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Moscovici: Greece will need to legislate a few more fiscal measures

European Commissioner for Economic and Financial Affairs, Pierre Moscovici, said that Greece needs to still legislate a few more fiscal measures but also measures to modernize the public administration and state services. He did acknowledge that the bulk of austerity measures Greece legislated in May were sufficient for the country to reach and maintain a primary surplus of 3.5% of GDP. However, he said that a few more measures in terms of “new policies” and “fiscal adjustment” would be in need of legislation on the part of Greece. The new measures will be discussed during the third program review.

“The Eurogroup agreement was successful but Greece needs to legislate a few more measures.”

In an interview with Sunday newspaper Proto Thema, Moscovici said among others:

“In the last months, Greek authorities have made enormous efforts to implement 140 prerequisites and to conclude the second program review. The recognition of these efforts was largely reflected in the Eurogroup agreement that paves the way for the release of the tranche of the ESM bailout program. The review conclusion and the disbursement of 8.5 billion euros are an important positive signal for Greece, as they end the recent period of uncertainty. They also offer a strong base for the last year of the Greek program. The Eurogroup has also pledged to support Greece’s return to the markets.”

Speaking about the third program review which in due to commerce in early autumn, the EU Commissioner said that the 3rd review will focus on the implementation of the agreements of the first and second review.

“There are few things that will need a wide-ranging legislation of new policies. There are also a few things in terms of fiscal measures that will need  to be legislated,” he stressed.

Moscovici did not specify  what new measures that will be needed. He spoke about the need of modernization of the Greek state services, of the public administration and the welfare system, he vaguely mention the fields of “social policies and cohesion, the system of Minimum Guarantee Income,  the full operation of the new unified pensions fund, further reforms in the health care and the non-performing loans.”

KTG assumes that the modernization plans are included in the “new policies legislation” of Prierre Moscovici. The fiscal measures normally end up in tax hikes and income cuts, whether directly or indirectly through hikes in Value Added Tax or cuts in health care services.

Moscovici avoided to predict when Greece would return to the international bond markets to raise fresh capital.

“This could happen sometime in the near future,” he said adding that the ‘second review increased investors’ confidence towards Greece.”

He urged Greece to proceed with the implementation of the agreement.

PS With regards to Greece, I suppose, bearer of hope Emmanuel Macron has already found a joyful modus operandi with Angela Merkel.

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  1. Morons such as Pierre, Emmanuel, and the other with the bottle can talk stupidities all they like. We know who feeds them and who commands them as puppets. Their mumblings don’t deserve even one mm of paper or web space.


    Pursuit or mistake?
    Intention or necessity?

    By George Vakos, (a Greek and EU citizen).

    Since four consecutive years, strict austerity economic measures have been imposed to Greece. In this period the public dept has increased from 110% up to 185% of GDP, the registered unempoyment rate has increased 300% reaching 25%, the GDP has decreased at least 25% etc.
    Today is evident that further austerity will be imposed to the general population, as a tool to cover budget deficits, generate a primary surplus, recovery and growth of the economy and ultimately exit of the economic crisis, according to the economic policy of the lenders IMF, ECB, EU and mainly to the German duo Merkel-Sch”auble and their agreements (memoranda) signed with the Greek governments.

    However, many leading economists have different views:

    * Nobel prize winning economist Joseph Stiglitz, professor at Columbia univercity:
    “There is no instance of a large economy getting to growth thru austerity. Austerity leads the economy to perform more poorly. It leads to more unemployment, lower wages, more” unequality “.

    * Nobel prize-winning economist Paul Krugman calls AUSTERITY: “an unethical experimentation on human beings”.

    * John Maynard Keynes claimed that:
    “The boom, not the slump, is the right time for austerity”.

    * The American economist Nouriel Rubin had said in May 2010 that the rescue plan imposed to Greece, is “doomed to fail because the adoption of a program of fiscal austerity in the deficit to 10% of GDP is an impossible mission.”

    * The former USA Secretary of the Treasury and CEO of Federal Reserve Bank Timothy Geithner in his recent book remembers the February 2010, when he learned that the EU would impose harsh measures in Greece, said: “It was clear that Greece had to check the budget deficit, but the imposition of austerity too quickly would be counterproductive as it presses the economy and the tax revenues, ultimately increasing the deficit. ”

    * The greater imposed austerity, creates greater recession in economy. According to IMF data:
    The following chart demonstrates the proportional relationship between austerity and recession:
    The horizontal axis shows austerity measures-spending cuts and tax increases-as a share of GDP, as estimated by the International Monetary Fund. The vertical axis shows the actual percentage change in real GDP. As you can see, the countries forced into severe austerity experienced very severe downturns, and the downturns were more or less propotional to the degree of austerity.

    PS: A fundamental European Union principle had been the convergence, not the divergence of the EU member states’ economies.!

  3. “Trust”. vs austerity:
    a new perspective
    by George Vakos

    Since the beginning of the Greek budget crisis in 2010, Greece’s lenders (Troika: IMF, ECB, EU), imposed strict austerity economic policy via signing memoranda with the Greek governments, and the Greek parliament.

    In times of crisis, the real aim of austerity is not to tackle public debt, as we’ve been falsely led to believe.

    Since the outbreak of the 2008 crisis in the US, across Europe, Australia, and the world: austerity exploits the economic crisis by disguising a reverse income transfer. A redistribution of income from the poor to the rich, which increases, rather than decreases, the total debt. In order for an economy to grow, thrive and repay debt we must see an increase in many areas, one of which is consumer spending . Austerity causes the economy to shrink, rather than expand.

    Since the world has been watching Greece and commenting on an issue that is way more complicated than the media would have you believe, here is information specific to Greece. The 4 (four) Greek Banks have been “supported” with hundreds of billion euros by charging the Greek Public. This means that the public is charged with repaying the debt, in one form or another.

    This economic policy (austerity + banks’ support) surged the Greek Public debt to unprecedented heights and together with a massive recession has caused GDP to plunge at least 25%, which can not be sustained by the Greek economy for any length of time, whiteout disastrous consequences.

    In 2014, the then Greek FM Mr. Hardouvelis stated:
    “Our primary goal is reliability. By reliability we shall achieve a lot”.

    Mr. Hardouvelis is a loyal Trichet’s “student”, though this policy of increasing the “Trust” has destroyed the country.(In this period of time, the public debt has surged from 110% up to 175% of GDP, the registered unemployment rate has surged 300% reaching 28%, the GDP has plunged at least 25% etc. )

    In June 2010 Jean-Claude Trichet, the then president of the ECB (European Central Bank), dismissed concerns that austerity might hurt growth:

    ” As regards the economy, the idea that austerity measures could trigger stagnation is incorrect…. In fact, in these circumstances, everything that helps to increase the confidence of households, firms and investors in the sustainability of public finances is good for the consolidation of growth and job creation. I firmly believe that in the current circumstances confidence-inspiring policies will foster and not hamper economic recovery, because confidence is the key factor today”.

    Trichet embraced a view, especially common in Germany, that was rooted in a sort of moralism. Greece had spent too much and taken on too much debt. It must cut spending and reduce deficits. If it showed adequate courage and political resolve, markets would reward it with lower borrowing costs. He put a great deal of faith in the power of confidence….

    So the Keynesian economics, tossed out the window.
    Priority is given to lenders and not the workers,
    thereby increasing their belief that they will not lose their money.

    Today though, five years of imposing the austerity policy, the effects on the economy proved disastrous, the same as described in a common manual of

    ” The countries forced into severe austerity experience very severe downturns, and the downturns are more or less proportional to the degree of austerity”.

    Today, paradoxically, “Trichet” school’s exponents are still stammering the same argument of “reliability” and insist on imposing on Greece the continuation of the same economic policy, of austerity, by further cutting of the wages and pensions and imposing overtaxation on the general population.

    Despite the new third agreement, (memorandum of the summer 2015), Eurogroup President Jeroen Dijsselbloem told CNBC during the G20 convention in Ankara, Turkey, that the new Greek government emerging from the September 20, 2015 elections will have to work to regain TRUST.

  4. One more point G. Vakos: they all know about the effects of austerity in an ailing economy. The truth is, however, that austerity throughout the Eurozone feeds vampire nations such as Germany. By crippling (via austerity and drainage of liquidity) the economies of the deficit nations (Italy, Portugal, Greece, France, Spain, etc.), the Germans eliminate competition. When no liquidity is available there can be no investment, when austerity is on, crippling taxes go with it, thus further discouraging private investment. Equally, the banking sector loses trust, with subsequent transfer of deposits to Germany (safe heaven). This, in turn, forces states to delve deeper into debt in order to save banks – a crazy, bizarre result of Eurozonomics!
    Austerity is therefore not the result of idiotic policies or of leaders being stupid, but a carefully calculated mechanism to transfer assets and funds from the deficit countries to the surplus countries of the Eurozone, Germany in particular.
    This economic insanity cannot survive forever, of course. The question is what state the victims will be in after having fed the vampires for so long. Reliable sources report that some of them have already started sharpening their wooden stakes….