Euro zone finance ministers will consider three options on Thursday for what happens after Greece exits its bailout at the end of the year, seeking to balance the need to reassure investors with the demands of domestic Greek politics. The Greek government has staked its survival on exiting the bailout a year early, a move that will please voters hammered by austerity measures imposed by the EU and the IMF, but which has already rattled markets, pushing up Greek bond yields.
Read more
Alpha Bank AS, Greece’s fourth largest lender, reported a steep third-quarter net loss Tuesday due to a mammoth voluntary retirement scheme, but otherwise showed an improvement in core operating trends and declining provisions for bad loans, The Wall Street Journal reported. For the three months to September, the bank said net losses totaled €156.9 million ($197 million)—better than market expectations—compared with a net profit of €361.4 million in the second quarter. A year ago, the bank reported a €255.9 million loss.
Read more
Eurozone leaders are weighing a plan to allow Greece to exit its four-year-old bailout at the end of the year by converting nearly €11bn of unused rescue funds into a backstop for Athens for when it raises cash from the markets on its own, the Financial Times reported. The plan, which will be discussed at a meeting of eurozone finance ministers in Brussels on Thursday, would allow Antonis Samaras, Greek prime minister, to declare an end to the quarterly reviews by the hated “troika” of bailout monitors ahead of parliamentary elections, which could come as early as March.
Read more
Now that Greece has said it will seek a credit line from the eurozone’s bailout fund once its rescue program runs out at the end of the year, the difficult negotiations on how to make the new aid palatable to both Athens and other European capitals have begun, The Wall Street Journal Real Time Brussels blog reported. The Greek government is looking at early elections next spring if Prime Minister Antonis Samaras fails to find a supermajority (in other words add an extra 25 lawmakers to his 155-delegate-strong coalition) to back a new president by March.
Read more
Just a few months ago, Greece appeared to be on the road to recovery. But in recent days it has helped stir up a storm in European bond markets as investors realized that Athens might not be on such a firm path after all, the International New York Times reported. Signs of instability in the Greek government and concern that it may attempt an early exit from its internationally supervised bailout program have intensified worries in global financial markets about the state of the eurozone.
Read more
Greece should have a precautionary credit line to help it regain normal access to bond markets, the head of the IMF said Thursday, The Wall Street Journal reported. “The country would be, in our view, in a better position if it had precautionary support,” International Monetary Fund Managing Director Christine Lagarde said in a news conference. The IMF’s precautionary facilities give countries access to a credit line that can assure investors the country can pay its obligations, keeping borrowing costs down.
Read more
Greece’s creditors insist the country should retain access to bailout funds next year even as the government seeks an almost-balanced budget for the first time in decades, two officials with knowledge of the matter said, Bloomberg News reported. The country’s budget deficit will shrink to 338 million euros ($424 million) next year, or 0.2 percent of gross domestic product, from 1.41 billion euros, or 0.8 percent of GDP, this year, according to the 2015 draft budget, which was submitted to parliament today.
Read more
Antonis Samaras’s ambition to drive Greece out of its rescue program is running into a roadblock, Bloomberg News reported. The country’s prime minister might be thwarted by conditions for the European Central Bank’s asset-purchase program, as detailed by President Mario Draghi. Policy makers meeting in Naples yesterday were resolute that Greece should stay under economic surveillance to be eligible, according to a euro-zone central-bank official involved in the negotiations. The official asked not to be named, as talks are private.
Read more
Prime Minister Antonis Samaras announced tax reductions on Saturday in a bid to appeal to Greeks weary of four years of austerity that have cut living standards and to gain political capital as the opposition pushes for early general elections, the International New York Times reported. Speaking in the northern port of Thessaloniki at an annual trade fair where Greek prime ministers traditionally set out their economic policy for the coming year, Mr. Samaras announced a 30 percent cut to a tax on heating oil.
Read more
In the decade before Greece's debt crisis, businessman Aristides Belles rode a wave of acquisitions to turn his company, Nireus Aquaculture SA, into one of the largest fish farmers in the world—a staple of supermarket shelves across Europe, The Wall Street Journal reported. Today, Nireus—named after an ancient Greek sea god—is awash in an ocean of debt and has become a parable for the bad loans crippling Greece's corporate sector. Most of the company's big investors have fled, profits and dividends have disappeared and Nireus shares have fallen more than 70% in the past five years.
Read more