Showing posts with label Greek Crisis. Show all posts
Showing posts with label Greek Crisis. Show all posts

Thursday, January 11, 2018

Hedge Fund Sees Juice in Greek Rally as Yields Hit 2006 Low


By Todd White  and Sid Verma
9 Ιανουαρίου 2018, 3:59 μ.μ. EET Updated on 9 Ιανουαρίου 2018, 6:43 μ.μ. EET
Convergence trade remains favorite of Algebris Investments
Borrowing costs drop as traders eye recovery, end of bailout

One of Western Europe’s most dramatic bond-convergence trades this decade -- Greece over Germany -- looks like it will reward investors yet again in 2018.

London hedge fund Algebris Investments is among those betting economic momentum will take the country’s borrowing costs even closer to Germany’s after the Mediterranean country’s 10-year yield spread narrowed by about 44 basis points this month alone. Algebris says it may shrink by as much as 75 basis points.

Tuesday, December 19, 2017

Greece’s Olive Oil Industry Offers a Lesson on Economic Hurdles

The country is a major producer of ‘green gold,’ but sells much of it in bulk
The Wall Street Journal

By Nektaria Stamouli | Photographs by Andrea DiCenzo for The Wall Street Journal
Dec. 18, 2017 5:30 a.m. ET
106 COMMENTS
STREFI, Greece—Workers at Yiannis Skiadas ’ mountainside mill pressed prized Kalamata olives on a recent day to extract the thick, fragrant oil known regionally as “green gold”—most of which would get shipped abroad in bulk and blended into Italian olive oil.

Mr. Skiadas could earn almost three times as much by branding his oil and selling it himself. But that would require investing in every step from cultivation to marketing, and quick cash from Italian customers is appealing after a decade of economic pain in Greece.

“Thank God for the Italians,” he said.

Greek olive oil should be a shining example of the country’s export sector. Instead, it offers a lesson in why Greece remains deeply uncompetitive despite years of pressure to fix its economy.Greece has what should be significant competitive advantages, including a climate that is favorable for agriculture and a 22% drop in labor costs since 2010, around the start of the Greek debt crisis.

But the country has been unable to leverage its low cost base to pull itself out of economic malaise. The value of Greek exports fell last year, despite years of efforts aimed at promoting export-led growth. Just 2.5% of Greek enterprises are involved in export activity, according to a recent survey by Ernst & Young.

Bank lending is scarce in a country mired in debt. And Greece’s notoriously inefficient bureaucracy makes it time-consuming to secure health and safety approvals and export paperwork, according to Greek exporters.

Similar problems affect other Greek agricultural products from peaches to wine. Exports of textiles and household appliances have also slipped in recent years.

The failure of Greece’s olive-oil makers to break into the international market for branded oil is especially painful. Greece is the world’s No. 3 producer of olive oil, according to Eurostat, but just 4% of branded olive oil sold world-wide is Greek, according to a 2015 report by the National Bank of Greece .

The reason: Greek olive-oil producers have mostly stuck to making bulk oil, unable or unwilling to invest in making the branded product that can command lofty prices in foreign markets. Only 27% of Greek olive oil is exported as a branded product, compared with 50% from Spain and 80% from Italy.

“Greece hasn’t invested to create a brand name, as have Italy and Spain,” says Christina Sakellaridi, who heads the Greek Exporters Association. “Now it’s difficult to compete with them.”

By sticking with bulk oil rather than branded oil, Greece is forgoing about €250 million ($294 million) in revenue each year, according to the National Bank of Greece report, money the capital-starved country desperately needs.

Many Greek olive farms and mills are family-operated and have fewer than 10 employees, according to olive-growers’ associations. Their small size leaves them with little of the money and management skill needed to upgrade their products and establish a brand name.

For those who do invest, the payoff can be significant. Before the crisis, Georgios Skarpalezos sank money into new machinery for his mill. Now he makes extra virgin olive oil that he sells in, among other places, London’s Harrods department store. He makes as much as €4 a liter, while a middleman, usually an oil-mill owner, might make as little as 10 to 20 euro cents a liter on bulk oil.

“I cannot produce huge quantities, because I have to focus on the quality of the product,” said Mr. Skarpalezos, showing dark glass bottles designed to safeguard the oil.

Olive-oil producers also often need to import products such as Mr. Skarpalezos’ glass bottles and plastic caps.

Friday, November 10, 2017

Greece's Eurobank close to deal to sell Romanian assets to Banca Transilvania

NOVEMBER 10, 2017 / 10:47 AM / UPDATED AN HOUR AGO
Reuters Staff
1 MIN READ

Reuters

ATHENS, Nov 10 (Reuters) - Greece’s Eurobank said it is close to finalising a deal to sell its Romanian subsidiaries to Banca Transilvania.

The potential sale is part of a restructuring plan agreed by Greece’s third largest lender with European Union authorities, and includes Romanian units Bancpost, ERB Retail Servces IFN and ERB Leasing IFN.

Public debt, unemployment, big NPL pile weigh on Greece: central bank governor

NOVEMBER 10, 2017 / 11:57 AM / UPDATED 16 MINUTES AGO
Reuters Staff
2 MIN READ


Reuters

ATHENS (Reuters) - Greece’s banks have shown progress in tackling a stockpile of non-performing loans, Bank of Greece governor Yiannis Stournaras said on Friday, but said it would remain a challenge for the country.

Greek banks are saddled with 103 billion euros in bad loans, equal to almost 60 percent of the economy, after years of financial crisis and crippling recession. The European Central Bank wants that reduced by 38 billion euros by the end of 2019.

Monday, November 6, 2017

A Turning Point for Greece

By Marcus Ashworth

Bloomberg

Nov 6, 2017 1:00 AM EST
Greece is taking a step closer to get the respect it deserves from Europe.Yields on the country's government bonds, which have already taken great strides lower this year, hit a new low last week on news the government is preparing a major debt swap. The exercise, first reported by Bloomberg News, should allow Greece to sell bonds in future -- and help end its dependence on the largess of its main creditors.

Thursday, November 2, 2017

Refugees in Greece demand transfer to Germany, start hunger strike

NOVEMBER 1, 2017 / 3:35 PM / UPDATED 18 HOURS AGO
Karolina Tagaris, Deborah Kyvrikosaios
3 MIN READ
ATHENS (Reuters) - A group of mainly Syrian women and children who have been stranded in Greece pitched tents opposite parliament in Athens on Wednesday in a protest against delays in reuniting with relatives in Germany.

Some of the refugees, who say they have been in Greece for over a year, said they had begun a hunger strike.

“Our family ties our stronger than your illegal agreements,” read a banner held up by one woman, referring to deals on refugees between European Union nations.

Wednesday, October 25, 2017

Don't blame others for your problems, Germany's Schaeuble tells Greece

OCTOBER 25, 2017 / 12:03 AM / UPDATED 14 HOURS AGO

Reuters Staff

3 MIN READ


REUTERS

ATHENS (Reuters) - Outgoing German Finance Minister Wolfgang Schaeuble urged debt-wracked Greece to stop blaming others for its financial woes and stick to a reform agenda instead of relying on debt relief.

Schaeuble, a leading advocate of Greece’s tough austerity programs and one of Germany’s most powerful politicians, was elected speaker of its lower house of parliament on Tuesday.

The 75-year-old lawyer, whose no-nonsense approach on austerity made him a popular hate figure among Greeks, told Greek Skai TV that Athens must take responsibility for its fiscal difficulties and act on them.

Monday, September 25, 2017

EU ends Greece's deficit procedure in positive signal to markets

SEPTEMBER 25, 2017 / 12:04 PM / UPDATED AN HOUR AGO
Reuters Staff
2 MIN READ


BRUSSELS (Reuters) - European Union states decided on Monday to close disciplinary procedures against Greece over its excessive deficit after improvements in Greece’s fiscal position, confirming the country’s recovery is on the right track.

The move, although largely symbolic, sends a new signal that Greece’s public finances are again under control, facilitating the country’s plans to tap markets after a successful issue of bonds in July which ended a three-year exile.

EU fiscal rules oblige member states to keep their budget deficits below 3 percent of their economic output or face sanctions that could entail hefty fines, although so far no country has received a financial penalty.

Greece had a 0.7 percent budget surplus in 2016, and is projected to maintain its fiscal position within EU rules’ limits this year.

“In the light of this, the Council (of EU states) found that Greece fulfils the conditions for closing the excessive deficit procedure,” the EU said in a note.

“After many years of severe difficulties, Greece’s finances are in much better shape. Today’s decision is therefore welcome”, Estonia’s finance minister Toomas Toniste said.

The EU states’ decision confirmed a proposal by the EU executive commission in July to end the disciplinary procedure for Greece.

The economics commissioner Pierre Moscovici said the decision was “a recognition of the tremendous efforts and sacrifices the Greek people have made to restore stability to their country’s public finances.”

But he stressed that Greece still needs to positively exit its bailout program which ends in August after a third review of the country’s reforms by international creditors.

“There needs to be constructive cooperation between all institutions and the Greek authorities to ensure a smooth and swift conclusion of the third review, with no unnecessary drama,” Moscovici said.

Friday, September 22, 2017

As Crisis Ebbs, Tsipras Promises Doubters a 'New' Greece


By REUTERSSEPT.
21, 2017, 9:57 A.M. E.D.T.

ATHENS — Greek Prime Minister Alexis Tsipras has found a precious commodity he hopes can help him and the nation turn a corner after years of crisis and austerity -- time.

Since taking power in early 2015, he has spent most of his days and nights in firefighting mode, battling Greece's creditors to renegotiate the harsh terms of a series of bailout deals.

Wednesday, September 20, 2017

It's Bailout-Review Time in Greece and Markets Are Wary - Again

By Sotiris Nikas  and Viktoria Dendrinou
20 Σεπτεμβρίου 2017, 5:00 π.μ. EEST

Bloomberg

Crunch time for Greece as review tests bailout-exit capability
IMF demands on Greek banks, debt relief among review issues
The moment of reckoning may soon be upon Greece.

As the country enters the final year of its bailout, questions remain on whether it will be able to stand on its own feet when the rescue program ends. In the immediate term, with creditor representatives descending upon Athens last week for the third review, other concerns loom large: Will this review of the bailout program be different from the previous two? What role will the International Monetary Fund play? Will Greece complete the 95 measures in the review in time?

Tuesday, September 19, 2017

Greece Must Complete Most Pending Bailout Reforms by November-PM

By REUTERSSEPT. 18, 2017, 6:48 A.M. E.D.T.


The New York Times

ATHENS — Greece must complete most of the pending reforms agreed with its official creditors by November in order to speed up the conclusion of a key progress review and exit the bailout in time, Prime Minister Alexis Tsipras told his cabinet on Monday.

Greece's bailout progress is being reviewed by its lenders on a quarterly basis and the next review is expected to start in October. Tsipras has promised to make the country financially independent by 2018, when its third rescue programme expires.

The IMF Needs to Stop Torturing Greece

The fund should write down the country's debt, not demand another bank recapitalization.
By J. Kyle Bass

19 Σεπτεμβρίου 2017, 7:30 π.μ. EEST

“Beware of Greeks bearing gifts,” wrote the ancient Roman poet Virgil. In the 21st century, it’s the Greeks who should have been more careful about accepting offerings -- specifically from the International Monetary Fund, which is now torturing the country in a misguided effort to get its money back.

Greek officials have worked hard to shore up their economy and finances. From 2010 through 2016, the government achieved the all-but-impossible task of shrinking its primary budget deficit by nearly 18 percent of gross domestic product, and is finally in surplus. After a brutal contraction of almost 30 percent, the economy is exhibiting positive signs in almost every area -- industrial production, new automobile registrations, construction permits, tourist arrivals.

Tuesday, September 12, 2017

Greece: Where Literally Sitting on Goldmine Is Not Enough to Make Money

By Sotiris Nikas , Paul Tugwell , and Danielle Bochove
11 Σεπτεμβρίου 2017, 3:50 μ.μ. EEST 11 Σεπτεμβρίου 2017, 8:31 μ.μ. EEST

Bloomberg

“Irrespective of what will happen next, the damage for Greece as an investment destination is done and it is very significant,”

Eldorado Gold Corp. has put Greece on the spot.

The Canadian mining company’s decision on Monday to suspend all its operations in Greece, citing delays in acquiring routine permits, puts the Syriza government of Prime Minister Alexis Tsipras in a difficult position. Eldorado Gold is the largest foreign investor in Greece and its decision comes as the country, which is working on creating a sustainable path to exit its bailout program, tries to lure foreign investments.

Thursday, August 31, 2017

Greece Offers Latest Effort to Reform Public Sector, a Key Bailout Demand

Aug. 30, 2017, at 1:08 p.m

US News

ATHENS (Reuters) - Greece's government presented a three-year plan to overhaul the country's public sector on Wednesday, the latest attempt to fix a problem that helped plunge the country into its worst crisis in decades seven years ago.

Athens, which has signed up for three international bailouts since 2010, has promised its lenders to shrink and modernize its administration to cut costs, make it more efficient and end a legacy of patronage hiring.

The leftist-led government says it aims to evaluate and educate state workers, distribute staff according to the sector's needs and seek candidates with digital skills, create online databases and simplify regulation by 2019.

UPDATE 1-Greece's Eurobank, Piraeus profitable in Q2, bad debt levels ease

AUGUST 30, 2017 / 7:43 PM / 15 HOURS AGO
Reuters Staff
4 MIN READ
* Eurobank posts 8.8 percent rise in Q2 profit

* Non-performing loans ease to 34.6 pct of book

* Piraeus Bank swings to 7 mln euro profit in Q2 (Adds Eurobank, Piraeus CEOs comment, details)

By George Georgiopoulos

ATHENS, Aug 30 (Reuters) - Greece’s Eurobank reported a sixth straight quarterly profit on Wednesday and Piraeus Bank swung back into the black, pointing to a recovery from the nation’s economic crisis as banks slowly reduce their pile of bad debts.

Greek banks have been struggling with problem loan portfolios after a protracted recession pushed unemployment to record highs, making it hard for borrowers to service debts.

Sunday, August 27, 2017

Chastised by E.U., a Resentful Greece Embraces China’s Cash and Interests


By JASON HOROWITZ and LIZ ALDERMANAUG. 26, 2017

The New York Times

ATHENS — After years of struggling under austerity imposed by European partners and a chilly shoulder from the United States, Greece has embraced the advances of China, its most ardent and geopolitically ambitious suitor.

While Europe was busy squeezing Greece, the Chinese swooped in with bucket-loads of investments that have begun to pay off, not only economically but also by apparently giving China a political foothold in Greece, and by extension, in Europe.

Last summer, Greece helped stop the European Union from issuing a unified statement against Chinese aggression in the South China Sea. This June, Athens prevented the bloc from condemning China’s human rights record. Days later it opposed tougher screening of Chinese investments in Europe.

Tuesday, August 8, 2017

Who Will Be Europe’s Alexander Hamilton?

AUG 7, 2017 4

Project Syndicate

SYLVESTER EIJFFINGER
Sylvester Eijffinger is Professor of Financial Economics at Tilburg University in the Netherlands.

TILBURG – Not too long ago, the European Central Bank’s actions were usually met with cheers. But more recently, the ECB has drawn criticism from not just bankers and economists, but also citizens and politicians.
With returns on fixed-income investments decreasing, investors are being forced into equity investments, which have become riskier and more expensive, owing to increased uncertainty about financial and economic stability. That uncertainty reflects the fact that the ECB’s extremely low interest rates are serving to prevent desperately needed structural reforms in eurozone countries with high deficits and debt.

Monday, August 7, 2017

Greece launches new offshore oil and gas tenders

AUGUST 7, 2017 / 3:38 PM / 15 MINUTES AGO

Reuters

ATHENS, Aug 7 (Reuters) - Greece launched two tenders on Monday for offshore oil and gas exploration and exploitation in the west and south of the country, the energy ministry said.

The move follows expressions of interest by a consortium of Total, Exxon Mobil and Hellenic Petroleum for exploration in two sites off the island of Crete, and by Greece's Energean for a block in the Ionian Sea in western Greece.

Greece scapegoats a statistician who only did his job


The Washington Post

By Editorial Board August 4
IN GREECE, the lucrative tourism industry is threatened this summer by millions of oversized jellyfish washing ashore on the nation’s beaches. An even slimier development is the ongoing persecution of the country’s first independent chief statistician, whose tough-minded steps to straighten out Greece’s notoriously fraudulent economic data have been repaid with farcical prosecutions by a judicial system rapidly discrediting itself in the world’s eyes.

Andreas Georgiou, an American-trained economist who spent two decades working at the International Monetary Fund, was hired as Greece’s top statistician in 2010 as the country’s debt crisis was spiraling out of control. His goal was to honestly report economic data that for years had been fudged by politicians and officials seeking to minimize their own fateful fiscal mismanagement.

Friday, July 21, 2017

The IMF Has Approved a $1.8 Billion Conditional Loan For Greece

Reuters
10:31 PM ET
The International Monetary Fund on Thursday approved in principle a $1.8 billion standby loan arrangement for Greece, making a conditional commitment to help underpin the country's long-running bailout program for the first time in two years.

But the IMF's approval-in-principle means the fund will not make any money available until after it receives "specific and credible assurances" from Greece's European lenders to ensure the country's debt sustainability.
The approval is also conditional on Greece keeping its economic reforms on track. The current bailout, Greece's third since 2010, is now shouldered exclusively by European institutions.