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Greece Fine-Tunes PSI and New Loan Agreement

Negotiations on the new loan agreement to Greece look as if they have not be concluded on Tuesday evening as it was planned. The meeting between PM Papademos with the coalition government parties leaders have been postponed again for Wednesday, sometime in the afternoon, Greek media reported.

The Troika will visit Papademos tonight to fine tune the final text of the loan deal. It looks as finding 3.3 billion euro to cut in the private and public sector is a Sisyphus work. How the wages cut in the private sector will help the state revenues is a puzzle that nobody cares to solve.

The final text of 150-160 pages will be handed out to the three party leaders and their approval is needed.

There is some rumors, the Troika might hold separate meeting with each of the political leaders.

Should the new loan agreement be approved, it will be submitted to the Parliament, the voting is expected to take place on Sunday, Feb 12, 2012.

Coalition party leader Samaras expressed his discontent about the delays, while Karatzaferis (LAOS) questioned the legality of the new loan agreement.

IIF head Charles Dallara is leaving Athens on Wednesday. The Greek bond swap (PSI) has been fine tuned too in a meeting between Finance Minister Venizelos, Dallara and Ackerman (Deutsche Bank). Unconfirmed information  speaks of an average interest rate of 3.4 percent.

German Finance Minister Wolfgang Schaeuble said the the Eurogroup meeting will take plac

PS Tomorrow Wednesday a new cold weather front will hit Greece with freezing temperatures and snowfalls. Coincidence?

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  1. The Greek elites definitely want to stay with the Euro. Surprisingly, (it seems) the majority of the Greek people also want to stay with the Euro, despite a clear path laid out to them, by the Troika: another decade of austerity (debt to GDP 120% in a decade).

    Very clear.

    Do the Greek people know something about math, or have they all become delusional? Protests and demonstration do not mean a thing when their bottom line is to stay with the Euro.

    • it’s is more complicated than a black & white ‘EU+Troika austerity’. There are quite some Greeks that see also something possitive in the whole bailout-processes, that the system of nepotism and clientism might collapse, thatthe state might finally get some discipline. “the absess has burst” that’s something one hears here from friends and relatives. People never give up hope.

  2. Dramatic drop in budget revenues

    “January data show decline of 7 percent, against projections for 8.9 pct rise”

    “Revenues posted a 7 percent decline compared with January 2011, while the target that had been set in the budget provided for an 8.9 percent annual increase.

    Worse still, value-added tax receipts posted an 18.7 percent decrease last month from January 2011 as the economy continues to tread the path of recession: VAT receipts only amounted to 1.85 billion euros in January compared to 2.29 billion in the same month last year.

    The VAT revenue data represent a particular worrying sign regarding the depth of recession for 2012, while even more painful measures are expected to lead to a reduction in salaries and therefore a further drop in consumption. This is the vicious cycle that the government will have to tackle by way of additional fiscal measures this summer.

    According to the current data, the 2012 budget will certainly have to be revised soon, given that the original estimate for a contraction of 2.8 percent is now raised to 3.5-4 percent of gross domestic product”

  3. “Coincidence takes a lot of planning” (Hawaii five-O) 😆