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All Roads Lead to Athens?
Stephanie Levitz of the Canadian Press reports, Harper uses Greece trip to teach political lesson to his government and theirs:
Prime Minister Stephen Harper brought a message from Canadian politics to his Greek counterpart Saturday.
He said that sometimes, a government needs to act even if the opposition doesn't want to co-operate.
Harper arrived in Greece for his first bilateral visit as the country is being rocked by protests and political turmoil over its debt crisis and the austerity measures required to get the deficit under control.
For the past year, Greece has relied on a $155 billion package of bailout loans from other EU countries and the International Monetary Fund.
But the first round of austerity measures agreed to in return didn't ease market concerns that the Greek economy can be salvaged.
On Friday, Greek Prime Minister George Papandreou failed to get all-party support on new measures, jeopardizing the next round of bailout funds from the European Union and the IMF.
But on Saturday, Harper said he's confident the Greeks will get the situation under control.
"I know from experience that it is not unusual for opposition parties to refuse to co-operate with government," Harper said.
"But governments have a responsibility to act and I certainly honour the determination of Prime Minister Papandreou and the very difficult actions he's had to take in response to problems his government did not create."
Harper said he's using the Greek situation as an example.
Accompanying Harper on the trip is Treasury Board President Tony Clement, who is of Greek heritage. Clement will be in charge of making the $4 billion in cuts to government services next year as Canada pays down it's deficit.
Harper said he wanted Clement to sit in on the meetings to show him "we have nothing like the challenges faced here in Greece. He has a comparatively easy task."
Clement also signed a youth mobility agreement with Greece as part of the trip. The agreement helps facilitate work and tourist trips by young people.
But the challenges facing Greece did hit home for Harper.
He was originally supposed to stay in a hotel fronting the Hellenic Parliament but was moved to another after thousands of protesters had amassed there late Friday.
Harper came to Greece following the G8 meetings in France, where leaders discussed the global economic crisis, including Greece's dilemma.
He had said going into Athens that he was looking forward to hearing about the situation from the Greek perspective. He received a full briefing on Saturday as he visited Papanderou.
He wouldn't comment on what he heard
"We have every confidence that our Greek hosts here and our European friends will continue to deal with the matters so the global economy can continue to grow," Harper said.
There are about 250,000 Canadians with Greek heritage and several within the prime minister's circle, including Clement and newly-elected member of parliament
Costas Menegakis. Both are on the trip.
They were part of a business roundtable Harper held earlier in the day with a group of Canadian and Greek executives, including representatives of Coca-Cola and Bombardier.
Harper's director of communications, Dimitri Soudas, is also of Greek origin.
On Sunday, Harper will visit the village of Kalavryta, where members of Soudas' family still live.
Harper will be there to pay his respects at a memorial for the Greek men and boys rounded up and summarily killed by the Nazis during the Second World War. They included Soudas' grandfather.
The prime minister had done very little international travel prior to entering politics, but he said Saturday Greece was one of the countries that had intrigued him.
"I have always been fascinated by your country as a cradle of democracy and this was one of the first places in the world I visited in fact 34 years ago as a young man," Harper told Philippos Petsalnikos, the Speaker of the Hellenic parliament.
"And notwithstanding the challenges that we read about, I have observed the remarkable progress the country has made over the past several decades."
Later in the day, he and his wife Laureen had a chance to take in some of what Greece looked like centuries ago.
They visited the Acropolis museum in Athens and then the Acropolis itself.
As he toured the Greek ruins and posed for photos in front of the Parthenon, Harper pointed to the massive columns behind him and joked: "I should build this."
The next time Prime Minister Harper visits Greece, he should tour the islands, especially the island of Crete where my sister now lives (she used to work at the Canadian embassy in Athens). There, he can visit many historic sites, including the Suda Bay War Cemetry in Crete where Allied and German casualties are buried (this is an incredible site to visit).
As for Treasury Board President Tony Clement, some friendly advice. I just completed a contract at Industry Canada here in Montreal, the ministry which he was previously in charge of. As I stated in my open letter to Prime Minister Harper following the elections, cut the fat across all government departments and Crown corporations. People think I'm a fiscal liberal, but when it comes to the public sector, I think we need to increase the harmonized sales tax (HST) and examine spending at every single government department by evaluating the services they provide and cut all fat out of their budgets. (Hint: Some departments have lots of fat to cut while others are running bare bone operations and are dangerously close to not providing adequate services).
I do like the youth mobility agreement with Greece which helps facilitate work and tourist trips by young people. When we were teenagers, my brother and I went touring all over Greece with other Canadians of Greek origin from across Canada. Apart from being a blast, we also got to visit many important historic sites in northern Greece and the Peloponnese. I recommend such trips for all young Canadians, not just those of Greek origin. I also recommend they bring along and read a copy of Henry Miller's classic, The Colossus of Maroussi, as they tour Greece (this is one of my favorite books).
From my vantage point, the trip to Greece is a little bit pleasure but
mostly political. While Canada is definitely in better shape than
Greece, there are some eery similarities. In particular, household debt
in Canada is at record levels, spurring a Canada bubble of historic proportions, which is also aided and abated by Canada's mortgage monster.
When this bubble pops -- and it eventually will -- the economy will get
hit hard and our Canadian dollar will tank (still think if CAD reaches
1.10, it's a short!) and our bonds will rally (that's why Canadian bonds
are still valuable).
There are a few politicians, senators and senior policymakers in Ottawa
who read my blog. They have privately told me they're worried about our
debt profile and what will happen to our economy if China slows and
unemployment or interest rate rise. Making a pit stop in Greece
following the G8 meeting and hinting that we should pay attention to
what is going on there because the same can happen here is a bit
far-fetched, but you never know. I happen to believe a big slowdown in
Canadian real estate lies ahead, and along with it, unemployment will
rise and the economy will falter.
As for my ancestral home of Greece, it was last September when I met up with Petros Christodoulou, the new head of the Public Debt Management Agency,
in Athens. He told me that "restructuring was not an option," and asked
me my thoughts of Greek "diaspora" bonds. Good luck peddling those now
that things have gone from bad to worse in Greece, no thanks to what
Stiglitz correctly points out to are shortsighted austerity policies
which are preventing countries from creating jobs needed to generate economic growth.
In the region of Athens, residential and commercial real estate development are down a whopping 88% and in Crete, where my brother-in-law runs a building materials company, real estate activity is down 85% from last year. He had to fire five employees and he is still trying to collect monies owed to him by hotels that are sending cheques that bounce. The Greek judicial system is bogged down by tons of cases where businesses are owed money, even by the Greek government (I heard of one major tourist operation in Athens that went bankrupt because the government wasn't paying them money they owed).
Too much austerity is killing the Greek economy. People are losing their jobs, and even those that still have them are seeing their wages slashed. There have been savage cuts in the private sector and now the focus is on cuts in the public sector (when the economy is extremely weak!). Banks have all but stopped lending money and consumers are retrenching because they fear the worst is yet to come. It's a disaster.
Having said this, I'll tell you exactly what's going to happen. Greek assets are going to go on sale -- a fire sale to be precise. Big private equity shops across Europe, North America and the Middle East are salivating at the thought of buying state assets in Greece for next to nothing. As in every crisis, some funds will profit in a huge way.
And while restructuring looks all but certain now, don't discount Greek
bonds or the National Bank of Greece as dead. Depending on what the ECB
and European leaders decide, there may still be opportunities with these
investments selling at distressed levels. Below, CCTV reports on the
PM's visit to Athens.
»
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Leo,
Greece will burn, and the only ones left will be the Greeks.
Canada playing patty-cake with Greece is like Mexico having chats with Italy pre-WWII. "Cool, the trains are on time."
Hope that works out for Cananda.
Big Miss for Canada's Q1 GDP
meanwhile The Royal Bank of Canada, TD Canada Trust and Bank of Nova Scotia all announced Friday that they were lowering certain residential mortgage rates by 0.10 per cent, effective May 28, 2011.
and (LOL)
Four Seasons penthouse in Toronto sells for $28 millionAll roads lead to Athens insofar as the outcome will be a template for sovereign debt crisis everywhere. Seems to me that is why the troika are doing a Greek waterboarding. The rest of the PIIGS are watching.
But if the banks had done their enhanced due diligence with the same forensic and draconian foresight before they admitted Greece into the EU, perhaps it would not have come to this end. Instead, all they did was make the rest of the EU taxpayers the co-signers for the Greek largess and spread the already existent Greek risk to the European taxpayers. Greece didn't get here overnight.
The Euro-elites knew Goldman Sachs had to cook the books for Greece to get them into the EU. Where were the ECB and EU elites then? They knew what they were getting into with Greece. They knew the trends. They knew Greece was already unsustainable. Sure Greece got liars loans, but they were enabled by the EU and the ECB who were more than happy to help them in a way that shifted their own risks. They weren't helping Greece, they were helping themselves.
Greece should just default, or "restructure," as polite newspeak prefers to call it. If Greece caves and gives away assets and their sovereignty for the temporary fix currently on the table, they will just end up defaulting anyway. And next time around they will have been economically stripped mined, so they might as well just do it now.
If Greece defaults now at least they retain their own assets and sovereignty to start over and get on with restructuring their economy to get their house in order. Hard Lessons learned by all.
The right wing in Canada is extremely good at firesales of public assets to friends and families at extremely discounted prices. The typical Canadian shuffle works like this:
(1) moderately left leaning governments aquire/build assets at somewhat overinflated levels and then (2) the right wing governments bad mouth said properties and then sell them at significant losses (often covered up by inflating unseen pension liabilities).
It is the real tragedy of the Canadian electoral system.
If the public assets were efficiently run (profits?) how could they be bad mouthed, and more telling, sold at firesale prices? If they were really good investments the investors would line up to get them and bid them up.
I'm sure you know all about Freddie Mac and Fannie Mae. They cooked the books for years to hide their losses. There was outright fraud from the very top. It's all well known now, but the leftists covered and protected the fraud an dcriminal activity. Still do. Congressional oversight and investigation was nil, and the left called criticisms of these two government run entities nothing but right wing attacks.
We all know better now.
.. ditto
No job creation in Canada, USA, Greece and most developed nations as well as monarch and dictator oil producing nations----but lots of manufacturing jobs being created in China and emerging markets without comparable pay scale , retirement, vacation, medical and other benefits. Solution to this global macro economic problem has been applying cyclical deficit fiscal and monitary policies which are obviously not working . Only other options are austerity or changing global economic trade policy. We have run out of any possible comparative advatages such as innovation, financial sector reliance{reserve currency status} with outright greed manifistation the result in politics and economic activity----last phase before collapse
Bank of Canada should raise the interest rate and bring down the price of the housing to be more in line with the income of house buyers. But it may be already late for that.
Greece is a lovely country with nice food, weather, seaside and people. They have to say "sorry" and let the bondholders share the costs of the mistakes made in past. Or the richer countries in the EU have to accept that it is in their own interest to save bondholders and pay out.
"When this bubble pops -- and it eventually will -- the economy will get hit hard and our Canadian dollar will tank (still think if CAD reaches 1.10, it's a short!) and our bonds will rally (that's why Canadian bonds are still valuable)."
Canadian long term bond rates are lower than the U.S.:
http://www.tmxmoney.com/HttpController?GetPage=BondsAndRates&Language=en
http://www.bloomberg.com/markets/rates-bonds/government-bonds/us/
Its when short term rates decline that people should be worried.
The banks in Canada are proposing to buy out the stock market. Should be interesting.
"Savage cuts in the public sector" LOL!
Leo, you have no idea what real hardship is. The whole of your short life has been spent in a socialist haze, as have the lives of your parents.
You have absolutely zero perspective, and really, just STFU.
You cannot even quote properly, it is savage cuts in the private sector.
I stand corrected--must've been wishful thinking on my part...
I was told that 96% of canadian foreign im-exports are with the USA.
Like the dutch, is it the pot calling the kettle black?
Here's more on the sale of souverignity. http://www.businessinsider.com/greek-bailout-will-require-loss-of-sovere...
please review the Zero Hedge policy section "There will be no links to Blodgets piece of crap poor excuse for a Blog (same for Ritholtz) - please use primary sources and let's have some decorum
(Joe if that is you or one of your interns shilling for more page views (as in that's how Henry comps his writers) please forgive me)
The UK is following an austerity program based on the Canadian plan of the 1990's. The reason cited is Greece. The US is apparently studying the UK plan with a view to implement cuts.
Go figure!
Leo, making such a statement is good copy but to be credible requires data to support it.
I reviewed the links you provided and found no comparison between household debt in Canada and same in Greece (and associated metrics i.e. debt servicing, income, assets etc). Apart from household debt (if that is indeed true) what other similarities are there? My understanding is that Greeks retire at 50, don't pay taxes and live in a country where ticket sales to the Acropolis are an important part of GDP.
You predict the tanking of the C$ (what currency pair), what will be the cause (and the cause of the cause) and what is the timeframe e.g. >2yrs from now. To make a general statement and exclude timing is to say nothing at all. e.g. I predict the world is going to end
Leo put some meat on the bone and original thought in your articles! Anyone can cut and paste, your mentor, Ms. Webber understands that better than any.
Minister Maxime Verhagen of the Netherlands is lobbying for a "solution". He sees the financial crisis as a symptome, and it's origins in that some (unnamed) countries didn't "modernise" (read: globalise) their economy as the dutch did. He wants to impose a state of "in recievership" on the countries that are in financial difficulty, if they want financial assistance of the dutch. The politician Geert Wilders is against any further bailouts, and wants the Netherlands to "retreat" on it's current path. Verhagen calls him emotional, and rejects the idea, on the basis that it's going to hurt the Netherlands economy.
Of course the Netherlands are a banking and multinational hub, parties who'd love to circumvent souverign "restrictions" and "restructure" the countries in trouble as they desire. The reason that was offered for the bailouts in the first place, that of it being a "liquidity crisis" is not mentioned at all, nor is the complete failure of the bailouts which should've been a singular event.
Maxime Verhagen is also firmly in the camp of the nuclear industry (with substantial bank investments), and is pushing for a new nuclear reactor, of which the design is secret (in coöperation with the french nuclear giant EDF).
The modus operandi of the minister is to obfusciate the real important discussion points, and shroud his ideas in a cloak of "common sense" hereby counting on the language barrier, that is for most dutch (even if they speak and understand more languages) not a reason to look beyond the messages in their native language.
As christian right wing politician, Maxime Verhagen, who didn't leave his post even after electoral defeat, is the poster child of the New European Order, a proponent, ironically (because of his position as minister (servant) of the people) of doing away with souverign rights of individual citizens throughout europe, their Constitutions, and all that stuff..
He also says the position of the dutch and german economies is in principle healthy, of course he doesn't mention the government debt, and exposure to bank contagion the dutch government has subjected its citizens to, by guaranteeing bank loans and deposits.
With the promise of "balancing the books" as a "good shopkeeper" (typical dutch thinking), the assets, freedom and independence of european citizens is sold down the river if this neo-fascist in sheeps' clothing gets his way.
I apologise for not including a subtitled link, my (studio) computer is acting up with the video format capture.
http://beta.uitzendinggemist.nl/afleveringen/1103148
The Greeks should do a Greek on Harper and send him packing. If they dont the reverse will happen and Greece and the Greeks will be doomed for eternity.
Take a cue from the Icelanders and say Bugger Off
`struth; Harper is owned by the same people who put Greece in the position she is now in... guess what he and his lot have in mind for Canada.
Hint: All (Harper`s) roads lead to Athens.
"Mundus vult decipi, ergo decipiatur."
Old Latin proverb, (quoted from Bonner/Wiggins, Financial Reckoning Day)
Yea, go against what much of your govt. says. It's Amazing what Harper and his Greek heritage treasury guy is saying. The reason why Canada is okay with this is because of one thing. They are part of the western anglo banking system, they will always get special deals by the US because of the closeness of them to the US. You won't see the IMF screwing Canada or England or the US or Australia, because essentially they own the system. It's totally alright for a country to say stuff it and walk on their debt, it's been done before. They are trying to entice and talk baby talk to the leaders of Greece to get them to not only stay in the system, but to keep believing that no matter what the debt is the debt.
They owe at least 150 billion dollars to the ECB, and they need more money. They don't and won't be able to pay all this back, hell the country has a tax base of 11 million people. They could do a 100% austerity cut and it would still take 2 or more years of it to break even. What are the people to do, just eat dirt and pay the bankers back. The only thing they have is their islands. Greece has 1400 islands and 227 of them are inhabited, so they have over 1100 islands that have no one on them. Countries are looking at this realestate for themselves big time.
if the Euro-landers totally screw it up "all roads lead to Athens." it is "in the cards" as Solitaire would say.
Follow the yellow brick road. Egypt, Libya, and now Greece; how much gold does Greece have. Gee, do you think this is all about replenishing the vaults?
Yes, ignore the opposition, that's how a Democracy works, right?
From the article my guess is Harper could not place greece on a map before this trip.
Love the way that the author of the quoted article uses words. Stephanie Levitz phrases it, 'Clement will be in charge of making the $4 billion in cuts to government services next year as Canada pays down its deficit.' Shouldn't that be 'tries to reduce it's dependence on borrowing', or something like that since they are still forecasting $30 to $50 billion deficits for the next few years. To me 'pay down' means having a surplus and applying it to the debt. 'Spin' like that pisses me off. Harper advising and in turn learning from the Greeks, a Canadian/Greek tragedy.
The Greeks need to hire some of those super sharp Canadian money managers from Quebec - Leo, you can recommend 6 or 7 to the Greek authorities, right?
What the Greeks really need to do is to hire harper, make him a Greek citizen and confiscate all his travel documents. The bad news is that this would lower the average IQ of Greece. The good news is that it would simultaneously raise the average IQ of Canada. Harper never gets to take a dump without clearing it with his masters in washington first. The world's #2 puppet, after osama soetoro.
What you say is true, so for the Greeks to make a profit they would need to kidnap him and threaten to return him unharmed.
jesus loves me yes i know, for the bible tells me so........harper is the bland of the bland.......what a name for a politican.
nice to know you have 'connections' in the highest govt circles, Leo which kind of begs the question as to why you are not over in Greece advising over how to negotiate the best deals for Greeks as opposed to your line about Greece will 'sellout'.........seems like you are kind of talking out of both sides of your mouth......sorry, but that is how it looks.
btw........i am short the Euro.......and the Pound too.
go back into the archives, Leo advocated Greek bonds as a good investment all along
Leo, you believe the HST should be increased.
On May 19th, the Governor of the Bank of Canada made a speech about how inflation is the biggest danger right now. In the same speech, he said indirect taxes (read HST) are inflationary.
Why do you hate people on fixed incomes?
Harper said nothing which is exactly what you would expect from a politican.
For what it is worth the Euro looks like a massive short, and if I were Greek I would tell the other side to shove it.
It is the Greek's call to default, not the banks.
Funny how the "cradle" of democracy may very well be responsible for the fall of democracy.
When I hear Greeks bitch about how Germans work too hard yet turn around and want hand outs from those very people, it brings to mind my favourite Jefferson quote:
“The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.”
Hmm,
Europe's south bashes Merkel for "work harder" quip
Greece should "throw up the gates" as is already being done throughout Europe--take their chances with the Americans. Unless of course "Christine" has other plans...
I see where you´re going with this Leo. Likewise, I can find articles that argue a different point of view.
My main point however is that in fact, Greece is looking for something from Germany in the end.
As for who works hardest, let´s first determine what I am owed by the world if I move a stack of rocks from one side of my yard to the other on a daily basis. Based on many people´s job here in Ottawa, unfortunately, too much.
WORK YOU LAZY BITCH! *WHIP!* WHO HAS THE LONGEST ECO-PENIS?
What a disgusting show of conditioned envy and greed. But hey, i guess if you're not part of the solution, you're part of the problem - after all, who would consider the possibility, that the mindset of the "anti-socialists" here, and the mindset of socialists, are both part of the same thousands years old and now broken economic model.
It's just so much easier to point fingers at symptoms, than question the premises.
All right .... Greece responsible for the fall of democracy ....
Jeez ... and here I was thinking that it was the Bankers, the corrupt politicians, the financial elite ....
go figure!!
So whom exactly sold the idea to all these people that free education, free heath care, 6 weekes of vacations, free 40 year pensions.... were all sustainable?
They sold it to themselves and that is the demise of democracy because it fails to acknowledge that someone actually has to pay for the shit. Instead, of facing the truth of the matter, they would rather point the fingure at the guy making $1 million per year.
Well you can look at the bright side, at least they got indebted through excessive domestic well-being measures instead of excessive foreign war-monging measures!!!
All this finger-pointing is really getting scary.
Every one gets the debt it deserves... Karma b!tchez!
Woopsy daisy!
Canada has oil. Greece doesn't.
Canada had Paul Martin. Greece doesn't.
Canadian banks were bailed out by the Canadian government and got to squirm out of their legal/moral obligations in commercial paper. Always ready to get the government to guarantee their "risk" taking.
Paul Martin still has not returned the $54 billion he 'borrowed' from the EI fund to balance the deficit.
When did the Canadian Government bail out the banks? I must have missed that one.
Of the many times the Canadian government bailed out the banks the ones that come quickly to mind would be:
1. Dome Petroleum and the crash in oil in the early 80's when the federal government quietly passed legislation allowing the big 5 to write off their losses over 5 years instead to 1 year. Otherwise they were all broke.
2. The fall of 2008 when hundreds of millions in mortgages were purchased by the government to provide liquidity to the very illiquid Canadian banks; the very same banks that were borrowing from the Federal Reserve while telling everyone they were better than the rest.
3. When CHMC did a Fanny Mae after the great crash of 08 and guaranteed virtually all the mortgages written by the Canadian banks.
These guys are far better at monopoly and propaganda than banking.
Mulroney Years, 92-94, interest rates were around 14%. You could get a locked in account GIC on a six month for 7.5%. 1 year was 9.1% Houses were around 25% - 10% depending which city you are in right now.
True. But Greece doesn't have to work. Who is fooling whom?
Deals like this don't last forever. Just ask the $35 per hour Crossword Puzzlers working for the BIG AUTO UNION. And the $40 per hour Domino Players.
That's all you got?!
How about adding a sprinkle of socialist, here ... comunist, there......
Yep... the problem is definitely the middle class people making too much money .... the data definitely points that out ...
It's the auto-workers sucking the economy dry .....
Nice! 1 year and 21 weeks on ZH and still spewing the usual bullshit ....
Oligarchs rest easy ... Dirtt just solved it all for us!
Guy,
you need to relax. It´s not that they middle class is making too much, it´s that they are consuming too much as a collective. Take for instance health care in Canada. Sure it free and every has access to it; but is it sustainable? No it isn´t. It´s a social policy which has been funded for the better part of 30 years by debt.
So no...the middle class isn´t making too much money. They´re consuming too much.
So, the middle class is consuming too much health care? They certainly are consuming a lot of health care insurance...