A little step forward

WITH austerity the worst word to use in Greece, at least there seems a little light at the end of the financial tunnel, after a lengthy meeting this week.

  Greece received a two-year extension to its fiscal adjustment programme, but no decision was made on the disbursement of an outstanding 31.5 tranche of an EU/IMF bailout loan at Monday's Eurogroup meeting of eurozone finance ministers in Brussels.

 "Together with the Greek adjustment program the Eurogroup will further discuss (Greece's) financing needs and debt sustainability at an extraordinary meeting that will be convened on 20 November," the ministers said in a joint statement that was read out by Eurogroup president Jean-Claude Juncker at a press conference after the meeting, adding that a few more "prior actions" remained to be implemented by the Greek authorities by then.

 The Eurogroup acknowledged the considerable efforts made by the Greek citizens and welcomed the resolve of the Greek authorities to put the programme back on track, particularly after parliament's adoption of a "substantial set of reforms (omnibus bill of austerity measures) as well as a convincing budget for 2013" on November 7 and 11 respectively, Juncker said, adding that "these have received a preliminary positive assessment" by the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF) Troika of Greece's international lenders.

 He said that the ratification process for the disbursement of the next tranche by the eurozone national parliaments will begin shortly before November 20, after which the Eurogroup will convene again, possibly on November 26, either in person or by teleconference, to ascertain whether everything is in place for the final approval of the next loan tranche to Greece.

 

TOUGH TIMES AHEAD

 AS winter looms, there are more and more signs that the Greek economy still has a very long way to go. All around the major towns and cities there are for sale and to let signs up as desperate people make every effort to make ends meet, but they are finding it very tough. Here in our village, which has virtually closed down for the winter, every lamp-post is full of yellow signs which have telephone nunber on them with apartments vacant.

LOW WAGES, HIGH PRICES

  One button that a country living beyond its means has to press is marked ‘cost cutting'. Greece has done that. Wages are plunging at the behest of international creditors who are keeping the country alive on a drip-feed of aid.

  By the end of this year, the entire surge in the average cost of labour per unit of output from 2001 to 2009 will have been unwound, according to a draft European Commission paper.

  The drop in nominal unit labour costs this year alone is projected to be 8.7 percent - not surprising given that the unemployment rate is 25 percent.

But wages are only one input among many that determine prices. The most comprehensive gauge of a country's cost competitiveness is its real, or inflation-adjusted, effective exchange rate (REER) relative to its main trading partners.

  And in 2011, Greece's REER was still 18-20 percent above its 2000 level, according to Eurostat, the EU statistics agency."Of course the issue of prices concerns us. There's a problem, and we're aware of it," Athanasios Skordas, deputy minister for economic development and competitiveness, told Reuters.

Inflation is falling - it was 0.9 percent in the year to September - and economists expect it to come down further.

  But to thoroughly convert wage to price competitiveness will entail a daunting array of reforms, such as making it easier to start a business and removing barriers to competition in key markets such as energy.

Platon Monokroussos, head of financial markets research at Eurobank in Athens, said these market rigidities were one reason why falling wages had not translated into a quicker drop in inflation.

APOLOGIES ALL ROUND

Robin & Pat Williams

FIRST  we must say thank you to the regular followers of this blog, we now have more than 15,000 viewings in more than 86 countries which is fantastic.

  As some of the posts and photographs pages were getting a little old we have taken them off. Some have been refreshed and more will follow to replace them. Again thanks to you all, have a good festive season, and keep on reading our news and views from Crete and from Greece.

Weekend in Chania

THERE is so much on the island of island of Crete and we had the opportunity of exploring much of the western end and particular the Chania end at the weekend. This was not a trip organised by our senior citizen organisation, but another and exceptionally good value.

First port of call on the route to Chania was the area of Askifou, Sfakia and in particular the war museum founded by George Hatzidakis and his family following the events of 1941. Germany gained control of most of Europe and it was decided to invade Crete in the largest airborne attack ever staged.

Defending the island were some 40,000 British, Australian and New Zealand troops, as well as 10,000 unarmed troops from Greece. Some 500 Junkers planes were loaded and sent to take the island, but it was a disaster as some 90% of the first wave were destroyed. It took until the end of May before the fighting was over, but it was a mistake that Hitler never made again. The museum is a personal effort by the family and well worth the effort to see.

It was then over the mountains to the coastal area were some many troops were rescued from before returning to Chania and our hotel, and time to make personal explorations of the town. There was a surprise by the next morning, when we discovered a local market behind the hotel and there was time to explore before breakfast, and bag a few bargains.
  First point of interest today was the monastery Agia Triada, dating back of the 1600's, well preserved and maintained it was a perfect setting for photographs before going to the traditional village of Elos famous for its chestnuts. Someone in the party brought more that 20 kilos of them so they must be good!! We had a modest half kilo.
  Then it was the famous springs at Argyopolis for a cracking lunch, time to buy the famous sour dough bread at Georgeopolis some cheese at a famous maker and a break at Rethymno before returning tired and well fulfilled.

Free wine and another party!!!

 WE have been in our village of Old Hersonissos for eight years, but tonight was the first time in this period that the village had a Carnation celebration.It's an old tradition that they decided should be returned to the village, and it was a great success. Carnations are big business in this area and the growing season starts in November, hence the party. The square was blocked off. There was as much free wine as you could manage, good prices on other drinks and a steady supply of souvlaki (meat on sticks) for those who needed feeding.

  We certainly hope that this is an event that will stay in the village calendar for many years to come. It started slowly, but the Greeks always party late and, as the evening wore on so the square filled up. Live music and dancing of course and the party went on into the small hours.