Greece paid pensions to the deceased

Greece has had some financial trouble over the course of the year, if you haven’t been paying attention. They were eventually bailed out by the European Union.

Greece has now discovered that it has been paying pensions to people who have passed away – in one case, more than a decade ago.

As part of efforts to cut spending and tackle waste, Greece discovered that 321 of the people over 100 years old to whom it pays pensions had died. The country’s Deputy Labour Minister, George Koutroumanis, described the discovery as “incredible”. He said they were now reviewing the circumstances of people under 100. Mr Koutroumanis decribed the situation as a “Third World phenomenon” that could not be allowed to continue “in a country that wants to be called a European country”.

With help from the police, the government discovered money that had been paid into the bank accounts of the deceased. Although the number is small, it is a significant proportion of the number of people over 100 in Greece. It is also an issue that senior ministers are taking very seriously, as they say it indicates the inefficiency of the country’s benefits system.

A national register of pensioners is to be set up along with a more centralised payments system, the deputy labour minister said. Greece is going through a period of economic upheaval, as it cuts spending and tries to increase tax revenue in order to trim its large budget deficit.

Seven European banks fail stress test

Seven European banks would not be strong enough to withstand another recession. They would face a capital shortfall of 3.5 billion euros ($4.5 billion).Tests were run in an attempt to revive investor confidence showed on Friday, but have obviously not succeeded.

Five of Spain’s smaller regional lenders, known as cajas, failed the test and their recapitalization is likely to speed a restructuring of the troubled sector.

Banks in Germany and Greece were also seen as weak spots and in need of restructuring, but state-owned Hypo Real Estate was the only German lender to flunk and state-controlled ATEbank was the only Greek bank to fail.

No big banks failed the test.

Europe tested how 91 banks would cope with another recession and losses on government debt after the Greek crisis hit markets and raised fears the euro zone could unravel.

It aimed to repeat a health check on U.S. banks last year that helped restore investor confidence and underpinned a recovery by bank shares.

Well, see you next year?

Ireland’s debt rating downgraded

Ireland’s debt was downgraded this morning. The downgrade was “primarily driven by the Irish government’s gradual but significant loss of financial strength, as reflected by its deteriorating debt affordability,” said Dietmar Hornung, a lead analyst for Ireland at Moody’s Investors Service.

Ireland went from an Aa1 to an Aa2. At the end of last year, Ireland’s debt-to-GDP ratio reached 64% and is still rising.

Of course, fears of a European collapse are ignited again. Ireland is part of collection of countries known as PIIGS. Portugal, India, Ireland, Greece and Spain, the countries with wavering economies.

Meanwhile, the IMF was in Hungary to discuss the $25 billion in aid that was sent in 2008 from IMF and the European Union. The talks did not go well, it seems.

The central governments of the EU, Germany in particular, are trying to send a strong message to the countries of Europe. German voters seem to be against bailing out more European nations.

Hungary is central Europe’s most indebted country with debt around 80% of GDP.

Euro rises

After the whole Greece debacle, the value of the euro has plummeted. Now, the euro has climbed to a three week high against the dollar. The reason?

Spain has successfully auctioned off some of its debt.

The euro hit $1.2412. The euro was helped by European equities, which advanced for a seventh straight session.

The euro has regained more than 5 cents from a four-year low of $1.1876 set on EBS last week, though it remains more than 13 percent lower year-to-date.

European Union leaders are attempting to strengthen budget discipline and economic policy coordination. While critics believe Spain’s auction was only a temporary fix, perhaps the upward trend can continue.

Stock market gains

After last week’s losses, the Dow Industrial gained more than 400 points. Attributed to the European $1 trillion bailout plan of Greece, the gain hints at the possibility of long term recovery. The trillion dollar plan will help troubled nations and stabilize the euro.

The euro gained versus the dollar, and the dollar gained versus the yen. On Friday, trades of 296 stocks were cancelled by Nasdaq. These stocks were the ones whose prices fluctuated the most. The trades occurred between 2 p.m. and 3 p.m. During the fluctuation, the stocks were traded at the price at 2:40 when they should have traded at the 2:45 price.

The Dow plunged almost 1,000 points in a matter of minutes, but was able to gain some of that back before the end of the day.

Hopefully, the upward swing will continue as Europe’s unstable economy is addressed.

Greek debt still causing problems

The euro fell to the lowest level against the dollar in  a year.

Meanwhile, in Greece, public sector workers storm the Acropolis and tangle with riot police over the bailout. A general strike is planned for Wednesday, nationwide, but the public sector added today, as well. The plan to bailout Greece includes wage freezes, pension cuts, and tax increases. Fears that the plan targets low income Greeks have driven many to protest.

Two days ago, the European Union and the International Monetary Fund announced a three year $146 billion bailout for Greece. But, the bailout seems to be serving as a catalyst, igniting every problem and issue with the euro since its introduction. Some believe that the European Union is the problem, not the solution.

The question now is which country will be next?

Greek Bailout Strengthens Euro

EU leaders agreed on a 30 billion Euro aid package for Greece, with the IMF adding 10 billion Euros of its own to Greek relief. The loans will be applied if needed.  The interest rate on these loans is set at 5%, which seems a bit high for debt-ridden Greece, but will have to do. Greece already pays 7% or higher on its current debt.

As a result, it seems the value of the euro has increased. On Friday, the value of the euro was $1.3488. Now, it’s up to $1.3616.

If more bailouts are on the way for the EU, though, the euro may be difficult to maintain at that rate. By the time this is posted, the euro will undoubtedly fluctuate again. However, this shows that investors may have faith in the bailout plan.

Europe’s Big Fat Greek Bailout

Over the past few days, the Greek markets have been circling the drain. It appears as though the debt-ridden country will not be able to pay their debts. A bailout may be in order. Euro zone leaders fought hard for a bailout plan the provides Greece with loans and IMF funds. One intent is to protect the euro.

Greece hoped that the existence of the plan would be enough to calm the market, and, as of today, they have no interest in putting the plan in action. However, the plan is too vague to calm the market. Should a bailout be required, every member of the EU must agree to the plan. Germany does not seem to support the plan while Italy and France have both voiced support for Greece.