Greek Government Approves Latest Austerity Measures As Protestors Dwindle
As Greece’s parliament approved their new batch of austerity measures, in order to receive their next tranche of funding from the troika, a new phenomena appears to have gripped Greece; public apathy…
Only three thousand Greek’s protested outside the Greek parliament building in Athens on Wednesday evening, significantly less than the tens of thousands who protested in the early years of the brutal cuts. This latest protest also had an air of inevitability to it; gone we’re the violent protestations and angry slogans, replaced by a resignation and acceptance. The Greeks have finally been cowered, having learned that resistance is useless. Irrespective of what ordinary Greeks do, at the ballot box or in the streets, whatever government they elect, they will cower to the will of the troika and the bond-holders, at the expense of the majority, whilst the losses are continually socialised onto the masses in the form of austerity.
In the final insult to the Greeks protests have now been banned for today. With the bill passed, German finance minister Wolfgang Schäuble, (who many in Greece blame for pushing the tough cutbacks forced on the country in recent years), is visiting. Greek police have set up a cordon around the city center to provide a welcoming Potemkin facade of calm in which “public gatherings and rallies” are now outlawed. It started at 9am local time (7am BST) and will run until 8:00 pm (6pm BST).
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The narrowly approved new batch of austerity measures will include thousands of public-sector job cuts and transfers, demanded by the troika in order to keep vital bailout loans flowing. The vote was the first major test for conservative prime minister Antonis Samaras since a left-wing party abandoned his coalition government last month. The legislation will put 12,500 public-sector staff – teachers and municipal workers mainly, in a programme that subjects them to involuntary transfers and possible dismissals. It also prepares the country for another compulsory 15,000 layoffs by the end of next year. City halls across Greece have been closed this week, uncollected rubbish has piled up on the streets, as unions held a general strike on Tuesday against the proposed cuts.
Europe’s balance of payments
If Greece and the remaining PIIGS are to have any hope of climbing out of the holes they have dug for themselves (and those that have been dug for them by their creditors) then efficient management of the Eurozone economy by their central bank is essential. The economy’s latest balance of payments was listed yesterday, this morning the ECB has published its latest balance of payments data and on first inspection the data appears to be extremely healthy…
The seasonally adjusted current account of the euro area recorded a surplus of €19.6 billion in May 2013. This reflected surpluses for goods (€18.1 billion), services (€6.4 billion) and income (€4.9 billion), which were partially offset by a deficit for current transfers (€9.8 billion). The 12-month cumulated seasonally adjusted current account recorded a surplus of €189.5 billion in May 2013 (2.0% of euro area GDP, compared with a surplus of €53.3 billion a year earlier. This shift resulted from increases in the surpluses for goods (from €42.9 billion to €148.7.
UK Retail Sales Increase By 0.2% Month On Month
The UK retail sales figures (month on month) came in within a whisker of the prediction; a 0.2% increase versus a 0.3% estimate. The devil in the detail is that retailers achieved this moderate growth by heavily discounting their products flying in the face of the retail sages’ timeless adage; ” turnover is vanity, profit is reality”.
Estimates of retail sales for June show continued growth in the quantity bought (or sales volumes) in the retail sector and an underlying pattern of moderate growth. Comparing quarter 2 with quarter 1 in 2013, the quantity bought increased by 0.9%.
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On an annual basis (June 2013 compared with June 2012) the quantity bought in the retail sector increased by 2.2%. The main sources of upward pressure came from the non-store retailing sector and non-specialised stores (or department stores). Feedback from department stores suggested sales had increased due to promotions and consumers buying clearance items. Looking at the monthly picture (June 2013 compared with May 2013) the quantity bought increased by 0.2%. Again, there was strong growth in sales in department stores with a rise of 3.0%. This is the highest rise since March 2012.
Market Overview At 10:00 UK Time
European bourses have reacted positively to the news that Athens has agreed its latest bailout terms and the healthy ECB balance of payments data may have also contributed to an upbeat mood. the STOXX is up 0.25%, the UK FTSE is up 0.42%, the CAC is up 0.26%, the IBEX is up 0.62%, whilst the DAX is currently flat. The Athens exchange index is currently the leading index up 0.81% on the day. The DJIA equity index future is currently flat, whilst the NASDAQ future is currently down 0.11%.
Looking at commodities NYMEX WTI is down 0.17% at $106.3 per barrel whilst NYMEX gas is up 0.14% at $3.63 per therm. Gold spot is up 0.46% at 1281, silver is up 0.5% at $19.43 per ounce.
Asian/Pacific Exchanges
The Nikkei closed up 1.32%, the Hang Seng closed up 0.12%, whilst the CSI closed down 1.64%. The ASX 200 closed up 0.24%.
Forex Focus
The yen weakened 0.6 percent to 100.18 per dollar early in the London session after depreciating 0.5 percent yesterday. The dollar advanced 0.2 percent to $1.3102 per euro. The 17-nation shared Eurozone currency rose 0.4 percent to 131.25 yen after touching 131.38, the strongest level witnessed since June 5th. The yen dropped for a second day versus the dollar on bets that G20 finance ministers and central bankers meeting this week will endorse the Bank of Japan’s monetary easing that aims to stoke 2 percent inflation.
The pound dropped 0.3 percent to $1.5164 early in the London session after gaining 0.7 percent over the past two days. It fell to $1.4814 on July 9th, the lowest witnessed since June 2010. Sterling traded at 86.40 pence per euro after reaching 87.11 yesterday, the weakest since March 13th.
