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Friday, 15 January 2010

BUILDING CONFIDENCE... UR DOING IT WRONG

The strapping young man above is Andreas Loveros, Greece's minister for employment and social security.

The photo is taken from his personal website, a testament to his "man of the people" credentials. Note how carefully the people around him have been vetted. What's the chance that in a football crowd, even a VIP football crowd, it's only the career politician cheering his face off while everyone else politely stays out of the camera's line of sight?

But why concern ourselves with this mild and harmless muppetry when a massive torrent of FAIL spews forth from the Minister's mouth on a daily basis while the country struggles for credibility?

To the facts, then. As minister for labour, Loverdos is in charge of paying out pensions and benefits. Our creditors may well be interested in goings on in his domain, as public welfare funds are generally in deficit, and their deficits are the state's deficits - by law.

Here, then, was the reassuring rant he had in store for them - and, mostly, for us, on national TV no less:

"For instance, in the other half of my ministry, the Labour ministry, let me illustrate: on Wednesday we run out of cash, by Thursday we will struggle to pay unemployment benefits. The funds are bust, and when I say bust, I mean we're out of spit let alone money, how else can I put it?"
 This will have alarmed some creditors, but happily our friends in the Commission will stick with us, no? Well, you see, Loverdos (or rather, the ministry of finance on his behalf) promised them EUR 4bn of annual savings. Niiice. Except, as he noted in the same interview, he cannot as of yet say where half of this will come from:

" I don't know where I'll get it from. I've given orders to seek out, code by code, what we can cut back from a single Euro to millions."

Well it might be a rude shock to hear that but hey at least it's an encouraging sight to see a Greek minister biting the bullet. Right?

Wrong. Because it is clear that the "code-by-code" search for savings is focusing on the single-Euro items, not the million-Euro ones. The paper reports:

"He clarified he is not going to touch pension payouts, or pensionable age limits."
 The statements can be heard here:





Of course, it is possible that the minister misspoke or was taken out of context. This alarmism is unlike him, no?

No. Only yesterday the self-same man came out with an even bigger bombshell. On a day when our Statistics Agency reported a year-on-year increase in the number of the unemployed of nearly one third, Loverdos came out with the news that unemployment in Greece is 18% and rising. Now the widely discredited National Statistics Agency only quotes 9.8% in its newly released LFS figures for October. Loverdos correctly chooses to adjust them, although I would argue his choice to include part-timers but not soldiers or "eternal" university students misrepresents the fast.

The "eternals" are reportedly 300,000 or 7% of the Greek labour force, outnumbering actual students for the first time. The draftees are an estimated 50,000 per year. or another 1% of the labour force. And of the remaining three million suckers, at least half a million are civil servants.

I'm not sure how any of this coming from a minister is meant to rebuild our credibility. The lack of cash argument is almost certainly hyperbole. Why say it?

Journos offer two scenaria:

1. He's not expecting to do a good job in his new post and is lowering expectations drastically.
2. He's trying to prepare his constituents for harsh fiscal measures by stressing the extent of our problems.

Well, it's not no. 2. To PASOK's core constituency, huge unemployment stats actually constitute a stronger case for government spending. Unless a case is being made for blowing our commitments to Europe.

The plot thickens.



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