As Greece Rounds Up Migrants, Official Says ‘Invasion’ Imperils National Stability

NY Times: August 6, 2012

Angelos Tzortzinis/Agence France-Presse — Getty Images

Immigrants being detained in central Athens on Sunday. About 6,000 people were held in a police operation over the weekend.



ATHENS — A vast police operation here aimed at identifying illegal immigrants found that, of 6,000 people detained over the weekend, 1,400 did not have proper documentation, leading the minister of public order to say that Greece was suffering an “unprecedented invasion” that was threatening the stability of the debt-racked nation.

The minister, Nikos Dendias, defended the mass detentions, saying that a failure to curb a relentless flow of immigrants into Greece would lead the country, which is surviving on foreign loans, to collapse. “Our social fabric is at risk of unraveling,” Mr. Dendias told a private television channel, Skai. “The immigration problem is perhaps even greater than the financial one.”

He said he would resign if he was obstructed. “There would be no point in me staying on,” he said. That appeared to be a warning to left-wing opposition parties, one of which called the operation a pogrom.

About 4,500 officers conducted raids on streets and in run-down apartment blocks in central Athens, a police spokesman said, calling the sweep one of the largest ever by the force. Eighty-eight Pakistanis were flown back home on a chartered flight on Sunday, said the spokesman, who spoke on the standard ground rules of anonymity. He said more deportations were expected in the coming days.

With its position on the southeastern flank of the European Union, Greece has long been the most common transit country for impoverished migrants from Africa, Asia and the Middle East. But the global economic malaise and the revolutions of the Arab Spring have sharply increased the flow of migrants, and the government has been calling for more help from the European Union.

Prime Minister Antonis Samaras promised to crack down on illegal immigration in campaigning before the general elections in June, which his conservative New Democracy party won by a small margin, followed by Syriza, the party that denounced the weekend operation. But no mass efforts had been made before that, fueling the fury of ascendant right-wing groups.

Last week, the authorities decided to transfer hundreds of officers to Greece’s land border with Turkey, a popular route for smugglers sneaking migrants from Africa and Asia into the country for a fee. Many of those officers have been moved to border guard duty from the security details of politicians as part of an overhaul of the force. The reinforcements were sent amid fears of an increased influx of refugees from Syria, where political tumult has devolved into civil war.

The growing population of immigrants in Greece — about 800,000 are registered, and an estimated 350,000 or more are in the country illegally — adds to the anxieties of many Greeks, who are seeing the government’s once-generous social spending evaporate. They complain that the foreign residents are depriving them of jobs and threatening the national identity.

Such frustrations have been exploited politically, notably by Golden Dawn, a far-right group that has been widely linked to a rising number of apparently racially motivated assaults but vehemently denies being a neo-Nazi group. Once obscure, it drew 7 percent of the vote in the June elections.

The party has called for the immediate deportation of all immigrants and has accused Mr. Samaras of reneging on his pre-election promises to curb illegal immigration. The party has won public support through a range of initiatives, including the distribution of free food, but only for those who can show Greek identity cards.

Argentina celebrates bond payoff as end of an era

by MICHAEL WARREN (Associated Press Writer Almudena Calatrava contributed to this story.)
Associated Press 8/2/2012

BUENOS AIRES, Argentina — Bond payoffs are supposed to be boring, but Argentina’s president is celebrating Friday’s final $2.3 billion payment on a bond given to people whose savings were confiscated a decade ago, calling it a lesson for European countries now mired in foreign debt.

The nation’s economic disaster left thousands with a grim choice after the government seized their dollar-denominated deposits to stop bank runs in 2002. They could switch to devalued pesos and regain access to what was left of their savings, or accept a piece of paper promising to repay the money in dollars over the next 10 years.

Few had any faith in the government’s promises back then. Argentina had just defaulted on more than $100 billion in foreign debt, banks were shuttered, the economy was in ruins and streets were filled with pot-banging protesters whose chants of “throw them all out” would send five presidents packing.

But Argentina has mostly paid up after all, making good on 92.4 percent of that defaulted debt so far, including $19.6 billion in U.S. currency over the years to cancel the Boden 2012 bond. Most of the hard-luck account-holders later sold the bonds at a loss, but as the government makes its last $2.3 billion payment on Friday, the few stalwarts who kept the faith have been made whole, while earning a modest 28 percent profit over the years.

“It was good business” for anyone who got the bonds early and held them, said Jorge Oteiza, a bond trader with Banco Comafi in Argentina. “To have the same buying power you had back then isn’t bad.”

President Cristina Fernandez praised her government for meeting its commitments and blamed multinational financial institutions for the debt crises that afflicted Argentina back then and threaten Europe today.

“This is the money that the banks should have returned to the Argentine citizens,” she said during a national address from the Buenos Aires stock exchange Thursday night. Showing charts and rattling off numbers, she argued that her government has shown the world how to emerge from default without imposing austerity measures, while growing its economy and strengthening the social safety net.

This debt relief “has given us an immense independence from the activity of the market,” she said to applause from the hundreds of guests she had invited onto the exchange floor.

Argentina’s foreign-currency debt has dropped from a daunting 166 percent of GDP at the end of 2002 to a more manageable 42 percent of GDP at the end of 2011, said Ramiro Castineira of the Econometrica consulting firm. “If before it was a burden to shoulder, now it’s just a handbag. It doesn’t restrict the economy as it did in the past,” he said.

However, the debt has grown in nominal terms during the same period, from $137 billion to $179 billion.

Many economists suggest the official story is misleading at best, since the government has refused to pay billions of dollars in other bad debts while borrowing freely within Argentina, taking money from pension funds, provinces, state-owned banks and the central reserve to stimulate the economy and reduce its foreign debt exposure.

In her determination to make Argentina financially independent, critics say Fernandez has only shifted the debt burden onto her citizens, imposing terms that could stunt the country’s future growth. For example, the government promised to pay negative 0.25 percent interest over 10 years for the $27.9 billion it took from the central bank for debt relief.

“It’s wonderful to see Argentina pay down debt, but for every dollar they’re paying down, they’re borrowing two or three through the other window, and increasingly from their own people,” said Arturo Porzecanski, an expert on emerging markets at American University in Washington.

Economy Minister Hernan Lorenzino proudly described the Argentine recipe in a column Wednesday published by Telam, the government news agency: Spurn the requirements of the International Monetary Fund and World Bank. Strong-arm the so-called “vulture funds” into accepting lower returns on their risky bets. Nationalize private pension plans, the airline and now the YPF oil company, putting their assets to use creating jobs. And tap central bank reserves to pay down international debts.

Frozen out of international markets as a consequence of the 2002 default, this government made breaking their rules a point of pride, Lorenzino suggested.

“At first, they called us heretics and the international community turned its back on us,” he recalled. But “this government makes policies today without conceding to international pressure, thinking first of those on the inside, and later on those outside.”

Lorenzino has said this government will not take on more international debts. Not that it could: Friday’s payoff still doesn’t resolve nearly $7.5 billion it owes the U.S. and other Paris Club nations, or the $11.2 billion claimed in U.S. courts by bond holdouts.

Argentina also owes millions in court judgments to U.S. companies, and Spain’s Repsol Group wants $10.5 billion for its shares in YPF that Fernandez expropriated this year. Many of these investors would try to seize any newly borrowed money before it reaches Buenos Aires.

Lorenzino suggested that Argentina’s renegade approach makes it better prepared to confront global crises because the portion of its debt held by the private sector has dropped from 124 percent of GDP a decade ago to 14 percent last year. “This was possible only under the concept of economic independence, political sovereignty and social justice,” Lorenzino wrote.

But this shift from private to public debt means that the government is essentially borrowing from Argentine taxpayers and bank account holders to stimulate its economy, at rates far below inflation, which is estimated at 25 percent a year or more. Unless this changes soon, the money could run out and there will be few other places to turn for help.

“This is no longer an ‘us-versus-them’ problem,” Porzecanski said. “At first they went after the big multinationals, then the ‘filthy-rich bondholders,’ then powerful institutions like the IMF. Now it has become a fight for financial resources within Argentina. That’s why I think the end is coming.”