Billions in Damages from Greece's Record Floods

Thessaly — a major farming center for thousands of years — accounts for about 5% of national economic output, and a much larger proportion of agricultural produce, although much of that is now cotton and tobacco. - AP
Thessaly — a major farming center for thousands of years — accounts for about 5% of national economic output, and a much larger proportion of agricultural produce, although much of that is now cotton and tobacco. - AP
TT

Billions in Damages from Greece's Record Floods

Thessaly — a major farming center for thousands of years — accounts for about 5% of national economic output, and a much larger proportion of agricultural produce, although much of that is now cotton and tobacco. - AP
Thessaly — a major farming center for thousands of years — accounts for about 5% of national economic output, and a much larger proportion of agricultural produce, although much of that is now cotton and tobacco. - AP

The apples were almost ripe for harvesting when the worst storms in more than a century struck Greece's breadbasket in Thessaly.

Now, farmers on the forested slopes of Mount Pilion, which overlooks the plain of Thessaly, say they face millions of euros in damage from the flooding that began earlier this month. They will be lucky to salvage a third of their crop — and that will only happen if wrecked road access to their orchards is patched up in time.

As bad as the damage suffered by the Pilion farmers was, their peers in the plain were hit by even greater devastation from last week's disastrous floods that left 16 people dead, days after wildfires killed 20 people in northeastern Greece.

The storms flooded 720 square kilometers (280 square miles), mostly prime farmland, totally destroying crops. They also swamped hundreds of buildings, broke the country's railway backbone, savaged rural roads and bridges and killed tens of thousands of livestock.

Thessaly — a major farming center for thousands of years — accounts for about 5% of national economic output, and a much larger proportion of agricultural produce, although much of that is now cotton and tobacco.

Some areas remained under threat of flooding Friday, with some lakeside dwellers warned to prepare for evacuation if needed, The AP reported.

Greece, which has returned to fiscal health after an eight-year financial crisis that shook global markets, is now assessing the staggering cost of the flooding.

Finance Minister Kostis Hatzidakis said the precise sum remains elusive.

“But ... we’re talking in the billions (of euros),” he told private Antenna TV, adding that the center-right government is drafting a supplementary state budget of about 600 million euros ($638 million) for this year's immediate funding needs.

Prime Minister Kyriakos Mitsotakis was expected to outline further details during a keynote economic policy speech on Saturday.

The natural disaster came amid a cost-of-living crisis triggered by Russia's war in Ukraine which, on the back of the COVID-19 pandemic, inflated state social spending through an array of subsidies.

Hatzidakis warned that this might now be curtailed. The government is adamant that it must meet its savings targets to prove that Greece has forever rejected its former profligacy, and pending an eagerly anticipated new credit upgrade that would boost foreign investment and cut borrowing costs.

“If we send the message that in Greece we are again becoming lax and adopting wrong practices of the past, we will relapse," Hatzidakis said. "After so many sacrifices over so many years, and the progress in recent years, (that) would be an enormous shame.”

Officials are confident that the savings target will be met, and the European Union, which has also pledged flood relief funds, has said this emergency spending won't be subject to Greece's budget constraints dating from the 2010-2018 financial crisis.

The government says EU assistance will contribute to urgent infrastructure repairs in Thessaly, starting with the wrecked railway line.

Nikos Tachiaos, a deputy minister for infrastructure, said the damage is “enormous,” particularly to the railway, where a 50-kilometer (80-mile) stretch of the only line carrying goods and passengers between southern and northern Greece has been largely destroyed.

He said it could take up to two months to get just one track partially functioning.

“But the full rebuilding of the railway network will take a long time ... and a lot of money,” Tachiaos told state-run ERT television.

A flooded section of the main north-south highway partially reopened late Friday, while efforts were underway to restore drinking water to Volos, a town of about 85,000 in the shadow of Pilion.

The government has also promised speedy compensation to thousands of people whose houses were flooded and who lost livestock and farm machinery. The loss of nearly 90,000 sheep, goats, pigs and cows has been registered so far, along with more than 120,000 poultry.

In the village of Zagora on Pilion, farming union leader Thodoris Georgadakis urged authorities to mend the unpassable roads leading to local orchards where apples await harvesting.

“The cost of the storms could exceed 10 million euros ($10.7 million) for apple farmers alone,” he told The AP. “We expect this harvest to reach 6,500 tons, down from 22,000 on a normal year. That's only if the roads are mended soon.”

The damage to crops could also push up already inflated food prices across Greece, with double-digit increases already reported in some areas. Fears have also been expressed that flooded fields will be unusable for years, though Greece's agriculture ministry has sought to play down that concern.

A ministry statement Friday warned that authorities would crack down on profiteering, adding that Thessaly grows only 7.5% of the country's total fresh fruit and vegetables, “and very little of that has been affected.”

In southern Pilion, Mayor Michael Mitzikos worries about the effect on the important tourist industry, especially in battered seaside villages from which visitors had to be evacuated by sea after their road access was destroyed.

Mitzikos said the cost was “incalculable.”

“There are the tourists who fled their rented rooms and hotels (amid the floods) and also all those who canceled,” he said. “The season in these coastal areas normally extends into early November."



France Has a New Government, Again. Politics and Crushing Debt Complicate Next Steps

France's Prime Minister Francois Bayrou makes an address after observing a minute of silence as part of an official day of mourning for the victims of Cyclone Chido which hit the archipelago on the French Indian Ocean territory of Mayotte a week ago, at The Hotel Matignon in Paris on December 23, 2024. (AFP)
France's Prime Minister Francois Bayrou makes an address after observing a minute of silence as part of an official day of mourning for the victims of Cyclone Chido which hit the archipelago on the French Indian Ocean territory of Mayotte a week ago, at The Hotel Matignon in Paris on December 23, 2024. (AFP)
TT

France Has a New Government, Again. Politics and Crushing Debt Complicate Next Steps

France's Prime Minister Francois Bayrou makes an address after observing a minute of silence as part of an official day of mourning for the victims of Cyclone Chido which hit the archipelago on the French Indian Ocean territory of Mayotte a week ago, at The Hotel Matignon in Paris on December 23, 2024. (AFP)
France's Prime Minister Francois Bayrou makes an address after observing a minute of silence as part of an official day of mourning for the victims of Cyclone Chido which hit the archipelago on the French Indian Ocean territory of Mayotte a week ago, at The Hotel Matignon in Paris on December 23, 2024. (AFP)

France’s president and prime minister managed to form a new government just in time for the holidays. Now comes the hard part.

Crushing debt, intensifying pressure from the nationalist far right, wars in Europe and the Middle East: Challenges abound for President Emmanuel Macron and Prime Minister Francois Bayrou after an already tumultuous 2024.

What's wrong with French finances? The most urgent order of business is passing a 2025 budget. Financial markets, ratings agencies and the European Commission are pushing France to bring down its deficit, to comply with EU rules limiting debt and keep France’s borrowing costs from spiraling. That would threaten the stability and prosperity of all countries that share the euro currency.

France’s debt is currently estimated at a staggering 112% of gross domestic product. It grew further after the government gave aid payments to businesses and workers during COVID-19 lockdowns even as the pandemic depressed growth, and capped household energy prices after Russia invaded Ukraine. The bill is now coming due.

But France’s previous government collapsed this month because Marine Le Pen’s far-right party and left-wing lawmakers opposed 60 billion euros in spending cuts and tax hikes in the original 2025 budget plan. Bayrou and new Finance Minister Eric Lombard are expected to scale back some of those promises, but the calculations are tough.

“The political situation is difficult. The international situation is dangerous, and the economic context is fragile,” Lombard, a low-profile banker who advised a Socialist government in the 1990s, said upon taking office.

“The environmental emergency, the social emergency, developing our businesses — these innumerable challenges require us to treat our endemic illness: the deficit,” he said. “The more we are indebted, the more the debt costs, and the more it suffocates the country.”

How long will this government last? This is France’s fourth government in the past year. No party has a parliamentary majority and the new Cabinet can only survive with the support of lawmakers on the center-right and center-left.

Le Pen — Macron’s fiercest rival — was instrumental in ousting the previous government by joining left-wing forces in a no-confidence vote. Bayrou consulted her when forming the new government and Le Pen remains a powerful force.

That angers left-wing groups, who had expected more influence in the new Cabinet, and who say promised spending cuts will hurt working-class families and small businesses hardest. Left-wing voters, meanwhile, feel betrayed ever since a coalition from the left won the most seats in the summer's snap legislative elections but failed to secure a government.

The possibility of a new no-confidence vote looms, though it's not clear how many parties would support it.

What about Macron? Macron has repeatedly said he will remain president until his term expires in 2027.

But France's constitution and current structure, dating from 1958 and called the Fifth Republic, were designed to ensure stability after a period of turmoil. If this new government collapses within months and the country remains in political paralysis, pressure will mount for Macron to step down and call early elections.

Le Pen's ascendant National Rally is intent on bringing Macron down. But Le Pen faces her own headaches: A March court ruling over alleged illegal party financing could see her barred from running for office.

What else is on the agenda? The National Rally and hard-right Interior Minister Bruno Retailleau want tougher immigration rules. But Bayrou wants to focus on making existing rules work. “There are plenty of (immigration) laws that exist. None is being applied,” he said Monday on broadcaster BFM-TV, to criticism from conservatives.

Military spending is a key issue amid fears about European security and pressure from US President-elect Donald Trump for Europe to spend more on its own defense. French Defense Minister Sebastien Lecornu, who champions military aid for Ukraine and ramping up weapons production, kept his job and stressed in a statement Tuesday the need to face down “accumulating threats” against France.

More immediately, Macron wants an emergency law in early January to allow sped-up reconstruction of the cyclone-ravaged French territory of Mayotte in the Indian Ocean off Africa. Thousands of people are in emergency shelters and authorities are still counting the dead more than a week after the devastation.

Meanwhile the government in the restive French South Pacific territory of New Caledonia collapsed Tuesday in a wave of resignations by pro-independence figures — another challenge for the new overseas affairs minister, Manuel Valls, and the incoming Cabinet.