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Greek Government, And Bailout Deal, On Verge Of Collapse Due To Definition Of "Fresh Milk" | Zero Hedge
The Greek economic collapse, depression and bankruptcy has seen many odd things in its brief and often times violent history (in those days when the violent elements were not on strike), but this surely is the first time when one of the countless Greek bailouts may be on the rocks due to the disagreement over the definition of “fresh milk.” No, really. Reuters explains that Greece’s government risks another rebellion over bailout terms this week after milk producers lobbied against a move to free up prices as part of efforts to make the economy more competitive. Basically, for Greeks, milk is fresh if it is 5 days old or less, yet according to the always fascinating codex of the Troika, “fresh” can be labeled anything that is as old as 11 days…. including the salmonella bacteria it contains. What’s worse, is that the “spoiled milk” scandal, far from a joke, has swept over the country, and now even threatens to topple the government.
The country’s international lenders want it to ditch rules, such as limiting the shelf life of fresh milk to five days, that effectively deter importers.
But Greek dairy producers and lawmakers representing farming constituencies are fighting the move to call milk up to 11 days old ‘fresh’ – the latest in a long line of last-minute disruptions to Greece’s bailout reviews with the European Union and International Monetary Fund.
Six lawmakers from within the ruling coalition – three from Prime Minister Antonis Samaras’s New Democracy party and three from the Socialist PASOK – have opposed the proposal that will be submitted to parliament on Friday as part of an omnibus reform bill that Greece must pass to secure bailout aid.
If they vote against it, Samaras and PASOK leader Evangelos Venizelos could be forced to expel them, further reducing the government’s slim majority of just 153 seats in the 300-seat assembly.
In other words, there is a possibility that Samaras’ government, which nearly brought down the Eurozone after the summer of 2012 elections were almost won by the “anti-bailout” Samaras, will have no choice but to expel enough people from his party to leave it without an absolute 50%+1 majority, and potentially lead to a government collapse! All because of the definition of fresh milk.
Yup: it sure sounds like the European “Union.”
The bill – which will pave for the way for up to 10 billion euros ($14 billion) of aid – is expected to pass after last-minute wrangling, but the row has highlighted how powerful lobbies can undermine the country’s bailout lifeline.
“You don’t need to be an expert to understand that extending the shelf life is aimed at allowing milk from abroad to be labelled as fresh,” PASOK lawmaker Mihalis Kassis told Greek radio at the weekend. “If that’s a prerequisite by the (EU/IMF) troika then we deserve what we get.”
The controversy has captured headlines and days of debate on Greek television, overshadowing expectations that the country will soon be able to raise money on bond markets again.
“It is unfair and saddening, at a time when Greece is spreading its wings to emerge from a rut, that there is such dissonance,” Samaras said during a trip to Brussels on Friday.
“MPs drowning in a glass of milk!” the daily Ethnos wrote on its front page on Saturday. “Spoiled milk” proclaimed the center-left Eleftherotypia newspaper’s headline.
Why are foreign exporters so interested in penetrating the Greek milk market? Simple: prices. “Greece is the only country in Europe that has legislation to determine the shelf life of fresh milk and the price, at around 1.30 euros per litre, is among the highest in the EU. The Paris-based Organisation for Economic Co-operation and Development (OECD) says Greeks paid about a third more for dairy produce than the EU average in 2012.”
One would think that the Greeks would welcome the competition from abroad, and that the lower price would be a good thing. Well, if cow farms and milkmen account for a substantial portion of the Greek GDP, not to mention employment pool, which apparently in Greece they do, it becomes clear why the nation which is now a complete and utter economic disaster quarantine area, would be leery of allowing any foreign influence to raise its already laughter inducing unemployment rate.
So aside from that, the Grecovery is on pace.
With Greek Prime Minister Antonis Samaras settling into his role as EU President, UKIP’s Nigel Farage stunned the “Goldman Sachs puppet” with a 150-second tirade of truthiness he has likely never experienced. Farage sacrastically remarks how Greeks “will be dancing in the streets” at Samaras’ ‘successful’ negotiation on MiFiD reminding him that “60% of youth are unemployed and the neo-nazi party are on the march.” Europe is now run by “big business, big banks, and big bureaucrats,” Farage goes on, suggesting the smarmy-looking Samaras should “rename his party from New Democracy to No Democracy.” People do not want a United State of Europe, the outspoken UKIP leader explains, they want a “Europe of sovereign states,” and concludes ominously, “the European elections will be a watershed.”
…And you come here Mr Samaras and you tell us that you represent the sovereign will of the Greek people? Well, I’m sorry, but you’re not in charge of Greece, and I suggest you rename and rebrand your party – it’s called ‘New Democracy’, I suggest you call it ‘No Democracy’.
Because Greece is now under foreign control. You can’t make any decisions, you’ve been bailed out, and you’ve surrendered democracy, the thing your country invented in the first place.
And you can’t admit that joining the euro was a mistake – of course Mr Papandreou did that didn’t he, he even said there should be a referendum in Greece and within 48 hours, the unholy trinity (troika) that now run this European Union had him removed and replaced by a ex-Goldman Sachs employee puppet.
We are run now by big business, big banks and in the shape of Mr Barroso, big bureaucrats…
This morning we were treated to the usual stupifying comments from Greek leadership that “Greece won’t need more loans,” and will “start becoming a normal country,” because the Greek ‘recovery’ is “built on solid foundations.” However, it appears the public-at-large is not so happy as the BBC reports shots were fired at the German ambassador’s residence in Athens. Samaras said Greeks “have gone through hard times.” With over 60 bullets fired, it seems the someone is upset that their union overlords won’t lift those hard times anytime soon…
Shots were fired at the German ambassador’s residence in Athens early on Monday, without causing injury.
Bullets were found embedded in the steel gate, Greece’s Kathimerini news website reports.
Ambassador Wolfgang Dold’s residence is in the Greek capital’s Halandri district. The raid took place at around 03:30 local time (01:30 GMT).
It is not clear who the attackers were. Germany’s insistence on budget cuts has caused much resentment in Greece.
At least 60 spent bullet casings were found at the scene of the attack. Police say the bullets came from two Kalashnikov assault rifles.
So far no-one has admitted carrying out the attack.
In a message to the unidentified perpetrators, Mr Dold said “whoever is responsible for this act: you will not succeed in disrupting the close and friendly relations of our two countries”.
He was in the residence when the shots were fired.
German Foreign Minister Frank-Walter Steinmeier said Berlin took the attack “very seriously” and “nothing, absolutely nothing, can justify such an attack”.
The Greek government called it a “cowardly terrorist action” aimed at undermining Greece’s six-month presidency of the EU, which begins on 1 January.
Germany is the biggest lender involved in the Greek bailout – a 240bn-euro (£200bn; $331bn) rescue for the debt-laden country that started in 2010.
The bailout conditions require Greece to rein in public spending, and that has meant hardship for Greeks who have lost their jobs or who now pay more for essential services.
In 1999 the ambassador’s residence was hit by a rocket-propelled grenade, in an attack claimed by the now defunct radical left-wing group November 17.
Greece Tumbles Into The Deflationary Abyss, While Its Primary Surplus Sounds The “Grexit” Alarm | Zero Hedge
While the second-derivative hopers and primary budget surplus believers cling to the faith that Stournaras talking about recovery is enough to bring the depressing Greek nation out of its slumber, the fact is that Greek deflation has never been worse. However, it gets worse… as a recent study by CFR finds that countries are most at risk of defaulting the year they turn a positive primary budget – meaning they are no longer reliant on their creditors. Simply put, the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running – this makes it more likely, rather than less, that Greece will default sometime next year. Beggars, once again, become choosers.
Less worse un-growth and Hope deflating…
Things are looking up in Greece – that’s what Greek ministers have been telling the world of late, pointing to the substantial and rapidly improving primary budget surplus the country is generating. Yet the country’s creditors should beware of Greeks bearing surpluses.
A primary budget surplus is a surplus of revenue over expenditure which ignores interest payments due on outstanding debt. Its relevance is that the government can fund the country’s ongoing expenditure without needing to borrow more money; the need for borrowing arises only from the need to pay interest to holders of existing debt. But the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running.
This makes it more likely, rather than less, that Greece will default sometime next year. As today’s Geo-Graphic shows, countries that have been in similar positions have done precisely this – defaulted just as their primary balance turned positive.
The upshot is that 2014 is shaping up to be a contentious one for Greece and its official-sector lenders, who are now Greece’s primary creditors. If so, yields on other stressed Eurozone country bonds (Portugal, Cyprus, Spain, and Italy) will bear the brunt of the collateral damage.
- Greek MPs back public sector cuts (bbc.co.uk)
- Greece approves sweeping public sector cuts (telegraph.co.uk)
- Greece simmers as Antonis Samaras government passes more austerity cuts (guardian.co.uk)
- Greek coalition in disarray as small party meets over threat to quit (scooprocket.com)
- Global markets stabilize – there are no markets , just manipulations ! Greece may be the day’s exception though….. (fredw-catharsisours.blogspot.com)
- UPDATE 2-Greek coalition in disarray, small party considers quitting (xe.com)
- Greece’s crisis in times of …political crisis (keeptalkinggreece.com)
- Row over closure of Greek ‘BBC’ puts coalition in jeopardy (thetimes.co.uk)
- Greece coalition partners pulls ministers (star-telegram.com)
- IMF and Greece: Institutional Monstrous Failure | Editorial (guardian.co.uk)
- Stocks Plunge As IMF Tells Greece To Plug Holes Or It Pulls The Plug (rvnewstoday.com)