A week ago we joked that Greece was rapidly sliding into the "fourth world" (and had the photos to prove it [6]). Well, today Equity Index provider MSCI took our joke and made it into something way too serious when overnight it made Greece the first developed nation ever to be downgraded into "emerging market" status. Not quite fourth world, but that too will come. However, what's worse for Greece is that as we reported yesterday, the majority of Greeks have no way of learning about this following the governmental "temporary" shutdown of its one national TV prodier, ERT. Kathimerini followed [7]up with news that ERT would be renamed to NERIT, the New Hellenic Radio Internet and Television - a state company owned by the public sector and regulated by the state, and relaunched by the end of August, however what matters to the public is that the vast majority of employees would likely be let go permanently.
However, the biggest news out of Greece is that the events in the 24 hours have pushed the depressed country right back into crisis mode, with political bickering front and center (the opposition leader called the uncoordinated move "a coup" even as coalition partners blasted the broadcaster shutdown while Europe washed it hands), while the economic contraction is set to accelerate once more following what is certain to be another escalation in daily protests and riots. And who can blame them - with that last civilizational "premium" - free TV for all - gone, what else is there to do?
From Reuters [8]:
Greece's fragile government faced an internal revolt and fierce public protest on Wednesday over the sudden closure of state broadcaster ERT, hours after the humiliation of seeing its bourse downgraded to emerging market status. The twin setbacks, coupled with the derailing of a troubled privatization program, blew a hole in rising investor confidence that had prompted Prime Minister Antonis Samaras to declare the risk of a "Grexit" from the euro was dead and a "Greekovery" was under way.
Yields on Greece's 10-year benchmark bond crept back above 10 percent after Athens failed to sell state gas firm DEPA on Monday, leaving it short of cash to meet its international bailout targets.
The stock market traded at two-month lows after Greece became the first developed nation ever to be lowered to emerging market by equity index provider MSCI.
Prime Minister Antonis Samaras's government declined comment on the market reclassification as it tried to fend off a growing media backlash against ERT's dramatic closure. The public broadcaster was yanked off air just hours after the shutdown was announced in what the government said was a temporary measure to staunch an "incredible waste" of taxpayers' money prior to relaunching a slimmed-down station.
Labor unions called a 24-hour national work stoppage for Thursday and journalists went on an open-ended strike, forcing a news blackout on privately owned television and newspapers. "The strike will only end when the government takes back this coup d'etat which gags information," the journalists' union said.
Some ERT journalists were occupying the broadcaster's building in defiance of police orders and broadcasting over the Internet. Hundreds of employees and protesters gathered outside.
Ah, the smell of Greek chaos in the morning - it smells like normalcy. In retrospect, it appears only the Greeks did not see this coming. When the country handed over its sovereignty to the European Commission, all of the subsequent events were perfectly clear for all to see.
Perhaps the biggest irony is that the state broadcaster was one of the more fervent supporters of the regime, gladly ignoring the flaws in the administration and focusing on what little positives there was. It will no longer have this chance:
Many Greeks have little love for ERT journalists and the state broadcaster is often cited as an example of inefficiency, overspending and jobs given in return for political favors.
But the speed and suddenness of the shutdown - ERT screens abruptly went black just before midnight - stunned Greeks long used to the slow pace of public sector restructuring.
"This government's ways are dictatorial: they decide and they order," said 45-year old Panagiotis, who declined to give his full name for fear of losing his own public sector job.
"It was a wrong move. Yes, the public sector needs to be downsized and we all knew that ERT was being used for political favors but they did not need to fire them all."
Coming back full circle, once more the biggest threat to Greece, to Europe and the Euro, is coming from Greece, where the events in the 24 hours may have destabilized the government enough to hand over power to the anti-bailout party, Syriza:
Many Greeks have little love for ERT journalists and the state broadcaster is often cited as an example of inefficiency, overspending and jobs given in return for political favors.
But the speed and suddenness of the shutdown - ERT screens abruptly went black just before midnight - stunned Greeks long used to the slow pace of public sector restructuring.
"This government's ways are dictatorial: they decide and they order," said 45-year old Panagiotis, who declined to give his full name for fear of losing his own public sector job.
"It was a wrong move. Yes, the public sector needs to be downsized and we all knew that ERT was being used for political favors but they did not need to fire them all."
The closure opened cracks in Samaras's fragile three-party coalition. Samaras's two junior partners, the Socialist PASOK and the Democratic Left said they would oppose the decision.
Both parties said they had not been consulted but stopped short of saying the row could bring the government down.
So-called experts are appalled by the possibility of early elections:
"It's anyone's guess what would happen in elections now and what impact it would have on the economy at a time when a so-called Greekovery is visible on the distant horizon." The decision was taken by ministerial decree, meaning that it can be implemented without immediate reference to parliament. But the communist opposition said it would put a legislative amendment to parliament on Wednesday to annul the decision. Opposition leader Alexis Tsipras was to meet State President Karolos Papoulias to protest against the decision. On Tuesday, he called the closure "a coup, not only against ERT workers but against the Greek people", and accused the government of the "historic responsibility of gagging state TV".
Wait, Greekovery? That's a new (if idiotic) one. Is that abbreviated to "reek"? And in what nation is your GDP crashing to Year 2000 levels [9]indicative of even the faintest "recovery"?
Oh yes, Greece.