Yet again, the Greeks are coming down hard in a very un-American manner, on the body politik’s misbehavior. Following our comments last week on the life sentence for the Greek Mayor who embezzled EUR 17mm, eKatherimini reports, former Greek Defense Minister Akis Tsochatzopoulos has been sentenced to eight years in jail for failing to declare his assets properly over the last few years. While not on the same scale as the mayor’s fraud, The ex-minister failed to declare 47,000 euros of assets in 2006, 33,000 in 2007 and 20,000 in 2008. The property has been seized and Akis is not allowed an appeal but the story doesn’t end there for he also faces a separate trial for embezzlement of taxpayers’ money.
Whether it is Euro-Skeptic MEPs, tin-foil-hat-wearing bloggers, anarchic facebook-friends, or ‘V-for-Vendetta’-atavar’d twitterati, the European Union is now engaging in a social media blast to”correct their misconceptions”. In what appears to be a coordinated troll-patrol, Nigel Farage notes the “very very scared” leaders of the European Union are spending taxpayers money to counter growing skepticism at the unelected leaders dragging citizens into a United States of Europe. The outspoken British MEP makes it very clear he thinks this social media smear campaign is leading towards a ‘mugabe-like’ banana republic, as Europe’s leaders, who he believes are the “most dangerous people in Europe in 70 years,” are terrified at the citizenry’s realization that none of this removal of sovereignty was ever voted for. Banana Republic indeed…
Europe has now officially become the Schrodinger continent, demanding both sides of the economic coin so to speak, and is stuck between the proverbial rock and hard place (or “a cake and eating it”). On one hand it wants to telegraph its financial system is getting stronger, and doesn’t need trillions in implicit and explicit ECB backstops, on the other it needs a liquidity buffer against an economy that, especially in the periphary, is rapidly deteriorating (Spanish bad debt just hit a new all time high while Italian bad loans rose by 16.7% in one year as more and more assets become impaired). On one hand it wants a strong currency to avoid any doubt that there is redenomination risk, on the other it desperately needs a weak currency to spur exports out of the Eurozone (as Spain showed when the EUR plunged in 2012, however that weak currency is now a distant memory and it is now seriously weighing on exports). On the one hand Europe wants to show its banks have solidarity with one another and will support each other, on the other those banks that are in a stronger position can’t wait to shed the stigma of being associated with the weak banks (in this case by accepting LTRO bailouts).
It is the latest that is the most glaring dichotomy because as reported earlier, while some 278 banks, or about half of the original LTRO participants, voluntarily paid back some €137 billion to the ECB, it is none other than Moody’s warning that European banks, especially those in the periphery, will need much more cash.
Banks in Spain, Italy, Ireland and Britain need to set aside much more money to cover potentially bad loans, credit ratings agency Moody’s said on Thursday, meaning European taxpayers may again be tapped for cash. Read More
The inefficiency of Greece’s tax collection mechanism combined with many people’s inability to pay their taxes for 2012 has resulted in expired debts for the January-November period last year to soar to 12 billion euros from 11 billion in the first 10 months, Finance Ministry data show.
As a result, as far as taxpayers are concerned, the combined total of both old and new debts to the state now stands at 55.5 billion euros.
The ministry has found that 1.13 million periodic statements for value-added tax for the same period have not been submitted by enterprises and the self-employed, which means that they have withheld the VAT received from customers for sales made or services provided.
Old debts amounted to 43.49 billion euros, 2.99 billion of which concerns state companies and corporations. Another 8.5 billion euros concerns firms that have already gone bankrupt while the remaining 31.8 billion relates to various taxpayers and enterprises. The state has only managed to collect about 1 billion euros of this old debt, while writing off some 359 million euros.
The new debts, recorded in 2012, amount to 12.07 billion euros and are expected to steadily increase. The state has only managed to collect 1.1 billion euros of this new debt and has written off another 179 million.
The total of 2.19 billion euros cashed in satisfies the requirement set out in the government’s bailout agreement with its creditors. However, the troika – as the representatives of the European Commission, the European Central Bank and the International Monetary Bank are known collectively – says in its report that some 80 percent of outstanding debts cannot be collected. Read More
After a LONG day, the Senate has overwhelmingly voted to approve a Fiscal Cliff deal, sending legislation for final approval in the House.
There was a little nervousness this evening that liberals might not be on board the deal, but the bill passed easily 89-8.
The basic gist is: taxes will rise for individuals making $400K or more and families making $450K or more.
These thresholds are higher than Democrats would like, but Democrats are getting an Unemployment Insurance extension, as well as an extension of other credits.
There is also a permanent fix to the Alternative Minimum Tax indexing.
As for the “sequester” that will be delayed for two months.
This part is infuriating conservatives, who see the spending cuts delayed once again, while taxes rise on many Americans (even though the income taxes will stay low for most taxpayers, payroll taxes will rise).
The New Economic Collapse Video: It makes uncomfortable but urgent viewing.
When Casey Research Chief Technology Investment Analyst Alex Daley met former Reagan Budget Director David Stockman to talk about the economy and where he sees it leading taxpayers investors and savers in the near future, he got some very intriguing insights from a man who served right at the heart of the US federal government.
True, some if it makes for uncomfortable watching, but the message is critical if you want to keep your assets safe in what David calls calls “the great unwind.”
The leader of the main opposition Radical Left Coalition (Syriza) party, Alexis Tsipras, was quoted as predicting the country’s default, while also forecasting that the government will “soon present” a return to a national currency (drachma) as a national success.
In an interview published with Real News newspaper on Saturday, Tsipras said any re-negotiation of a memorandum signed by Greece with its EC-ECB-IMF creditors ended on the night of the June 17 election, while charging that any payment extension is “essentially a longer rope with which to hang ourselves.”
He also criticised the government for abandoning, as he said, any discussion over restoring cuts made to pensioners receiving low pensions, re-instituting collective bargaining talks and increasing the tax-free ceiling for individual taxpayers.
He even attacked Finance Minister Yannis Stournaras, for whom he had spoken positively of during the vote of confidence discussion in parliament, saying he is the definition of a finance minister that the EC-ECB-IMF ‘troika’ would have chosen. (AMNA)
Think the ECB announcement to do undergo a pseudo OSI impairment is a done deal? Not so fast – Germany may yet throw a wrench in there. According to Bloomberg, next week German lawmakers will conduct three votes on Greece among which:
the €130 billion Greek bailout package… Wasn’t it €145 billion by now?
the empowerment of the EFSF to guarantee Greek government bonds held by the ECB
the guarantee of Greek government bonds held by private sector after the debt swap
So while according to “sources” the ECB has already reached an “agreement in principle” to provide Official Sector debt relief, Germany may once again come out of left field with a blocking veto after German taxpayers realize that once again the ECB is throwing money down the drain on its Greek bond holdings, because as pointed out earlier, someone sure is taking a loss on those very same Greek bonds, no matter how convoluted the ECB-EFSF non-arms length and incestuous relationship.
If you thought that last night’s news that Greece had been consulting (and paying) the far more “stable” Irish Central Bank on how to, oh, avoid bankruptcy, this may jus top it. In an FT article describing the new set of austerity measures most of which are very loud threats that Greece will very soon (really) take austerity seriously (they promise), we stumble across the following gem: “The conservative opposition New Democracy party said a shortage of ink had prevented the computerised tax centre at the finance ministry from sending out claims to taxpayers over the last 10 days. There was no response from the finance ministry to the claim.”…
So…. let’s get this straight. If austerity does not force all the tax collectors to be on permanent strike which it appears it will, than the sharp ink shortage will surely destroy any attempts to generate state revenue through tax collections. And there is more bad news: when Greece goes back to its prior currency, the drachma, or the obolus, or goats, or whatever, there will be no ink to print it. And since Greece will enter hyperinflation shortly following its evolutionary transition from disorganized banana republic to organized hyperinflationary implosion, this may be a concern.
Europe’s latest bailout for Greece is in danger of fraying over whether countries giving Greece aid should receive cash collateral, The Wall Street Journal reported Saturday.
The European Commission on Friday pressed eurozone members to resolve the issue quickly or risk disrupting the bloc’s bailout efforts. European equities continued to fall Friday as concerns over the economic outlook and the eurozone debt crisis persisted.
A fresh rift over terms of Greece’s bailout would further damage Europe’s credibility, just as the region’s leaders have been scrambling to convince investors that they can bring the continent’s debt crisis under control.
After it emerged this week that Greece had agreed to give Finland a hefty cash deposit as security for Finland’s portion of the Greek bailout package, other European countries have begun to ask for a similar favor.
The more cash that Athens has to set aside to reassure its eurozone creditors, however, the greater the burden for Greece — and for lenders such as Germany and France, which are not seeking collateral.
The €110 billion ($158 billion) bailout package for Greece could be disrupted if other countries seek to imitate Finland’s deal on collateral, the commission, the European Union’s executive arm, said.
Finland and Greece announced a deal Tuesday under which Greece would deposit about €500 million in an escrow account with the Finnish government, as a precondition for Finland agreeing to release funds from the eurozone’s bailout fund. Read More