June 18, 2012
SouthAmerica: The Greek election results from this weekend has improved the crisis and economic situation in Greece: the only way you can believe that is if you are âBrain Dead.â
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The New York Times â June 18, 2012
âMarkets Signal Initial Relief at Greek Election Resultsâ
By: Stephen Castle
...The election results, however, are destined to spark a period of intense horsetrading among political parties in Greece to form a coalition government, followed by a second negotiation to secure concessions on loan terms from international lenders.
...In Athens, with most of the votes tallied, New Democracy led with 29.6 percent of the vote and 129 of the 300 seats in Parliament. Syriza had 26.9 percent and 71 seats, and the center-left Pasok party was in third with 12.3 percent of the vote and 33 seats. The extremist far-right Golden Dawn party surprised some by maintaining its level of support from the last election on May 6, securing 6.9 percent of the vote and 18 seats.
With Syriza pledging to stay out of government and lead opposition to austerity, political leaders and financial markets know that the political situation in Athens remains complex. Pasok officials had said they would insist on Syriza being part of any coalition they would join, though it is unclear whether or not this is a negotiating ploy.
While Greeceâs international lenders insist that the basis of the bailout agreement must stay intact, there is speculation that Athens might be given more time or better terms to pay back loans, and that European funds might be used to try to spark economic activity.
âYou are betting on the ability of the Greek politicians to form an effective coalition government and making a judgment on the leeway there is to re-negotiate their program,â said Mr. Wattret of BNP Paribas. âIt is pretty obvious that the current arrangements require adjustment, but there is a balance between what Greece wants and what the other member states will accept.â
Source:
http://www.nytimes.com/2012/06/19/business/global/daily-euro-zone-watch.html?pagewanted=all
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Greece:
Population:
10,767,827 (July 2011 est.)
10,000,000 (June 2012 est.)
9,500,000 (June 2013 est.)
Labor Force:
5 million (2011 est.)
4.5 million (2012 est.)
4 million (2013 est.)
Note: Reduction in population = all kinds of qualified people getting out of town for greener pastures. And many of these people are taking what is left of their money with them to invest somewhere else - translation: the best qualified people in Greece are leaving the country with major capital flight.
Unemployment skyrocketed reaching a high of 21.9% in March 2012, leaving over a million jobless. At the same time, youth unemployment reached 52.8%.
GDP (official exchange rate)
US $ 312 billion (2011 est.)
US $ 285 billion (2012 est.)
US $ 270 billion (2012 est.)
GDP â real growth rate
-7% (2011 est.)
-8% (2012 est.)
-5% (2013 est.)
Greece has a capitalist economy with a public sector accounting for about 40% of GDP. A developed country, the economy of Greece mainly revolves around the service sector (85.0%) and industry (12.0%), while agriculture makes up 3.0% of the national economic output.
Immigrants make up nearly one-fifth of the work force, mainly in agricultural and unskilled jobs.
Regarding tourism a very important sector of Greece's economy:
Before the Greek Crisis:
Greece attracts more than 16 million tourists each year, thus contributing between 18.2% to the nation's GDP in 2008 according to an OECD report.
The number of jobs directly or indirectly related to the tourism sector were 840,000 in 2008 and represented 19% of the country's total labor force.
After the Greek Crisis:
It is a good place to go to participate in major riots. And don't forget to take with you a supply of âMolotov cocktailâ if you want to have some fun in Greece.
Gross external debt:
US$ 583.3 billion (30 June 2011)
Note:
The Globe and Mail (Ca) â March 16, 2012
âGreek Bailout 2 just a Band-aid solutionâ
Debt-wise, Greece is now actually worse off than when the whole mess of the second bailout began. After the private sector haircut, which, together with the European Central Bank swap, amounts to a $138-billion (U.S.) debt writedown, Greece is now in line for $170-billion in new loans, an additional $38-billion âpro-growthâ lending facility from the IMF, and a standing $40-billion reserve loans facility for its banks.
As of today, the expected Greek bank bailout bill stands at $63-billion. Behind all that looms another $20-billion yet-to-be-announced lending package that will be required to get Greece over its 2012 targets, given the deterioration in its GDP. All in, Greek debt could rise by as much as $130-billion with Bailout 2, although the most likely number will be closer to $100-billion. This would bring Greeceâs gross external debt from 192 per cent of GDP projected before Bailout 2 to more than 225 per cent, using IMF figures.
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In a nutshell:
If you where in âpanicâ on Friday because of the Greek election over the weekend, then you should be even in more âpanicâ today as the bank runs start to spread like wildfire.
The smart money has been leaving Greece as fast as they can, before the entire herd get spooked and start the final stampede.
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