EU creditor countries poised to micromanage Greece

Section:

... while sucking its blood dry.

* * *

By Peter Spiegel, Gerrit Wiesmann, and Kerin Hope
Financial Times, London
Thursday, February 23, 2012

http://www.ft.com/intl/cms/s/0/fde0e3d4-5e3b-11e1-85f6-00144feabdc0.html

European creditor countries are demanding 38 specific changes in Greek tax, spending, and wage policies by the end of this month and have laid out extra reforms that amount to micromanaging the country's government for two years, according to documents obtained by the Financial Times.

The reforms, spelt out in three memoranda of a combined 90 pages, are the price that Greece has agreed to pay to obtain a E130 billion second bail-out and avoid a sovereign default that the government feared would throw Greek society into turmoil.

They range from the sweeping -- overhauling judicial procedures, centralising health insurance, completing an accurate land registry -- to the mundane -- buying a new computer system for tax collectors, changing the way drugs are prescribed, and setting minimum crude oil stocks.

... Dispatch continues below ...



ADVERTISEMENT

Free Month Subscription to Market Force Analysis for GATA Supporters

Market Force Analysis is a unique, patent-pending approach to commodity market analysis. An algorithm has been developed to extract supply and demand weightings from futures market data. The difference between supply and demand is the market imbalance that is called "market force," so named because it is what drives price. It brings clarity to past market action and predicts market trends. Because it is derived from accurate futures market data it is not subject to the errors inherent in macro-level estimates of supply and demand.

Learn more here:

https://marketforceanalysis.com/About_MFA.html

Market Force Analysis focuses on short-term (15 days) and medium-term price predictions to help both short-term traders and long-term investors understand market moves and benefit from the generated prediction of prices. To read subscriber comments that show how much the service is appreciated, visit:

https://marketforceanalysis.com/Testimonials.html

The MFA service has been pioneered by market analyst and Gold Anti-Trust Action board member and researcher Adrian Douglas.

The Market Force Analysis premium service provides:

-- A bi-weekly report.

-- Access to the MFA hot list of junior mining stocks derived from analysis of more than 800 mining stocks. The MFA hot list consistently outperforms well-known mining share indices like the HUI, GDX, and GDXJ.

-- E-mail alerts about actionable trades.

-- E-mail updates with important information.

To obtain your 1-month free trial subscription to the Market Force Analysis letter, e-mail info@marketforceanalysis.com and put "MFA Free Trial" in the subject field.



"The programme is much, much more ambitious than economic reform," said Mujtaba Rahman, Europe analyst at the Eurasia Group risk consultancy. "This is state building, as typically understood in traditional low-income contexts."

Most urgency is attached to a 10-page list of "prior actions" that must be completed by Wednesday in order for eurozone finance ministers to give a final sign-off to the new bail-out at an emergency meeting scheduled for Thursday.

The 38 measures are a mix of laws that must be passed by parliament, ministerial decisions, and presidential decrees that affect a complete cross-section of Greek economic activity, from health spending to municipal administration to tax collection.

Only a handful of the measures are listed as passed or in the process of being implemented, including a highly publicised E300 million in pension reductions and E325 million in other spending cuts. The other reforms are grouped under six categories, though most of the changes fall under spending cuts, bank regulations, and economic reforms.

Among the measures that must be completed in the next seven days are reducing state spending on pharmaceuticals by E1.1 billion; completing 75 full-scale audits and 225 value added tax audits of large taxpayers; and liberalising professions such as beauty salons, tour guides, and diet centres.

Even the longer-term reforms must be completed quickly. A draft 49-page "memorandum of understanding on specific economic policy conditionality," dated February 9, includes dozens of measures that must be completed in the first half of the year.

Many structural measures were agreed in 2010 as part of Greece's first rescue package but were blocked by influential interest groups, trade unions and some senior finance ministry officials.

The opening up of closed professions -- including pharmacists, lawyers, and truck and taxi drivers -- was due in September 2010, for example. While legislation liberalising 130 sectors was passed last year, backup measures needed to implement the law were postponed indefinitely after a fierce backlash, including a three-week strike by taxi drivers at the height of the tourist season.

Similarly, a delay in reforms of healthcare procurement, which are opposed by doctors, medical suppliers, and hospital managers, meant that savings of only E500 million were achieved in 2011 against a target of E1 billion, leaving the missing amount to be collected this year.

Mr Rahman said the scale and the speed of the reforms demanded raised questions about whether sceptical eurozone lenders were setting up Greece to fail some time within the next year.

"Even if one understands the political imperative, the programme is being set up to fail as many of the targets will be impossible to achieve," he said.

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16



ADVERTISEMENT

A Rare Opportunity with Collectible Gold Coins
Whose Premiums Are Far Below Normal

Sovereign debt problems in the United States as well as Europe will worsen this year. The mainstream financial media may never report about the likely inflationary consequences of bailouts and "quantitative easing," nor are they likely ever to recommend tangible assets for financial protection. But at Swiss America Trading Corp. we believe that it is no longer a luxury to own gold and silver coins but rather a necessity.

At the moment the public is showing little interest in Double Eagle U.S. $20 gold coins, so the price premiums above the intrinsic melt values (.9675 ounce of gold in each coin) are historically low. The ratio of price to bullion content for these coins has been 2:1 but today it is only about 1.25:1.

This is a real opportunity. So give us a call or e-mail and we will be glad to discuss the potential of these coins and how to use a ratio strategy to increase your gold ounces without money out of pocket.

In the January edition of his Early Warning Report, Richard Maybury writes: "As they are inherently in very limited supply, I believe that high-quality numismatics will become tulips, eventually rising a thousand percent or more in real terms, when money velocity goes into mid-second stage. In late stage, who knows -- 2,000 percent? 3,000?"

All inquiries will receive without charge (while supplies last) our latest book, "The Inflation Deception," as well as our newsletter "Real Money Perspectives."

-- Tim Murphy, trmurphy@swissamerica.com

-- Fred Goldstein, figoldstein@swissamerica.com

Telephone: 1-800-289-2646

Swiss America Trading Corp., 15018 North Tatum Blvd., Phoenix, AZ 85032