Greece

Greece Renegs On Troika Terms Hours After Getting Bailout Extension

Zero Hedge,

13 November, 2012

Earmuffs time for Europe's carefully sculpted theater of goodwill, solidarity and cohesion. Because this has to be some sort of record. 

Hours after Greece got its much desired two year bailout extension of Deutsche Bank from Germany Europe, Greece is already in breach of the terms it, and Europe, all "fought so hard" for. 

From Kathimerini: "A planned 25 percent increase in the price of public transport tickets next March is to be postponed until October, the general secretary of the Development Ministry, Nikos Stathopoulos, said on Tuesday. The increase originally demanded by the troika would have pushed the price of a ticket for all modes of public transport to 1.75 euros from 1.40." 

Instead the Troika's demand is overruled, and in its place is a promise that some efficiency has been extracted elsewhere, until of course, said promise is probed and uncovered to have also been a lie.

“We managed to postpone the increase until October, from March, and we hope to eventually be able to avert the measure,” Stathopoulos said, attributing the change of plan to a crackdown on fare dodging on public transport.

 

Sources told Kathimerini last month that the campaign has contributed to a 9 percent increase in ticket purchases, bringing in nearly 300,000 euros in revenue in just three weeks.

Perhaps a far better indication of Greek society is that the local ministry is now making provisions to reimburse travellers with prepaid transit cards for "strike days" on which the transport services are offline. Lately, this has been a majority of them.

The ministry is also planning to change the regulations relating to weekly, monthly and annual travelcards to allow commuters to be reimbursed for strike days when transport services do not operate. Earlier this week, the Athens Urban Transport Organization (OASA) said it was not obliged to compensate travelcard holders who were unable to use public transport last week because of a series of strikes by employees.

 

As for what one can expected from a "reformed" and "contrite" Greece, here it goes: "The Finance Ministry admitted on Tuesday it does not know the identities of the owners of the 500,000 properties for which last year’s special tax levied via electricity bills was not paid."

In a written response to a parliamentary question, Deputy Finance Minister Giorgos Mavraganis stated the tax corresponding to each electricity connection may not be listed in the name of the owner, but in that of the tenant, a former or a deceased owner etc. However, Public Power Corporation and the alternative power suppliers charged with collecting the tax submitted lists of tax evaders to the ministry in May.

In other words, not only has Greece not stepped up its tax collections efforts, it has no idea who or where the tax evaders are as part of its much (self) lauded plan from 2011 to boost government revenues...

And finally:

If and when the ministry establishes who is supposed to pay for each property, tax authorities will issue payment orders including fines. Confiscating salaries and properties would be a last-resort measure.

Would that be the 14th monthly salary, or 16th for the Parliamentary workers? Either way, we are certin they are all shaking in their boots. Shaking.

Greece Bank Stocks Implode on Bank Recapitalization Plan

Minyanville,

13 November, 2012

US bond markets and banks were closed today for the Veterans' Day holiday, so trading volume was much lighter than usual. Average trading volume on the NYSE was more than 50% below the 10-day average.

It was a busy day on the news front. Greece successfully passed its 2013 budget in a parliamentary vote. The vote passed with a much wider margin than the austerity vote last week, temporarily alleviating any concerns that the Greek government was imploding. However, Greece must roll over 5 billion euros this week to successfully redeem the 3-month bills that are due on Friday. Also in Greece, the Greek government announced the final plan to recapitalize Greek banks, which bore the brunt of the debt writedown earlier this year, to raise common equity rates. Greek banks were under considerable pressure today; National Bank of Greece's (NYSE:NBG) stock fell by more than 10%.

Mortgage REIT Annaly Capital (NYSE:NLY) announced its intention to purchase CMBS financing and servicing company Crexus for $839 million. However, the stock fell by about 0.75%, which was its second fall; the first fall occurred after the firm announced a $1.5 billion common share buyback last month.

Also in M&A action, investment bank Jefferies (NYSE:JEF) was acquired by private equity firm Leucadia in a $2.8 billion merger, roughly 24% over the closing price from Friday. Leucadia will acquire the remaining 71.4% of Jefferies to complete the deal.

Tomorrow's Financial Outlook

This week is pretty quiet on the economic front in the US. Notable tomorrow is the monthly Treasury budget, which is expected to widen to -$115.0 billion from -$98.5 billion last month. However, with the US trade balance narrowing last week, it is possible that the budget gap may not widen as much as expected.

Globally, Japan will release industrial production data and Greece will sell bills in the morning. If Greece cannot raise 5 billion euros from the bill sale, there may be advanced discussions of a Greek default.