would be under a positive scenario of a primary budget surplus, a return to economic growth, and privatisation,» a euro zone official, who insisted on anonymity, said.

"New prior actions will be needed, on top of the existing 89,» the official said, referring to a list of already agreed reforms that need to be in place before any new tranches of eurozone and IMF emergency loans to Greece can be paid.

Apart from the debt projections, representatives of the IMF, the European Commission and the European Central Bank – known as the troika - have been calculating how much more money Athens will need if it is given until 2016 rather than 2014 to reach a primary surplus of 4.5 percent, as agreed in February.

A primary surplus or deficit is the budget balance before the government services its debt. In Greece's case, it would mean government tax revenues exceeding spending, meaning Athens is beginning to get on top of its budget-deficit problems.

The two extra years would give the fast-contracting Greek economy some welcome respite, allowing it to return to growth sooner and therefore increasing the chances the country would eventually be able to make its debt sustainable. [...]

Ver notícia no ekathimerini.com

Eleições na Grécia: a difícil tarefa de formar um governo estável

17 de junho: uma data crítica para o futuro da Grécia e do euro

Para qualquer observador da política europeia resulta claro que as eleições legislativas, ocorridas a 6 de maio, na Grécia, abriram um período delicado. À aparente acalmia que se vivia desde março, altura em que foi desbloqueada uma nova tranche de apoio financeiro à Grécia, sucedeu uma grande incerteza. As eleições resultaram num colapso dos partidos de poder, extremamente evidente no caso do PASOK, o tradicional centro-esquerda grego. Perdeu cerca de ⅔ dos seus eleitores face às legislativas de 2009. A vitória da Nova Democracia – o outro partido tradicional de poder, da área do centro-direita – foi escassa e inútil. Não atingiu, sequer, 19% dos sufrágios. Daí resultou um impasse político, pela incapacidade de formar governo. Para além da pulverização do espectro partidário, que impossibilitou também coligações, as eleições mostraram uma ascensão dos partidos radicais. À esquerda do PASOK, o SYRIZA mais do que triplicou a votação, emergindo como segunda força política, com perto de 17%. À (extrema) direita da Nova Democracia, o neonazi Aurora Dourada surgiu praticamente do nada para obter cerca de 7% dos sufrágios.

Com  as eleições a realizar a 17 de junho – uma data a reter, onde decorrerá, também, a segunda volta das legislativas em França e das presidenciais no Egito –,  o anti-establishment SYRIZA aparece em ascensão. O principal combate eleitoral está a ser travado entre Alexis Tsipras (SYRIZA) e Antonis Samaras (Nova Democracia). As últimas sondagens divulgadas sugeriam vantagem para o SYRIZA, com intenções de voto de 31,5%. Para a Nova Democracia cerca de 26%. Todavia, as múltiplas sondagens evidenciaram também flutuações muito significativas do eleitorado. (A lei eleitoral proíbe divulgação de sondagens nos 15 dias anteriores às eleições. A Nova Democracia terá sondagens, realizadas nos últimos dias, que lhe darão uma votação acima dos 30% e superior ao SYRIZA). Face a estas oscilações dos eleitores, o vencedor é incerto. Assim, as grandes questões em aberto são: i) no caso de vitória da Nova Democracia, poderá surgir um solução de governo estável, quando o PASOK está fora de jogo na disputa pela vitória? ii) será possível a Grécia manter-se na zona euro se dessas eleições resultar uma vitória do SYRIZA,  opondo-se ao atual acordo com o FMI, o BCE e a Comissão Europeia?

Apenas podemos conjeturar sobre as respostas. Há, no entanto, receios fundados de uma situação particularmente crítica no pós 17 de junho. Sobre a primeira interrogação – e excetuada uma alteração de vulto nas atuais intenções de voto –, não haverá nenhum partido a obter votação suficiente para governar sozinho. Isto, mesmo tendo em conta o sistema de proporcionalidade reforçada, que atribui mais 50 deputados ao vencedor das legislativas. A hipótese que parece ser inevitável é de um governo coligação. Todavia, há toda uma tradição política grega de sentido contrário, que faz recear o seu fracasso. A história política da Grécia democrática, que emergiu após a queda da ditadura dos coronéis (1967-1974), é basicamente uma história de alternância entre o PASOK e a Nova Democracia – sem coligações e representando, ambos 77,5% a 87,5% dos votos. No atual contexto de fragmentação partidária, uma vitória da Nova Democracia não é garantia de estabilidade governativa. Também não é garantia de capacidade de impor medidas de austeridade e de reforma bem sucedidas. É de esperar, até, que sob um governo liderado pelo centro-direita, surja uma contestação nas ruas ainda maior do que durante o anterior governo de Giorgios Papandreou do  PASOK.

Quanto à segunda interrogação, sobre as consequências de uma vitória eleitoral do SYRIZA, é ainda mais difícil antecipar os acontecimentos em devir. Desde logo, este teria de efetuar uma coligação à esquerda. As dificuldades serão até maiores do que para a Nova Democracia. Não é líquido que essa coligação seja possível ou estável. Vai ter de mostrar como se põem em prática objetivos de política económica contraditórios. Tsipras pretende repudiar, de alguma forma, o atual acordo de resgate do Estado grego. Ao mesmo tempo, sustenta não pretender sair do euro, aliás em sintonia com a esmagadora maioria dos gregos. O programa de governo do SYRIZA inclui medidas para nacionalizar os bancos e usar os fundos europeus em políticas sociais e de crescimento, reduzindo drasticamente a austeridade. É um facto que o atual acordo de resgate colocou a população grega sob duríssimas medidas de austeridade, sem qualquer fim à vista. Compreende-se, também, que este seja sentido como um diktat. No entanto, mesmo considerando o “efeito François Hollande” – que colocou na agenda europeia a necessidade de políticas de crescimento –, é realista que a Grécia possa ser bem sucedida nesta alternativa?

Pelos motivos apontados, após 17 de junho a crise europeia poderá atingir o seu pico mais crítico, sobretudo se surgir um governo liderado pelo SYRIZA. Entre a Grécia e a União Europeia é provável que decorra um perigoso jogo político. Do lado europeu, existirão pressões e ameaças de suspensão do financiamento. Do lado grego, irá jogar-se com o efeito dos “estilhaços” de uma rotura e/ou saída do euro: não pagamento aos credores, efeito psicológico de pânico sobre os bancos e mercados financeiros e contágio aos países sob resgate, ou à beira dele. É difícil antecipar tudo o que poderá acontecer. Há ainda um aspeto legal relevante, embora não inultrapassável politicamente. Nos Tratados europeus, não está prevista a saída da zona euro. Contudo, nos países do núcleo duro do euro, especialmente na Alemanha, o repúdio das medidas previstas no acordo de resgate, a ocorrer, será visto como inaceitável. As razões são várias. Criaria um precedente para os outros Estado-membros endividados ou sob resgate. Provavelmente, apareceriam forças políticas a querer replicar o “efeito SYRIZA”. Seria um estímulo para eclipsar a atitude de “bom aluno” prevalecente em Portugal e na Irlanda. Importa notar: já hoje quase 70% dos alemães estão contra a permanência da Grécia no euro. Se os acontecimentos seguirem este rumo, a caixa de Pandora da saída do euro vai começar a abrir-se. 

Rumo a uma inevitável saída da Grécia do euro?

Grécia: uma nova República de Weimar? (Comparação de resultados entre as eleições legislativas de 2009 e 2012)

Eleições de 6 de maio: o colapso do sistema político-partidário da democracia grega pós-1974

Dêem uma oportunidade à Grécia

Cartoon: ‘A Grécia e a Europa à beira do precipício‘ in Expresso

Grécia aprova medidas de austeridade em clima de guerrilha urbana

O parlamento grego aprovou as novas medidas de austeridade, no meio de uma onda de protestos violentos que está a deixar Atenas num clima de guerrilha urbana. Os manifestantes usaram bombas incendiárias, pela primeira vez num protesto na Grécia, e vários edifícios, alguns deles históricos, foram incendiados.

A Grécia aprovou, este domingo, cinquenta minutos após a hora prevista do início da votação, o memorando de entendimento com a troika, que define um novo pacote de austeridade, condição para Atenas receber o segundo resgate, que livra o país da bancarrota.
Os deputados do Parlamento grego votaram às 22.50 horas em Portugal continental (0.50 de segunda-feira, em Atenas) o novo plano de austeridade que a troika do Fundo Monetário Internacional (FMI), da União Europeia (UE) e do Banco Central Europeu (BCE) exigem como condição para o país receber um segundo pacote de resgate, de 130 mil milhões de euros, sem o qual irá à bancarrota.
A aprovação do plano de austeridade causou mossa no Governo, com a expulsão de 43 deputados, que não respeitaram a disciplina partidária e votaram contra o acordo. Nas ruas de Atenas, contam as agências France Press e Reuters, vive-se "um clima de guerrilha urbana", com confrontos entre polícias e manifestantes. [...]

Ver artigo no Jornal de Notícias

A Grécia vexada com a proposta alemã de nomeação de um ‘comissário para o orçamento‘

Greek politicians have reacted angrily at a leaked German proposal for a euro-commissioner to control the country's fiscal policy.

"Our partners do know that European integration is based on the institutional parity of member states and the respect of their national identity and dignity,” finance minister Evangelos Venizelos said Sunday (29 January) in a statement.

“Whoever puts before a people the dilemma of choosing between financial assistance and national dignity disregards basic historical lessons," he warned, a veiled reference to the Nazi occupation of Greece during World War II.

A German draft proposal, published on Friday by the Financial Times, envisaged the appointment of a "budget commissioner" by the eurozone finance ministers. This person's job would be "ensuring budgetary control" and compliance with the EU-IMF conditions attached to the second bail-out, which still has to be approved. [...]

Ver EUObserver

A Grécia pondera a saída do Euro?

Greece's economic problems are massive, with protests against the government being held almost daily. Now Prime Minister George Papandreou apparently feels he has no other option: Spiegel Online has obtained information from German government sources knowledgeable of the situation in Athens indicating that Papandreou's government is considering abandoning the euro and reintroducing its own currency.

Alarmed by Athens' intentions, the European Commission has called a crisis meeting in Luxembourg on Friday night. The meeting is taking place at Château de Senningen, a site used by the Luxembourg government for official meetings. In addition to Greece's possible exit from the currency union, a speedy restructuring of the country's debt also features on the agenda. One year after the Greek crisis broke out, the development represents a potentially existential turning point for the European monetary union -- regardless which variant is ultimately decided upon for dealing with Greece's massive troubles. Given the tense situation, the meeting in Luxembourg has been declared highly confidential, with only the euro-zone finance ministers and senior staff members permitted to attend. Finance Minister Wolfgang Schäuble of Chancellor Angela Merkel's conservative Christian Democratic Union (CDU) and Jörg Asmussen, an influential state secretary in the Finance Ministry, are attending on Germany's behalf. [...]

Ver notícia do Der Spiegel

Grécia planeia a construção de muro contra imigração ilegal na fronteira com a Turquia

The Greek government plans to build a wall along its 206-km-long land border with Turkey to help keep out unwanted migrants on the model of the US border with Mexico.
Greek junior minister for citizen protection, Christos Papoutsis, a former EU commissioner for energy, made the announcement in an interview with the Athens News Agency on Friday (31 December), saying: "Co-operation with other EU states is going well. Now we plan to construct a fence to deal with illegal migration."
"The Greek society has reached its limits in taking in illegal immigrants ... We are absolutely determined on this issue. Additionally, we want to provide a decisive blow against the migrant smuggling rings that trade in people and their hopes for a better life," he added.
Mr Papoutsis compared the planned construction to the 1,050-km-long fence running through sections of Arizona, California, New Mexico and Texas on the Mexico-US border.
Built at a cost of €1.8 billion over the past five years and backed-up by cameras, radar surveillance, jeep-mounted patrols and predator drones, the 4.5-metre-high metal wall initially raised howls of protest on humanitarian and environmental grounds, but has since gained widespread public support in the US. [...]

Ver notícia no EUObserver

A China oferece apoio financeiro à Grécia

Chinese Premier Wen Jiabao offered Greece a major vote of confidence on a visit to the debt-ridden European nation, saying China will continue to buy Greek bonds and announcing the creation of a $5 billion fund to help Greek shipping companies buy Chinese ships.
The remarks represent some of China's most substantive support for the euro zone amid the region's debt troubles, and reflect the Asian giant's growing willingness to wield its economic clout to obtain wider international influence. Mr. Wen's Athens visit kicks off a week of intensive Chinese-European diplomacy, with the premier heading to Italy and Turkey as well as to summit meetings with European Union leaders in Brussels. "We hope that by intensifying cooperation with you, we can be of some help in your endeavor to tide over difficulties at an early date," Mr. Wen said Sunday in a speech to the Greek parliament. "China will not reduce its euro-bond holdings and China supports a stable euro." China has long had economic interests in Greece, primarily in its shipping industry, and it runs a substantial trade surplus with the European country. China's relations with Greece have come into focus in recent months as Greek officials actively lobbied the Asian nation to support its economy. Athens is desperate for investment as the country claws its way out of a deep recession and a debt crisis that drove it to the brink of bankruptcy in May. [...]

Ver notícia no WSJ

‘Grécia lança solução para a disputa sobre o nome Macedónia‘ in EU Observer

A senior Greek official has indicated that Athens is ready to accept the name 'Northern Macedonia' for its northern neighbour, in a development that could bring an end to the 19-year-old title dispute that has hampered Skopje's EU membership ambitions.

"The name 'Northern Macedonia' fits with the settlement as envisaged" by Athens, Greek deputy foreign minister Dimitris Droutsas told national media on Monday (5 April).

Should Macedonian leader Nikola Gruevski reject this proposal "he will have to explain to the Macedonian people why he is depriving them of their European prospects," Mr Droutsas added.

Currently referred to as the Former Yugoslav Republic of Macedonia (FYROM) in official terminology, Athens is strongly opposed to a shortening of the country's name to simply "Macedonia," a title already used by a northern province in Greece.

The jealous guarding of the regional name has lead Athens to campaign against international recognition of its northern neighbour under the title of Macedonia, an independent nation following the break-up of Yugoslavia in 1991.

The Greek administration also insists that the issue must be resolved before Skopje can enter into EU accession discussions, a process that requires unanimous support from the bloc's full complement of members.

An indication that a potential solution was being worked on came in late February when senior UN mediator Matthew Nimetz said Athens and Skopje shared grounds for resolving the dispute, suggesting any future name for FYROM could include a "geographical determinant." [...]

Ver notícia no EU Observer

‘Alemanha aconselha Grécia a vender ilhas para saldar dívidas‘ in Diário Económico

"O Estado grego deve desprender-se de forma radical das suas participações em empresas e também vender terrenos, como por exemplo, as suas ilhas desabitadas", sugere Frank Schäffler, membro da comissão parlamentar de finanças, citado pelo jornal "Bild".

O liberal argumenta ainda que a chanceler Angela Merkel "não deve prometer ajudas" à Grécia.

A chanceler democrata-cristã reune-se amanhã em Berlim com o primeiro-ministro grego, Yorgos Papandreu, num encontro em que abordará a situação financeira da Grécia, entre outros assuntos.

Para o democrata-cristão Josef Schlarman, Atenas deve evitar a todo custo a falência, recorrendo, para isso, a qualquer medida que permita obter capital.

"A Grécia possui edifícios, empresas e ilhas desabitadas, que poderão ser usados para o pagamento das dívidas", afirma.

Atenas aprovou ontem um plano de choque com o qual pretende economizar aproximadamente 4,8 mil milhões de euros para sanear a economia grega, que já acumula uma dívida superior a 110% do Produto Interno Bruto (PIB) e um défice de 12,7%.

As medidas contempladas pelo Executivo grego incluem o congelamento de pensões, a redução de salários dos funcionários públicos e a subida de impostos.

http://economico.sapo.pt/noticias/alemanha-aconselha-grecia-a-vender-ilhas-para-saldar-dividas_83177.html

‘O pecado original da Europa‘ in Wall Street Journal

Europeans are blaming financial transactions arranged by Wall Street for bringing Greece to the brink of needing a bailout. But a close look at the country's finances over the nearly 10 years since it adopted the euro shows not only that Greece was the principal author of its debt problems, but also that fellow European governments repeatedly turned a blind eye to its flouting of rules.

Though the European Commission and the U.S. Federal Reserve are examining a controversial 2001 swap arranged with Goldman Sachs Group Inc., Greece's own budget moves, in clear breach of European Union rules, dwarfed the effect of such deals.

Predicaments of the sort Greece is facing—years of overspending, leaving bond investors worried the country can't pay back its debts—weren't supposed to happen in the euro zone. Early on, countries made a pact aimed at preventing a free-spending state from undermining the common currency. The pact required countries adopting the euro to limit annual budget deficits to 3% of gross domestic product, and total government debt to 60% of GDP.

But an examination of budget reports to the EU shows Greece hasn't met the deficit rule in any year except 2006. It has never been within 30 percentage points of the debt ceiling.

Greece has revised its deficit figures, always upward, every year since 1997—often considerably. Several times, the final figure was quadruple what was first reported. Late last year, the Greek government set in motion its current crisis by increasing its 2009 budget-deficit estimate, initially 3.7% of GDP, to nearly 13% of GDP.

Those revisions far exceed the impact of controversial derivative transactions Greece used to help mask the size of its debt and deficit numbers. The 2001 currency-swap deal arranged by Goldman trimmed Greece's deficit by about a 10th of a percentage point of GDP for that year. By comparison, Greece failed to book €1.6 billion ($2.2 billion) of military expenses in 2001—10 times what was saved with the swap, according to Eurostat, the EU's statistics authority.

The Greek problem has shown that EU financial institutions don't have enough teeth or expertise to rein in renegade member states, said Jean-Pierre Jouyet, chairman of France's stock-market watchdog and former chief of staff to a president of the European Commission, Jacques Delors. "We need new tools to manage these disequilibriums, because a pact without sanctions is not enough," said Mr. Jouyet.

Constantine Papadopoulos, secretary-general for international economic affairs at the Greek foreign ministry, said Greece entered the euro zone legitimately. "The notion that Greece 'cheated' to get into the euro zone is one of those notions that has stuck in people's minds in Europe and, being the well-crafted piece of propaganda that it is, is extremely difficult to reverse," he said.

Mr. Papadopoulos, a member of the now-ruling Socialist party, said most of the revisions took place because an incoming New Democracy government in 2004 retrospectively revised the way it dealt with military spending. That, he said, had an impact on the recorded budget deficit for the past years of the Socialist government. But Eurostat deemed those revisions necessary, since Greece had "widely underestimated" its military spending.

The Aegean country wasn't alone in breaking the euro zone's rules: A majority of other euro-zone members also failed to meet the debt and deficit requirements at least once over several years, the reports show.

The euro's launch, with 11 founding members in 1999 and Greece joining 18 months later, amounted to a deliberate political gesture by European leaders: Membership in the fledgling currency should be as broad as possible. Italy and Belgium were allowed in with the first group despite well exceeding the debt threshold—a decision that spurred some controversy.

Bringing in Greece, the ancient "cradle of democracy," was symbolically important. In any case, by the late 1990s Greece was being billed as a great economic turnaround story and few eyebrows were raised.

Greece's current crisis—which has weakened the euro and sown concerns about the debt levels of some other European countries—shows Europe's political ambitions for a broad euro are clashing with economic realities. It also suggests Greece's economic success was partly a mirage created by misreported economic statistics.

This is a consequence of a weakness that economists and historians say was built into the common currency at birth: the lack of a coordinated fiscal policy to go with monetary union. From the beginning, the euro has been replete with unresolved tensions, says David Marsh, author of "The Euro," a 2009 book chronicling the birth of the currency. The currency union was seen by some politicians as a way to pull the EU toward political union; others, mainly in Germany, emphasized the need for fiscal and monetary rectitude.

Once a country is in the currency, little can be done to a wayward member because the euro's architects built in no real means of enforcement.

That's in part because of a compromise made in a 1996 European summit in Dublin that placed the decision whether to levy fines on errant governments with other EU governments. That was a victory for Jacques Chirac, then French president, over German Chancellor Helmut Kohl, who wanted the fines to be automatic. Since then no country has been fined.

Willem Buiter, chief economist at Citigroup and a former member of the Monetary Policy Committee of the Bank of England, described the 1996 agreement aimed at enforcing the debt and deficit rules as "a paper tiger."

"It is ineffective, because for a while it created the illusion that there were sticks and carrots capable of changing the fiscal behavior of the member states, when in reality there were neither," he wrote in a new research report.

The lax attitude to fiscal rules began early. Eager to get the euro in place in the late 1990s, EU leaders decided 1997 would be the key year. If everyone could meet the targets for that year, the currency could be launched.

The 60% debt goal was simply out of reach—Belgium, for instance, had debt equaling 131% of GDP in 1995. The countries agreed excess debt was acceptable, so long as it appeared to be shrinking. (The euro zone as a whole has never met the 60% debt limit.)

Instead, Europe tried to stand firm on the annual deficits. That triggered a busy year of one-off boosts to government coffers. Countries sold mobile-phone spectrum licenses. France got a payment of more than €5 billion for assuming future pension obligations from the soon-to-be-privatized France Télécom. Germany tried, but failed, to revalue its gold reserves.

Buoyed by these maneuvers—and helped by the tech boom—11 of the 12 countries made the 3% goal for 1997. With much fanfare, the euro was born as the clock ticked from 1998 to 1999, though notes and coins didn't begin circulating for another three years.

With much less fanfare, countries later revised their numbers: Of the original 11 entrants that qualified on the basis of their 1997 data, three—Spain, France and Portugal—later revised their 1997 deficit figures to above 3%. France's budget revision, to 3.3%, wasn't made until 2007.

Greece didn't make the first wave. Its 4.0% deficit in 1997 missed by too much. Even then, technocrats doubted Greek statistics. But in late 1999, eager to keep the euro zone on track, the EU overlooked those concerns. The figures for 1998 appeared better, and European governments agreed that Greece had met the fiscal goals.

They cited a cut in its deficit to 2.5% of GDP in 1998 and a projection of 1.9% for 1999, and saluted Greece for reducing its debt. "The deficit was below the Treaty reference value in 1998 and is expected to remain so in 1999 and decline further in the medium term," the governments proclaimed in December 1999.

None of that turned out to be true. In March 2000, Eurostat said a new accounting standard pushed Greece's 1998 deficit up to 3.2%. Later, in a 2004 report, Eurostat added nearly €2 billion to the original 1998 deficit—largely because Greece had wrongly deemed subsidies to state entities as equity purchases, a device Portugal would later use. In the end, the 1998 figure stood at 4.3%, well above the euro-zone entry criterion.

It got worse. Eurostat found that Greece barely recorded any expenditure on military equipment for years, routinely overestimated tax collections, didn't record hospital costs in the state health system and counted EU subsidies to private entities in Greece as government revenue.

In the face of an economic downturn, others joined the Greeks. France and Germany breached the deficit limit in 2002, 2003 and 2004, setting the example that even the bloc's economic powerhouses didn't have to play by the rules. In 2003, the Netherlands and Italy did too. "When Germany and France got into difficulty, there was not a strong reaction from the European Union," says Jean-Luc Dehaene, a former Belgian prime minister. Finance ministers decided on the response, and "they tend to make a political decision," he says.

Of the 12 early members of the euro, all but Belgium, Luxembourg and Finland have overrun the budget rule at least once. Finally, under political pressure, the norms were softened in 2005 to allow the deficit limit to be breached in an economic downturn.

That was after the tragicomic tale of Greece's 2003 deficit. In March 2004, Greece reported that its 2003 deficit had been €2.6 billion, or 1.7% of GDP. Eurostat put in a footnote calling the figure "provisional," but it was still well below the euro-zone average of 2.7%.

Any Greek celebration was short-lived. Two months later, under pressure from Eurostat, Greece put out new figures. The 2003 deficit was now 3.2%, thanks in part to overestimated tax receipts and EU subsidies. Four months after that, it was up to 4.6%: Greece had failed to include some military expenses, overestimated a social-security surplus, and low-balled its interest expenses. Another revision in March 2005 kicked it up to 5.2%. Later that year, it became 5.7%. What had been reported 18 months earlier as an €2.6 billion deficit was now €8.8 billion.

In short, says Vassilis Monastiriotis of the London School of Economics, Greece "failed to internalize the logic of the euro zone—which is fiscal discipline.

http://online.wsj.com/article/SB10001424052748704548604575097800234925746.html?mod=WSJEUROPE_hpp_LEFTTopStories

A UE e a Grécia: ‘É para o teu bem‘ cartoon in Público

‘Wall Street ajudou a camuflar dívida da Grécia‘ in New York Times

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.

As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.

Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.

The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.

It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.

Athens did not pursue the latest Goldman proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about Wall Street’s role in the world’s latest financial drama.

As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.

In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come.

Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a country’s liabilities.

Some of the Greek deals were named after figures in Greek mythology. One of them, for instance, was called Aeolos, after the god of the winds.

The crisis in Greece poses the most significant challenge yet to Europe’s common currency, the euro, and the Continent’s goal of economic unity. The country is, in the argot of banking, too big to be allowed to fail. Greece owes the world $300 billion, and major banks are on the hook for much of that debt. A default would reverberate around the globe.

A spokeswoman for the Greek finance ministry said the government had met with many banks in recent months and had not committed to any bank’s offers. All debt financings “are conducted in an effort of transparency,” she said. Goldman and JPMorgan declined to comment.

While Wall Street’s handiwork in Europe has received little attention on this side of the Atlantic, it has been sharply criticized in Greece and in magazines like Der Spiegel in Germany.

“Politicians want to pass the ball forward, and if a banker can show them a way to pass a problem to the future, they will fall for it,” said Gikas A. Hardouvelis, an economist and former government official who helped write a recent report on Greece’s accounting policies.

Wall Street did not create Europe’s debt problem. But bankers enabled Greece and others to borrow beyond their means, in deals that were perfectly legal. Few rules govern how nations can borrow the money they need for expenses like the military and health care. The market for sovereign debt — the Wall Street term for loans to governments — is as unfettered as it is vast.

“If a government wants to cheat, it can cheat,” said Garry Schinasi, a veteran of the International Monetary Fund’s capital markets surveillance unit, which monitors vulnerability in global capital markets.

Banks eagerly exploited what was, for them, a highly lucrative symbiosis with free-spending governments. While Greece did not take advantage of Goldman’s proposal in November 2009, it had paid the bank about $300 million in fees for arranging the 2001 transaction, according to several bankers familiar with the deal.

Such derivatives, which are not openly documented or disclosed, add to the uncertainty over how deep the troubles go in Greece and which other governments might have used similar off-balance sheet accounting.

The tide of fear is now washing over other economically troubled countries on the periphery of Europe, making it more expensive for Italy, Spain and Portugal to borrow.

For all the benefits of uniting Europe with one currency, the birth of the euro came with an original sin: countries like Italy and Greece entered the monetary union with bigger deficits than the ones permitted under the treaty that created the currency. Rather than raise taxes or reduce spending, however, these governments artificially reduced their deficits with derivatives.

Derivatives do not have to be sinister. The 2001 transaction involved a type of derivative known as a swap. One such instrument, called an interest-rate swap, can help companies and countries cope with swings in their borrowing costs by exchanging fixed-rate payments for floating-rate ones, or vice versa. Another kind, a currency swap, can minimize the impact of volatile foreign exchange rates.

But with the help of JPMorgan, Italy was able to do more than that. Despite persistently high deficits, a 1996 derivative helped bring Italy’s budget into line by swapping currency with JPMorgan at a favorable exchange rate, effectively putting more money in the government’s hands. In return, Italy committed to future payments that were not booked as liabilities.

“Derivatives are a very useful instrument,” said Gustavo Piga, an economics professor who wrote a report for the Council on Foreign Relations on the Italian transaction. “They just become bad if they’re used to window-dress accounts.”

In Greece, the financial wizardry went even further. In what amounted to a garage sale on a national scale, Greek officials essentially mortgaged the country’s airports and highways to raise much-needed money.

Aeolos, a legal entity created in 2001, helped Greece reduce the debt on its balance sheet that year. As part of the deal, Greece got cash upfront in return for pledging future landing fees at the country’s airports. A similar deal in 2000 called Ariadne devoured the revenue that the government collected from its national lottery. Greece, however, classified those transactions as sales, not loans, despite doubts by many critics.

These kinds of deals have been controversial within government circles for years. As far back as 2000, European finance ministers fiercely debated whether derivative deals used for creative accounting should be disclosed.

The answer was no. But in 2002, accounting disclosure was required for many entities like Aeolos and Ariadne that did not appear on nations’ balance sheets, prompting governments to restate such deals as loans rather than sales.

Still, as recently as 2008, Eurostat, the European Union’s statistics agency, reported that “in a number of instances, the observed securitization operations seem to have been purportedly designed to achieve a given accounting result, irrespective of the economic merit of the operation.”

While such accounting gimmicks may be beneficial in the short run, over time they can prove disastrous.

George Alogoskoufis, who became Greece’s finance minister in a political party shift after the Goldman deal, criticized the transaction in the Parliament in 2005. The deal, Mr. Alogoskoufis argued, would saddle the government with big payments to Goldman until 2019.

Mr. Alogoskoufis, who stepped down a year ago, said in an e-mail message last week that Goldman later agreed to reconfigure the deal “to restore its good will with the republic.” He said the new design was better for Greece than the old one.

In 2005, Goldman sold the interest rate swap to the National Bank of Greece, the country’s largest bank, according to two people briefed on the transaction.

In 2008, Goldman helped the bank put the swap into a legal entity called Titlos. But the bank retained the bonds that Titlos issued, according to Dealogic, a financial research firm, for use as collateral to borrow even more from the European Central Bank.

Edward Manchester, a senior vice president at the Moody’s credit rating agency, said the deal would ultimately be a money-loser for Greece because of its long-term payment obligations.

Referring to the Titlos swap with the government of Greece, he said: “This swap is always going to be unprofitable for the Greek government.”

http://www.nytimes.com/2010/02/14/business/global/14debt.html