It's All Greek To Me

[leistb]

Greece is currently the vanguard in a group of nations facing a sovereign debt crisis. Many have speculated that as Greece goes, so goes the rest of the group of nations known as the PIIGS (Portugal, Ireland, Italy, Greece and Spain). As of 27 April 2010, S&P has downgraded Greece's bond status to junk and the yields on their bonds have skyrocketed over the last several days. Default looks to be imminent.

As this economic picture unfolds, please post all Greek-related items in this thread. However, if something catastrophic is breaking and requires its own attention, please post it outside this thread and it can be merged later.

Thank you.

[leistb]

Greece Deterioration Hits Nitrous: IMF, EU, ECB Find Greek Plan €4.8 Billion Short



Submitted by Tyler Durden on 02/25/2010 10:56 -0500

Greeks just can't catch a break. Market News reports that a "joint report drafted by the European Commission, the International Monetary Fund and the European Central Bank finds that the calculations contained in Greece's budget plan falls €4.8 billion short of what is needed to meet its deficit cutting objective this year" according to senior Greek government officials. Well, our RBS spin-unadjusted take on this data is bearish to quite bearish for the country's Moody's downgrade prospects, which is the gating factor to utter and total chaos once the GGB are no longer accepted as collateral by the ECB. Not to mention Greece's bond issuance propensity (but anonymous government sources have said about 50 times this week the.bond.is.getting.done), and its Bund spread, which at last check was set to probe recent record wides. In the meantime there is no bank run, repeat NO BANK RUN in Greece.

And for the benefit of a presumably budget conscious RBS (which just paid itself the same amount in billions as it just cost taxpayers in Q4, somewhere north of $1 billion), here is the balance of the Market News release:

The report asserts that the Greek government is underestimating its debt service payments for this year by E1 billion and is too optimistic in estimating that it can generate an additional E1.2 billion of revenue by cracking down on tax evasion, the sources said.

It also says that Greece will not get as much funding from the EU budget as it projects.

As MNI reported earlier Thursday, Greece has already signed onto E3.5 billion in additional budget cuts and tax hikes to try and plug the gap. However, a top official at the Greek finance ministry said the government will not try to produce the extra E1.3 billion that would be required, for fear of social unrest and of "strangling the economy."

In any event, the E4.8 billion discrepancy detailed in the report is not necessarily the final and definitive figure, a senior finance ministry source said. The European Commissioner for Monetary and Economic Affairs, Olli Rehn, is expected in Athens Monday to discuss the report and the alleged discrepancy.

Rehn said in Brussels earlier today that he expected to see the report on Friday.

We are looking forward to seeing just how the much anticipated amicable resolution which RBS is so eagerly predicting, unravels.

http://www.zerohedge.com/article/gre...-billion-short

[leistb]

Greek Treasuries Pancake As Bond Vigilantes Chant Death Chorus



Submitted by Tyler Durden on 02/25/2010 11:37 -0500



Ah, curve pancaking - better known in bond parlance as the death rattle. The Greek 4 Year GGB just traded wider of the 15 Year at a spread of -4bps (yup, negative). This, to continue the parlance lesson, means the bond vigilantes are now pretty sure how the Greek situation will play out. Oh, and Greece, all the best with that €5 billion10 year bond issuance. The 1 Year spot his exploded from just over 200 bps on January 1, to just under 5%, a rout for all short-term GGB holders. We are anxiously awaiting RBS' rebuttal.









http://www.zerohedge.com/article/gre...t-death-chorus

[Samen]

Oh hoh and some more---->

Bernanke Says Fed Reviewing Goldman Swaps With Greece (Update1)

February 25, 2010, 11:32 AM EST

By Craig Torres
Feb. 25 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the use of credit default swaps to destabilize a country is “counterproductive,” and added the central bank is reviewing the arrangements of Goldman Sachs Group Inc. and other companies with Greece.
“We are looking into a number of questions related to Goldman Sachs and other companies and their derivatives arrangements with Greece,” Bernanke said today in testimony before the Senate Banking Committee in Washington.
Greek bonds slid today, pushing the premium investors demand to hold the nation’s 10-year securities instead of German bunds to the most in more than two weeks, amid concern the country’s credit ratings may be cut.
Federal Reserve officials are using new supervisory powers over firms such as Goldman Sachs and Morgan Stanley to gather information on financial system risks. Bernanke was responding to a question from Senator Christopher Dodd, a Connecticut Democrat, who asked if there should be limits on the use of credit default swaps to prevent “runs against governments.”

Destabilize

“Obviously, using these instruments in a way that intentionally destabilizes a company or a country is -- is counterproductive, and I’m sure the SEC will be looking into that,” Bernanke said. “We’ll certainly be evaluating what we can learn from the activities of the holding companies.”
U.S. stocks fell today in part as Moody’s Investors Service said it may downgrade Greek debt. The Standard & Poor’s 500 Index was down 1.52 percent at 10:51 a.m. in New York. Yields on U.S. 2-year notes declined 0.03 percentage point to 0.828 percent.
Goldman Sachs helped Greek officials raise $1 billion of off-balance-sheet funding in 2002 through swaps, which European Union regulators said they knew nothing about until recent days.
Goldman Sachs did “nothing inappropriate” when it arranged currency swaps for Greece that reduced the nation’s national debt by 2.37 billion euros ($3.2 billion), a top executive said.
“They did produce a rather small, but nevertheless not insignificant reduction, in Greece’s debt-to-GDP ratio,” Gerald Corrigan, chairman of Goldman Sachs’s regulated bank subsidiary, told a panel of U.K. lawmakers Feb. 22. The swaps were “in conformity with existing rules and procedures.”
“As a matter of policy, we don’t comment on legal or regulatory matters,” Michael DuVally, a Goldman Sachs spokesman, said today.

Full storie and a lot more at http://www.businessweek.com/news/201...th-greece.html

[Ross]

If the Greeks have done back door deals with GS they have probably
indulged in all sorts of financial fraud . I am sure I would not lend them
money even at 15% for 1 year money ( hmm , better make that 30% ) .

About the only option left for Greece is a Dutch auction .
Can you sell an entire country ?

They could probably add substantial value by offering it as
unoccupied property or property with no unions .

Perhaps the cheapest option would be to pay the Government
union members to migrate .

[Samen]

Goldman Sachs Group Inc. managed $15 billion of bond sales for Greece after arranging a currency swap that allowed the government to hide the extent of its deficit.

http://www.bloomberg.com/apps/news?p...d=a8wj2A4RttMQ

------
It appears they had some help from the catastrophe experts.

[Samen]

So maybe i can by myself a nice vineyard or olive patch to retire in

[leistb]

Ze Germans: "Only The IMF Can Help Greece"


Submitted by Tyler Durden on 02/28/2010 11:42 -0500

Those banana-hugging Germans strike back, and by doing so, throw the rotten apple of the imminent Greek collapse straight into America's back yard: in today's edition of Handelsblatt, German politicians have said that only the International Monetary Fund is the right institution to save Greece from going bankrupt. While the increasingly irrelevant Greek rumor-spreader has been very busy over the past few days, getting Greek newspaper Ta Nea to announce that now Caisse des Depots has entered the KfW bailout syndicate, in an interview with German TV station ARD, Merkel said that not only is this yet more gibberish but that there is no legal basis for any of the rumored actions. So what will happen to Greece? Well, if former ECB Chief economist Otmar Issing has his way, Greece's dirty laundry will end up being washed by American taxpayers, because you see Greece is just as much a member of the IMF as it is of the EU, or so the Germans claim.
Rough google translation from Handelsblatt:

Former ECB chief economist Otmar Issing provides a similar view: "My preference is that you turn on the IMF, since Greece is a member of the IMF, not the European Union", said the current chairman of the Intergovernmental Commission for the financial architecture for information in this newspaper recently the Europe Committee of the Bundestag. The monetary union was not a state, Issing argued, but a community of sovereign states. If you could help Greece, other countries refuse to help little, "he said.

Not all that shocking, a Greek default (but, but, it is only 0.00001% of world GDP or whatever), it is now confirmed, would be the next Lehman:

A bankrupt government would meet not only the euro zone, but shaking the entire global financial system. After the video of Obama, Merkel and Brown said the spokesman for the U.S. president, Robert Gibbs, Obama was convinced that the EU would respond "appropriately and effectively" to the crisis. On the foreign exchange markets, the continuing uncertainty sparked a new wave of speculation against the euro. According to the U.S. inspection CFTC, the number reached bets on a falling euro share price, a new record. This year, the euro against the dollar has lost about ten percent of its value.

The biggest hindrance to a Greek bailout: Germany itself, whose political parties realize they are getting closer to comparable riots as those recently seen in Greece should they proceed with what the Greek rumormonger has been dreaming of:

The head of the CSU in the European Parliament Markus Ferber, however, rejects aid from the EU and its Member States for Greece and categorically to commercial banks that take part in consequence of the crisis on speculation against the euro, to impose stricter rules. "Greece is a bottomless pit. Giving now that money would be a big mistake," said Ferber to Handelsblatt Online. Ferber expressed her concern, given the ongoing crisis triggered by speculation against the euro, Greece. The CSU European politicians called for strict rules to prevent such speculation. "Emergency escape must be participating banks under the license," said Ferber. About an initiative he would soon talk with EU internal market and services commissioner, Michel Barnier.

Ferber said that a German participation in an aid package for Greece was prevented by legal reasons. "The Constitutional Court has ruled in its Maastricht ruling that German participation in a bailout of another country from the German ratification law would no longer be covered," said Ferber.

Rather than rely on aid from the EU, Greece could try on new bonds to raise money, so Ferber. "If it is more expensive in Greece than in Germany, incur debts, then this corresponds to market rules. The U.S. is no different if, for example, California pays a higher risk premium than Nevada," said CSU European politicians.

Sure enough, recent PR (or lack thereof) escalations by Greece, which has so far not gotten its way, apparently have not led to any material deterioration in German opinion toward the defacto insolvent PIIG (or at least so the far more diplomatic Germans claim).

Greece's government is trying, however, in dispute with Germany not pour oil into fire. The question of German reparations for the occupation in the Second World War would not now put on the agenda, said Vice Foreign Minister Dimitris Droutsas the Handelsblatt. Ahead of the visit to Germany by Prime Minister Giorgos Papandreou Droutsas stressed the "very close and cordial relations" between the two countries. While Athens would overcome the acute financial crisis on their own. To do this, but need the political solidarity of the EU partners - and especially the support of Germany.

The question of German reparations was open, in fact, said Droutsas. "But we want that now do not make the topic completely and mix with the current financial difficulties of Greece." In view of the "special sympathy felt by many German for Greece," one should not focus on the misunderstandings and mistakes of the past but the present and see tomorrow, "said the politician:" I am optimistic that together we can achieve much. "Regarding the meeting with Chancellor Merkel, to Papandreou and Droutsas come together in Berlin on Friday, the minister said that Athens was now waiting for Government a "really strong political support."

We eagerly await to see what Greece's increasingly marginalized rumor spreader's next steps will be.

http://www.zerohedge.com/article/ze-...an-help-greece

[DReynolds]

http://online.wsj.com/article/SB1000...googlenews_wsj

MARCH 2, 2010, 9:37 A.M. ET

Berlin Sees German Resistance to Greece Aid

By ANDREA THOMAS
BERLIN—Reports that Germany will back a financial bailout have bolstered European financial markets, but Berlin's hesitant leaders are running up against stiffening popular opposition in Germany.

New German opinion polls and conversations with Berlin lawmakers and pundits reveal a deep disinclination to throw German money into a rescue plan for Greece, helping to explain the lack of progress or details emerging from reported contingency plans.

Chancellor Angela Merkel remains focused on emphasizing that radical Greek budget reforms are the key to solving its debt crisis. She has made no reference to any plan for Germany to purchase or guarantee Greek government debt. Instead, she regularly brings up the no-bailout clause in the Maastricht Treaty for the European Monetary Union.

"She is caught between the devil and the deep blue sea. Germany doesn't like it if a country is forging its numbers and that it should then help such a state. This is extremely unpopular in Germany," said Gerd Langguth, professor of political science at the University of Bonn. But because of the possible negative implication on the euro zone as a whole, "Merkel will certainly have to consider helping Greece somehow, but this is extremely unpopular in Germany."

[leistb]

Originally Posted by DReynolds

http://online.wsj.com/article/SB1000...googlenews_wsj

MARCH 2, 2010, 9:37 A.M. ET

Berlin Sees German Resistance to Greece Aid

By ANDREA THOMAS
BERLIN—Reports that Germany will back a financial bailout have bolstered European financial markets, but Berlin's hesitant leaders are running up against stiffening popular opposition in Germany.

New German opinion polls and conversations with Berlin lawmakers and pundits reveal a deep disinclination to throw German money into a rescue plan for Greece, helping to explain the lack of progress or details emerging from reported contingency plans.

Chancellor Angela Merkel remains focused on emphasizing that radical Greek budget reforms are the key to solving its debt crisis. She has made no reference to any plan for Germany to purchase or guarantee Greek government debt. Instead, she regularly brings up the no-bailout clause in the Maastricht Treaty for the European Monetary Union.

"She is caught between the devil and the deep blue sea. Germany doesn't like it if a country is forging its numbers and that it should then help such a state. This is extremely unpopular in Germany," said Gerd Langguth, professor of political science at the University of Bonn. But because of the possible negative implication on the euro zone as a whole, "Merkel will certainly have to consider helping Greece somehow, but this is extremely unpopular in Germany."

Let's see... Have the German taxpayers bailout the Greeks who cooked their books to get into the EU, spent like drunken sailors and wish to continue to fund bloated union pension plans while striking at the suggestion of austerity measures... Geeeez, what's not to like?

[Sysiphus]

Let's see... Have the German taxpayers bailout the Greeks who cooked their books to get into the EU, spent like drunken sailors and wish to continue to fund bloated union pension plans while striking at the suggestion of austerity measures... Geeeez, what's not to like?

The fact that an American ibank helped them cook the books, made massive amounts of money doing so and likely will benefit enormously from the resulting decrease in spreads if Germany bails Greece out does not help either. If I were German, I would certainly be telling my pols where they could stuff any bailout package.

[leistb]

Greek Workers Occupy Ministry; New Walkout Called (Update1) By Maria Petrakis





March 4 (Bloomberg) -- Greek demonstrators took over the Finance Ministry building in central Athens and blocked streets in the city center as union groups stepped up protests against government wage cuts and tax increases to curb the deficit.

About 200 members of the PAME union group, aligned with the Communist Party of Greece, were at the ministry today and protesters also took over the nearby General Accounting Office, according to a police spokeswoman. Another group blocked a central road in downtown Athens, snarling traffic.

Greek Prime Minister George Papandreou yesterday unveiled 4.8 billion euros ($6.6 billion) of additional deficit cuts as he tries to convince European allies and investors he can tame the region’s biggest budget gap. European Union officials praised the moves and Greek bonds gained on the measures, which include a 30 percent cut to three bonus-salary payments to civil servants.

“The measures are grossly unfair,” Dimitris Bratis, the president of the Greek teaching federation, which will strike for 24 hours tomorrow, told NET TV today. “We’re being asked to pay for the crisis. Greek taxpayers are being asked to foot the bill again.”

The main union for public workers, ADEDY, called a three- hour work stoppage for tomorrow and a protest rally in the city center, that the country’s private-section union group, representing 2 million Greek workers, will also join, according to spokesman Stathis Anestis.

‘Rise Up’

The Finance Ministry building was draped with a banner urging Greeks to “rise up” against the budget measures and protesters on the roof of the building exhorted passersby to join a protest march by PAME scheduled for later today. Last week, the same group blockaded the Athens stock exchange headquarters, preventing staff from entering the building.

ADEDY said it is considering rescheduling its March 16 24- hour strike, the third this year, to next week. GSEE’s executive met today to decide on new strike and protests.

Papandreou’s package announced yesterday includes cuts in spending for education and an increase in value-added taxes, as well as to the bonuses paid to civil servants for holidays and a pension freeze. The package of measures is due to be voted on tomorrow in parliament, where Papandreou has a 10-seat majority.

The GSEVEE federation, which represents small businesses and craftsmen, said the measures were “neither fair, nor effective.”

“The attempt to fix the fiscal crisis underlines clearly the government’s attempt to move the cost of this attempt to the real economy,” Nikos Skorinis, the secretary of GSEVEE said in an e-mailed statement.

To contact the reporters on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net

Last Updated: March 4, 2010 05:58 EST

http://www.bloomberg.com/apps/news?p...K6.wdqKM&pos=8

[DReynolds]

http://www.reuters.com/article/idUSL...pe=marketsNews

EU parliament to stage hearing on Greek statistics

Thu Mar 4, 2010 12:36pm EST

BRUSSELS, March 4 (Reuters) - The European Parliament will soon organise a public hearing on the unreliable Greek statistics, the EU assembly said in a statement on Thursday.

The hearing "of all those implicated in the falsification of Greek public accounts" is to be "promptly" organised by the parliament's economic and monetary affairs committee, the statement said, but gave no exact date for the hearing.

The statement said that parliament would invite to it the representatives of the European Commission, the Eurogroup, the European Central Bank, Eurostat, the Greek government, investment bank Goldman Sachs (GS.N) and others.

"This hearing is not intended to look for an easy scapegoat in Goldman Sachs, although its practices pose serious problems elsewhere especially concerning its participation in the current wave of speculation on Greek debt," former Belgian Prime Minister Guy Verhofstadt, now a member of European Parliament, said in the statement.

"The goal is to understand how and why the entire political and administrative chain, from Athens to Brussels passing through Frankfurt, could have ignored the dressing up of Greek public accounts ", said Verhofstadt, who originally proposed the idea of the hearing.

[leistb]

Originally Posted by DReynolds

http://www.reuters.com/article/idUSL...pe=marketsNews

EU parliament to stage hearing on Greek statistics

Thu Mar 4, 2010 12:36pm EST

BRUSSELS, March 4 (Reuters) - The European Parliament will soon organise a public hearing on the unreliable Greek statistics, the EU assembly said in a statement on Thursday.

The hearing "of all those implicated in the falsification of Greek public accounts" is to be "promptly" organised by the parliament's economic and monetary affairs committee, the statement said, but gave no exact date for the hearing.

The statement said that parliament would invite to it the representatives of the European Commission, the Eurogroup, the European Central Bank, Eurostat, the Greek government, investment bank Goldman Sachs (GS.N) and others.

"This hearing is not intended to look for an easy scapegoat in Goldman Sachs, although its practices pose serious problems elsewhere especially concerning its participation in the current wave of speculation on Greek debt," former Belgian Prime Minister Guy Verhofstadt, now a member of European Parliament, said in the statement.

"The goal is to understand how and why the entire political and administrative chain, from Athens to Brussels passing through Frankfurt, could have ignored the dressing up of Greek public accounts ", said Verhofstadt, who originally proposed the idea of the hearing.

The octopus arms of Goldman reach far and wide.

[DReynolds]

Originally Posted by leistb

The octopus arms of Goldman reach far and wide.

Not content with fu**ing up the US and Western European economies, Goldman and Citi and UBS and AIG have managed to screw up economies all over creation with garbage assets and deceptive accounting.

[Ought Six]

Greek police fire teargas at protesters in Athens


Reuters
Thu Mar 4, 2010

ATHENS -- Greek police fired teargas on Thursday to disperse about 50 demonstrators in central Athens after clashes broke out during protests against government austerity measures, a police official said.

Left-wing groups and communist trade unions rallied in the Greek capital a day after the government announced 4.8 billion euros ($6.5 billion) in wage cuts, a pension freeze and tax increases to reduce its huge fiscal deficit.

"There were clashes between police and protesters," the official said. "Police fired teargas. There were a few arrests."

Opposition to THE austerity measures has so far been relatively muted for a country with a tradition of street protests but one pollster said it should move quickly to counter a general sense of shock.

The private sector GSEE union and its sister public sector union ADEDY, which represent half of Greece's 5-million workforce, called workers to stop work from midday on Friday and attend a rally outside parliament.
_____

(Reporting by Angeliki Koutantou; Writing by Ingrid Melander; Editing by Andrew Dobbie)

[kanuck57]

Greece says 5-yr bond 3 times oversubscribed
By NICHOLAS PAPHITIS
03.04.10
http://www.forbes.com/feeds/ap/2010/...omepagetopnews

ATHENS, Greece -- Greece raised badly needed cash with a new bond issue Thursday, passing a key test of its ability to avoid a disastrous debt default and dig out of a financial crisis that has shaken the European Union.

The five-year bond was three times oversubscribed, with euro15 billion ($20.5 billion) in offers received, a Finance Ministry statement said. The government took euro5 billion ($6.8 billion), offering a 6.3 percent yield.

The ministry said the high level of offers "shows that despite the extremely difficult circumstances, investor confidence in the Greek economy remains strong."

But it added that the steep yield - compared to benchmark German bonds of equivalent maturity - stressed the need for Greece to accelerate its reform plans, "to restore market confidence and exit the crisis."

The sale, most of which was absorbed by international institutional investors, reflects on Greece's ability to raise money to pay off expiring bonds and avoid the risk of default. Its announcement comes a day after debt-ridden Greece detailed a whole new round of painful austerity measures, including salary cuts for civil servants, pension freezes and tax increases on cigarettes, alcohol, luxury goods and gems.

Labor unions fiercely oppose the measures. Several thousand people - many chanting "Disobey, do not pay!" took part in two separate demonstrations organized by left-wing groups in central Athens late Thursday.
Read All Comments

In one of them, clashes broke out between stone-throwing protesters and police, who used tear gas and stun grenades to disperse troublemakers, who smashed bus stops and battered bank fronts with sticks and crowbars. No arrests or injuries were immediately reported.

Unions have announced further protests for Friday, when parliament is set to approve draft legislation on the new austerity plan that aims at euro4.8 billion ($6.55 billion) in budget savings this year.

The measures were intended to show markets that the government is serious about getting spending under control and will have the money to pay its debts.

Greece has to borrow some euro54 billion ($74 billion) through sovereign debt issues this year, and has so far raised around euro13 billion ($18 billion), including treasury bill sales. It has around euro20 billion ($27 billion) worth of debt maturing in April and May. But low market confidence in the country has translated into extremely high borrowing costs for Athens, and the government has been seeking a way to borrow at more reasonable rates.

Greece's problems have shaken confidence in the common European currency, and raised fears of contagion to other wobbly southern economies - principally Portugal and Spain that both have worrisome debts and restive unions.

However, Spain also held a successful bond issue Thursday, in an encouraging sign that troubled southern nations are still able to raise cash through debt issues. Spain's Treasury sold 4.5 billion euros in new 5-year bonds, in an issue that was 1.5 times oversubscribed.

Athens is pressing its European Union partners for stronger support in return for its new harsh austerity plan, saying it needs a vote of confidence that would calm the markets. Prime Minister George Papandreou is to meet with German Chancellor Angela Merkel whose country has the 16-nation eurozone's biggest economy, in Berlin Friday, and with French President Nicolas Sarkozy in Paris on Sunday. Next week, he travels to Washington for talks with President Barack Obama.

Greece's economy makes up some 2.5 percent of the 16-member eurozone's GDP.

The European Union has made a vague expression of support, and there has been market speculation that Germany and France might extend help in the form of state-owned banks guaranteeing Greek bonds.

But French Finance Minister Christine Lagarde said Thursday a Franco-German aid plan for Greece is not on the agenda at the moment. She said France and Germany are working on different solutions, but there is no need for them right now.

Lagarde hailed the "courage" of the Greek government and its new austerity plan, but stressed that it's important to make sure those measures are carried out.

Many analysts think the EU would step in to stop a Greek default and avoid the severe blow it would cause to the euro currency and to the balance sheets of European banks who hold Greek bonds.

Greece has indicated that if the EU fails to detail potential emergency support it could turn to the Washington-based International Monetary Fund - causing considerable embarrassment to the 27-member bloc by appealing to an outside agency.

European Central Bank chief Jean-Claude Trichet showed little enthusiasm for the notion. "I do not trust it would be appropriate to have the introduction of the IMF as a supplier of help," he said.

While the IMF reiterated it was ready to help Greece with technical expertise, an official said there were no plans for Papandreou to see the fund's officials when he visits Washington. "We stand ready to assist, we expect that Europe will be able to fix this problem," said Caroline Atkinson, the head of the IMF's external relations department.

Greek government spokesman George Petalotis said there was no bailout deal with the EU. What Athens was looking for, he said, is "a clear and explicit statement ... that Greece genuinely is a solvent country on which everyone can rely - so risks will be lowered on international markets and we can borrow money."

"That is enough for us," he said.

Germany has stressed repeatedly that Greece bears the main responsibility for overcoming its debt crisis. Merkel welcomed the deeper austerity measures Wednesday, but stressed that her meeting with Papandreou would "not be about pledges of aid."

Greece's two largest labor unions are organizing work stoppages and a protest rally outside parliament Friday, as lawmakers vote on the austerity plan.

The ADEDY umbrella union representing civil servants, who will suffer most from the measures, decided Thursday to walk off the job from noon onward, shutting down public services and grounding flights for four hours.

Greece's Olympic Air and Aegean have canceled more than 40 flights in total, while more have been rescheduled.

The private sector umbrella union, GSEE, called for a three-hour walkout from noon, and the two unions will hold a demonstration in Athens, where most forms of public transport will be idle throughout the day.

State school teachers, journalists and railway workers will walk off the job too.

A Communist-affiliated labor union has also called a general strike and demonstration for Friday. That union occupied the finance ministry building in central Athens early Thursday, hanging a massive banner from the roof, and organized a peaceful demonstration attended by about 3,000 people Thursday evening.

"Our intention is for the measures never to be implemented," said protest organized Nikos Xourafis. "They want to take money from people who have none to give."

Associated Press Writers Elena Becatoros and Derek Gatopoulos in Athens, Aoife White in Brussles, Emma Vandore in Paris, Daniel Woolls in Madrid and Geir Moulson in Berlin contributed to this story



.

[Sysiphus]

6% yield?! I suspect there is some arbitrage going on to cover shorts.

[kanuck57]

YouTube video Mar 3 2010 - Webster Tarpley: Bankers in slump plot against euro to save dollar 4min 28sec:

You Tube

The Greek government has announced new austerity measures aimed at slashing its huge budget deficit. It comes a day after the Prime Minister said that the country was fighting for survival. The new measures -- which will reduce annual pay and increase taxes -- were ordered by the EU in an bid to prevent a collapse of the Euro. But street protests have been raging in Athens against the plans. Meanwhile, the U.S. Justice Department is reported to have launched a probe into leading American hedge funds. They're suspected of helping Greece cover up its debts to weaken the European currency. Journalist Webster Tarpley believes that was a plot hatched to prop up the dollar's supremacy.

================================================== ===


Financial Warfare Exposed: Soros, Goldman Sachs, Hedge Funds Attack Greece to Smash Euro
Webster G. Tarpley
March 3, 2010
http://tarpley.net/2010/03/04/financ...uro/#more-1353



It has been evident for some time that the ongoing speculative attack on Greece, along with such other countries as Spain, Ireland, Portugal, and Italy, was not primarily a reflection of their economic fundamentals, nor yet a spontaneous movement of “the market,” but rather an orchestrated action of economic warfare. The dollar had been relentlessly falling through the late summer and autumn of 2009. It obviously occurred to various Anglo-American financiers that a diversionary attack on the euro, starting with some of the weaker Mediterranean or Southern European economies, would be an ideal means of relieving pressure on the battered US greenback. Since these degenerate elites are incapable of directly solving the problem of the dollar through increased production, full employment, and economic recovery, one of the few alternatives remaining to them is to create a situation in which the euro is collapsing faster, leaving the dollar as the beneficiary of some residual flight to quality or safe haven reflex.

This is what emerged during the first week of December with a speculative assault or bear raid against Greek and Spanish government bonds as well as the euro itself, accompanied by a scurrilous press campaign targeting the “PIIGS,” an acronym for the countries just named, coming from inside the bowels of Goldman Sachs. I have discussed this phenomenon several times over the last two to three weeks on my radio program on GCN - World Crisis Radio with Webster Tarpley.

Now comes concrete proof of this conspiracy in the form of a Feb. 8 “idea dinner,” held at the Manhattan townhouse of Monness, Crespi, Hardt & Co, a boutique investment bank. Among those present were SAC Capital Advisors, David Einhorn of Greenlight Capital (a veteran of the fatal assault on Lehman Brothers in the late summer of 2008), Donald Morgan of Brigade Capital, and, most tellingly, Soros Fund Management. The consensus that emerged that night over the filet mignon was that Greek government bonds were the weak flank of the euro, and that once a Greek debt crisis had been detonated, all outcomes would be bad for the euro. The assembled predators agreed that Greece was the first domino in Europe. Donald Morgan was adamant that the Greek contagion could soon infect all sovereign debt in the world, including national, state, municipal and all other forms of government debt. This would mean California, the UK, and the US itself, among many others. The details of this at dinner were revealed in the headline story of the Wall Street Journal on Friday, February 26, 2010. (See article)

Nor was this the only cabal in town intent on attacking the euro through the week Greek flank. The article cited suggests that GlobeOp Financial Services and Paulson & Co. are also piling on. The zombie banks were also heavily engaged. The article reported that Goldman Sachs, Bank of America-Merrill Lynch, and Barclays Bank of London were also assisting speculators in placing highly leveraged bearish bets against the euro. Note that these zombie banks are alive today because of US taxpayer money, in Barclay’s case through AIG.

It amounted to a deliberate attempt to create a large-scale world monetary crisis which would certainly bring with it the dreaded second wave of the current world economic depression. The creation of monetary chaos in Europe through the convulsive destruction of the euro under speculative attack would cripple commodity production in western Europe, severely undermining one of the dwindling areas of the world economy which are still functioning. The genocidal implications for humanity ought to be obvious, but the assembled hedge fund hyenas were not concerned with these consequences.

George Soros has been telling every media outlet that will listen that the euro is doomed to fall apart and break up over the short run. Soros even has a theory to deploy as part of his speculative attack. Soros argues that the fatal flaw or original Sin of the euro is that it was based on a common central bank among the participating countries, but lacked a common treasury and tax policy. This means that a country like Greece can no longer defend itself from a speculative attack on its bonds by the simple expedient of currency devaluation, since there is no more drachma, and the euro is controlled from Frankfurt, not Athens. British spokesmen are quick to point out that, even though the financial situation of London is far worse than that of Athens, the British government is already devaluing the pound through a downward dirty float.

Given Soros’s infamous track record, he must be taken seriously. In 1992, Soros became world famous through his attack on the European Rate Mechanism, which he executed by a highly leveraged speculative assault on the British pound, at the time one of the weaker members of the ERM. Soros’ speculative attack led to a pound devaluation and the ragged breakup of the ERM, and netted Soros £1 billion in profits. It was as if Soros had personally stolen a £20 note from every man, woman, and child in Britain. The speculative gains were no doubt gratifying, but the overriding political purpose of the assault was to sabotage that phase of European monetary policy.

The London Economist has gone out of its way to mock Spanish Prime Minister Zapatero’s remark that Spain was under international speculative attack. Press organs of the city of London and Wall Street have ridiculed the Greeks as a nation of paranoid conspiracy theorists. And yet, the revelations made so far are strong circumstantial evidence of pre-concert, as Lincoln would say. Even the US Department of Justice has been forced to send letters to the participants in the infamous “idea dinner,” warning them not to destroy any of their records and thus putting them on notice that they are under investigation. While we should not have any illusions about the prosecutorial zeal of Attorney General Eric Holder, who once represented the international financial bandit Marc Rich, this is at least a beginning. Spanish and Italian judges are noted for their independence, and one of or more them may wish to examine the activities of Soros, Goldman Sachs, and their hedge fund allies.

Greece does not need an austerity program, as the Greek labor movement has eloquently argued in the course of their successful and admirable general strike last week. Greece does not need a bailout from Germany, the sinister International Monetary Fund, or from anyone else. Least of all does Greece need to accept the advice of Austrian school or Chicago schools charlatans who recommend the catharsis of a deflationary crash that would destroy an entire generation through unemployment, poverty, and despair. Greece needs to defend itself with a 1% Tobin tax on all derivatives and other financial transactions. Greece should take the lead in outlawing credit default swaps, which amount to issuing insurance without meeting the capital requirements of being an insurance company. Greece needs to enforce EU and national antitrust laws. If Soros and his gang succeed in breaking up the euro, Greece should make the best of it by immediately imposing heavy-duty exchange controls and capital controls to protect the new drachma, on the model of Malaysia a dozen years ago. Greece should shut down domestic zombie banks and seize its central bank and use it to issue 0% credit for industrial and agricultural hard commodity production. If the Greeks made plain what they intend to do if they are forced to fall back on the drachma, the financiers who fear such an example would have another reason to relent.

Another obvious expedient is that of a bear squeeze or short squeeze. Soros, Goldman Sachs, and their gang of hedge fund allies have now used derivatives to establish short positions against Greek bonds and the euro, betting that these latter will go down. Political pressure is now being brought to bear on the European Central Bank and the Greek central bank to undertake an unannounced large-scale purchase of Greek bonds and euros in the forward market, causing the Wall Street predators to lose their bets, thus punishing them severely with extravagant losses. This is normal central bank practice, and it will be astounding if the Greeks do not execute such a maneuver very soon.

The world now faces a stark choice between two alternatives, with Wall Street forcing the issue. The first is that the zombie banks and hedge funds, having been saved and bailed out by national states and their taxpayers, will repay the favor by driving the national states and all forms of state, provincial, and local government into bankruptcy. This will be synonymous with the destruction of modern civilization itself. The second and preferred alternative is that the national states summon the political will to use the inherent powers of government to place the zombie banks, hedge funds, and related purveyors of derivatives into bankruptcy receivership and shut them down once and for all, relying in the future on nationalized central banks for the provision of credit. The second alternative would allow the preservation of modern civilization as we have known it. But in the meantime, the derivatives-based speculative attack on the southern flank of the euro has accelerated the arrival of the second wave of depression, which now appears likely to strike the world before the end of 2010.



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[leistb]

Several protests turned violent in parts of Greece today as austerity measures were being discussed. Link

[leistb]

Hat tip AZ from Market Ticker Forum:

A law in Greece must be printed in a government newspaper before it can be considered officially passed. Police officers took over the printing offices to prevent its publication. The law in question has to do with their salaries. Very interesting development indeed.

Go here.

[leistb]

Rolling blackouts and disturbances in response to austerity measures.

Story here.

[leistb]

Greece: The first domino.

[Ought Six]

http://www.businessweek.com/news/201...eece-woes.html

Greece dragging down the euro again.

[Samen]

There are whispers that Finland is in the same boat with the Greek in this situation, politicians are mostly denying it but talking about tax increases over the line and pay decreases.