Greek Prime Minister Says Positive Economic Data Points to Austerity Easing

“Greece is turning the page,” Mr. Samaras told politicians and entrepreneurs at an annual international trade fair in the northern port of Thessaloniki, traditionally used by Greek prime ministers to outline their government’s economic policy for the coming year. “There will be no more austerity measures,” he said.

Citing figures released on Friday by the national statistics agency, Mr. Samaras said the Greek economy shrank 3.8 percent in the second quarter, significantly less than an estimate of 4.6 percent. It was the smallest contraction since 2010, when Greece signed its first multibillion-euro loan deal with its so-called troika of creditors — the European Commission, European Central Bank and International Monetary Fund. The improvement is largely the result of an unexpectedly strong rebound in the country’s crucial tourism sector, with a record 18 million foreign visitors expected this year, he said.

Equally encouraging are early indications that the country will achieve this year a primary surplus — a budget surplus not counting debt financing, Mr. Samaras said. He said this would be the “first decisive step toward exiting the policy of memorandums,” referring to Greece’s two loan agreements since 2010, which are worth a total of 240 billion euros ($315 billion) and have been meted out in installments in exchange for a series of austerity measures.

Mr. Samaras said achieving the surplus would open the way for two things, in line with an agreement with creditors — some form of debt relief for Greece, but also the chance to help citizens who have been hardest hit by austerity. It remains unclear how large the surplus will be; Mr. Samaras put it at 1.1 billion euros for the first seven months of the year. Mr. Samaras said 70 percent of the surplus would go toward “lightening the injustices” suffered by Greeks on low pensions and by members of the police, fire service and coast guard whose salaries have been slashed as part of public sector cutbacks.

Greece remains wracked by political and economic instability and may even need additional bailout money. The I.M.F. warned in a report at the end of July that a persistent recession, now in its sixth year, and the government’s failure to accelerate overhauls might create an 11 billion-euro hole in Greece’s finances over the next two years.

The monetary fund said Greece’s economy could return to growth as early as next year. But that forecast comes with a question mark, given that output has fallen 25 percent since its peak in 2007, while unemployment has surged to 27 percent — the highest in the euro zone — and youth joblessness has exceeded 60 percent.

Mindful that representatives of the country’s troika of foreign lenders are expected back in Athens later this month for a new audit, Mr. Samaras was vague on details about potential handouts, including a potential subsidy for heating oil, which saw an increase in taxation last year. He also promoted the benefits of an economic reform program that was bolstered by a write-down of privately held Greek debt last year and the suspension of interest payments on foreign loans, which together helped cut Greece’s debt by 145 billion euros. It now stands at 321 billion euros.

“We stopped the debt from ballooning,” he said, claiming that Greece could return to precrisis levels of prosperity by 2020 by exploiting the potential of its tourism and energy industries and by pushing a program of state privatizations. “Five or six years of difficulties cannot wipe out 3,000 years of glorious history.”

The premier lashed out at the main leftist opposition, Syriza, which opposes the terms of Greece’s foreign loan agreements, saying it “does not want to govern.” He claimed that the leftists were as extreme as “the neo-Nazis” of the ultraright, anti-immigrant party Golden Dawn, which has soared to third place in opinion polls, after Syriza and the premier’s conservative New Democracy, which leads the coalition government.

In a statement, Syriza accused the prime minister of “suffering from delirium,” saying, “Mr. Samaras sees unemployment slowing down even as 1.5 million of our fellow citizens don’t have work.”

Alexis Tsipras, the leader of Syriza, joined anti-austerity protests in Thessaloniki on Saturday evening, which were expected to draw thousands of disenchanted workers. About 4,000 police officers were being deployed to prevent the violence that has marred previous rallies organized by trade unions.

Unionists are planning to scale up their opposition to austerity in the coming weeks ahead of the scheduled return to Athens of troika inspectors after German federal elections on Sept. 22. The problem of Greek debt, and how to handle it, has featured prominently in campaigns for the German elections, whose outcome is expected to set the tone for tough negotiations between the Greek government and the troika. Chancellor Angela Merkel of Germany has insisted there will be no second debt haircut for Greece but has suggested a third loan program, much smaller than the first two, might be extended to Athens to cover the anticipated 11 billion euros funding gap.

The gap is expected to be discussed in talks between Greek government and troika officials in Athens. Negotiations will also focus on a raft of tough proposed reforms that are sure to test the stability of Mr. Samaras’s fragile coalition. They include a lagging program aimed at selling off state assets, lax tax collection efforts, the progress of a system of forced transfers and layoffs in the Civil Service, the possible closure of state-owned defense companies that are running losses and a likely end to a moratorium on home foreclosures.

Privatization Chief Quits After Another Misstep In Big Greek Asset Sales

One of the ways Greece plans to dig itself out of debt is through the sale of state-owned assets. But that effort has been besieged by missteps.

The latest involved Stelios Stavridis, the chairman of the government privatization agency, who had overseen one of the country’s first big asset sales — a one-third stake in the state gambling company, OPAP, for 652 million euros. But then he hitched a ride to a vacation spot on the private jet of a Greek oil magnate involved in the deal.

Government officials insisted that Mr. Stavridis’s ouster from the privatization agency, Taiped, was “for ethical reasons” and would not upset the country’s state sell-off effort. But the privatization program has suffered from political upheaval and delays and has fallen far short of the revenue targets set by Greece’s so-called troika of foreign creditors, the European Commission, the European Central Bank and the International Monetary Fund.

The Greek finance minister, Yannis Stournaras, on Sunday sought Mr. Stavridis’s resignation from Taiped after a newspaper quoted the chairman as saying he had traveled last week on the Lear jet of the oil and shipping oligarch Dimitris Melissanidis, a major stakeholder in the Greek-Czech consortium Emma Delta, which agreed to buy the OPAP stake in May.

The contract was signed Aug. 12 after much wrangling over the details. A few hours later, Mr. Stavridis, a 65-year-old Swiss-trained engineer, joined the oil magnate on his plane, which dropped Mr. Stavridis on Cephalonia, an island in the Ionian Sea where he spends his summer vacations. “Melissanidis, who was traveling to France, offered to take me with him to accommodate me,” Mr. Stavridis was quoted as telling the Proto Thema newspaper, which published a photograph of him, smiling, sitting next to a flight attendant.

Speaking to the Greek private television channel Skai after his firing on Monday, Mr. Stavridis defended his decision to fly on Mr. Melissanidis’s jet, noting that the trip had come long after the OPAP deal was completed. He referred to “hypocrisy” in Greek society which, he said, was interested in “the facade rather than the essence.”

“I am not a monk and I won’t hide,” said Mr. Stavridis, who founded Piscines Ideales, one of Europe’s largest manufacturers of swimming pools in 1991. More recently, he was head of the Athens water board, Eydap, which is also in the country’s privatizations portfolio.

Less than six months ago, Mr. Stavridis’s predecessor, Takis Athanasopoulos, was accused of a breach of faith during a previous stint at the head of the state electricity board. Prosecutors accused him of commissioning a power station in central Greece even though he knew it could not operate profitably.

The main left-wing opposition party, Syriza, which has vowed to reverse all privatizations if it comes to power, said Taiped was “a tool of the troika” whose goal was “the biggest sell-off of state wealth that Europe has seen since the era of East Germany.” In a statement on Monday, Syriza described the Stavridis affair as “the first clear admission of the dirty relationship between the government of the memorandum and business interests,” referring to the Greek deals for foreign loans.

The troika has urged Athens to speed up state sell-offs and to step up tax collection to raise much-needed money. But revenue targets have been revised downward several times. The original target of 50 billion euros by 2016 was later changed to 19 billion euros, then to 15 billion euros. Since last year, the troika has focused on annual targets. But Taiped is expected to fall 1 billion euros short of its 2.5 billion euro target for 2013.

Greek Protesters Await Angela Merkel on Athens Visit

Ms. Merkel was to meet with Prime Minister Antonis Samaras, President Karolos Papoulias and with Greek and German entrepreneurs on a six-hour visit expected to be accompanied by rowdy demonstrations against Germany’s perceived leading role in pushing Greece to impose more pain on its citizens in exchange for rescue financing.

Eager to give Europe’s most powerful leader a warm and safe reception, Greek authorities are mounting the biggest security operation since 1999 when President Bill Clinton visited Athens amid furious protests at NATO airstrikes against the former Yugoslavia.

Some 7,000 police officers, many brought to the capital from the provinces for the day, will be on standby along with rooftop snipers and protests have been banned in much of downtown Athens.

Security will be particularly heavy outside the Parliament and the German Embassy. The police may resort to the use of water cannons if rallies get out of hand. The precautions reflected the desire of Greece’s fragile coalition government, embroiled in difficult talks with Greece’s so-called troika of foreign lenders on a $17.4 billion dollar austerity package, to contain its citizens’ rage at Ms. Merkel, who has been cast here as the arch-villain of the euro crisis.

Ms. Merkel’s visit comes only days after her main rivals, the Social Democratic Party, announced that Peer Steinbrück would run against her in next year’s general election.

Mr. Steinbrück served as Ms. Merkel’s finance minister in her government from 2005 to 2009, and his party has been more lenient in its discussion of Greece’s future prospects in the euro zone, arguing the time lost by the government between elections earlier this year must be taken into account when considering aid to the country.

The Social Democrats criticized Ms. Merkel’s visit to Athens as coming too late. The chancellor was last in Athens in 2007. Carsten Schneider, a finance expert with the Social Democrats criticized the chancellor in comments Tuesday to ARD public broadcaster as “only giving advice from behind a desk in Berlin” since the outbreak of the crisis in 2009.

Even within Ms. Merkel’s own Christian Democratic party there are differences of opinion on how to handle Greece. While the chancellor has in recent months shifted her rhetoric from stressing the importance of austerity and come out more strongly in favor of keeping Greece in the euro zone, her current finance minister, Wolfgang Schäuble has upheld a tougher line on Athens.

“We want to help Greece to build up an efficient bureaucracy and an efficient economy, but at some point, Greece needs to stand on its own two feet,” Mr. Schäuble told RBB public broadcaster on Monday . “It is pointless to help a bottomless pit.”

Ms. Merkel’s government has said her visit is intended as a clear signal of solidarity with the Greeks and will not interfere with the forthcoming report by the troika of lenders — the International Monetary Fund, the European Central Bank and the European Commission.

Mario Draghi, president of the European Central Bank, told reporters in Brussels on Tuesday that no decisions would be taken on Greece until the report is produced, but he warned that “regarding reforms, more needs to be done” in Greece, Reuters reported.

In Greece, civil servants, including teachers and doctors, are walking off the job for three hours starting at noon to protest Ms. Merkel’s visit and have prepared banners reading “Don’t cry for us Mrs. Merkel” and “Merkel you are not welcome here” to wield during rallies.

Daily speculation in the local media about the outcome of Greek negotiations with the troika, aimed at securing a $40.8 billion dollar loan without which the country faces default in late November, was eclipsed on Tuesday by anticipation of the German leader’s visit.

Headlines in center-right newspapers read, “A message of support,” “A decisive visit by Merkel” and “We are staying in the euro.” Others, more skeptical, declared “Merkel is bringing no gifts” and “A day of anger.”

This anger was echoed by a nurse heading into the center to join fellow protesters. “This is pure provocation, we have to answer back,” said the nurse, Christina Amanti, 37. “It’s like she’s visiting her protectorate. What’s she going to do, pat us on the back and tell us to keep getting poorer, that it’s good for us?”

Melissa Eddy contributed reporting from Strasbourg, France.

Reed Smith Forms Alliance With Greek Firm

Pittsburgh-based Reed Smith has formed a strategic alliance with Athens, Greece-based business law firm Papapolitis & Papapolitis, aiming to team up on the "large projects and transactions" anticipated to come out of the economic struggles and structural reforms in Greece, according to a joint press release sent out Monday.

Reed Smith has had an office in Piraeus, Greece, since 2007, when it merged with 250-lawyer, London-based firm Richards Butler.

The firm currently has eight lawyers, including three partners, based in the office, which focuses mainly on shipping, life sciences, commercial disputes and corporate work.

According to a scan of the Am Law 100, Reed Smith is the only U.S.-based firm with an office in Greece.

In fact, it appears to be one of only three firms on the Global 100, along with Allen & Overy and Norton Rose, that have Greek offices.

Papapolitis & Papapolitis is a 114-year-old firm with 17 lawyers that centers its practice on banking, finance and capital markets, corporate governance, corporate and mergers and acquisitions, dispute resolution, real estate and tax law.

According to the press release, the two firms have had "an informal working relationship" for the past two years.

Reed Smith global managing partner Gregory B. Jordan told The Legal Intelligencer Monday that the formation of the strategic alliance is an opportunity for Reed Smith to partner with a "strong and well-established" Greek firm.

"We've become increasingly close with the Papapolitis firm," Jordan said. "The purpose of the alliance is to get closer with them and to let the marketplace know."

Jordan said the two firms will now embark on joint marketing efforts.

Crédit Agricole Starts Talks to Sell Its Greek Unit

PARIS — Crédit Agricole, the big French bank, said Monday it had begun exclusive talks to sell its Greek unit, Emporiki, to Alpha Bank for a symbolic one euro.

Crédit Agricole, which has the largest exposure of any European lender to the troubled Greek financial sector, is trying to reduce the possible damage if Greece were to leave the euro. Alpha Bank is one of Greece’s largest banks.

Already, many of the loans Greek banks made during the days of easy credit have soured after years of financial crisis and austerity-induced recession. An exit, which would probably be accompanied by a sharp devaluation of the new Greek currency against the euro, would further reduce the value of those loans when translated into euros.

Crédit Agricole's gamble on Greece has been a spectacularly bad one. The bank in 2006 paid €2.2 billion, or $2.8 billion, for its stake in Emporiki, which is based in Athens, but its losses from the unit are now approaching €6 billion.

Representatives of the International Monetary Fund, the European Central Bank and the European Commission were in Athens on Monday to discuss a new austerity package as Finance Minister Yannis Stournaras presents the 2013 budget plan to Parliament. The proposal is expected to include new measures, including tax increases and spending cuts, to reduce the 2013-2014 budget by €13.5 billion.

As part of its deal with Alpha Bank, Crédit Agricole said it would inject another €550 million into Emporiki, on top of the €2.3 billion it injected in July.

The Hellenic Financial Stability Fund, the Greek banking support agency, had made it a condition of any sale of Emporiki that the bank be recapitalized.

The French bank will also buy €150 million of convertible bonds to be issued by Alpha Bank. All told, the French bank’s funding to Emporiki would fall by €700 million.

Aurélie Marboeuf, a Credit Agricole spokeswoman, said the bank would book a loss of around €2.8 billion before taxes when the sale closes, possibly as early as the third quarter of this year.

These measures will help it reach its solvency targets for the end of 2013, she said.

Alpha Bank said in a statement that the deal would result in a €3 billion recapitalization of the combined Alpha-Emporiki and would contribute toward Alpha Bank’s own recapitalization, and that the combined group would have about 19 percent of Greek deposits and 25 percent of lending.

Alpha said it expected “substantial” synergies from the deal, including €150 million in annual cost savings from economies of scale.

Société Générale, another French lender, said in late August that it was in advanced talks to sell its 99.1 percent stake in Geniki Bank, a large Greek bank, to Piraeus Bank, also a Greek bank.

Reed Smith Forms Alliance With Greek Firm

Flag of Greece/clipart.com 2012

Pittsburgh-based Reed Smith has formed a strategic alliance with Athens, Greece-based business law firm Papapolitis & Papapolitis, aiming to team up on the "large projects and transactions" anticipated to come out of the economic struggles and structural reforms in Greece, according to a joint press release sent out Monday.

Reed Smith has had an office in Piraeus, Greece, since 2007, when it merged with 250-lawyer, London-based firm Richards Butler.

The firm currently has eight lawyers, including three partners, based in the office, which focuses mainly on shipping, life sciences, commercial disputes and corporate work.

According to a scan of the Am Law 100, Reed Smith is the only U.S.-based firm with an office in Greece.

In fact, it appears to be one of only three firms on the Global 100, along with Allen & Overy and Norton Rose, that have Greek offices.

Papapolitis & Papapolitis is a 114-year-old firm with 17 lawyers that centers its practice on banking, finance and capital markets, corporate governance, corporate and mergers and acquisitions, dispute resolution, real estate and tax law.

According to the press release, the two firms have had "an informal working relationship" for the past two years.

Reed Smith global managing partner Gregory B. Jordan told The Legal Intelligencer Monday that the formation of the strategic alliance is an opportunity for Reed Smith to partner with a "strong and well-established" Greek firm.

"We've become increasingly close with the Papapolitis firm," Jordan said. "The purpose of the alliance is to get closer with them and to let the marketplace know."

Jordan said the two firms will now embark on joint marketing efforts.

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Reed Smith Forms Alliance With Greek Firm

Reed Smith has formed a strategic alliance with Athens, Greece-based business law firm Papapolitis & Papapolitis, aiming to team up on the "large projects and transactions" anticipated to come out of the economic struggles and structural reforms in Greece.