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Greece economy: Merkel rules out more debt relief
Greece economy: Merkel rules out more debt relief
German Chancellor Angela Merkel has ruled out cancelling any of Greece’s debt, saying banks and creditors have already made substantial cuts.
But Mrs Merkel told the Die Welt newspaper she still wanted Greece to stay in the eurozone.
Greece’s left-wing Syriza party won last weekend’s election with a pledge to have half the debt written off.
Its new finance minister has refused to work with the “troika” of global institutions overseeing Greek debt.
The troika – the European Commission, European Central Bank and International Monetary Fund – had agreed a €240bn (£179bn; $270bn) bailout with the previous Greek government.
But Finance Minister Yanis Varoufakis has already begun to roll back the austerity measures the creditors had demanded as part of the deal.
Meanwhile, EU economic and financial affairs commissioner Pierre Moscovici told the BBC’s Hardtalk that Greece had to honour its previous commitments, although he said he wanted Greece to remain in the eurozone.
…click on the above link to read the rest of the article…
ECB Threatens Athens With Bank Funding Cutoff If No Deal In One Month: February 28 Is Now D-Day For Greece
ECB Threatens Athens With Bank Funding Cutoff If No Deal In One Month: February 28 Is Now D-Day For Greece
As Deutsche Bank’s George Saravelos politely puts it, “Developments since the Greek election on Sunday have moved very fast.” And indeed, so far the new Tsipras cabinet, and here we focus on the words and deeds of the new finance minister Yanis Varoufakis, has shown that the market’s greatest hope – that the status quo in Greece will continue – has been crushed into a pulp (and so have Greek stock and bond prices) especially following yesterday’s most recent comments by the finmin in which he said that Greece “does not want the $7 billion” from the Troika agreement and that it wants to “rethink the whole program”, culminating with an epic exchange with Eurogroup chief Jeroen Dijsselbloem in which Greece made it clear that the “constructive talks” are over.
And suddenly the Eurozone is stunned, because what had until now been its greatest carrot when it comes to dealing with Greece, has become completely useless when the impoverished, insolvent nation itself says it no longer needs a bailout, seemingly blissfully unaware of the consequences.
So earlier today the ECB’s Erikki Liikanen, tired of pleasantries and dealing with what to Europe is a completely incomprehensible and illogical stance, one which is essentially a massive defection by Greece in the European “prisoner’s dilemma”, and which while leading to a Greek financial collapse and Grexit – both prerequisites to a subsequent Greek economic recovery unburdened by the shackles of the Euro – would also unleash a European depression, came out and directly threatened Greece that it now has 1 month until the end of February to reach a deal with the Troika, or else the ECB would cut off lending to Greek banks, in the process destroying the otherwise insolvent Greek banking sector.
And since only the ECB backstop has prevented a banking sector panic, the ECB is essentially betting the house, and the sanctity of the Eurozone (because after a Grexit all bets are off which peripheral leaves next) that the threat, and soon reality, of a bank run (at last check Greece had about €145 billion in deposits still left in its bank after JPM’s latest estimate of €15 billion in outflows in January) will finally force Varoufakis and Tsipras to sit at the negotiating table with the understanding that not they but the Troika has all the leverage.
…click on the above link to read the rest of the article…
Can Syriza renegotiate Greece’s multi-billion bailout?
Can Syriza renegotiate Greece’s multi-billion bailout?
Left-wing protest party facing up to the political reality of governing Europe’s most indebted nation.
The Greek left-wing party Syriza gets down to work, after storming to power on an anti-austerity ticket.
From protest party to ambitious political newcomers, Syriza is facing up to the political reality of governing Europe’s most indebted nation.
Newly-elected prime minister Alexis Tsipras held his inaugural cabinet meeting on Wednesday.
But can the new government live up to its commitment to renegotiate Greece’s multi-billion dollar bailout?
Host: Shiulie Ghosh
Guests:
Anastasia Giamali, a journalist for the Dawn Newspaper in Athens.
Olaf Boehnke, head of the Berlin office for the European Council on Foreign Relations.
Dimitiri Sotiropoulos, a research fellow for the Greek think tank ELIAMEP, or Hellenic Foundation for European and Foreign Policy in Athens.
…click on the above link to view video…
“The Barricades Are Down” Syriza Is Already Rolling Back Austerity “Reforms”
“The Barricades Are Down” Syriza Is Already Rolling Back Austerity “Reforms”
It didn’t take long for Syriza to start making changes in Greece. While these may be minor at the margin compared to the debt “issues”, as KeepTalkingGreece reports, Alexis Tsipras and his junior coalition partner Panos Kammenos pushed the Fast Forward button to restore a series of so-called “reforms”, that is austerity measures imposed by the country’s lenders, the Troika – among the left-wing reforms are: scrapping planned privatizations, scrapping fees in public hospitals and prescriptions, restore “the 13th pension” for low-pensioners and other actions that SYRIZA had promised before the elections. And the iron barricades in front of Parliament have been removed.
Iron Barricades
The first revolutionary move was conducted by alternate Minister responsible for Citizens’ Protection and Public Order. Yiannis Panousis removed the iron barricades in front of the Greek Parliament. The barricades were installed to protect the lawmakers from angry demonstrators after the huge anti-austerity protests from 2010 onwards.
…click on the above link to read the rest of the article…
Greece Begins The Great Pivot Toward Russia
Greece Begins The Great Pivot Toward Russia
Ten days ago, before the smashing success of Greece’s anti-austerity party, Syriza, we noted that Russia gave Greece a modest proposal: turn your back on Europe, whom you despise so much anyway, and we will assist your farmers by lifting the food import ban.
And, sure enough, Greece’s new premier Tsipras did hint with his initial actions that Greece may indeed pivot quite aggressively away from Europe and toward Russia in general and the Eurasian Economic Union in particular (as a tangent recall “Russia’s “Startling” Proposal To Europe: Dump The US, Join The Eurasian Economic Union“).
Today we got further evidence that Tsipras will substantially realign his country’s national interest away from the west and toward… the east.
First, as Reuters reported, today the new premier halted the “blue light special” liquidation of Greece to those highest bidders who have the closest access to various printing presses and stopped the privatization of Greece’s biggest port on Tuesday, “signaling he aims to stick to election pledges despite warning shots from the euro zone and financial markets.”
One of the first decisions announced by the new government was stopping the planned sale of a 67 percent stake in the Piraeus Port Authority, agreed under its international bailout deal for which China’s Cosco Group and four other suitors had been shortlisted.“The Cosco deal will be reviewed to the benefit of the Greek people,” Thodoris Dritsas, the deputy minister in charge of the shipping portfolio, told Reuters.
…click on the above link to read the rest of the article…
Greece at the Crossroads: the Oligarchs Blew It
Greece at the Crossroads: the Oligarchs Blew It
Once one oligarchy falls, it will threaten to topple a long line of oligarch dominoes.
A great many narratives invoking Greece are being tossed around, but only one really encapsulates the unvarnished truth: the Oligarchs blew it. The oligarchs in both Greece and the European Union/ECB had the opportunity a few years ago to trade some of their outsized wealth and political power for stability and sustainable expansion.
Instead, they chose to not just cling to every shred of their outsized wealth and power but to actively increase it. Their greed and hubris has now put their entire system of parasitic wealth extraction at risk of collapse. Their political stranglehold on power has been weakened, and there’s no going back: they blew it, and now it’s too late. The debt-serfs have finally had enough.
If you enter Greece in the custom search box on this site, six pages of blog entries come up. I have addressed the situation in Greece many times; this summarizes my conclusion:
Greece, Please Do The Right Thing: Default Now (June 1, 2011)
Thankfully, many in Greece have reached the same conclusion, for the same reasons:
Greece’s New FinMin Warns “We Are Going To Destroy The Greek Oligarchy System”
The basic problem is that Greece Is a Kleptocracy (June 28, 2011). Greece has shown the world how oligarchies can expand their wealth and power even as their populace slides deeper into poverty. A recent article, Misrule of the Few: How the Oligarchs Ruined Greece, lays out the key dynamics.
Writer Pavlos Eleftheriadis pulls no punches:
…click on the above link to read the rest of the article…
Greek election: It’s really up to the ECB and EU now
Greek election: It’s really up to the ECB and EU now
The result was worse than expected whatever the final outcome – the anti-austerity vote is massive, but it could be an empty gesture as Greece in reality has little choice: Comply with the Troika or leave the EUR. I doubt the later will happen with the same vote as the Greeks are tired of austerity but not off being European.
…click on the above link to read the rest of the article…
More reasons for the financial markets to worry
More reasons for the financial markets to worry
Five tests of unity that the eurozone will face this week.
In the wake of Sunday’s election in Greece, the unity of the eurozone will come under close scrutiny this week.
The financial markets were already in a state of excitement over the launch of quantitative easing (QE) by the European Central Bank (ECB). They were also alarmed by some of the more combative rhetoric from Syriza, the radical left party that – as expected – emerged as the winner from the Greek election. How much those markets may now take further fright could depend on whether they detect other signs of disunity and contradiction in the eurozone’s leadership. Here are some of the perils that the eurozone must navigate in the coming days:
1. France’s reform programme
François Hollande, the president of France, demanded back in August 2014 that the European Union and the ECB should do more to boost growth and the European Commission should make the eurozone’s budget rules more flexible. Even though Hollande is hardly negotiating from a position of strength and until this month he was haemorrhaging political support, nevertheless he has got what he asked for. A proposal for the EU to establish a €315 billion investment fund was published by the Commission this month and will be put to legislators, Mario Draghi announced his plans for quantitative easing (QE) on Thursday (22 January) and the previous week the Commission announced relaxation of the EU’s budget rules.
So what do the French do in return? Well, members of the French national parliament will today be debating the Loi Macron, Hollande’s flagship plan for economic and social reform. Among other things, it would allow shops to open 12 Sundays a year and tackle the protected positions of pharmacists, court registrars and notaries. The reforms are bitterly opposed by a large faction of Hollande’s socialists and the centre-right, which when in power from 2007-12 proved adept at committing France to reform but not so good at carrying it out. Later today the European Commission will brief finance ministers, meeting in Brussels, on when it plans to reassess the French, Italian and Belgian budgets for conformity with the eurozone’s budget rules. At the end of this week (30 January), Hollande will meet Angela Merkel, the German chancellor, in Strasbourg. That will be a chance to update her on the Loi Macron. The debate in the national parliament is scheduled to conclude on 6 February.
…click on the above link to read the rest of the article…
Greece’s New FinMin Warns “We Are Going To Destroy The Greek Oligarchy System”
Greece’s New FinMin Warns “We Are Going To Destroy The Greek Oligarchy System”
Over two years ago, we first highlighted Yanis Varoufakis’ perspectives on the destruction of Greece and Europe’s bogus growth pacts. Since then he has grown in both reason and popularity as his no-nonsense discussons of the mis-design of the euro (and potential solutions) have made him the front-runner to be Syriza’s new finance minister. Never one to mince words or play politics, Varoufakis tells Channel 4’s Paul Mason in this brief (but chilling for Brussels) interview, what his party would do if it gets into government in Greece, and admits the prospect of power in Europe is “scary”. As he sums up, “we are going to destroy the Greek oligarchy system,” and with it, we suspect, much of the narrative that holds the fragile European Union together…
As Varoufakis previously explained,
The Troika is trying to suffocate us and to put pressure on the democratic choice by telling us: either you follow our requirements, or you will be cast into hell.They actually have their own threats as exogenous circumstances of the situation, as they are simply part. They are trying to terrorize the Greek voters.
Doesn’t seem like much middle-ground there.
But if no agreement is possible, or found?
…click on the above link to read the rest of the article…
Far-right Golden Dawn party takes third place in Greece elections
Far-right Golden Dawn party takes third place in Greece elections
Greece’s far-right radical party Golden Dawn is expected to come third in the parliamentary election. The anti-immigrant party with Nazi roots is showing remarkable staying power, despite most of its members and lawmakers facing criminal charges.
News of Golden Dawn’s all-but-official success comes as the far-left Syriza and the Independent Greeks parties, which came in first and second, reached an agreement on the formation of a coalition government.
Golden Dawn has secured its place in the parliament with over 6 percent of votes. If victorious, they’ll be contributing 18 MPs to the 300-member parliament.
Leader Nikolaos Mihaloliakos and several senior figures in the party are either behind bars or under house arrest.
Mihaloliakos posted a congratulatory recorded message for his party colleagues, saying “we achieved this great victory despite the fact that we could not be guaranteed an equal and so-called democratic election as the regime likes to call it, shunned by all (media), facing mudslinging and slander from all sides … having to campaign through a payphone. We have a fresh mandate … everyone fought to keep Golden Dawn away and they lost. Golden Dawn won.”
…click on the above link to read the rest of the article…
Anti-austerity Syriza sweeps Greece parliamentary poll
Anti-austerity Syriza sweeps Greece parliamentary poll
Party’s leader Alexis Tsipras, who wants to renegotiate EU and IMF bailout terms, set to become next prime minister.
Syriza, a radical left party, has swept to power in Greece promising to end years of painful austerity policies, in an election victory that puts the country on a collision course with the EU and international creditors.
In a result that exceeded analysts’ expectations, Syriza and its 40-year-old leader Alexis Tsipras won 149 seats in the 300-seat Greek parliament, just two short of an absolute majority, with most of the votes counted on Sunday.
Antonis Samaras’ New Democracy, the former party of government, was routed and reduced to around 76 seats.
Syriza, which says it does not want to leave the euro, will become the first anti-austerity party to take power in Europe and Tsipras will be Greece’s youngest prime minister in 150 years.
Tsipras, a former Communist youth activist, told thousands of flag-waving supporters in Athens: “Greece is leaving behind disastrous austerity.”
Tsipras repeated his pledge to renegotiate the terms of Greece’s $269bn bailout with the EU and the International Monetary Fund, but struck a more conciliatory tone than during his fiery campaign.
…click on the above link to read the rest of the article…
Troika Punches Panic Button on Greece and Spain
Troika Punches Panic Button on Greece and Spain
After four years of inflicting economic pain and misery on Europe’s semi-bankrupt periphery, the Troika (IMF, ECB and European Commission) is suddenly in a lather over the potential political consequences of its disastrous economic policies: “I wouldn’t like extreme forces to come to power. I would prefer if known faces show up,” said European Commission president Jean-Claude Juncker regarding the upcoming Greek elections.
Speaking at a press conference in Pekin, the IMF’s Chief Economist Oliver Blanchard warned that unemployment in Spain remains too high, fueling a surge of support in “populist movements” and “political parties that do not want to form part of the euro.”
Blanchard’s words were a barely veiled reference to the phoenix-like rise of Podemos, a stridently anti-establishment but far from Eurosceptic political party. In recent polls of voter intentions for the upcoming municipal elections (March) and general elections (September), the new party, now in its second year of existence, has consistently commanded between 25% and 30% of the votes – more than either of the two main parties.
The fear among the political elite, both in Madrid and Brussels, is palpable. In the last few days, Prime Minister Rajoy dispatched his Vice-President, Soraya Sáenz de Santamaria, and Minister of Industry, José Manuel Soria, on a vital mission to persuade Spain’s biggest media conglomerate, Grupo Planeta, to adopt a more critical tone in its reporting on Podemos. In return the government will offer the broadcaster more licenses for more channels. Bienvenido a España!
…click on the above link to read the rest of the article…
Syriza Leads In 6 Polls; Leader Tsipras Shuns Merkel, Says “Won’t Honor Commitments”
Syriza Leads In 6 Polls; Leader Tsipras Shuns Merkel, Says “Won’t Honor Commitments”
With the leads in at least six polls (of between 4% and 10%), Syriza leader Alexis Tsipras has come out swining for the anti-EU vote this morning:
- *TSIPRAS SAYS ONLY SYRIZA CAN END GREECE’S CATASTROPHIC COURSE
- *TSIPRAS SAYS WON’T HONOR COMMITMENTS MADE BY PREVIOUS GOVT
- *TSIPRAS SAYS WILL NEGOTIATE WITH EUROPEAN PEERS NOT WITH MERKEL
For now Greek assets remain bid on the glorious awesomeness of Draghi but we suspect – though The ECB gave themn room to negotiate and Djisselblom mentioned the possibility of ‘working’ with Greece – that if things go as the polls suggest Monday could see more bloodletting in EURUSD (and bank runs in Greece).
As Bloomberg reports, Tsipras had a lot more to say…
Greeks called on Jan. 25 to decide whether to continue with the tragedy of catastrophic austerity or whether to return to growth, democracyMany Greeks turning to Syriza not because of ideology but out of need
Tax burden needs to be eased for middle class, Syriza would abolish property tax, introduce levy for large real estate holdings
ECB QE decision was “historic”, pleased by turn away from austerity to measures aimed at boosting growth
Syriza knows obligation arising from membership in European institutions, austerity wasn’t part of EU’s founding treaty
Syriza doesn’t recognize commitments made by previous govt that will bind new administration
As Keep Talking Greece blog reports, 2 days before the election, Syriza leads in six polls:
…click on the above link to read the rest of the article…
Oh, Greece!
Oh, Greece!
Greece’s bailout program is not working. After receiving hundreds of billions of Euros in new loans to stave off a sovereign default, Greeks are on the verge of electing a new government that may throw Eurozone politics into turmoil.
From the outset, this was always going to be a tricky one for European bureaucrats and lenders. Restoring the solvency of a state which historically had great difficulties in collecting taxes from its citizens was not going to be easy. Moreover, the crash exposed fundamental flaws in the Greek economy, which at the time turned out to be a leading indicator for other Southern Eurozone countries.
With the world still reeling from the Great Recession, in 2010 Greece applied for a rescue program as its funding costs soared once the fragility of its finances could no longer remain hidden.
It can be argued that if debt balances had been restructured there and then to levels where they could actually be paid off over an extended period of time, together with unpleasant but sensible fiscal policies – as we shall see, taking into account important differentiators of the Greek economy – the cost of the bailout could have been much more manageable.
…click on the above link to read the rest of the article…
Citi, Goldman, ICAP And Others Preparing For Grexit, Again
Citi, Goldman, ICAP And Others Preparing For Grexit, Again
Every couple of years the same identical European drill repeats itself: 1) Greece makes loud noises as it approaches an election, 2) Europe says it couldn’t care what the outcome is and that Greece should stay in the Euro but if it exits it won’t be a disaster, 3) the ECB reminds everyone of the lie that it is not preparing for Plan B (it is) despite holding on to over €100 billion in “credibility-crushing” Greek bonds, 4) panicking Greek banks say the deposit outflow situation is completely under control (adding that “The Bank of Greece along with the European Central Bank are monitoring closely the developments and intervene whenever this is necessary,” which is code word for far more familiar, five-letter word), and meanwhile 5) all non-Greek banks quietly start preparing for the worst case scenario.
So far this time around, we had everything but step “5”. We do now.
According to the WSJ, “banks and other financial institutions in Europe are stress-testing their internal systems and dusting off two-year-old contingency plans for the possibility Greece could leave the region’s monetary union after a key election later this month. Among the firms running through drills are Citigroup Inc., Goldman Sachs Group Inc. and brokerage ICAP PLC, according to people familiar with the matter.”
And soon enough Bloomberg, because who can possibly forget the mysterious appearance of the “XGD Crncy” in June of 2012, only to disappear moments later after a few hurried phone calls from Frankfurt…
…click on the above link to read the rest of the article…
