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  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    Greek PM assures EU creditors reforms coming to unlock cash

    The risk of a continued standoff is underlined by the different descriptions of reforms Athens would need to launch stated by Tsipras and Merkel.

    Tsipras - "It is clear that Greece is not obliged to implement recessionary measures," referring to previously agreed reforms. "Greece will submit its own structural reforms, which it will implement."

    Merkel - who insisted that only the full completion of already approved measures would be acceptable to the creditors. "The reference point is the agreement of Feb. 20," she said. "We have not changed one iota."
    I can't wait to see the new list of "detailed" "non recessionary" structural reforms offered by the Greeks. The cashbox will remain locked.
    Mar 20, 2015. 07:28 AM | 4 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    Greece pushes utilities to lend government cash
    Reuters - March 19, 2015

    After Prime Minister Alexis Tsipras's government dipped into the cash reserves of pension funds the government is now calling on the main utilities, such as the Athens Water Co (EYDAP), the Public Power Company and the telecom company OTE, to undertake repo transactions in which these entities lend money to the Greek debt agency through a short-term repurchase agreement. However, OTE is 40 percent-owned and managed by the German telecoms giant Deutsche Telekom.
    Tsipras, is pushing for a political deal with Merkel and other European leaders on the sidelines of the summit meeting beginning Thursday in Brussels. Meanwhile, talks with the Troika have been put on hold while the summit takes place. Given that the Greeks violated their previous deal by unilaterally approving humanitarian aid without discussions of how it's going to be paid for, I expect little out of the summit. Tsipras meets with Putin right after that summit, signaling that the table stakes are being raised.

    If the Greeks claim that they put humanity before bill paying, the Germans could respond with questions concerning the timing of the aid. There has been plenty of time to discuss the aid and its ramifications with the Troika, but instead the timing has the feel of "grand-standing" in yet another attempt by the Greeks to avoid dealing with the Troika on what it considers as questions of state.

    Deposit outflows continue, and the ECB granted the Greeks only half of the requested Emergency Liquidity Assistance (ELA). Things will start hitting the fan when capital controls are placed on the Greek banks.
    Mar 19, 2015. 09:26 AM | 6 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    … The bad is that the present clowns in power in Athens are enlisting “casual” tax spies among tourists and other Greeks to pose as customers on behalf of the tax authorities while wired for sound and video to catch tax cheats. Where Alcibiades once walked, “casual” tax inspectors will now try and entrap poor pistachio sellers, and that leather wearing, bald, joke figure of a finance minister, Yanis Varoufakis, had the gall to send this plan to the head of the Eurogroup.

    That sums it up rather well.
    Mar 18, 2015. 11:38 PM | 3 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    March 18, 2015 - Greek Parliament Adopts Anti-Poverty Law Despite EU Row.

    The Greek Parliament has passed a SYRIZA-proposed draft law to address the country’s long-standing humanitarian crisis, despite objections expressed from the international creditors. This first package of social measures put forward by Prime Minister Alexis Tsipras’ leftist government drew support across the board in parliament, including from the conservative, former ruling New Democracy party.

    According to the bill, free electricity of up to 300kWh will be provided to 300,000 households, which either had their electricity supply disconnected or are unable to pay their bills, with priority given to those who live in extreme poverty.

    Free electricity will also include reconnection to the grid and refers to cases where power supply was cut off by the end of January 2015. Similarly, some 30,000 households are expected to receive rent subsidies, with the grant covering mainly new leases and the renewal of older ones, while it is expected to reach 70 euros per month per person and 220 euros per month per family. Priority will be given to families with young children, residing in urban areas.

    Furthermore, the bill includes a feeding program for another 300,000 families in the form of discount coupons or other electronic means. It will take into account the tax returns and income of beneficiaries from each source. In the case of unemployed who do not receive benefits, their formal declaration will be required.

    The new bill came under fire from various European officials and was characterized as a “unilateral action,” which is inconsistent with the commitments the Greek government undertook in the February 20 Eurogroup meeting.

    This sets up the big confrontation. The Greeks made a law that will have effects on the countries liquidity position without consultation with the Troika. So it's not likely that any cuts were made to pay for the humanitarian aid.

    It's a clever move forcing the EU to argue against the Greek government providing humanitarian aid instead of paying their creditors. Of course it will strongly backfire when its found that the fraud provisions are inadequate. I don't know that the fraud provisions will be inadequate, but given the fact that the Greeks don't pay their taxes, my guess is that fraud provision must be quite weak.
    Mar 18, 2015. 05:33 PM | 4 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    March 16, 2015 - Greek PM: We Will Not Back Down on What We Have Announced

    Greek Prime Minister Alexis Tsiaris in an interview with daily Ethnos expressed his determination to proceed with and implement his program down to the last detail, with the government submitting crucial bills to the Parliament soon.

    He also claims that common ground has been found with the partners on reforms. “Our program was presented in the policy statements and this is the program we have committed ourselves to. This four-year program will be implemented down to the last detail. [I assume that includes the amateur hour tax collectors and spy’s.]

    Tsipras says that the bills that the government has announced are non-negotiable and will be soon tabled in Parliament,” and added: “We have informed the institutions [Troika] we are open to their proposals but in Greece the Greek people voted, they chose a government to govern.” He said “Greece is not a colony” and that “there is no way back to the memorandum for Greece .”

    More nonsense. I see no effort at principled negotiations, negotiations that are cooperative or "win-win" in nature. Instead, the Greeks appear to be conducting a foot-dragging strategy. Foot-dragging is a common practice in a positional style of negotiation [] that also includes theatrics, threatening to walk out, stonewalling and setting up extreme bargaining positions.

    In this situation we have foot-dragging in combination with leverage provided by a time limit (loan repayments at the end of March). It appears that foot-dragging has taken the referendum card out of play because I doubt there is sufficient time to set up a Greek national referendum by the end of March. If it's still possible, than the fuse has to be very short. Why would the Greeks want the referendum card out of play? Because there is the chance that a Greek referendum on Greece retaining the Euro might go against the current Greek government. In addition, a referendum against the position of the Greek government would likely substantially weaken that government.

    If the Greeks were following a positional negotiation style what else would they be doing? Well, they might make claims that the Troika was suggesting unreasonable - draconian terms. For example, a claim made a few days ago in the Greek media is that one of the Troika members [an unknown member of-course] suggested that one way to increase Greek liquidity is for the Greek government to not pay salaries for one or two months [Establishment of a positional extreme]. In addition, it has already been established that the Troika will not negotiate on loan terms. Instead, they are insisting that the original terms of the loan agreement be maintained irrespective of the fact that the Greek economy has not rebounded after five years of austerity.

    What's Next?
    The Greeks paid their IMF loan tranche. Why go through all the effort of "borrowing" Greek pension fund money if the Greeks were planning to default? I think that is a key question that needs some possible scenarios.

    Meanwhile, the Greek government wants to remain in power. They have miserably failed to meet the expectations they set with the Greek people. So now the strategy seems to be to bait the Germans into making insulting remarks, and than wait for the EU to throw the Greeks out. At that point the Greeks would likely claim they did everything they could, but the Germans and other EU nations were totally unreasonable, and as a consequence they were thrown out even thought the Greek people wanted to stay in. Is this the reason for playing nice with the IMF? Do they think the IMF will help them if they get thrown out of the EU?

    If I am reading this correctly, than most of what we are seeing and will be hearing from the Greeks is nonsense and attempts to bait the Germans. I don't see any attempts to perform principled negotiations. The one thing the Greeks must have is a default. They can never pay back the debt owed.
    Mar 16, 2015. 10:05 AM | 4 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    Varoufakis inexplicably poses for a picture layout in the Paris Match magazine
    Children are dying in Greece for lack of food and medicine. Over a quarter of the population is unemployed. Over half of those between 15 and 24 are unemployed ... Arrogance to the point of being blind.

    At least now we know why the guy is always smirking. Unfortunately, it appears the joke will be on the Greeks.
    Mar 15, 2015. 08:28 PM | 2 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, March 18, 2014 [View instapost]
    March 13, 2015 - Lynas warns of uncertain survival prospects

    Troubled rare earths producer Lynas Corp has warned it may not be able to repay its lenders – even after it rescheduled some loan repayments until next year. The company's auditor has also warned of "significant doubt" about the survival of the company. The company has slashed costs by shutting down much of its Australian non-mining operations, which have been shifted to Malaysia. But continued operational difficulties are threatening the company's financial viability.

    Going Concern:
    Lynas auditors Ernst and Young told shareholders on Friday of the "existence of a material uncertainty that may cast significant doubt about the company's ability to continue as a going concern" due to a heavy debt repayment schedule coupled with operational difficulties the group is facing.

    Profit / Loss Balance?
    Lynas said it was having problems with "production volumes, sales volumes, operating expenses and rare earths market prices" as it continues to seek to boost output at its Malaysian processing unit.

    And despite the agreement of Japanese trader Sojitz to defer loan repayments in 2015, Lynas needs other creditors to also provide it with additional financial concessions to ensure its survival.

    "There is some uncertainty as to whether the lenders will agree to extensions or whether a refinance will be available," it told shareholders on Friday as it disclosed it had lost another $103.5 million in the six months to December, which lifted total losses to a staggering $879.7 million.

    Lynas has borrowings of $508 million on its balance sheet – which is more than double its remaining equity of $237.5 million.

    Operational gains at its Malaysian processing unit have been recorded, it said, but "there are still significant improvements to be achieved and until fully stable there continues to be a risk of periodic reductions in production".

    A sea of red ink, and considerable uncertainty about production volumes, sales volumes, operating expenses and rare earths market prices. Production output is still not stable, and I could not find any color on the LAMP's lack of production stability. Add to that the on going loses and the debt situation and it seems either a sale or bankruptcy protection is in their immediate future.
    Mar 13, 2015. 06:19 AM | 5 Likes Like |Link to Comment
  • Swine Flu, MERS, Ebola And Medical News Concentrator January 1, 2015 To ?? [View instapost]
    We can hope :)
    Mar 12, 2015. 07:16 PM | 4 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    I don't believe
    The Greek list of refoms was rejected, and the Greeks have now stated they are "willing to enrich" the list of reforms submitted. Meanwhile, one of the first edicts of the Greek government was that they would not be taking orders from the Troika, and that the Troika was not to enter Greece again. Well, not anymore. The Troika will be going back to Greece. So the only thing accomplished was changing the name of the Troika to the institutions. A totally empty accomplishment.

    I have not been posting much because I can't make sense of the Greek strategy. That suggested reform of having business customers and even tourists act as undercover tax spies was nonsense. Than we have the threat that was immediately withdrawn that if the EU council did not accept todays submitted reform list ,as is, then the Greeks would resort to a referendum. Of course that kind of statement is clearly a threat and amounts to nothing less than blackmail.

    It's almost as if the Greeks are attempting to bait the EU council or a certain member of the council into giving their own ultimatums. Is the Greek governments strategy designed to give the impression that the EU is not negotiating in good faith? Is that what this is all about - convincing the Greek people that the Greek government has no other choice but to exit the Euro?
    Mar 9, 2015. 01:27 PM | 2 Likes Like |Link to Comment
  • QuickChat #278, February 5, 2015 [View instapost]
    Storage dearth may drive oil prices to $30
    Mar 5, 2015. 07:00 PM | 4 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    An Engineer with theatre arts knowledge!
    Mar 3, 2015. 04:20 PM | 1 Like Like |Link to Comment
  • QuickChat #278, February 5, 2015 [View instapost]
    Great to see you Doc!
    Mar 3, 2015. 03:38 PM | 4 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    Reuters Feb 27, 2015
    Greece runs out of funding options despite euro zone reprieve
    By Jan Strupczewski and Deepa Babington

    Greece is running out of options to fund itself irrespective of the four-month bailout extension. This lack of liquidity puts pressure on Athens to quickly implement reforms it vocally opposed or to default on debt repayments in a matter of weeks.

    Shut out of debt markets and faced with a steep fall in tax revenues [Because lots of people stopped paying them after the new government was elected.], Athens is expected to run out of cash by the middle or end of March. Its finance minister has warned that Greece will struggle to repay creditors starting with a 1.5 billion euro IMF loan repayment due in March.

    [By the way, the fall in tax revenues likely means that Greece no longer has a primary surplus. Number one priority has to be collecting overdue taxes. The Government has to go mid-evil on collecting overdue taxes.]

    ECB Is Applying A Liquidity Squeeze:

    One source of quick cash potentially available to the Greek government is the issuance of more T-bills that mature in three or six months. However, Athens' creditors have set a 15 billion euro cap on such debt and that has already been reached. The EU is said to have ruled out raising the T-bill ceiling because it would be tantamount to central banks financing governments. One person familiar with ECB thinking said that any extension of the T-bill cap is highly unlikely because the ECB is using the liquidity squeeze to force the Greeks to quickly start discussions on the loan financing reviews and finish that as soon as possible – not even waiting for the end of April.

    Borrowing From Greek Pension Funds?
    Greece could raise money to make the IMF payments by delaying payments to suppliers. They could also raise up to 3 billion euros by borrowing from state pension funds. Although, the government may already have used up part of this, one source familiar with the matter said.
    I believe the "borrowing" from state pension funds solution was tried by the previous government and was ruled illegal by the courts. Not that being illegal seems to mean anything. My guess is if the pension funds are "borrowed" the pension programs will eventually go bankrupt and the pension holders will suffer a major haircut. Too bad the Greeks can't print money, than they could repay the pension funds with highly devalued money, just like in the US.

    Now there is talk about another loan program being needed. One for an additional 56 B. The money is needed to provide funds to repay a portion of the original principal and interest on current loans.
    Mar 2, 2015. 08:18 PM | 2 Likes Like |Link to Comment
  • Axion Power Concentrator 391: Mar. 01, 2015 [View instapost]
    Well Said HT! I totally concur.
    Mar 2, 2015. 02:01 PM | 11 Likes Like |Link to Comment
  • Stability Of The European Union (23) January 1, 2015. [View instapost]
    Austria's financial watchdog took control of bad bank Heta Asset Resolution on Sunday and halted payments on more than 11 billion euros ($12 billion) worth of debt, after the state refused to plug a capital hole of up to 7.6 billion euros revealed in an external audit.

    Finance Minister Hans Joerg Schelling on Monday declined to estimate how big a loss creditors would have to swallow to pay for Heta's winding up, saying this was a decision for the Financial Market Authority (FMA).

    The finance ministry noted that creditors can be forced to contribute to the costs of winding down Heta - or "bailed in" - under new European legislation that Austria adopted this year so that taxpayers do not have to shoulder the entire burden.
    Mar 2, 2015. 09:43 AM | 3 Likes Like |Link to Comment