Is Goldman responsible for Greek crisis?

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Let´s see if the rumoured €20 billion bail-out to save the German banks ever materializes. Everyone is going to be really happy then.

EU has instruments to help Greece, Almunia says

ANDREW WILLIS

© 2010 EUobserver.com. All rights reserved. Printed on 20.02.2010.

EUOBSERVER / BRUSSELS - EU competition commissioner Joaquin Almunia has said he believes the euro area has the instruments available to help Greece meet its debt challenges, so long as Athens delivers on its reform and austerity pledges.

"Even if the instruments to channel this solidarity are not predefined in all the details, the EU and the euro area are in a position to have these instruments," he told a gathering of centre-left political parties in London on Friday (19 February).

The Greek parliament, Athens: Some MPs have had enough of EU austerity demands (Photo: dungodung)

The remarks by the EU's former economy chief come a day after Greece repeated calls for eurozone member states to provide greater details of a potential bail-out plan, saying the move would help calm markets and lower Athens' borrowing costs this year.

At an informal summit of EU leaders Brussels last week, euro area states promised to take "determined and co-ordinated action if needed to safeguard financial stability in the euro area," but markets were unimpressed by the tacit political support for a bail-out without greater clarity on how it would be achieved.

A clearly enunciated plan would help Greece reduce the costs of refinancing €53 billion in debt this year, the country's finance minister Giorgos Papakonstantinou told Reuters on Thursday.

It would also make it easier for Greece to shrink its budget deficit by the promised four percent this year, and could even obviate the need for a bail-out package in the first place, he added.

"I'm not asking people to say exactly what is going to happen, but we need to give the assurance to markets that we are actually working toward a potential instrument ... so that we will never have to use it," he said.

Mr Papakonstantinou made a similar call in Brussels earlier this week during a meeting of EU finance ministers, but was rebuffed. A number of states, including European heavyweight Germany, are keen to avoid a bail-out if possible, fearing it could open the floodgates to other calls for help.

Instead, ministers and the European Commission are emphasising the need for Greece to rapidly cut its budget deficit, totaling 12.7 percent of GDP in 2009, and implement a list of structural reforms in order to weed out weaknesses in its real economy.

But some in Greece are already growing tired of the tough requests from its EU partners.

These populist politicians make me sick. Nazi-Germany burned 45% of dwellings in Lapland during the war, but nobody is stupid enough to use rhetorics like this:

"How does Germany have the cheek to denounce us over our finances when it has still not paid compensation for Greece's war victims?" Margaritis Tzimas, of the opposition conservative New Democracy party, said in an address to the Greek parliament on Thursday.

"There are still Greeks weeping for their lost brothers," he added. Analysts warn the Greek crisis risks creating a new north-south division in Europe.

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Those Grecos might want to consider rationalizing their military equipment. One might imagine that they have logistics nightmare with all those various weapon systems. And supposedly their conscription army is poorly trained.

From Ares Blog

Greece Forced to Make Drastic Cuts in Military Spending

Christina Mackenzie

Greece's serious financial troubles are going to affect their military spending. Yhe highest in the European Union and second in NATO only to the United States, the Greeks spend 2.8% of their GDP on defense, compared to an average 1.7% in the other European NATO countries. Defense personnel account for 2.9% of the active population against an average 1.1% in other NATO member states.

Deputy defense minister Panos Beglitis was asked earlier this week by my colleagues at Le Monde about the defense budget. “We have lived totally surealistically,” he conceded, adding that the 2010 defense budget would amount to €6 billion, a 6.6% cut on the 2009 one. “We are the ministry which is the most engaged in the joint effort to reduce our deficit,” he said. But he was careful to add that “we are rationalizing our spending but not at the expense of our military capacity.”

The historic reason behind Greece's massive arms spending lies with neighbor Turkey with whom it entertains, shall we say, difficult relations. Beglitis noted “Turkish provocations” from the Turkish army's occupation of the northern part of the island of Cyprus in 1974 to the “continued violations of Greek air space”.

Jean-Paul Hébert, a defense analyst, notes that “when one of the two countries buys 50 tanks the other orders 60.” The two nations ranked amongst the world's top arms importers in 2008 with Saudi Arabia, the United Arab Emirates and India.

But as far as Greece is concerned that ranking is likely to drop considerably in 2010 and beyond.

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