Russians still interested in acquiring privatised Greek rail companies

Russian Railways (PZD) are still in talks with the Greek government on the possibility of submitting bids in the privatisation of related Greek state companies, Russia's railway boss Vladimir Yakunin said earlier this week. Talking to the Public Chamber of the Russian Federation - a sort of alternative "Parliament of experts" - Yakunin was quoted by Th. Avgerinos from ANA-MPA as saying that these companies included the Greek trains operator TRAINOSE, the rolling stock repair and maintenance company ROSCO and the port of Thessaloniki.

Yakunin stressed that "nothing had gone quiet" and that the Greek Prime Minister Alexis Tsipras had requested a meeting with him during his recent visit to Moscow, during which he indicated that the Greek side was also interested in such cooperation.

Audit Court Rules In Favour of Hellinikon Privatisation

Hellinikon Global I S.A., the highest bidder for the former airport of Helliniko, south of Athens, may proceed through the privatisation process, according to the Court of Audit by a unanimous and irrevocable ruling, state news agency ANA-MPA reported.

In its decision, the Court's majority panel discussed an injunction filed in December 2014 by the Region of Attica and residents' groups. They were protesting a decision by a Court section, which had ruled that the tendering process was legal and that Lamda Development S.A., the guarantor of Hellinikon Global, had won as highest bidder.

In the project, Lamda Development, is backed by China's Fosun and Al Maabar, a unit of Abu Dhabi's sovereign fund Mubadala Development.

The 7-billion-euro plan to develop Hellenikon, a 620-hectare (1,520 acre) plot, is one of Europe's most ambitious real estate projects and Lamda has said it will take some 15 to 20 years to complete once construction begins in 2016 after all legal permits are secured.

ANA-MPA, Reuters

OPINION - Water Companies: Privatization Plans Stall

Following key legal decisions and a widespread popular disapproval, the Hellenic Republic Asset Development Fund has announced that it is re-examining plans to privatize the Thessaloniki water utility EYATH. However the fund has made it clear that it is unwilling to abandon the process entirely.

Both EYDAP and EYATH, the water utility companies for Athens and Thessaloniki respectively, were originally due to be transferred to private ownership despite widespread popular opposition and negative experiences from such privatizations in other countries. Privatization of the water companies is a Memorandum obligation and revenue from the sales would have counted towards the revenue targets for privatizations which the government has struggled and largely failed to meet so far.

But the privatization of EYATH, which was at a more mature stage, has now been at least temporarily frozen according to an announcement by the HRADF at a shareholders’ general meeting yesterday. The fund cited adverse legal decisions and popular disapproval as reasons behind the suspension of the process. In an unofficial referendum in Thessaloniki for the water privatization in which over 200,000 people took part, 98% voted against the move.

However the HRADF has far from abandoned the process stating that it would, ‘re-examine the process of utilizing EYATH and will announce its relevant decisions.” The fund also stressed that it was obliged to protect the reliability of the privatization process indicating that it is unwilling to entirely abandon the move.

The ‘freezing’ of the EYATH privatization comes following a key decision by the Council of State that deemed the transfer of a controlling stake of the Athens water provider, EYDAP to the HRADF unconstitutional. The court effectively reversed the transfer of a controlling stake in the company from the state to the Hellenic Asset Development Fund (HRADF). All of the shares were due to be sold to private investors.

Most significantly, the crux of the decision was that effectively transforming the water utility into a privately controlled for-profit company would render the state unable to guarantee that it could fulfill its constitutional obligation of providing affordable and clean water.The decision also noted the de facto monopoly of EYDAP in the Attica region given that the water and sewage pipes necessary for the proper sanitation of the city are among the company’s assets.

The ruling had cast a long shadow over the privatisation of EYATH for which the HRADF was at the stage of accepting binding offers from approved bidders. It was considered likely that the Council of State would issue a similar ruling for EYATH. While the HRADF is reportedly still examining ways that the management of EYATH would be given over to private investors together with a minority stake in the company (considered essential to render the investment attractive) the EYDAP ruling renders this legally complicated.

Now following the decision by the HRADF to freeze the sale of EYATH it is believed that the Fund may return 50% plus one share back to the government (it currently holds 74% of the shares in EYATH), with the remaining 24% to be sold to private investors. However a transfer of any shares back to the state from the HRADF is forbidden by the Memorandum Agreement. Specifically, according to the HRADF website, “Any asset transferred to the Fund is to be sold, developed or liquidated. The return of any asset back to the State is not allowed”.

In short, the ruling of the Council of State and the Memoranda are in conflict with each other over the issue and it is unclear which one will ‘win out’.

Campaigners as well as the general public will be breathing a cautious sigh of relief at the news. For the government however, it is yet another setback in its privatization programme which has continually failed to meet targets which have repeatedly been revised downwards. Revenue from the water privatizations were expected to bring in about 800 million euros in revenue towards the targets of 1.5 billion euros for 2014 and 2.24 billion euros for 2015.

The government will also be regretting the timing of the apparent collapse of the water privatizations, coming, as it has, as the government and the employees of the Public Power Corporation (DEI) prepare to face off over legislation that will provide for the sale of the profitable ‘little DEI’ to private investors.

The union GENOP-DEI is likely to be emboldened to dig in its heels by the failure of the government to push through the water privatizations, although public opinion is somewhat more divided over the question of the DEI privatization than for water utilities.

PressProject

Samaras & Finance Ministry CLASH Over "Athens Riviera" Plans

Following a recent decision by the Interministerial Commission for Privatizations, another package of high value properties and state assets was transferred to the Hellenic Republic Asset Development Fund (HRADF) with a view to their privatization. However among them were properties on the Attica coast had already been earmarked for a different government scheme to develop the so-called 'Athens Riviera'.

For years many commentators have bemoaned the fact that Athens is a city with ‘its back to the sea.’ Despite the city’s proximity to a coastline dotted with blue flag winning beaches stretching down to the cape of Sounion with its eponymous temple (where according to legend Theseus’s father, Aegeus, cast himself off the cliffs thus giving the Aegean its name), the Attica seaside is in many places markedly underdeveloped, with the city deprived of a major potential attraction for residents and tourists alike.

In order to develop the 35+ kilometers of coastline in a unified and coherent way, the state-run enterprise Attica Coastline S.A. (Attiko Paraktio Metopo) was established whose charter is to ‘administer and develop public and private facilities located in the area between the Peace and Friendship Stadium in Faliron and Cape Sounion.’

Prime Minister Antonis Samaras has personally been a driving force in the realisation of the project which was one of his 2012 pre-election pledges, and which he said would bring billions in revenue to the Attica region.

Since then, the project has been plagued by delays and legal roadblocks.

To date none of the properties to be developed have actually been transferred to Attica Coastline. Yet it received renewed political support from the Prime Minister himself less than two months ago who reportedly sought to put an end to scenarios of ‘fragmentation’ of the project, requesting the relevant ministers accelerate procedures to transfer properties to the company. But apparently the ministers did not receive the memo.

Only a few days ago, or on the 28th of May, the Interministerial Commission for Privatizations authorized the transfer of several the state-owned Attica properties that were earmarked for Attica Coastline, to the Hellenic Asset Development Fund - which is the state run enterprise responsible for selling off state-owned assets for the purpose of servicing Greece’s debt.

These properties were part of a larger package of 55 properties that were transferred to the HRADF.

The ministers who signed the decision included Environment Minister Yiannis Maniatis, and Minister of Infrastructure Michalis Chrysochoidis - i.e. the same individuals that had supposedly agreed with Samaras about the Attica Coastline project in April. (Coincidentally the two latter ministers are both with the PASOK party of Evangelos Venizelos).

Finance Minister Yannis Stournaras and Tourism Minister Olga Kefalogianni also authorized the transfers to the HRADF.

The three properties that had been included in the Attica Coastline plans but were instead transferred to the HRADF include:

• - A 176.1 thousand square meters (44 acre) plot in the Athens municipality of Glyfada (which includes Olympic sailing facilities).
• - A 383 thousand sq.m. (96 acre) plot in Aspro Lithari Sounion which includes the site of the Cape Sounion luxury hotel
• - A 20.9 thousand sq.m. (5 acre) coastal plot in Glyfada

Particularly the properties in Glyfada are considered absolutely essential to the Attica Coastline plans, given that they are in the heart of what was supposed to be the unified and coherent development of the Athens seaside.

The announcement of the transfers provoked an angry reaction from the leadership of Attica Coastline.

Aris Matiatos, head of the enterprise was quoted in Kathimerini as saying that “the Prime Minister decided that there should be a unified plan for the coastal front of Attica. This should therefore be continued.”

Matiatos added that not one property had yet been transferred, despite Attica Coastline having already submitted plans for two ministerial decisions for the transfer of 21 properties to the company. A recent law passed by parliament had also sought to facilitate these transfers.

The decision over the three properties has now been recalled.

The HRADF claims that they were included in the transfers by ‘mistake’ (or due to an error) although it seems surprising that an enterprise whose sole task is the organised transfer of state assets could slip up so egregiously over three high profile properties with a total value in the hundreds of millions of euros.

And not one of the eight ministers who signed off on the decision happened to notice the error...

Others believe that the fiasco is the result of a clash between Finance Minister Yannis Stournaras and Samaras.

It has been reported that the decision to recall the transfer of the Attica properties to the HRADF came about following the direct involvement of the Prime Minister who was ‘annoyed’ at the initial move.

It should also be noted that it is not the first time that Attica Coastline and the HRADF have butted heads over properties on the Attica coast. Approximately a year and a half ago there was a disagreement over the ‘Asteras’ property in Lagonisi.

One of the main obstacles faced by Attica Coastline tp date appears to have been foot-dragging on the part of the Finance Ministry.

Perhaps a key point is that all of the revenue from asset sales from the HRADF are required by law to go to servicing the debt. Revenue from property sales by Attica Coastline on the other hand do not have such restrictions.

According to the government, the revenue from the sales would be used to fund developments on the ‘Athens Riviera’ which are widely seen as a pet project of the Prime Minister.

As it appears, the government’s ‘organised plans’ for state asset sales and development of the Attica coast are anything but.

PressProject

GOOD - Council of State Blocks Privatisation of EYDAP - Ruled Unconstitutional

The government's plans to privatise Greek water utilities suffered a major setback when the Council of State, the country's highest administrative court, blocked the transfer of state-owned shares in the Athens water company. Among the government’s plans to privatise state-owned companies few have attracted as much opposition as the move to transfer the water utility companies serving the water and sewerage needs of Greece’s largest cities to private hands.

Campaigners in Greece stress that the experience in other countries of such privatisations has been largely negative, with prices rising and quality of services falling after water utility companies were transformed into for-profit companies. It is perhaps indicative that the Berlin Waterworks - originally sold to private investors in 1999 was eventually repurchased by the Berlin municipality following a referendum in 2011 to the relief of many German citizens.

It is also worth noting that, unlike other privatisations, the privatisation of water companies in Greece is not memorandum commitment in and of itself (although revenue from potential sales would count towards the target of revenue from privatisations established by the agreements.) The European Commission has made also clear that it excludes water from the relevant Directives regarding state companies.

Privatisation of water utilities is also extremely unpopular in Greece. In a recent unofficial referendum held in parallel with the first round of municipal elections ten days ago (and which the government did its utmost to block) 98% of 200,000 participants voted against the move.

Despite this, the government has remained doggedly insistent on transferring EYDAP and EYATH (the water and sewerage companies of Athens and Thessaloniki respectively) to private hands. However its efforts were dealt a critical blow in Athens when the Council of State ruled on May 25th that the privatisation of EYDAP would be unconstitutional.

The court effectively reversed the transfer of a 34.03% stake in the company from the state to the Hellenic Asset Development Fund (HRADF) completed in May 2012. That transfer came after the transfer of a 27.3% stake in January of the same year and resulted in the HRADF having a controlling stake in EYDAP. All of the shares were due to be sold to private investors.

According to the court transferring a controlling stake in EYDAP to private hands would violate articles 5 and 21 of the Greek constitution which render the state responsible for the protection of citizens’ fundamental right to health.

Perhaps most significantly, the crux of the decision was that effectively transforming the water utility into a privately controlled for-profit company would render the state unable to fulfill its constitutional obligations.

     “The effective transformation of the state company to a private one which operates on a for-profit basis renders uncertain the continuation on its part of accessible services for the common good of a high quality as they will be no longer comprehensively secured by state oversight,’ the decision read in part (translation by TPPi).

The decision also noted the de facto monopoly of EYDAP in the Attica region given that the water and sewage pipes necessary for the proper sanitation of the city are among the company’s assets.

The ruling by the Council of State came after Athens residents filed a petition with the court against the moves to privatise EYDAP.

Residents of Thessaloniki also filed a similar petition against the privatisation of EYATH but it was thrown out on technical grounds. However anti-privatisation campaigners together with municipalities from the region of Macedonia will launch a new legal action with the court imminently.

The privatisation of EYATH is at a more mature stage than that of EYDAP, with the HRADF looking to sell a controlling state in the utility to one of two intrested strategic investors approved by the HRADF in May 2013 - namely the consortia Suez / Ellaktor and Merokot /G. Apostolopoulos / Miya / Terna Energy.

The qualified bidders are now in the process of submitting binding offers.

However the recent ruling over the EYDAP privatization has cast a shadow over this process, with many believing that the Council of State will take a similar view with EYATH.

While such a move would throw a spanner into the works of a government desperately looking to meet revenue targets from privatisations, it would be a relief to the citizens who want to make sure that their right to access to water does not pass through the hands of a private company (and a monopoly at that) looking to maximise profits.

PressProject

SHAME - Privatizing the Greek coast will allow illegal properties to be legitimised

In a move that it would be generous to call misguided, a draft law prepared by the Finance Ministry on coastal development in Greece will do away with long-standing prohibitions against building on the seafront and open the way for beaches to effectively be privatized.

The bill which seeks to open the way for widespread commercial exploitation of beaches and coastal property would effectively do a way with a number of long-standing protections which restrict developments and preserve the open access to the sea-front for the public which is enshrined in the Greek constitution. It will also open the road for illegal developments already built to be legitimised, thus rewarding developers who have previously deemed the law beneath them.

The draft law has provoked angry reactions from citizens and environmental organizations who maintain that it will open the way for large developments and beach privatizations which in the long run will ultimately degrade the Greek coastline and the country’s potential for sustainable tourism, thus repeating the mistakes made by countries such as Spain where extensive developments on the coast now blight many areas.

Specifically the law would do away with all restrictions on the maximum area of a beach that is available to permanent commercial exploitation through concessions such as rented umbrellas, sun loungers and bars. Currently such concessions on a beach can be no greater than 500 square meters separated by undeveloped buffer zones of at least 100 square meters. The bill would make it possible for even large beaches in Greece to be carpeted from end to end with umbrellas and beach bars.

Furthermore, the law opens the way for buildings to be constructed right on the water’s edge, even extending the coastline through earthworks into the sea. The only requirement for such developments to be green-lighted is that local authorities must deem the development as ‘absolutely necessary for the achievement of the business goals’ of the enterprise in question. Effectively this means that coastal hotels will be able to build and extend their grounds right to the water’s edge.

The law will also open the way for illegal buildings built on the seafront and used for commercial purposes (and not residences) to be legalized given payment of a fine. This is a step that even previous legislation which allowed for the legalisation of illegal buildings in the country stopped short of taking, as it was deemed to run counter to the constitution. Yet today’s leadership of the Finance Ministry apparently has little time for such constitutional niceties. The move also undermines an ongoing effort by the Environment Ministry to demolish such buildings.

Finally the law will also remove the right of citizens to access the sea-front. This is a right clearly enshrined in the Greek constitution which deems the shoreline as public property which citizens have a right to access. The bill would allow private companies to obtain exclusive right of use of beaches requiring only that conditions are imposed ‘which will secure the public’s access following reasoned balancing of the interests which are facilitated or impaired.’

What is most clear from the bill is that the current administration interprets the term ‘public land’ not as areas which belong to all the Greek people, but as areas that belong to the government and which it can sell to whomever it likes, and under whatever conditions it sees fit in order to bolster its short-term finances.

Perhaps most telling is the fact that the bill which seeks to (de)regulate the ‘development’ of beaches and coastlines was not drafted by the Environment Ministry which is actually competent for such matters, but by the bean counters at the Finance Ministry who are conditioned to believe that sound long-term planning is purely an exercise in making numbers on spreadsheets add up, regardless of the actual effects their decisions have on the country in the real world.

Stupidity is probably not too strong a word for this exercise in selling out Greece’s long-term advantage (it’s unique and largely unspoilt coastline) in the service of short-term targets cooked up by European and IMF technocrats whose deficiencies and narrow-mindedness are apparent to anyone who has visited a Greek unemployment office.

One can only hope that the bill which is expected to be voted on after the European elections will meet enough resistance to suffer the ignominious defeat it so richly deserves.

PressProject

NO SURPRISES - Hedge fund banks on profits from Athens water privatization

Betting against US subprime mortgages in 2007 made him a billionaire. Now John Paulson is betting (some of) his hedge fund's money on the Athens Water Utility, a state company which is slated to be privatised even as voices grow throughout Europe demanding the re-nationalisation of private water providers.

According to Bloomberg News, Piraeus Bank S.A. sold its 9.9% stake in the Athens Water Supply and Sewage Co. (EYDAP) to the New York hedge fund founded Paulson. The shares for the company reportedly were purchased by Paulson & Co. for 86.3 million euros.

By making the purchase it would appear that the hedge fund is banking on the privatisation of EYDAP moving ahead. The government has stated that, come 2015, it will sell its 61% share in the listed company which is estimated to have a market value over one billion, in order to help meet its revenue target of 2.2 billion euros from the sale of state assets.

Yet the planned privatizations of EYDAP and EYATH (the Thessaloniki water provider) are particularly controversial, given that in Europe and abroad the current trend is to move away from privatizations of water suppliers. Cities including Paris and Berlin have already re-municipalized their water suppliers after privatisations led to increased costs and poorer services, enraging the public.

Given the poor record of private water companies in these two European capitals - as well as numerous other countries - it appears the height of hypocrisy for the troika to demand the privatization of Greece’s water suppliers in return for Greece’s bailout funds. The European Commission is under increasing pressure from campaigns to recognize water as a human right, not a commercial good. Already the Commission has stressed that its latest Directive on concession contracts does not impose privatisations of water companies on member states. “The proposed Directive will not lead to forced privatisation of water services. Public authorities will at all times remain free to choose whether they provide the services directly or via private operators,” the Commission wrote in a press release. Unless, apparently, they are recipients of bailout funds.

Currently for EYDAP, its privatisation hinges on a decision by the Hellenic Council of State which has been called to rule on the legality of the transfer of the shares in the state-owned company to the Hellenic Republic Asset Development Fund (HRADF). By law assets that are passed to the HRADF must be privatised, however the court may rule that the initial transfer violated the constitution.

Given this backdrop, the investment by the Paulson hedge fund in EYDAP is noteworthy. While the 86 million euros may be a drop in a bucket for the 22.8 billion dollar hedge fund, clearly the fund’s analysts see potential for profits from the deal, presumably banking on the fact that the privatisation will go ahead. It should however be noted that the fund has a recent history of failures as well as successes. One Paulson & Co. fund recently lost half of its value when it underestimated the recovery of the US economy. The fund also predicted a Greek eurozone exit and break-up of the euro in 2012.

The sale of the EYDAP shares also raises questions for Piraeus Bank and the Hellenic Financial Stability Fund. The bank initially acquired its stake in the water company when it bought the ‘good’ part of the bankrupt Agricultural Bank of Greece in 2012. That deal, overseen by the HFSF, saw all of the Agricultural Bank’s assets pass to Piraeus Bank for 95 million euros including the water company shares. Now that cost has almost been entirely recouped by Piraeus bank with the sale of just its EYDAP stake, seemingly supporting the case made by critics of the original deal that Piraeus Bank was effectively gifted numerous valuable assets.

PressProject

Hellinikon site: Did The Gov't Mark Down The Price?

In 2013, and specifically during the month of March, the price for the Hellinikon site -located in the southern part of Athens - was estimated at approximately 1.239 billion Euros by an independent agency, according to an article in the Sunday edition of RealNews. The newspaper says that the recent low offer of Lamda Development, and where that sets the bar for the Hellenic Asset Development Fund (HRADF) prior to the new offer by the Latsis controlled group, is expected this coming Wednesday. The article also states that there are shady connections between the architect Norman Foster of the company seeking the site and a consulting firm advising the HRADF and leaves it to be understood that this should be investigated.

KKE Slams SYRIZA On Proposal for Committee To Probe Submarines Scandal

 (Photo credit: Wikipedia)

The Communist Party of Greece (KKE) said that it was in favour of a Parliamentary probe into the suspect submarines contracts and privatisation agreements for the shipyards in Skaramangas. At the same time, KKE accused main opposition 'Coalition of the Radical Left' (SYRIZA) that tabled the proposal of "shooting blanks" in its criticism of this and past governments.

    "All these years, KKE has been condemning the policy of the privatisation, the downgrading and shrinking of the country's shipbuilding and repair sector, as well as of the defence industry," the announcement which was dispatched by the state news agency said.

KKE added that this policy was a typical example, revealing the anti-popular nature of the capitalist path for growth and EU strategies, as well as the responsibilities of PASOK and ND governments."

The announcement pointed out that KKE's conclusions after the factfinding committee set up in 2011 concerning the contracts for the submarines, as well as with a host of other statements, had attributed grave political responsibilities to ND, PASOK and their governments for the privatisation of the shipyards at Skaramangas and elsewhere and for the unacceptable and damaging contracts signed with German monopolies, the Abu Dhabi company and for the submarines.

Lastly, it said that KKE "is in favour of setting up of a factfinding committee in Parliament that will attribute political responsibilities and will investigate whether penal responsibilities also exist for the privatisations, the relevant contracts, the dissolution of the Skaramangas Shipyards, etc".

OPINION - Does The Papandreou +Rondos +Lazzard +Sorros Alliance = The Rothchilds? You Bet It Does!

 (Photo credit: Wikipedia)

In Greece we have a saying that says “show me your friends so I can show you who you really are”, meaning the people that you associate with are generally a direct image of your real character. If that is so, then to what conclusion can a simple blog like ours come to when we see George Papandreou encircling himself with “shady” groups and international crooks?

HellasFrappe has published many stories about Papandreou's meetings with George Sorros, but did you know that good old George has even more shadier friends? One such character is Alex Rondos and the other is the infamous and mysterious Lazzard group.

The Lazzard Company is a very hush-hush BANKING investment group. This “shady” group, which has acted as adviser to Papandreou while he was in government, apparently has direct links with the infamous Rothchilds of America. Yes the same Rothchilds that practically own every central bank in the world, and who, as some claim, have more than 60 percent of the world’s wealth (capital or over 500 trillion US smackaroos). The very same Rothschilds that employ international crook and Skopje propaganda financier George Sorros who in return is suspected of employing Mr. Alex Rondos.

Recap: So Papandreou's adviser is Alex Rondos, who is linked to the the Lazzard Group, and then linked to George Sorros and then linked to the Rothchilds… Is it just us here at HellasFrappe or does this stink from a mile away?

So why the Lazzard group. Well when the government of Papandreou was asked why the Lazzard group, it had said that they were sought out and coincidentally hired in order to take steps to cut its budget deficit in the wake of the 110 billion bail-out package (this of course was at the beginning of the crisis while Papandreou was in government). Lazard later on confirmed it had been hired to assist Greek authorities but dismissed speculation that debt restructuring was one option being considered.

The company was apparently giving Papandreou and his government “general financial advice” but at the same time it was apparently helping its communication with rating agencies and market participants.(This should make all of weary... and very, very skeptical.)

Reports at the time said that Lazzard was also advising Papandreou's government to restructure its railways, and the electronic gaming industry so as to bring it in line with European Union directives. (Incidentally, a bill which was introduced by Papandreou about the gaming industry almost cost him a coup d’état from his own deputies which in some say was set up by Evangelos the Large). Finally, the investment bank also apparently advised Papandreou and his cronies on privatisation initiatives and real estate investment trusts such as large chunks of state property.

(Notice, that the Lazzard group was pushing the government of Papandreou to SELL SELL SELL.... and at the same time was in contact with ratings agencies. Hmmm....)

Alex Rondos on the other, is a whole chapter by himself. Press reports say he was a former Ambassador of Greece and prior to his government service he also worked for the World Bank, formed the first international relief and development organisation of the Orthodox Church, the International Christian Orthodox Charities, and he also apparently worked with Catholic Relief Services in Ethiopia, the Middle East and the United States. Today, this mysterious man is apparently "consulting" for the private sector, and contributing to the efforts of several non-governmental initiatives.

Following his run at the World Bank, he became an adviser to Foreign Minister of Greece, George Papandreou counseling him and implementing changes in Greek strategy in the Balkans and Turkey as well as helped to manage the Greek Presidency of the European Union during the Iraq crisis (all this of course when Costas Simitis was heading PASOK).

In addition to serving as personal adviser to Papandreou, Rondos also apparently undertook special missions.

These special missions apparently included designing a relief mission to Kosovo during the NATO bombing campaign (he was a support adviser to Ambasador Maljas in 1999 via an NGO); advising senior democratic opposition politicians in Belgrade leading up to and during the change of power (or toppling of the Milosovic government), etc.

This is a direct passage from the article we have been analyzing on ohridsky.com (bear in mind that the English translation of this text is not that well)

     "After the fall of Milosevic, the Greek Embassy in Belgrade employs the wife of Ivan Vejvoda. Mediating the movement of persons "Resistance" and other half secret operations  at that time in Serbia. Once an external adviser to Vojislav Kostunica at a time when Kostunica is the President of Yugoslavia, and later as an external advisor to the Minister Zoran Djindjic.
     "Immediately after the assassination of Djindjic, Serbia's leaving and returning in 2004, and makes repeated attempts to bring to Kostunica and his acting office is through the centre of Athens next to the building of the Greek Foreign Ministry. Connoisseurs say that there are good relations in Turkey and that some acts there in the secret negotiations between Greece and Turkey and the Cyprus issue since the talks despite Serbian and Turkish.
     "In Greece, Alex Rondos was considered one of the Western country, "through which comp funds from secret funds for pursuit of political influences, pressures and political changes in neighbouring countries."

He also led the Greek humanitarian mission to Turkey following the earthquake there in 1999 that led to a rapprochement between Greece and Turkey. Throughout this period, he also served as a personal envoy of the Foreign Minister on missions to Turkey, governments in the Middle East, Europe, and the USA.
Impressive (and frightful) resume indeed. It is almost like he was always in the right place at the right time (or in the right place while matters of energy, banking, regime change and what not were being determined). So who the hell is this mystery man and why the hell was Papandreou so close to him (or what linked them to each other)?

His friendship with Papandreou apparently strengthened when Rondos came to Athens with the late President of the former Council of Hellenes Abroad (SAE) Andrew Athens to convince the Greek government to financially support the Greek Diaspora in the Black Sea. In 1999 Papandreou took the helm of the Foreign Ministry succeeding Theodore Pangalos.

Again... This does not really have any juice, so who exactly is this man that we hear so much about, who is apparently tied to the assassination attempt against former prime minister Costas Karamanlis and who was and probably still is so chummy chummy with Papandreou? Well... hold on to your hats Frappers, in the analysis on  ohridsky.com about Rondos we uncovered the following shocking information.

The site specifically said that Rondos is directly involved with the Greek Foreign Ministry’s chapter on foreign aid development which is responsible for an annual budget of some 60 million Euros, in other words, he has a lot of funds to move around with. The website claims that Rondos' connections to the IMF and the World Bank apparently helped Papandreou to deal with the debt crisis while in government.

The same report also notes that Rondos also holds excellent relations with FYROM authorities especially people from the WAZ Group including the director Srdjan Kerim. His liaison or mediator with Greek political and business structures is always Marinela Koppa, someone whose role in secret negotiations about the name issue is referred to in various WikiLeaks documents.

Interestingly, it also claims that Rondos' activities over the last decade also included a project in Egypt and the article clearly states... that the activity of this project was via an organization that was linked to non-violent protests that topple governments in undemocratic regimes. (Remember the Arab Spring... Coincidence?)

Quite shockingly the same article also says that this non-violent “organization” operates from centers in Serbia and (surprise, surprise) on the island of Crete. Some of Rondos' closest friends aside from Papandreou had also included former Deputy Minister of Foreign Affairs Dimitris Dolis, who has apparently also led para diplomatic activities by Greek NGOs in (other countries of turmoil such as) Pakistan and India. But the shocker for us here at HellasFrappe by far was discovering in the same news report that Rondos' first activities were in the countries of Albania, Egypt, Libya, Cyprus and Turkey, where he apparently occupied himself on marking the division of Mediterranean.

The article notes that Rondos was involved in Greek-Albanian "secret" activities (the politically correct term is secret diplomacy), and if we examine the news over the years then we can safely assume that this had something to do with strategic agreements on maritime borders (in other words... oil and natural gas). Apparently, these agreements were also known (and later signed) by Dora Bakoyannis who is also apparently an extremely close friend of Rondos, and who as we all know worked very hard at helping PASOK bring down Costas Karamanlis (who does not hold Rondos in the highest regard).

So now you have a general idea how all these names tie together. But what you do not know is that these ties go back at least four decades, or during a period when Margaret Chant, the mother of George Papandreou, (and former wife of our late Prime Minister Andrea Papandreou), was apparently working as a secretary for the Rothchilds. Of course we cannot confirm this, but there have been numerous reports about this over the years and from what we know she has never denied it.

In fact, some believe that she is the heart of all these links and let us not forget that she has/had worked very hard at promoting her son through the years.

It is also believed that she was the link that allowed the Rothschilds to approach her late ex-husband Andreas Papandreou who apparently was asked to come to Greece in 1974 and sell an “anti-American” climate to Greek Leftists who were at the time just beginning to come out of a dictatorship style government. Some also claim that Andreas founded PASOK via Rothchild funds (and/or CIA money) and sold the notion that he was a “Leftist” by slamming American policy with campaign slogans such as “Out with American bases” in Greece. The same analysts claim Andreas did this so he can steal votes from the Communist Party of Greece (KKE) which at the time held a strong position in Parliament.

This theory doesn't sound that far-fetched because when Andreas took office as Prime Minister in 1981 the anti-American slogans suddenly vanished and the Communist Party of Greece was weakened to some 8-9 percent. (Just like the Americans -or the FED- wanted).

During the same period, criminal George Sorros presented his newest protégé to the Rothchilds, Mr. Alex Rondos, yes the same man who later on stood by George Papandreou’s side. A couple of years later, and while papa Andreas Papandreou was in power, a new plan began taking shape, the Rothchilds together with Sorros and Alex Rondos began mapping out the political future of Papandreou under the strict eye of his mommy Margaret.

Some would say so what is wrong with that? True, there is definitely nothing wrong with friendships and/or relations, but let us not forget that Sorros and the Rothchilds were behind the dismantling of Serbia and the re-shaping of the Balkan map. And please do not take our word for it, do your own research. Just google the subject and you will find a plethora of information. In fact George Sorros even still brags about it.

Now add all the above to what Kissinger said in 1974 about Greece and the Greeks, (yes the same year Andreas Papandreou came to Greece), then zoom to the present and go research how investment banks work, and how they can damage and/or improve a country's image with credit agencies and presto... you will begin getting a good picture of what happened. (If of course all the articles you read end up with the IMF moving in... then you hit a jackpot.) Following this, go research which countries and areas were visited by Alex Rondos (while he was working under Papandreou) and you will find out that most of these areas later suffered from uprisings, war, economic turmoil and/or other troubles, and trust us Frappers everything (and we mean EVERYTHING) will begin making perfect sense.

In simple words, George Papandreou had a purpose. He was raised to take on the role he took (and probably promoted by his mother to do so). After all, the Rothchilds, George Sorros and Alex Rondos  worked very hard towards this, or since the mid seventies, and they invested heavily in George Papandreou's political future. He owes (and owed) them BIG TIME since his childlike buffoon knowledge on world affairs, combined with his (mommy's) lust for power, make George Bush Junior look so innocent!

Most importantly Papandreou owes them his political career and he does not care what price that entails. We saw this with Greece. Instead of helping Karamanlis to take softer austerity measures several years ago, (or basically freezing wages) Papandreou purposely refused because his job was to come into power and destroy everything that Karamanlis built. How else could he destroy and dismantle every opportunity this country had of ever becoming an international energy hub? How else would he place Greece in the arms of the IMF and allow corporate giants to move in and buy everything in this country at a sale price?

Treason, some would say and it is, but unfortunately the drama has not ended.

We are in the middle of this crisis, or right smack in the eye of the storm, and there are many, many more events at store. We have already witnessed the "Arab Spring", the clashes in Egypt, the crisis in the banking sector and judging from Rondos' involvement with FYROM we may even expect to see developments on the issue of Skopje very soon as well. Another subject is the issue of gold mining, the Cyprus issue, Turkish advances in the Aegean (something that Rondos has been lobbying for), the exploration and exploitation of oil and gas deposits of course and finally (and we believe this strongly) on the dismantling of Greece itself.

Does it sound like a huge conspiracy? It might to some because it is too incredible to even digest, but we  highly doubt it is and this is because if one goes through the news day after day, month after month and year after year, it is all there in black and white. In fact if you guys set out researching this in detail then you may even uncover more information than we did.

So why is all this happening? The answer is complex and at the same time very obvious: The name of the game is energy, and Greece is sitting right smack in the middle of this international energy chessboard. Even though the area of concentration is the Caucasus region (because of the vast amounts of natural gas that are suspected and/or have been found there), Greece still holds a geo-strategic position in the region because it is a gateway to the Middle East, to the Balkans, to Europe and most its natural reserve potential has not fully been explored yet.

Besides, almost all the current geopolitical developments in this region are energy-related and part of Rothschild fav. Dr Zbigniew Brzezinski's "grand chessboard" to Eurasia game.

Over the next few years, all the eyes of the world will be in the East Mediterranean, and this is not because of its vast amounts of natural gas which are suspected of being there, but because of the pipelines that will begin sending much needed energy to well over 500 million Europeans.

According to Wikipedia the following gas pipelines are at play (or are already functioning): The AMBO pipeline, the Baltic Pipeline System, the Brent System, the controversial Bourgas-Alexandroupoli pipeline, the CLH Pipelines - Spain, the  Druzhba pipeline, the Forties pipeline system, the Grozny-Tuapse pipeline, the Ninian pipeline, the Odessa-Brody pipeline, the Pan-European Pipeline, the Transalpine Pipeline, the South European Pipeline, the TRAPIL - France,

According to Wikipedia the following natural gas pipelines are at play (some of which prove the importance of Greece's role -and position in the Mediterranean and even more so in the control of the Aegean-) - The Baltic Gas Interconnector- Germany, Denmark and Sweden (planned), the Baltic Pipe (planned), the Balticconnector (planned), the BBL Pipeline, the Blue Stream pipeline, the CATS pipeline, the ENAGAS Pipeline - Spain, the Europipe I, the Europipe II, the FLAGS, the Franpipe, the Frigg UK System, the Fulmar Gas Pipeline, the GALSI (planned), the Gazela Pipeline, the Greece-Italy pipeline (planned), the Greenstream pipeline, the Interconnector, the JAGAL, the Langeled Pipeline - Northwestern Europe, the MIDAL, the Maghreb-Europe Gas Pipeline (Algeria-Morocco-Spain-Portugal), the Medgaz (Algeria-Spain), the MEGAL, the Nabucco Pipeline (planned), the NEL pipeline (under construction), the Netra, the NOGAT Pipeline System, the Nord Stream (North European Gas Pipeline), the OPAL pipeline, the Progress Pipeline, the Rehden-Hamburg gas pipeline, the STEGAL, the Skanled (planned), the Statpipe, the South German natural gas pipeline, the South Stream - Russia - Bulgaria - Italy/Austria -and formerly in Greece as well- (planned), the South Wales Gas Pipeline, the Soyuz Pipeline, the Trans Austria Gas Pipeline, the Trans Europa Naturgas Pipeline, the Trans-Adriatic Pipeline (planned), the Trans-Mediterranean Pipeline, the Transitgas Pipeline, the Turkey-Greece pipeline, the Tyra West - F3 pipeline, the Vesterled, the West-Austria-Gasleitung, the WEDAL, the White Stream, the Yamal-Europe pipeline, the Zeepipe.

Turkey has a strong presence in the region, but Israel does not trust Ankara at all. Today, it seeks an alliance with Greece and Cyprus and this is to our benefit because Greece is the only nation in the region that is on good (or fair) terms with all four global geopolitical players. Meaning: The US, Russia, the EU and China.

Most importantly, Greece controls the Aegean Sea. The Aegean Sea is an important as a sea route and air passage between Europe and Turkey and the broader Eastern Mediterranean, and between the former Soviet Republics of Russia, Ukraine (including the shipment of oil and gas from Azerbaijan, Turkmenistan etc.) and the Mediterranean Sea. Interestingly, the Aegean airspace is one of the main airways connecting Israel with the United States and Western Europe which is of major importance for the survival of Israel - with the implication that Israel would never consent to the occupation of this airspace by an unfriendly power -in other words Turkey-. The Aegean Sea is a very important space in the context of geopolitical dynamics and control, while it is an asset for whichever power has sovereign rights over it.

For now, we are being tugged at the nose by the US for geopolitical reasons because Papandreou made sure to relinquish Greece of any energy ties with Russia (Bourgas-Alexandroupoli pipeline, South-Stream, etc) and probably through his close ties with Rondos (and Lazzard, which was friends with Sorros, and the Rothschilds) Greece's natural gas and oil is now going to be controlled by the West, or the petrodollar (and/or the FED). On the other hand, the EU made sure to tie us hand and foot to the Memorandums of shame so it too can secure its share in this geopolitical game (that is why Samaras said European maritime boarders - This phrase alone speaks volumes).

So there you have it... now you know what is at play, and now you know what Papandreou's role was as well as why they wanted Karamanlis desperately out of the way quickly.

And no, never expect any of this news to be analyzed by the mainstream media, with the exception of reporters such as George Trangas, and EXTRA channel, and certainly never expect any of these people to be charged and thrown to jail either for the crimes that they may/or maybe not have committed. Certainly they have their networks set up on every corner of this globe and if we judge how they take care of Papandreou in the US, then it is obvious that when you scratch their back, they will scratch yours.

There is only one thing that can change their agendas and that is us. If we as a society begin discussing and debating the real issues that affect our country, or the stories within the stories... then we can protect Greece's interests. It might sound naive, but we can. If we stop being indifferent, arrogant and ignorant and begin involving ourselves on matters that deal with geopolitics, energy and politics then we can force change, and possibly end all this scheming. Certainly all the players indicated above have their own interests at heart, but we must also follow suit.

So shake off your political ideologies Frappers and unite with us today in surfacing the truth.

Will you join us?

Sources:
http://www.ohridsky.com/index.php?option=com_content&view=article&id=601&Itemid=121
http://hellasfrappe.blogspot.gr/2011/08/total-destruction-of-greek-russian.html
http://hellasfrappe.blogspot.gr/2011/08/authorities-launch-formal-investigation.html
http://hellasfrappe.blogspot.gr/2013/04/special-report-plot-thickens-in.html
http://hellasfrappe.blogspot.gr/2013/11/pasok-mp-implicated-in-karamanlis-wire.html

Putin Invited to Visit Greece

 (Photo credit: Wikipedia)

Prime Minister Antonis Samaras extended an invitation to Russian President Vladimir Putin to visit Greece, during his meeting on Monday with Russia's Federation Council Chairwoman Valentina Matviyenko, who is currently in Athens. (Refer to relevant article published on Monday for any background information).

Press reports claim that Matviyenko presented Samaras with a personal message from Putin and, according to sources, referred to the strong interest expressed by Russian firms for investments in Greece, as well as the Russian government's intention to support such investments in every way.

She said that energy giant Gazprom intends to participate in a new tender for the sale of Greece's public gas company DEPA, and at the same time expressed complaints over the stance adopted by the European Union on this issue. She noted that the EU had created problems over Gazprom coming to Greece when the company had activity throughout Europe.

Matviyenko also referred to Russian interest in the privatisation of Greece's railway and said she appreciated the difficulties and the struggle faced by Greeks.

     "The decisions you have made demand courage," reports quoted her as saying.

The Greek premier, in turn, appeared confident that Greece was now in the "final stretch" of a difficult course.

Samaras also raised the issue of his letter to Putin concerning the price of natural gas, with Matviyenko replying that there had been an immediate response, that two rounds of talks had already taken place, and that she hoped that an agreement will be reached after the third round.

Matviyenko also held a meeting with Government Vice President and Foreign Minister Evangelos Venizelos, ahead of the meeting between the Greek and Russian delegations at the Foreign Ministry.

Referring to the agenda of the talks, Venizelos said in statements following the meeting that they will focus on the entire spectrum of bilateral relations including tourism, energy, investments and privatizations. Greece will utilize to the fullest its six-month term in the rotating EU Presidency in the first half of 2014 to upgrade relations with Russia on all levels, bilaterally and with the EU, he added.

On her part, Matviyenko thanked Venizelos for the warm welcome and referred to the years she served as the Russian Ambassador to Athens, noting that since then Greece has a special place in her heart.

Making a special reference to the 185th anniversary of the bilateral diplomatic relations, she said that the long cooperation between the two countries is indicative of the ties linking the two peoples through centuries, noting that "the right conditions are present to take our relations to another level".

Matviyenko said that relations between Russia and Greece constitute an essential factor of stability in the Balkans and the greater region and, referring to the forthcoming Greek EU Presidency, underlined the need for closer relations between the EU and Russia.

Underlining Russian President Vladimir Putin's special interest in the relations with Greece, she said that he has given her a specific order to contribute to the reinforcement of bilateral relations on all levels.

Matviyenko said that the Russian side is very pleased with the relations between the two foreign ministries and in this context she conveyed the greetings of Foreign Minister Sergey Lavrov ahead of his meeting with the Greek foreign minister in the context of the UN General Assembly in New York. (AMNA)

Greek Privatisation Chief Dismissed After Newspaper Exposes His Love For Holiday Jet Setting

Greece dismissed the chairman of its privatisation agency on Sunday after a newspaper exposed how he used the private plane of a businessman who had just bought a state company to go on holiday. According to a report on Reuters which was later published on capital, Stelios Stavridis is the second head of HRADF to leave in less than six months, reigniting controversy around Greece΄s ailing privatisation programme which is a central requirement of its international bailout.

Delays and privatisation receipt shortfalls are a constant headache for the European Union and the International Monetary Fund, which bankroll Greece΄s 240-billion-euro rescue.

The lenders said last month that they would review the way HRADF was operating, after it emerged that the agency would miss its 2013 revenue target by about 1 billion euros.

     "Finance Minister Yannis Stournaras asked today for the resignation of HRADF chairman Stelios Stavridis," the Finance Ministry said in a brief statement.

A ministry official, speaking on condition of anonymity, told Reuters Stavridis was dismissed for "ethical reasons" after Proto Thema reported on Saturday that he travelled last week on the private plane of shipowner Dimitris Melissanidis, a major shareholder of a Czech-Greek consortium which in May agreed to buy a 33 percent stake in state gambling firm OPAP.

Stavridis took the flight immediately after the signing of an agreement to finalise the 652-million euro ($869 million) OPAP deal, Proto Thema said. The newspaper also published a photograph showing Stavridis in the plane, smiling next to a female flight attendant.

Stavridis said Melissanidis dropped him off at the Greek island of Cephalonia, which the shipowner would have passed anyway on his way to France.

     "He was kind enough to get me from Athens to Cephalonia ... I have nothing to answer for about that," Stavridis told Vima FM radio, adding the outcry about his trip was "hypocritical".

Stavridis, a Swiss-trained engineer and outspoken economic liberal who founded Greece΄s biggest swimming pool company, was earning 2,940 euros ($3,900) a month as HRADF chief.

Greece΄s privatisation programme would not suffer from his resignation, said HRADF΄s chief executive Yannis Emiris, who is keeping his post.

    "There will be absolutely no delays to the programme," Emiris said, rejecting any suggestion the OPAP deal might be reversed as a result of Stavridis΄s resignation.

The Finance Ministry official confirmed the OPAP deal would not be affected.

Stavridis΄s predecessor, Takis Athanasopoulos, stepped down after he was charged by a prosecutor with breach of duty over his former role as chairman of a state utility.

capital

Approval Of DEH Privatization Plan

The plan for the privatisation of the Greek Public Public Corporation (DEH), and which was announced in May, involves a three-stage privatization plan that was finally approved by the cabinet this week which local press suggest was part of the required terms indicated by the troika to release the EUR 4bn disbursement. The plan calls for up to 49% of the transmission company (ADMHE) to be in the hands of private investors by the end of 2013, along with management with the option to go to 51% by 2014.

Furthermore, a “small PPC” is going to be created through the carve-out of 30% of the company’s production capacity, which will then be sold to investors by Q1 2015 and finally the divestment of 17% of the existing company by Q1 2016.

Aside from formulating the required structured ahead of privatization, these reforms also create the backdrop required for a fully liberalized electricity market.

Rothschild & Goldman Sachs - Main Bank Advisers of Greece

“Rothschild’s long history of working with governments dates back to the origins of our firm more than 200 years ago.”

Hellenic Motorways S.A.: The HR will proceed to the sale of its participation in the Hellenic Motorways Co or in its subsidiaries which will hold rights on the concessions with Aegean Motorway SA, Nea Odos SA, Kentriki Odos S.A., Olympia Odos S.A., Moreas S.A., Attiki Odos S.A. and Gefyra S.A., as well as any other rights which may derive from future concessions that the HR may decide to implement in road transport infrastructure, including Egnatia Odos Motorway. For that purpose Ernst & Young, Rothschild & Sons LTD and Barclays Bank PLC have been selected to act as HR’s financial advisors.

Natural Gas Storage “South Kavala”: For the privatisation of a newly established special purpose company in which the HR has decided to assign its rights in the Natural Gas Storage “South Kavala”, HSBC Bank PLC and EFG Eurobank Equities SA have been selected as HR’s financial advisors.

Frequency Spectrum: The HR has selected Analysys Mason Limited and Aegis Systems LTD as its technical advisors for the exploitation of its rights in the frequency spectrum”
http://www.minfin.gr/portal/en/resource/contentObject/id/569f1cb6-ce89-421e-8e0a-43b6bd828f74

“Greece hires Rothschild, Goldman for Proton, TT bank sell-off”
http://in.reuters.com/article/2013/06/28/greece-banks-idINL5N0F428M20130628

“Rothschild-made Financial Crisis”
http://euro-med.dk/?p=9101

“Rothschild engineered financial crisis”
http://www.planetization.org/rothschild.htm

Emma Delta: Sale of Greece΄s OPAP not derailed

Contractual wrangling will not derail the privatisation of gambling firm OPAP, the company΄s buyer said on Wednesday, dispelling fears that Greece΄s troubled privatisation programme faced immediate collapse.

Athens agreed in May to sell a 33 percent stake in OPAP to Czech-Greek Fund Emma Delta for 652 million euros (556 million pounds). The sale was hailed as critical to kickstarting the country΄s stumbling privatisation programme and reform drive. The sale has yet to be completed, however, after Emma Delta, said it wanted to renegotiate a previous, also uncompleted OPAP deal - the purchase of a state lottery licence by an OPAP-led consortium - in which gaming systems providers Intralot  and Scientific Games  are minority partners.

Ιn his first interview on the sale, Czech investor Jiri Smejc, who controls Emma Delta, said the fund would go ahead with the purchase and review the instant-lottery contract later.

     "That would not cause any delay in the privatisation process," Smejc told Reuters.
     "I don΄t see any immediate or significant risk that would delay or block the (OPAP) deal," he said. He expects the sale to be completed in September, he said.

capital

ANALYSIS - The Cabinet "Reshuffle"

      “Like gravity, karma is so basic we often don't even notice it.”- Sakyong Mipham

It is difficult to observe the events surrounding the non-closure of ERT and the cabinet reshuffle in Greece with anything other that a sense of awed despair. Awe, because it is clear just how elegantly history repeats itself. Despair, because that is the only emotion this continual reshuffling of political failures in Greece merits.

Last week, the Democratic Left party withdrew from government, leading Mr. Samaras’ New Democracy (ND) – Pan-Hellenic Socialist Party (PASOK) coalition with 153 seats in Parliament. Many people must remember that in 1992, Antonis Samaras was removed as Minister of Foreign Affairs in the Mitsotakis government, and in 1993 formed “Politiki Anoixi”, leaving the ND government with a 150 seat majority in 1993. This led to new elections, which PASOK, under Andreas Papandreou, won. Ironically, the reasons Mr. Samaras left the government were the issue of FYROM and the privatisation of OTE, the national telecom.

Call this history repeating itself, call it karma: Mr. Samaras is now faced with the same slim majority in the Parliament. And with the need to privatise even more state organisations before him.

The reshuffle is also a source of despair. In order to retain the government he has literally spent his life trying to lead, Mr. Samaras has been forced to give Mr. Venizelos several new places in Cabinet in an attempt to keep PASOK MPs on side. This is exceptionally ironic to anyone remembering Mr. Samaras’ virulent attacks on PASOK in the 2012 election campaign: Xrissi Avgi has posted a useful excerpt here.

The PASOK that Mr. Samaras spent all 2011 and 2012 condemning as a party of special interests, corruption, and people whom he couldn’t possibly work with, is now the source of his political survival. PASOK polls between 4-6%.

The other source of despair is the fact that the faces in government represent political failures of a magnitude inconceivable in a normal democracy.

Mr. Venizelos becomes Minister of Foreign Affairs. It is difficult to describe how much “Benny” is a source of ridicule in Greece. Perhaps the only other people more derided are George Papandreou, Mr. Venizelos’ predecessor as head of PASOK, or Mr. Theodoros Pangalos, a previous foreign minister who’s gargantuan appetites are rivalled only by his florid prose. Mr. Venizelos turned the Eurozone finance ministers against him in 2011 and actively campaigned for George Papandreou’s downfall; we know that he will be entirely absorbed with domestic political events; we know that Greece needs a real foreign minister, not a placeholder.

Mr. Simos Kedikoglou, the Government Spokesperson, retains his seat. In any normal democracy, a government spokesman who managed to turn Europe and 65% of Greek public opinion against him through the illegal closure of the public broadcaster would have the good sense to resign and head home in abject failure. Not Mr. Kedikoglou. He retains his seat and perquisites, and will continue to lecture us about corporate restructurings that he knows nothing about.

Mr. Adonis Georgiades, a former deputy for LAOS who was absorbed into New Democracy in the recent electoral crisis, was nominated Minister of Public Health. Mr. Adonis is familiar for his rants on TeleAsty in which he would sell literature like a shoe salesman. To put it mildly, he has as much understanding of running the bankrupt Public Health ministry as I have of piloting the space shuttle. He will have to deal with thousands of highly qualified doctors and specialists, who are at the front line of the social collapse in Greece, for whom he has absolutely no empathy, and whom he will not be able to lead. He will have to continue reforms in the public procurement system, which is dominated by special interests and corruption. This is not a post where you learn on the job.

And in an inexplicable decision, Mr. Pantelis Kapsis, a journalist for the MEGA TV station owned by a major public works oligarch, has been appointed deputy minister for the restructuring of the public broadcaster. While I have nothing against Mr. Kapsis personally, it is simply inconceivable how a journalist working for a channel like MEGA, or indeed any private sector channel in Greece, can be appointed to restructure the public broadcaster.

This cabinet reshuffle exhibits all the signs of the political pathologies that affect Greece. Ministers have been appointed who have a record of political failure or of conflicts of interest in an attempt to consolidate internal political support. Its raison d’etre is internal political survival of two literally bankrupt political parties, who live in their own bubble and cannot possibly understand the real challenges of Greek society and the economy.

Its leaders, with few exceptions, are career politicians or from the tangled web of media and the public sector. Many only know politics: Mr. Samaras finished his Harvard degree in 1977, returned to Greece, and entered politics in an inherited seat in Messinia. Mr. Venizelos made his political bones defending Andreas Papandreou in the latter’s corruption trial in the Greek parliament.

It fails to create any sign of hope or inspiration that this government has a plan to reverse the decline. It is marked by choices of desperation rather than the true political courage needed to handle the issues at hand.

Mr. Samaras bought the survival of his government and his current term as prime minister. Mr. Venizelos bought the survival of his political party, which is on the brink of collapse and expulsion from Parliament. Both share in the spoils of government for a few more months.

Few foreign observers, and certainly few voters, understand the real reasons why the vaunted “Greek reform programme” is failing. But anyone with a real understanding of who makes the decisions, and how these decisions are made, cannot fail to comprehend this. The choice of the present cabinet is a case in point. And the future of the country is preordained.

By Philip Ammerman -philip-atticus.com

Philip Ammerman  is an investment advisor, consultant, and entrepreneur based in Athens and London and manages Navigator Consulting Group and European Consulting Network.

Azeri Co. SOCAR Improves Offer to Buy Greece's DESFA

Greece is set to agree the sale of its natural gas grid operator DESFA to Azeri state energy company SOCAR, a senior official directly involved in the talks said. The deal appears to raise the chances that the Trans-Adriatic Pipeline (TAP) is going to win its bid for Azeri gas, against its competitor Nabucco.

SOCAR has improved its offer to buy a 66% stake in the company to €400 million, a price that Greece΄s privatisation agency HRADF finds satisfying, the official said.

"The privatisation agency is very pleased, it΄s basically a done deal," the official told Reuters on condition of anonymity. HRADF may formally approve the sale as soon as on Thursday at its next board meeting.

A 35%t stake on sale is owned by refiner Hellenic Petroleum and the remaining 31% by Greece. This means that the debt-laden country would get about €188 million of the sale΄s total proceeds.

SOCAR was the sole bidder to buy DESFA after Russian energy company Sintez and Greek-Czech group PPF-Terna dropped out of the bidding earlier this month.

Greek energy officials have already said they were keen to seal the deal, which is part of the country΄s privatisation plan under its bailout from the European Union and the International Monetary Fund.

Athens also expects the DESFA sale to raise the chances of the Trans-Adriatic Pipeline (TAP), one of the two rival natural gas pipeline projects vying to become a conduit for Azeri gas to Western Europe (see background).

SOCAR already said earlier this week it wanted to increase its market share in Greek gas distribution from its current level of 17% and to deliver gas to the country from the major Shah Deniz field off Azerbaijan in the Caspian Sea.

DESFA is a wholly owned subsidiary of state-run natural gas company DEPA, whose privatisation failed earlier this month in an embarrassing setback to Greece΄s bailout plan.

Greece failed to attract any buyers for its natural gas company DEPA by the 10 June deadline for binding bids, in a major setback to the country΄s ambitious privatisation programme. Gazprom, the frontrunner to buy DEPA, withdrew at the final stage of the sale before a deadline to submit binding bids expired.

Gazprom said it was worried about DEPA΄s financial position, but Greece said the Russian firm may have been discouraged by fears that the EU would impose stringent conditions.

The DEPA failure came as a surprise to most: Greece had tried hard to woo Gazprom.

Athens had offered assurances that DEPA΄s austerity-hit customers would settle part of their arrears, and that Gazprom would not have to deposit part of the purchase price as a guarantee pending European Union approval.

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Bank of Greece Report on Monetary Policy 2012-2013

(Photo credit: Wikipedia)

Today, in accordance with its Statute, the Bank of Greece submitted its Report on Monetary Policy 2012-2013 to the Speaker of the Greek Parliament and the Cabinet.

The economy is rebalancing

In recent months there have been stronger indications, both at home and abroad, that the economy is rebalancing. These indications can be summarised as follows:

• - The possibility of a Greek exit from the euro area is now remote, as widely acknowledged by analysts and international organisations.
• - Confidence in Greece’s economic prospects is gradually being restored, as shown by the sharp decrease in the yield spread between Greek and German ten-year government bonds.
• - The Greek banking system has weathered the storm and proved resilient to the severe crisis; it is currently undergoing a process of restructuring on new, healthy foundations. This is the first crucial step towards restoring normal financing conditions in the real economy. It is worth noting that the stability of the banking system was shielded from the tangible risk of a spillover from the Cyprus crisis. Thus, the peak in uncertainty triggered by the developments in Cyprus proved short-lived, putting a halt to the outflow of deposits observed in April 2013.
• - The twin deficits (fiscal and external) have declined considerably: fiscal consolidation has made remarkable progress, and a primary surplus seems likely to be achieved in 2013, while the external balance has also improved substantially.
• - The implementation of the stabilisation programme is judged to be well on track, and disbursements under the loan agreement are continuing smoothly.

However, output continues to contract and unemployment is still rising

These indications are decidedly positive and, if sustained, herald a future improvement in the real economy. However, the recession and the rise in unemployment continue. Adjustment has taken a heavy toll in terms of output, employment and disposable income -- the reason being that it was necessary to address, within a short space of time, accumulating chronic problems and imbalances that, if left unchecked, would surely have led to a default and an exit from the euro area. In the end, the default was averted thanks to substantial progress in the area of fiscal adjustment, which made possible the continued financial support from our partners. The extent and duration of the recession could nevertheless have been lessened, had structural reforms to promote the efficient functioning of the public administration and markets been pursued more energetically and boldly.

An economic recovery is possible in 2014 if the improvement in economic sentiment takes hold and structural reforms are speeded up

If the implementation of structural reforms can be speeded up and the improvement in economic sentiment takes hold, it is plausible to expect that the results will soon be felt in the real economy as well. A prerequisite for recovery is the continued steadfast and faithful implementation of the stabilisation programme.

According to the Report, GDP is expected to contract at a rate of close to 4.6% this year, and unemployment to stabilise at around 28%. A return to positive growth is anticipated for 2014, while unemployment should start to decline in 2015.

Inflation is projected to turn out at about -0.3% in 2013 and core inflation at -1.1%. At the same time, it is estimated that the loss of competitiveness over the period 2001-2009 will be more than recovered by end-2013.

Finally, based on available evidence, the current account deficit is expected to narrow further to below 3% of GDP in 2013 and to hover around 2% in 2014.

The banking system has proved resilient to the crisis

Until recently, the banking sector had been facing serious problems with liquidity, loan portfolio quality and capital adequacy. These problems, though still present, are gradually being mitigated. It is particularly worth noting that, despite the extremely adverse conditions, the government and the Bank of Greece took effective action and succeeded in safeguarding financial stability and fully protecting depositors. This was confirmed again recently when, starting in late March, Greek banks had to tackle the negative fallout from developments in Cyprus. Following swift and effective action on the part of the Greek authorities, the risk that shocks from the Cypriot banking system would be transmitted to the Greek financial system was minimised, as deposits with Greek branches of Cyprus banks were fully excluded from the bail-in imposed on deposits in Cyprus. The former Cypriot bank branches operating in Greece continued to serve their customers smoothly after their acquisition by a domestic bank. The risk of contagion from the Cypriot to the Greek banking system was thus nipped in the bud.

The recapitalisation of core banks will soon be completed

Following the transitional recapitalisation of the core banks by the Hellenic Financial Stability Fund (HFSF) in May and December 2012 using EFSF debt securities, recapitalisation is nearing its completion within the specified timeframe.

Recapitalisation will mark the starting point for a restructuring of the banking system based on a comprehensive long-term strategy. A noteworthy number of mergers and acquisitions have already been completed, while the consolidation in the banking system has also been supported by the bank resolutions that took place without any disruption to market stability and with full protection of all depositors.

In the months ahead, the banking system will face new challenges. Once banks’ capital base has been strengthened, they will be expected to manage their new entities with a focus on achieving the maximum possible synergies, in the context of the regular (quarterly) funding plans that they are required to submit to the Bank of Greece for assessment. At the same time, banks will need to prepare for the new stress test exercise to be conducted by the Bank of Greece by end-2013. Special attention will be given to the more efficient management of non-performing loans. Moreover, by end-September 2013, the institutional framework of cooperative banks must be aligned with the best international practices.

The return of deposits, the fall in funding costs, as well as the completion of the restructuring and recapitalisation of the banking system (both of which are structural reforms of crucial importance), will all contribute decisively to the restoration of confidence in the prospects for the Greek economy and are prerequisites for economic recovery. The Bank of Greece will continue to take action with a view to maintaining the stability of the financial system, protecting depositors and creating a sustainably sound and well-capitalised banking system; these goals are a sine qua non for supporting the real economy.

Uncertainties and risks still remain

These encouraging developments, however, leave no room for complacency, as risks and uncertainties still remain which could jeopardise stabilisation and undermine the prospects of economic recovery:

• - Despite progress in several areas, the functioning of public administration remains weak. This weakness leads to shortfalls as regards the implementation of measures previously passed by the Greek Parliament and effectively delays reforms that could mitigate the intensity of the recession.
• - The protracted and deep recession, combined with the lack of liquidity, could increase the number of – essentially viable – businesses that are forced to shut down.

Policies to support the recovery

Nevertheless, the climate is more favourable today for the speedier pursuit of policies aimed at translating the improvement in expectations into real economic activity. For this to happen, there are a number of prerequisites:

First, to press ahead with the fiscal consolidation programme, fully adhering to the timetable and targets set. Meeting the budgetary targets both fully and on time is the first and essential condition for the continued smooth disbursement of funds under the loan agreement. Top priority should be given to achieving a primary surplus in 2013. Achieving the budgetary targets would bolster confidence in the Greek economy, while also eliminating the need for additional across-the-board measures. In fact, the progress made so far with fiscal adjustment has been crucial to ensuring continued financial support to the Greek economy.

Second, to accelerate structural reforms, especially in the public sector. In particular, emphasis should be given to:

• - finalising the tax reform agenda, which should create the conditions for reducing the tax burden of those who already pay taxes. This requires a broadening of the tax base, through the effective curbing of tax evasion;
• - improving the efficiency of tax administration, in order to boost public revenue. Of major importance in this respect is the upgrading and effective functioning of the General Secretariat of Public Revenue Administration;
• - taking steps to rationalise the functioning of the public sector, by utilising the opportunity for staff renewal opened up by the recent decision to replace some 15,000 civil servants who are expected to leave service under mandatory exits by 2014. New recruitments should be strictly merit-based and targeted to cover pressing needs in key areas (e.g. tax administration, health).

Third, to carry through the privatisation agenda with greater resolve and at a faster pace, assessing each privatisation in terms of its potential to create jobs and foster a shift in the Greek economy’s growth model.

Fourth, to urgently address the issue of unemployment, by inter alia strengthening active labour market policies. This can be achieved by making more effective use of resources available from the Structural Funds to support social cohesion.

Fifth, to complete pension reform in practice, by developing the occupational and private life insurance pillars, which, under certain conditions, could help offset the declines in main, first-pillar pensions. This would require eliminating existing obstacles and rigidities.

Sixth, to enhance liquidity in the short term, by accelerating: (i) the payment of public sector arrears to the private sector; and (ii) the utilisation of available resources of the National Strategic Reference Framework (NSRF) and the European Investment Bank to support investment and relaunch infrastructure projects.

Key to restoring normal liquidity conditions will also be the strengthening of the banking sector, which – along with the completion of structural reforms – will help to rebuild confidence in the economy and increase both the supply and demand for bank financing.

In the long term, however, given that domestic savings are not sufficient to finance growth via bank lending, alternative sources of financing the economy need to be tapped, complementing bank credit and EU funds. In this respect, as the economic and business outlook improves, Greece must seek to attract foreign direct investment through privatisations and to take advantage of the opportunities offered by the corporate bond market.