This week EU and IMF are discussing with Greece to assess whether budget deficit reduction and structural reforms to be implemented are sufficient to release EUR 8 billion of aid in October in order to avoid a default. This article reviews numerous dysfunctions in Greece.

1. http://marketsandbeyond.blogspot.com/
http://www.pcgwm.com/
Greece: this is THE week
As reporter by Bloomberg: “European Union and International Monetary Fund inspectors
hold a teleconference call today with Finance Minister Evangelos Venizelos, to judge
whether the government is eligible for its next aid payment due next month and on track
for a second rescue package approved by EU leaders July 21.”
So, here we are, finally, decision have to be taken after months of wrangling, (badly)
communicating and ignoring reality.
To raise EUR 78 billion in 5 years, Greece is to bring additional taxes, including a property
levy for EUR 2 billion: I am wondering how the Government intends to implement the
measure since the new land registry is not yet finalized and how will they be able to
privatize without a certainty regarding title of assets (real estate is part of the EUR 50
billion privatization program); the initial deadline was November 21 and December 30
2008 depending whether your are Greek resident or non-resident, then postponed to H1
2010, and now October 31, 2011. The fun is that Greece first launched a project to record
the use and ownership of land in 1995, with EU subsidies, but it ran into repeated delays
and nobody at EU did react… When the blind leads the blinds…
As reported by the English speaking Greek newspaper Ekathimerini: “Greece hopes to
complete the registration of all its land by 2020. So far, 13.8 million titles have been
recorded on the cadastre.” 2020!
Ekathimerini is an endless source of information on Greece dysfunctions: “The Citizens’
Protection Ministry Tuesday rebuffed a report in the Financial Times indicating that
Greece may be temporarily ejected from the passport-free Schengen travel area for its
failure to keep undocumented immigrants out of the bloc […] It added [the Greek Citizens’
Protection Ministry report] that the Commission should support member states
“managing the massive burden” of guarding the bloc’s external borders from illegal
immigration.” Oh, yes, give me more money!
Do you want more? Yes? Let’s carry on:
“Whereas more than 1,000 Greeks were losing their jobs in the private sector every day in
August, the government was assuring civil servants with lifetime tenure that their job
privileges were not in danger and the so-called reserve pool was not intended for them but
only for employees in the greater public sector. […] In the meantime, many Greeks were
surprised to hear the government had hired between 15,000 and 20,000 people in the
public sector in various forms since the start of 2010.”
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2. http://marketsandbeyond.blogspot.com/
http://www.pcgwm.com/
About the need to reduce expenditures: “…closing down one or two money-losing state
entities, such as the the Hellenic Railways Organization (OSE)…”
This is a topical and typical subject: the Hellenic Railways. A few numbers tell you all; for
2009 consolidated accounts:
Turnover - EUR 174 million
Operating loss - EUR 359 million
Total loss – EUR 937 million
Accumulated losses – EUR 2.5 billion
LT debt EUR - 7.8 billion
Interest paid - EUR 388 million (2x the turnover!)
Employees’ compensation - EUR 291 million (more than the turnover)
The auditors commented that they could not conduct a tangible asset and inventories
impairment test as well as updating the fair value of investment real estate assets.
I could not find the same information for 2010. According to data released by the Ministry
of Finance, on a non-consolidated basis, for the 5 months to May 2011, the situation
has improved but remained catastrophic, the turnover is 3x less than personnel expenses
(EUR 40,000 / employee / year as an average i.e. 4x the minimum wage, quite nice, and
excluding various benefits – EUR 48,000 in 2010), the net loss amounting to EUR 164
million.
As a whole, during the same period, public entities had revenues of EUR 512 million
personal costs of EUR 399 million and losses of EUR 534 millions (more than revenues).
This tells you all, and the situation is “better” than in 2010…
Greece’s officials are willing to raise taxes and cash via privatizations; good luck! For
example privatizations raised EUR 400 millions whilst EUR 5 billion was planned for 2011
– 3 months left…
However, I have no doubt that Greece will get its EUR 8 billion early next month.
Hopeless.
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3. http://marketsandbeyond.blogspot.com/
http://www.pcgwm.com/
Source:
Ekathimerini: Investors sought for land registry
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_07/07/2011_397548
Ekathimerini: Land register invites private bids
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_04/08/2011_401150
Ekathimerini: Ministry rebuffs Schengen report
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_13/09/2011_406189
Ekathimerini: Civil servants in the firing line
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_18/09/2011_406931
Ministry of Finance:
http://www.minfin.gr/content-
api/f/binaryChannel/minfin/datastore/bf/75/78/bf7578dec0e469420b8d6f742d5815d18
2d31eee/application/pdf/5-month+period+2011+comments+ENG.pdf
Hellenic Railways Organization: Annual financial statements for 2009
http://www.ose.gr/LinkClick.aspx?fileticket=eVoOiPOHPnY%3d&tabid=541
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