discipline
Forumer storico
Francamente dopo mesi di questo vespaio la lucidità ed equilibrio di Tommy mi lascia ammirato.
davvero, non partecipo ma leggo costantemente il monitoraggio continuo ed equilibrato di tommy
Titoli di Stato area Euro GRECIA Operativo titoli di stato - Cap. 1 (11 lettori)
- Creatore Discussione Imark
- Data di Inizio
- Stato
davvero, non partecipo ma leggo costantemente il monitoraggio continuo ed equilibrato di tommy
belindo
Guest
Francamente dopo mesi di questo vespaio la lucidità ed equilibrio di Tommy mi lascia ammirato.
Io mi sono quasi innamorato...................ma non ditelo a mia moglie!
A parte gli scherzi Tommy sa che gode della stima di molti di noi, anche del genuflesso.
sethi
Forumer storico
Grecia: Trichet, non uscira' da area Euro (Class-Cnbc)
MILANO (MF-DJ)--"Non c'e' possibilita' che la Grecia esca dall'areaeuro". Lo afferma Jean Claude Trichet, Governatore della Banca CentraleEuropea, nell'intervista esclusiva raccolta da Maria Bartiromo aCernobbio, ora in onda su Class Cnbc (emittente del gruppo Class E. cheinsieme a Dow Jones & Co controlla quest'agenzia) e alle 21h00 su ClassNews Msnbc. Trichet, raccontando come veda dalla sua prospettiva privilegiata lasfida per la ripresa e l'economia in Europa, ha toccato alcuni dei temipiu' importanti per il mercato e per i consumatori. Quando si parla didomanda domestica e di cosa potra' trainare le esportazioni, la "parolachiave e' fiducia. Stiamo cercando di portare le finanze pubbliche inequilibrio, ma naturalmente ci sono ancora delle oscillazioni. Quello checonta e' che continuiamo a lavorare sulla nostra competitivita' e checogliamo le opportunita' offerte dal fenomeno della globalizzazione. Perquanto riguarda la domanda domestica ancora una volta e' essenziale lafiducia", ha continuato Trichet. Il Governatore della Banca Centrale Europea ritiene che "sia menoprobabile che si verifichi una recessione a W, sulla base di dati qualil'aumento del Pil registrato nel secondo trimestre, che ha portato a unrialzo delle previsioni". "Direi - aggiunge - che abbiamo avuto dei buoni risultati nel secondotrimestre ed e' per questo che abbiamo deciso di rivedere al rialzo leprevisioni per quest'anno e per il prossimo. La probabilita' di una doppiarecessione e' calata nelle ultime settimane, ma non dichiariamo ancoravittoria, restiamo cauti e prudenti. Il resto dell'anno sara' menobrillante del secondo trimestre, quando il pil nell'area euro e' salitodell'1%. Ci si aspetta ora una crescita compresa fra l'1,4% e l'1,8% peril 2010, contro il tasso medio dell'1% stimato, mentre nel 2011l'espansione dell'economia dovrebbe essere dell'1,4% contro l'1,2%previsto". "E' importante - sottolinea il numero uno della Bce - rimanere prudentiper fare il lavoro necessario per continuare sulla strada della ripresa.In particolare questo include le politiche fiscali, il ripristino dellafiducia e la conservazione di questo livello di fiducia, che e' senzadubbio la cosa piu' importante in Europa al momento. Vedremo cosa accadra'partendo da queste basi, ma e' anche importante menzionare che i consumi egli investimenti dell'area euro hanno partecipato in modo significativoalla crescita dell'1% registrata da Aprile a Giugno, il contributo e'stato pari allo 0,3% del totale circa. Se poi si considera anche la spesadei governi si arriva allo 0,7%, il che significa un aumento della domandadomestica complessivo pari allo 0,7%. Certo ha contribuito anche ladebolezza dell'euro per lo 0,1%. Guardando queste cifre si capisce che laripresa non e' determinata solo dall'export e di conseguenza da una divisadebole, ma anche dalla domanda interna". Per quanto riguarda le riforme strutturali essenziali per la questionefiscale, per Trichet "nei 27 stati dell'unione europea e nei sedici statidell'area euro abbiamo economie che non sono abbastanza flessibili. Dunquee' su questo aspetto che bisogna lavorare, poiche' e' crucialenell'incrementare la crescita potenziale dell'Europa, che nel medio elungo termine e' assolutamente essenziale. Avevamo un programma chiamatoLisbon agenda, ma non lo abbiamo implementato come avremmo dovuto nelcorso degli ultimi 10 anni. Abbiamo ora un nuovo progetto, Europe 2020, enel prossimo decennio dobbiamo lavorare con impegno per portare a termineriforme strutturali. Infine una battuta sul sistema bancario. "Direi che guardando in unaprospettiva di medio termine e' necessario un rafforzamento. Una delledecisioni fondamentali in questo senso e' definire le tempistiche dellatransizione dagli attuali ai nuovi livelli di capitale richiesti. Siamocerti che il sistema sara' cosi' piu' resistente alle crisi, ma dobbiamoconsiderare i tempi della transizione", ha concluso Trichet.red(fine)MF-DJ NEWS0719:16 set 2010
MILANO (MF-DJ)--"Non c'e' possibilita' che la Grecia esca dall'areaeuro". Lo afferma Jean Claude Trichet, Governatore della Banca CentraleEuropea, nell'intervista esclusiva raccolta da Maria Bartiromo aCernobbio, ora in onda su Class Cnbc (emittente del gruppo Class E. cheinsieme a Dow Jones & Co controlla quest'agenzia) e alle 21h00 su ClassNews Msnbc. Trichet, raccontando come veda dalla sua prospettiva privilegiata lasfida per la ripresa e l'economia in Europa, ha toccato alcuni dei temipiu' importanti per il mercato e per i consumatori. Quando si parla didomanda domestica e di cosa potra' trainare le esportazioni, la "parolachiave e' fiducia. Stiamo cercando di portare le finanze pubbliche inequilibrio, ma naturalmente ci sono ancora delle oscillazioni. Quello checonta e' che continuiamo a lavorare sulla nostra competitivita' e checogliamo le opportunita' offerte dal fenomeno della globalizzazione. Perquanto riguarda la domanda domestica ancora una volta e' essenziale lafiducia", ha continuato Trichet. Il Governatore della Banca Centrale Europea ritiene che "sia menoprobabile che si verifichi una recessione a W, sulla base di dati qualil'aumento del Pil registrato nel secondo trimestre, che ha portato a unrialzo delle previsioni". "Direi - aggiunge - che abbiamo avuto dei buoni risultati nel secondotrimestre ed e' per questo che abbiamo deciso di rivedere al rialzo leprevisioni per quest'anno e per il prossimo. La probabilita' di una doppiarecessione e' calata nelle ultime settimane, ma non dichiariamo ancoravittoria, restiamo cauti e prudenti. Il resto dell'anno sara' menobrillante del secondo trimestre, quando il pil nell'area euro e' salitodell'1%. Ci si aspetta ora una crescita compresa fra l'1,4% e l'1,8% peril 2010, contro il tasso medio dell'1% stimato, mentre nel 2011l'espansione dell'economia dovrebbe essere dell'1,4% contro l'1,2%previsto". "E' importante - sottolinea il numero uno della Bce - rimanere prudentiper fare il lavoro necessario per continuare sulla strada della ripresa.In particolare questo include le politiche fiscali, il ripristino dellafiducia e la conservazione di questo livello di fiducia, che e' senzadubbio la cosa piu' importante in Europa al momento. Vedremo cosa accadra'partendo da queste basi, ma e' anche importante menzionare che i consumi egli investimenti dell'area euro hanno partecipato in modo significativoalla crescita dell'1% registrata da Aprile a Giugno, il contributo e'stato pari allo 0,3% del totale circa. Se poi si considera anche la spesadei governi si arriva allo 0,7%, il che significa un aumento della domandadomestica complessivo pari allo 0,7%. Certo ha contribuito anche ladebolezza dell'euro per lo 0,1%. Guardando queste cifre si capisce che laripresa non e' determinata solo dall'export e di conseguenza da una divisadebole, ma anche dalla domanda interna". Per quanto riguarda le riforme strutturali essenziali per la questionefiscale, per Trichet "nei 27 stati dell'unione europea e nei sedici statidell'area euro abbiamo economie che non sono abbastanza flessibili. Dunquee' su questo aspetto che bisogna lavorare, poiche' e' crucialenell'incrementare la crescita potenziale dell'Europa, che nel medio elungo termine e' assolutamente essenziale. Avevamo un programma chiamatoLisbon agenda, ma non lo abbiamo implementato come avremmo dovuto nelcorso degli ultimi 10 anni. Abbiamo ora un nuovo progetto, Europe 2020, enel prossimo decennio dobbiamo lavorare con impegno per portare a termineriforme strutturali. Infine una battuta sul sistema bancario. "Direi che guardando in unaprospettiva di medio termine e' necessario un rafforzamento. Una delledecisioni fondamentali in questo senso e' definire le tempistiche dellatransizione dagli attuali ai nuovi livelli di capitale richiesti. Siamocerti che il sistema sara' cosi' piu' resistente alle crisi, ma dobbiamoconsiderare i tempi della transizione", ha concluso Trichet.red(fine)MF-DJ NEWS0719:16 set 2010
tommy271
Forumer storico
Niente di nuovo, rispetto agli altri giorni.
Sul fronte degli spread/bund continua la lenta erosione che logora i fianchi al gruppo di testa dei periferici.
Critica la situazione in Irlanda per la vicenda Anglo Irish ed in Portogallo in vista delle nuove emissioni.
Come ieri tengono le posizioni Spagna e Italia.
Grecia 962 pb. (942)
Irlanda 381 pb. (349)
Portogallo 362 pb. (339)
Spagna 179 pb. (175)
Italia 148 pb. (145)
Sul fronte degli spread/bund continua la lenta erosione che logora i fianchi al gruppo di testa dei periferici.
Critica la situazione in Irlanda per la vicenda Anglo Irish ed in Portogallo in vista delle nuove emissioni.
Come ieri tengono le posizioni Spagna e Italia.
Grecia 962 pb. (942)
Irlanda 381 pb. (349)
Portogallo 362 pb. (339)
Spagna 179 pb. (175)
Italia 148 pb. (145)
tommy271
Forumer storico
LA GRECIA RESTERA' NELLA ZONA EURO
ROMA - «Non c'è possibilità che la Grecia esca dall'area euro». Lo ha dichiarato il presidente della Banca centrale europea Jean-Claude Trichet, in un'intervista all'emittente televisiva Class Cnbc. Per la ripresa in Europa, dichiara ancora Trichet, «la parola chiave è fiducia. Stiamo cercando di portare le finanze pubbliche in equilibrio, ma naturalmente ci sono ancora delle oscillazioni». Nell'immediato futuro, aggiunge, sembra «sia meno probabile che si verifichi una recessione a W (a cui a una breve ripresa segue una nuova ricaduta, ndr.)».
«Abbiamo avuto dei buoni risultati nel secondo trimestre - ha proseguito - ed è per questo che abbiamo deciso di rivedere al rialzo le previsioni per quest'anno e il prossimo. La probabilità di una doppia recessione è calata nelle ultime settimane, ma non dichiariamo ancora vittoria, restiamo cauti e prudenti». Complessivamente, per il 2010 «ci si aspetta ora una crescita fra l'1,4 e l'1,8%», e per il 2011 «l'espansione dell'economia dovrebbe essere dell'1,4% contro l'1,2 previsto».
(Corriere del Ticino. ch)
***
Anche a queste illazioni che la Grecia esca dall'Euro non credo: non ne vedo l'utilità. Ipoteticamente è più facile che esca autonomamente la Germania, riprendendosi il Marco ...
.
ROMA - «Non c'è possibilità che la Grecia esca dall'area euro». Lo ha dichiarato il presidente della Banca centrale europea Jean-Claude Trichet, in un'intervista all'emittente televisiva Class Cnbc. Per la ripresa in Europa, dichiara ancora Trichet, «la parola chiave è fiducia. Stiamo cercando di portare le finanze pubbliche in equilibrio, ma naturalmente ci sono ancora delle oscillazioni». Nell'immediato futuro, aggiunge, sembra «sia meno probabile che si verifichi una recessione a W (a cui a una breve ripresa segue una nuova ricaduta, ndr.)».
«Abbiamo avuto dei buoni risultati nel secondo trimestre - ha proseguito - ed è per questo che abbiamo deciso di rivedere al rialzo le previsioni per quest'anno e il prossimo. La probabilità di una doppia recessione è calata nelle ultime settimane, ma non dichiariamo ancora vittoria, restiamo cauti e prudenti». Complessivamente, per il 2010 «ci si aspetta ora una crescita fra l'1,4 e l'1,8%», e per il 2011 «l'espansione dell'economia dovrebbe essere dell'1,4% contro l'1,2 previsto».
(Corriere del Ticino. ch)
***
Anche a queste illazioni che la Grecia esca dall'Euro non credo: non ne vedo l'utilità. Ipoteticamente è più facile che esca autonomamente la Germania, riprendendosi il Marco ...
.
tommy271
Forumer storico
Un commento di Martin Wolf:
Se Berlino va bene ringrazi l'eurozona - Il Sole 24 ORE
***
http://www.ilsole24ore.com/art/noti...nalisi-beda-romano-175616.shtml?uuid=AYK8afNC
Opinioni sul vertice Ecofin:
http://www.ilsussidiario.net/News/E...tano-le-banche-e-penalizzano-l-Italia/111212/
http://www.ilsole24ore.com/art/notizie/2010-09-08/libera-vigilanza-europea-080357.shtml?uuid=AYS5JnNC
Se Berlino va bene ringrazi l'eurozona - Il Sole 24 ORE
***
http://www.ilsole24ore.com/art/noti...nalisi-beda-romano-175616.shtml?uuid=AYK8afNC
Opinioni sul vertice Ecofin:
http://www.ilsussidiario.net/News/E...tano-le-banche-e-penalizzano-l-Italia/111212/
http://www.ilsole24ore.com/art/notizie/2010-09-08/libera-vigilanza-europea-080357.shtml?uuid=AYS5JnNC
tommy271
Forumer storico
Grecia: camion assediano il Parlamento
Decine di autocarri sono stati parcheggiati stamani davanti al parlamento, nel centro di Atene, per protestare contro la politica di liberalizzazione del settore annunciata dal governo. I camionisti avevano chiesto un periodo di transizione più lungo, ma si sono visti rispondere no.
La manifestazione coincide con uno sciopero di quattro ore dei trasporti urbani, suburbani e ferroviari contro le riforme annunciate.
(L'Unione Sarda)
Decine di autocarri sono stati parcheggiati stamani davanti al parlamento, nel centro di Atene, per protestare contro la politica di liberalizzazione del settore annunciata dal governo. I camionisti avevano chiesto un periodo di transizione più lungo, ma si sono visti rispondere no.
La manifestazione coincide con uno sciopero di quattro ore dei trasporti urbani, suburbani e ferroviari contro le riforme annunciate.
(L'Unione Sarda)
tommy271
Forumer storico
Greece unlikely to default in next two years
By James Mackintosh
Published: September 8 2010 04:39 | Last updated: September 8 2010 04:39
After a heavy night’s drinking, one traditional Greek way to settle the stomach is a bowl of patsa, tripe soup. In Athens, the International Monetary Fund is now as welcome as tripe at a kids’ party, but the €110bn ($140bn) of soft loans it and the European Union have promised over three years are helping to ease the financial hangover of a decade of excess.
The power of the supposed hangover cure is being challenged by the market, though, not only in Greece but across the eurozone periphery.
The spreads of Irish and Portuguese 10-year government bonds over benchmark German Bunds hit new records on Tuesday. Greek spreads reached levels only previously seen in May, the day before the EU’s €750bn bail-out package.
Why, fund managers are asking, put their careers on the line for this risky debt? The answer, at least for Greece, is simple: the absence of buyers has distorted prices.
The 10-year Greek bond yields 11.7 per cent, little compensation for unknown losses on an eventual default. But the two-year looks like a bargain at 10.4 per cent, well above anything available from any other developed economy – and only just below that of crisis-struck Pakistan.
Given the dire state of the Greek economy, it may prove impossible to push through the reforms demanded by the IMF and EU; a change of government cannot be ruled out, either, an outcome that could lead to a rapid default.
But assuming the government can cling on to power, it makes no sense for it to default until it gets the budget deficit, excluding interest payments, down to zero. Any sooner and all the pain has to be taken in one go.
It is in Greece’s own best interests to keep taking IMF and EU money as long as it is available in order to spread out the pain of balancing the budget. After that, a default may well make sense. But that gives plenty of time for holders of short-dated bonds to find the yield otherwise so elusive.
(Financial Times)
By James Mackintosh
Published: September 8 2010 04:39 | Last updated: September 8 2010 04:39
After a heavy night’s drinking, one traditional Greek way to settle the stomach is a bowl of patsa, tripe soup. In Athens, the International Monetary Fund is now as welcome as tripe at a kids’ party, but the €110bn ($140bn) of soft loans it and the European Union have promised over three years are helping to ease the financial hangover of a decade of excess.
The power of the supposed hangover cure is being challenged by the market, though, not only in Greece but across the eurozone periphery.
The spreads of Irish and Portuguese 10-year government bonds over benchmark German Bunds hit new records on Tuesday. Greek spreads reached levels only previously seen in May, the day before the EU’s €750bn bail-out package.
Why, fund managers are asking, put their careers on the line for this risky debt? The answer, at least for Greece, is simple: the absence of buyers has distorted prices.
The 10-year Greek bond yields 11.7 per cent, little compensation for unknown losses on an eventual default. But the two-year looks like a bargain at 10.4 per cent, well above anything available from any other developed economy – and only just below that of crisis-struck Pakistan.
Given the dire state of the Greek economy, it may prove impossible to push through the reforms demanded by the IMF and EU; a change of government cannot be ruled out, either, an outcome that could lead to a rapid default.
But assuming the government can cling on to power, it makes no sense for it to default until it gets the budget deficit, excluding interest payments, down to zero. Any sooner and all the pain has to be taken in one go.
It is in Greece’s own best interests to keep taking IMF and EU money as long as it is available in order to spread out the pain of balancing the budget. After that, a default may well make sense. But that gives plenty of time for holders of short-dated bonds to find the yield otherwise so elusive.
(Financial Times)
tommy271
Forumer storico
Greek Deals Hidden From EU Probed as 400% Yield Gap Shows Doubt
By Alan Katz and Elisa Martinuzzi - Sep 8, 2010 12:01 AM GMT+0200
Four months after the 110 billion- euro ($140 billion) bailout for Greece, the nation still hasn’t disclosed the full details of secret financial transactions it used to conceal debt.
“We have not seen the real documents,” Walter Radermacher, head of the European Union’s statistics agency Eurostat, said in a Sept. 2 interview in his Luxembourg office. Eurostat first requested the contracts in February.
Radermacher vows new toughness when officials from his staff head to Greece this month to come up with a “solid estimate” of the total value of debt hidden by the opaque contracts. “This is a new era,” he said.
Greece is the only euro country that lied about using these complex swap contracts after Eurostat told countries to report them in 2008, Radermacher, 58, said. It also likely signed a greater number of individual agreements than any other euro member, based on information it has provided to Eurostat, he said. Greece’s debt was 115.1 percent of its total economic output last year, second among the 16 counties that share the euro, behind Italy’s 115.8 percent.
“What the Greeks did was an absolute cardinal sin,” said Ruairi Quinn, former finance minister of Ireland who presided over the 1996 meeting where debt and deficit limits for countries joining the euro were set. “They deserve to be punished for it. I think they have been severely punished for it.”
Doubling Deficit Estimate
Confidence in Greece’s statistics and its ability to repay debt was shattered in October, when the country more than doubled its 2009 deficit estimate. The euro plunged, sparking questions whether the single European currency could survive. It has lost 15 percent of its value against the dollar since Oct. 20.
Investors still don’t trust Greece. They demand yields more than five times that of Germany to hold 10-year Greek debt - a sign that buyers fear the country will have to reorganize its borrowing.
“I think restructuring will be a necessary part of them pulling out of the predicament they are in,” Andrew Bosomworth, Munich-based head of portfolio management at Pacific Investment Management Co., which oversees the world’s largest bond fund. He cited the projection of the International Monetary Fund, which foresees Greece’s debt topping out 149 percent of gross domestic product in 2012. Italy in May estimated that its debt would be 117.2 percent of economic output in 2012.
Buying Greek Bonds
Banks worldwide increased their total exposure to Greek debt in the first quarter of the year by 7.1 percent, or $20.7 billion, to $297.2 billion, according to a Sept. 6 report by the Basel, Switzerland-based Bank for International Settlements. Norway’s sovereign wealth fund, the world’s second largest, said in August that it had bought Greek bonds, along with those from Spain and Portugal, because of higher yields and as those governments push to reduce their deficits.
The fiscal crisis turned attention to currency swaps arranged by Goldman Sachs Group Inc. that helped Greece hide the extent of its debt.
“There are more, or even many, of this kind of swap operation, which we have to clarify,” said Radermacher, the former president of the German Federal Statistics Office who was appointed as the EU’s chief statistician in April 2008. “The Goldman Sachs case was the beginning.”
Smaller Contracts
Greece has told the agency that the other contracts were each significantly smaller than the ones signed with Goldman Sachs, Radermacher said. Signed in 2000 and 2001, the Goldman swaps reduced the country’s foreign denominated debt in euro terms by 2.367 billion euros and lowered debt as a proportion of GDP to 103.7 percent from 105.3 percent, according to a Feb. 21 statement by Goldman.
Goldman Sachs spokewoman Fiona Laffan declined to comment for this article.
In April, Eurostat said it might have to revise Greece’s 2009 debt figure higher by as much as 7 percentage points of GDP, in part because of the use of swap contracts that allowed it to reduce current reported debt in return for greater liabilities in future years.
About a third of Greece’s borrowings have swaps attached to them, according to a person with direct knowledge of the operations. Only a portion of those contracts were set up in a way to reduce current reported debt, the person said. Radermacher said he believed Greece stopped using swaps that included up-front payments in 2008, about the same time that Eurostat questioned the country that year.
Accepting Sacrifices
Greek Prime Minister George Papandreou, elected in October, has pledged to change his country, asking Greeks to pay taxes and accept sacrifices to pull the country through its financial crisis. His slogan is “either we change or we sink.”
“Our largest deficit was our credibility deficit,” Papandreou said in a Sept. 3 speech to his ruling Pasok party. He wasn’t available to comment for this article.
The new government has initiated a series of measures to end opaque financing in Greece. The statistics agency now reports directly to Greece’s parliament, rather than the finance ministry. A parliamentary committee this month will begin investigating the false statistics.
Under the rules to join the euro, countries’ debts must not exceed 60 percent of GDP. Interest payments linked to swaps are included in the calculation. That means that until accounting guidance was changed in 2008, upfront payments or lower initial interest payments could initially lower the debt or cause it to rise by a smaller amount than would otherwise be the case, while liabilities could increase down the road.
‘Hope Over Experience’
The problem is that such contracts rely on an estimate that the future debt will be lower or economic activity much greater, allowing a country to meet higher payments, said Yannis Stournaras, director general of the Foundation for Economic and Industrial Research in Athens. He was chairman of Greece’s Council of Economic Advisors from 1994 through 2000.
“You might say this is triumph of hope over experience,” he said, adding that the blame should be shared with the European Commission, which didn’t intervene despite years of warnings by Eurostat of problems with Greek data.
“We addressed the issue several times in meetings of finance ministers and we asked for enhanced powers for Eurostat in 2005, which we didn’t receive at the time,” said Amadeu Altafaj, a spokesman for the Commission.
Upfront Payments
In April 2009, the European Central Bank identified a Greek swap operation of unusual terms, according to a confidential ECB document dated March 3, 2010, obtained by Bloomberg News. The ECB said its executive board prepared internal reports on the swaps. ECB spokesman Niels Buenemann declined to comment on it.
Greece began using this type of contract for the 2001 budget year to avoid recording a spike in debt the first year after it adopted the euro, Stournaras said. It continued to use them after 2001 and increased their use after 2004, he said.
Under guidance set out in 2008 by Eurostat, any upfront payments linked to a swap must be counted as a loan.
Germany, Italy, Poland and Belgium, like Greece, received upfront payments from derivatives, Radermacher said at a hearing at the European Parliament in April. The difference, he said in the September interview, was that when Eurostat asked the other countries about the contracts in 2008, they provided the data and adjusted their debt figures.
A spokeswoman for Italy’s Finance Ministry in Rome said the country had received upfront payments and revised its debt figures accordingly when the accounting guidelines were revised. Officials from the other three countries’ debt agencies did not return calls for comment.
More Muscle
Eurostat gained new powers effective last month that allow it to audit a country’s financial data if it can show there are clear risks that the statistics aren’t accurate. The visit to Greece this month will include officials from Eurostat, the European Central Bank and the European Commission’s Economic and Financial Affairs directorate, Radermacher said.
“Because we have more muscles, so to say, we are free to ask for an inside look to whatever we find important or relevant,” Radermacher said.
He said he expects to have sufficient details to present an estimate of the off-market swaps’ impact for its semi-annual report on member states’ debts and deficits on October 22.
The transition to providing full and accurate data has been slow, according to Radermacher.
Partial Responses
The EU’s statistics agency for months got partial responses to requests for complete records on the country’s use of swaps. Eurostat still doesn’t know the full number of contracts Greece signed that used historical or other non-market interest or currency rates. Nor does it know the total amount of debt covered by those transactions or the effect on the country’s debt-to-GDP ratio.
Greece’s statistics office blamed the delay in answers on a lack of staff and expertise in the field, said Eurostat officials.
In August, Greece made a proposal for how to estimate the total effect of the off-market swaps without including any of the contracts themselves, Radermacher said.
He likened the task of unraveling Greece’s financial picture to the recent renovation of his house.
“You start to renovate and you open up the walls, then you are confronted with some surprises, and this is more or less the case here,” he said.
In the past few months, Greece has told Eurostat of a “big number” of off-market swaps, Radermacher said.
‘Smoke and Mirrors’
Eurostat’s ability to untangle the web of transactions and demand accurate records from all euro members is critical to restoring investor confidence in the currency and in Greece, says Edward Scicluna, a member of the European Parliament, which held a hearing in April on swaps.
Greek government bonds have lost about 24 percent since October, according to Bloomberg/EFFAS indexes.
“The swaps were part of the smoke and mirrors that were part of the mystique of the euro,” said Bill Blain, joint head of fixed income at Matrix Corporate Capital LLP in London. “There’s potential for Europe to trip-up again. It needs to provide full information and demonstrate that it’s in control of the situation.”
Changing Greece from a country that operates on hope to one that relies on hard numbers is Papandreou’s biggest challenge, said Ireland’s Quinn, who lived in Greece for a year in the early 1970s.
“Part of becoming modern Europe is shedding that tradition of being economical with the truth and not telling the full story,” he said.
Significant Stakes
The stakes for Greece are significant, Andrea Georgiou, head of the Hellenic Statistics Authority, said in a speech to employees on July 22, the day he took up his position. Providing real, credible figures will mean “to a great degree the success of the country’s economic policy in these difficult times as well as possibly our national interests on a long-term basis.” He didn’t comment for this article.
“If there’s a feeling that there’s proper due diligence, I’d feel more confident about investing,” said Robin Marshall, a director of fixed income at Smith & Williamson Investment Management in London, which manages $20 billion in assets including Greek debt. “For investors, the credibility hinges as much on perception as on the numbers themselves.”
(Bloomberg)
By Alan Katz and Elisa Martinuzzi - Sep 8, 2010 12:01 AM GMT+0200
Four months after the 110 billion- euro ($140 billion) bailout for Greece, the nation still hasn’t disclosed the full details of secret financial transactions it used to conceal debt.
“We have not seen the real documents,” Walter Radermacher, head of the European Union’s statistics agency Eurostat, said in a Sept. 2 interview in his Luxembourg office. Eurostat first requested the contracts in February.
Radermacher vows new toughness when officials from his staff head to Greece this month to come up with a “solid estimate” of the total value of debt hidden by the opaque contracts. “This is a new era,” he said.
Greece is the only euro country that lied about using these complex swap contracts after Eurostat told countries to report them in 2008, Radermacher, 58, said. It also likely signed a greater number of individual agreements than any other euro member, based on information it has provided to Eurostat, he said. Greece’s debt was 115.1 percent of its total economic output last year, second among the 16 counties that share the euro, behind Italy’s 115.8 percent.
“What the Greeks did was an absolute cardinal sin,” said Ruairi Quinn, former finance minister of Ireland who presided over the 1996 meeting where debt and deficit limits for countries joining the euro were set. “They deserve to be punished for it. I think they have been severely punished for it.”
Doubling Deficit Estimate
Confidence in Greece’s statistics and its ability to repay debt was shattered in October, when the country more than doubled its 2009 deficit estimate. The euro plunged, sparking questions whether the single European currency could survive. It has lost 15 percent of its value against the dollar since Oct. 20.
Investors still don’t trust Greece. They demand yields more than five times that of Germany to hold 10-year Greek debt - a sign that buyers fear the country will have to reorganize its borrowing.
“I think restructuring will be a necessary part of them pulling out of the predicament they are in,” Andrew Bosomworth, Munich-based head of portfolio management at Pacific Investment Management Co., which oversees the world’s largest bond fund. He cited the projection of the International Monetary Fund, which foresees Greece’s debt topping out 149 percent of gross domestic product in 2012. Italy in May estimated that its debt would be 117.2 percent of economic output in 2012.
Buying Greek Bonds
Banks worldwide increased their total exposure to Greek debt in the first quarter of the year by 7.1 percent, or $20.7 billion, to $297.2 billion, according to a Sept. 6 report by the Basel, Switzerland-based Bank for International Settlements. Norway’s sovereign wealth fund, the world’s second largest, said in August that it had bought Greek bonds, along with those from Spain and Portugal, because of higher yields and as those governments push to reduce their deficits.
The fiscal crisis turned attention to currency swaps arranged by Goldman Sachs Group Inc. that helped Greece hide the extent of its debt.
“There are more, or even many, of this kind of swap operation, which we have to clarify,” said Radermacher, the former president of the German Federal Statistics Office who was appointed as the EU’s chief statistician in April 2008. “The Goldman Sachs case was the beginning.”
Smaller Contracts
Greece has told the agency that the other contracts were each significantly smaller than the ones signed with Goldman Sachs, Radermacher said. Signed in 2000 and 2001, the Goldman swaps reduced the country’s foreign denominated debt in euro terms by 2.367 billion euros and lowered debt as a proportion of GDP to 103.7 percent from 105.3 percent, according to a Feb. 21 statement by Goldman.
Goldman Sachs spokewoman Fiona Laffan declined to comment for this article.
In April, Eurostat said it might have to revise Greece’s 2009 debt figure higher by as much as 7 percentage points of GDP, in part because of the use of swap contracts that allowed it to reduce current reported debt in return for greater liabilities in future years.
About a third of Greece’s borrowings have swaps attached to them, according to a person with direct knowledge of the operations. Only a portion of those contracts were set up in a way to reduce current reported debt, the person said. Radermacher said he believed Greece stopped using swaps that included up-front payments in 2008, about the same time that Eurostat questioned the country that year.
Accepting Sacrifices
Greek Prime Minister George Papandreou, elected in October, has pledged to change his country, asking Greeks to pay taxes and accept sacrifices to pull the country through its financial crisis. His slogan is “either we change or we sink.”
“Our largest deficit was our credibility deficit,” Papandreou said in a Sept. 3 speech to his ruling Pasok party. He wasn’t available to comment for this article.
The new government has initiated a series of measures to end opaque financing in Greece. The statistics agency now reports directly to Greece’s parliament, rather than the finance ministry. A parliamentary committee this month will begin investigating the false statistics.
Under the rules to join the euro, countries’ debts must not exceed 60 percent of GDP. Interest payments linked to swaps are included in the calculation. That means that until accounting guidance was changed in 2008, upfront payments or lower initial interest payments could initially lower the debt or cause it to rise by a smaller amount than would otherwise be the case, while liabilities could increase down the road.
‘Hope Over Experience’
The problem is that such contracts rely on an estimate that the future debt will be lower or economic activity much greater, allowing a country to meet higher payments, said Yannis Stournaras, director general of the Foundation for Economic and Industrial Research in Athens. He was chairman of Greece’s Council of Economic Advisors from 1994 through 2000.
“You might say this is triumph of hope over experience,” he said, adding that the blame should be shared with the European Commission, which didn’t intervene despite years of warnings by Eurostat of problems with Greek data.
“We addressed the issue several times in meetings of finance ministers and we asked for enhanced powers for Eurostat in 2005, which we didn’t receive at the time,” said Amadeu Altafaj, a spokesman for the Commission.
Upfront Payments
In April 2009, the European Central Bank identified a Greek swap operation of unusual terms, according to a confidential ECB document dated March 3, 2010, obtained by Bloomberg News. The ECB said its executive board prepared internal reports on the swaps. ECB spokesman Niels Buenemann declined to comment on it.
Greece began using this type of contract for the 2001 budget year to avoid recording a spike in debt the first year after it adopted the euro, Stournaras said. It continued to use them after 2001 and increased their use after 2004, he said.
Under guidance set out in 2008 by Eurostat, any upfront payments linked to a swap must be counted as a loan.
Germany, Italy, Poland and Belgium, like Greece, received upfront payments from derivatives, Radermacher said at a hearing at the European Parliament in April. The difference, he said in the September interview, was that when Eurostat asked the other countries about the contracts in 2008, they provided the data and adjusted their debt figures.
A spokeswoman for Italy’s Finance Ministry in Rome said the country had received upfront payments and revised its debt figures accordingly when the accounting guidelines were revised. Officials from the other three countries’ debt agencies did not return calls for comment.
More Muscle
Eurostat gained new powers effective last month that allow it to audit a country’s financial data if it can show there are clear risks that the statistics aren’t accurate. The visit to Greece this month will include officials from Eurostat, the European Central Bank and the European Commission’s Economic and Financial Affairs directorate, Radermacher said.
“Because we have more muscles, so to say, we are free to ask for an inside look to whatever we find important or relevant,” Radermacher said.
He said he expects to have sufficient details to present an estimate of the off-market swaps’ impact for its semi-annual report on member states’ debts and deficits on October 22.
The transition to providing full and accurate data has been slow, according to Radermacher.
Partial Responses
The EU’s statistics agency for months got partial responses to requests for complete records on the country’s use of swaps. Eurostat still doesn’t know the full number of contracts Greece signed that used historical or other non-market interest or currency rates. Nor does it know the total amount of debt covered by those transactions or the effect on the country’s debt-to-GDP ratio.
Greece’s statistics office blamed the delay in answers on a lack of staff and expertise in the field, said Eurostat officials.
In August, Greece made a proposal for how to estimate the total effect of the off-market swaps without including any of the contracts themselves, Radermacher said.
He likened the task of unraveling Greece’s financial picture to the recent renovation of his house.
“You start to renovate and you open up the walls, then you are confronted with some surprises, and this is more or less the case here,” he said.
In the past few months, Greece has told Eurostat of a “big number” of off-market swaps, Radermacher said.
‘Smoke and Mirrors’
Eurostat’s ability to untangle the web of transactions and demand accurate records from all euro members is critical to restoring investor confidence in the currency and in Greece, says Edward Scicluna, a member of the European Parliament, which held a hearing in April on swaps.
Greek government bonds have lost about 24 percent since October, according to Bloomberg/EFFAS indexes.
“The swaps were part of the smoke and mirrors that were part of the mystique of the euro,” said Bill Blain, joint head of fixed income at Matrix Corporate Capital LLP in London. “There’s potential for Europe to trip-up again. It needs to provide full information and demonstrate that it’s in control of the situation.”
Changing Greece from a country that operates on hope to one that relies on hard numbers is Papandreou’s biggest challenge, said Ireland’s Quinn, who lived in Greece for a year in the early 1970s.
“Part of becoming modern Europe is shedding that tradition of being economical with the truth and not telling the full story,” he said.
Significant Stakes
The stakes for Greece are significant, Andrea Georgiou, head of the Hellenic Statistics Authority, said in a speech to employees on July 22, the day he took up his position. Providing real, credible figures will mean “to a great degree the success of the country’s economic policy in these difficult times as well as possibly our national interests on a long-term basis.” He didn’t comment for this article.
“If there’s a feeling that there’s proper due diligence, I’d feel more confident about investing,” said Robin Marshall, a director of fixed income at Smith & Williamson Investment Management in London, which manages $20 billion in assets including Greek debt. “For investors, the credibility hinges as much on perception as on the numbers themselves.”
(Bloomberg)
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