5.45pm: I'm afraid I've got to drop the blog for the day now. Thanks for reading, and for your comments and assistance. We'll be back tomorrow.
Goodnight!
5.21pm: Greeks have been told that as of the end of the month all civil servants will be appraised by other senior civil servants and "experts" in the private sector.
From Athens, Helena Smith has the details:
The monitoring of the performance of civil servants was announced after Horst Reichenbach, the visiting head of the EU task force created with the express purpose of reforming Greece's public administration, held a series of meetings in Athens with top government officials.
In a country whose public sector is the antithesis of meritocracy the move is bound to be met with howls of protest. But EU officials say it is the only way of turning Greece's dysfunctional civil service around. For safety's sake it was announced that the task force will be supervising the monitoring!
We wrote about Horst Reichenbach's visit to Greece this morning (see 11.06am), explaining how he has been playing the "good cop".
Helena continues:
Officials announced that as of this week pensioners receiving state handouts will ALSO be counted. Readers will recall that until recently when a census of civil servants was ordered by the previous socialist government, no one was sure how many many public sector employees were on the payroll. The discovery, made by former finance minister Michalis Papaconstantinou, was one of the first signs for mandarins in Brussels that something was rotten in the state of Greece - and it wasn't only its mountain of debt.
There are currently thought to be around 800,000 Greek civil servants.
But to end on a good note. Greeks appear to be delighted with the choice of Eleftheria Eleftheriou the crooner who will be representing the nation in this year's Eurovision Song contest with the song Aphrodisiac.
5.05pm: I reckon that this is the first time that Fitch has upgraded Greece's credit rating since October 2003, when it raised Athens to A+ (there's a full list of Fitch rating moves online in a pdf, here)
Financial journalists are joking tonight that they've never had the chance to write upgrade and Greece in the same tweet before.
Fitch upgrades Greece to B-. Haven't used "upgrade" and "Greece" in the same tweet, ever.
— Charles Forelle (@charlesforelle) March 13, 2012
Live blog: news flash newsflash
4.52pm: Breaking news -- Fitch has upgraded Greece to B- with a stable outlook, from Restricted Default, following its bond exchange.
In a statement, Fitch said that Greece's debt service profile has been "significantly improved" now that €100bn has been wiped off its debt pile. It warned, though, that "significant and material default risk remains".
B- is only the sixth highest junk rating, classed as 'highly speculative' on Fitch scale.
Here's some key quotes from the statement:
In Fitch's view, there is a limited margin of safety for debt service on the new securities over a 12 to 24 month horizon, reflected in the Stable Outlook.
Post-default, debt service should be moderate. The effective interest rate on public debt is estimated to have fallen to less than 4% from 5.5%, while substantive amortisation payments have been pushed out to 2020 and beyond. Nonetheless, the capacity for continued payment remains vulnerable to deterioration in the political and economic environment.
Fitch expects the new EU-IMF programme will be fully funded (ie. not reliant on Greece regaining access to term finance from the market), in contrast to the first Greek Loan Facility, providing a limited margin of safety for bondholders.
While it is possible to discern a downward trajectory of the public debt/GDP ratio to around 120% by 2020 as targeted by the EU/IMF, this outcome is very sensitive to assumptions regarding the implementation of fiscal austerity and economic growth.
The current government has completed a long list of 'prior actions'. However, their implementation is likely to prove very challenging for any administration, while Greece's ability to sustain primary surpluses of 4.5% of GDP from 2014 onwards is untested.
The full statement is online here.
4.33pm: European stock markets have just closed strongly, with many indexes closing at their highest levels since last July.
Here's the numbers:
FTSE 100: up 1.07% , or 63 points, at 5955
Germany's DAX: up 1.37% at 6995
France's CAC: up 1.72% at 3550
Yusuf Heusen, sales trader at IG Index, commented:
Expectations that today would be quiet have been dashed as US markets hit new post-crisis highs despite the presence of a Fed meeting on today's agenda. US retail sales rose at their fastest rate for five months, as US consumers took heart from the improved employment landscape and returned to their shopping malls with new determination to spend.
4.16pm: Regular reader Ballymichael points out that the memorandum of understanding on Greek economic policy mentioned earlier (see 2.29pm) is now online, and can be seen here. Thanks BM.....
4.01pm: Greece has announced this afternoon that it expects to receive a total of €172bn of external aid between now and 2015.
Finance minister Evengelos Venizeloz said in a statement that Greece will receive the €130bn aid package that has finally been agreed after months of haggling, plus around €34.5bn currently untapped from its first rescue deal. It also hopes that the IMF might extend an €8.2bn loan in 2015 (on top of the IMF's contribution to the €130bn package).
Speaking of Venizelos....
source:http://www.guardian.co.uk/business/2012/mar/13/eurozone-crisis-greek-deal-spain-austerity
Category: Feature , Political Issues
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