The Greek cri­sis

Financial Mirror (Cyprus) - - FRONT PAGE -

Jacq, cit­ing two pe­ri­ods of sig­nif­i­cant rises in bond yields.

And an­a­lysts agreed that Greece played no role in those surges, which be­gan be­fore a Greek euro exit had be­come a se­ri­ous pos­si­bil­ity.

“There were sev­eral cat­a­lysts, in­clud­ing bet­ter than ex­pected eco­nomic sta­tis­tics and dec­la­ra­tions by mar­ket heavy­weights ar­gu­ing rates were too low and call­ing for a sell-off. That’s when the mar­ket took off,” said Jacq, who an­tic­i­pates more placid ac­tiv­ity in the near term.

“The sum­mer should be calmer [...] but come Septem­ber - be­tween the loom­ing rate rise by the US Fed­eral Re­serve and ne­go­ti­a­tions on Greece’s debt restruc­tur­ing - volatil­ity could make its re­turn,” said Robin. Sta­bil­ity Mech­a­nism (ESM), the eu­ro­zone per­ma­nent cri­sis res­o­lu­tion fund that was ini­tially set up five years ago in an ef­fort to save Athens from bank­ruptcy. Here is a look at what Greece has to do: - re­quest con­tin­ued sup­port from the In­ter­na­tional Mon­e­tary Fund af­ter its cur­rent IMF pro­gramme ex­pires in early 2016;

- stream­line con­sumer tax and broaden the tax base to in­crease rev­enue;

- make mul­ti­ple re­forms to the pen­sion sys­tem to make it vi­able. Ini­tial re­forms are due now, oth­ers by Oc­to­ber; - safe­guard the in­de­pen­dence of the sta­tis­tics agency; - in­tro­duce laws that would en­sure “quasi-au­to­matic spend­ing cuts” if the gov­ern­ment misses its bud­get sur­plus tar­gets;

- over­haul the civil jus­tice ef­fi­cient and re­duce costs;

- carry out prod­uct mar­ket re­forms that in­clude al­low­ing stores to open on Sun­days, broad­en­ing sales pe­ri­ods, open­ing up phar­macy own­er­ship, re­form­ing the bak­eries and milk mar­ket and open­ing up closed and pro­tected


to make

it more pro­fes­sions, in­clud­ing ferry trans­port;

- pri­va­tise the elec­tric­ity trans­mis­sion net­work op­er­a­tor, un­less al­ter­na­tives with the same ef­fect can be found;

- over­haul the labour mar­ket, which in­cludes re­view­ing col­lec­tive bar­gain­ing, in­dus­trial ac­tion and col­lec­tive dis­missal reg­u­la­tions;

- tackle banks’ non-per­form­ing bank gov­er­nance;

- in­crease the pri­vati­sa­tion pro­gramme, trans­fer­ring EUR 50 bln worth of Greek as­sets to an in­de­pen­dent fund, based in Greece, to carry out the pri­vati­sa­tions;

- mod­ernise, strengthen and re­duce ad­min­is­tra­tion;

- al­low mem­bers of the in­sti­tu­tions over­see­ing Greece’s re­forms - the Euro­pean Cen­tral Bank, IMF and Euro­pean Com­mis­sion, pre­vi­ously known as the ‘troika” - to re­turn to Athens and con­sult with on all rel­e­vant draft leg­is­la­tion be­fore sub­mit­ting it to public con­sul­ta­tion or to par­lia­ment;

- re­ex­am­ine, with a view to amend, leg­is­la­tion passed in the last six months that is deemed to have back­tracked on pre­vi­ous bailout com­mit­ments.

loans and





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