Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
With incendiary interviews, an undiplomatic demeanour, a celebrity photo shoot and an obscene finger gesture, Yanis Varoufakis is becoming part of Greece's debt problem rather than the solution, or so his euro zone partners believe.
The 'Varoufakis problem' is weighing on Greek debt talks - Business Insider
International Monetary Fund officials told their euro-area colleagues that Greece is the most unhelpful country the organization has dealt with in its 70-year history, according to two people familiar with the talks.
IMF Considers Greece Its Most Unhelpful Client Ever - Bloomberg Business
With Greek bank bonds collapsing, stocks near record lows, Greek default risk at post-crisis record highs, and Greek government bond yields spiking, it has been surprisng that we have not seen the ATM lines and generalized 'panic' of a population in fear of being "Cyprus'd." Well, now as ekathimerini reports, that appears to escalating and rapidly as credit sector officials estimated that the flight of deposits yesterday alone amounted to 350-400 million euros, which was some five times higher than the daily average in previous days.
Greek Bank Deposit Outflows Spike As Capital Controls Concern Spreads | Zero Hedge
While many economists support the Keynesian view that public sector investment can shore up the economy when the private sector is shrinking during a downturn, German Chancellor Angela Merkel has been leading the country with the belief that the government has a very limited role, andmarkets can operate freely in a social market economy. “They have a particular view of the world, and they want to impose that on other countries, in effect,”says Allen
How Germany Can Make or Break the Euro -- K@W
With relations between Greece and its European neighbors at an all-time low, and the country's politicians appearing increasingly defiant in the face of criticism, analysts are questioning whether Greece actually wants to get kicked out of the single currency.
Does Greece want to get 'kicked out' of euro zone?
“The risk for Europe remains Greece because, despite the agreement and Bundestag approval, it is not clear to me that the Greek interpretation of the loan extension is in accordance with the Troika’s understanding. German finance minister Wolfgang Schäuble is selling the deal to his German compatriots by saying things like, “Greece will not get a single penny until it complies with its obligations.” At the same time, the Greek finance minister Yanis Varoufakis is telling the press that “the Memorandum is finished! Because you know what the Memorandum is? It is a series of conditionalities and criteria that needed to be fulfilled. These criteria are now over!”
Greece will be left out in the cold while the rest of Europe recovers - Business Insider
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
The Greek government is dealing with liquidity problems and needs the Eurogroup to disburse the final tranche of its bailout program — roughly 7 billion euros ($7.6 billion) — as fast as possible. Athens is also dealing with the threat of a run on Greek banks, which increased after the head of the Eurogroup suggested that Athens may need to introduce capital controls. On top of its financial problems, the Greek government is also dealing with dissent in the ruling Syriza party.
Greece is dealing with 3 key problems - Business Insider
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
In Berlin, it is believed that Europe’s currency union is now sufficiently well bullet proofed to withstand a Greek default, and even exit, with only a bare minimum of adverse consequences for everyone else. A similarly naïve mind-set rules in Athens, where it is believed that Greece can both default and still remain in the euro. Both positions are fantasy, and therefore greatly increase the chances of disastrous mishap. Europe is once again sleep walking towards the abyss.
Europe once more sleep walks towards the abyss - Telegraph
The European Central Bank increased the cap on emergency liquidity for Greek banks, two people familiar with the decision said, as it seeks to keep the lenders alive without financing the nation’s government.
ECB Said to Raise Cap on Greek Banks to Over 71 Billion Euros - Bloomberg Business
Greece has until Monday to show how it will follow through on reform commitments after the euro area ruled out speedy access to aid funds, three officials said following a conference call of finance ministry deputies.
Euro Area Said to Give Greece Five Days to Deliver Plan - Bloomberg Business
“Let me disagree with about everything you said,” the ECB boss opened his comeback. “Are we blackmailing Greece? That’s a bit rich to say. The ECB has 104 billion euros exposure to Greece. That’s 65% of Greek GDP and the highest exposure in the eurozone.”
ECB’s Draghi: We’re not blackmailing Greece - MarketWatch
The "economic and financial disaster" of Greece's ruling Syriza party has hit the chances of other populist parties gaining power in Europe, analysts told CNBC, after surprising shifts in voting in local elections in France and Spain this weekend.
Will Syriza 'disaster' kill off populism in Europe?
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
Munger, better known as the vice chairman at Warren Buffett’s Berkshire Hathaway Inc., has long been critical of Greece, saying in 2011 that the bailed-out nation has been hobbled by insufficient contributions from its citizens. Greek politics were shaken up in January when Alexis Tsipras’s Syriza party was voted in on a pledge to ease austerity and negotiate a writedown of some of the country’s debt.
Munger Mocks Greece’s ‘Idiotic Idea’ You Can Vote Yourself Rich - Bloomberg Business
With the fight to keep Greece in the euro now in its sixth year, everyone is running out of patience. More importantly, Prime Minister Alexis Tsipras’s government in Athens is running out of money. While bond yields suggest investors expect Greece to stay in the euro, economists such as UniCredit Bank AG’s Erik Nielsen say it may be just a matter of time before he’s forced to print a new currency.
A Murky, Sloppy Muddle: How Greece’s Exit From Euro Could Happen - Bloomberg Business
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
'We are a Left-wing government. If we have to choose between a default to the IMF or a default to our own people, it is a no-brainer,' says senior Greek official
Greece is drawing up drachma plans in preparation to miss IMF payment - Business Insider
In this scenario, Greece fails to demonstrate a credible commitment to reforms in the next few weeks. In this case, the Europeans and the IMF suspend the current program, the ECB refuses to continue increasing the Emergency Liquidity Assistance (or just lets the Greek banks run out of eligible collateral), the loss of bank deposits accelerates triggering a full bank run, and Greece defaults to the IMF and the ECB. Unless any of these shocks force the Greek government to go back and seek a deal with the rest of Europe, Grexit within this year becomes inevitable, in our view. In this scenario, either Europe would offer it as an option, allowing Greece to remain in the EU, or it would become Greece’s only option to avoid a complete collapse of the economy and even a failed state.
Greece ugly scenario of capital controls bailout talks Grexit - Business Insider
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
No more than €462 million is due the IMF on April 9. A few days later, €1.4 billion in T-bills come due, and in a few more days, another €1 billion in T-bills. Then on May 1, Greece needs to pay the IMF €202 million in interest. In total, Greece has to scrape together a little over €3 billion this month.
Greek officials reportedly have a plan that would 'cause a furor in the markets' - Business Insider
Greeks love the euro. A Grexit is unthinkable for them. They’ve had plenty of experience with the drachma. No one would trust the drachma. The government would devalue it even faster than Draghi can devalue the euro. For the Greeks, the drachma has always been a way for the government to steal from them. They don’t want to return to it. They want to keep the euro. And the most powerful force behind hanging on to the euro? Government officials and politicians, including the current generation, expect to get their rich pensions paid in euros. They don’t want their pensions to be converted to drachmas either!
Greek officials reportedly have a plan that would 'cause a furor in the markets' - Business Insider
Greece must reach an outline funding agreement with its lenders at a meeting of euro zone finance ministers on April 24, its finance minister told a Greek newspaper on Monday. "At the Eurogroup (meeting) of April 24 there must be a preliminary conclusion (of the talks), as per the Eurogroup accord on Feb. 20," Yanis Varoufakis told daily Naftemporiki.
Greece needs deal with lenders on April 24: Varoufakis
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
Although Greece is to make a multimillion-euro debt repayment due to the International Monetary Fund (IMF) Thursday, there are fears that as the country drowns in debt and repayments, default could be just a matter of time.
Greek default: Is it a question of 'when' not 'if'?
If Greece were to leave the eurozone, it would face “pretty horrendous” times in the short term, a former head of the Bank of England said. But after 2 1/2 to three years, it would have a “rapidly growing” economy and falling unemployment, said Mervyn King, who ran the Bank of England from 2003 to 2013. He spoke before an audience of mostly Princeton University professors and students Thursday.
Ex-Bank of England boss sees a way to a ‘rapidly growing’ Greece - MarketWatch
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
Even if it survives the next three months teetering on the brink of bankruptcy, Greece may have blown its best chance of a long-term debt deal by alienating its euro zone partners when it most needed their support. Prime Minister Alexis Tsipras' leftist-led government has so thoroughly shattered creditors' trust that solutions which might have been on offer a few weeks ago now seem out of reach.
Greece may have blown best hope of debt deal - Yahoo Finance
"Whatever happens, even if they agree some tranche of aid for Greece, its economy is not going to achieve the rate of growth it needs to start paying down the debts. There is no prospect of Greece not defaulting, in my view, and if markets don't realise this they're living on another planet."
What would a Greek default look like?
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
"There are different sequences of events that could happen if Greece defaults, all of which might end up in a very nasty scenario - especially, when Greece is no longer able to access ECB (European Central Bank) funding facilities, such as its Emergency Liquidity Assistance (ELA) provision – as solvency is a requirement for ELA," Kuenzel said.
What would a Greek default look like?
"We have to earn the trust of our European partners, but they must also acknowledge that for five years they have been imposing a programme that makes matters worse. They need to convince us that they're serious about rebooting," he said. Mr Varoufakis clearly won the intellectual beauty contest in Washington, where most economists and officials broadly agree with his macro-economic analysis.
Grexit dangers mount as Greece's Yanis Varoufakis warns of 'liquidity asphyxiation' - Telegraph
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
OK, that was intense. I’ll write more about my visit, but right now (from Frankfurt, where I’m laying over for a couple of hours) I want to make a data point. about just how much adjustment Greece has done.
First, on the fiscal side, Greece has made an incredible adjustment — close to 20 percent of potential GDP, or the U.S. equivalent of about $3 trillion per year (not our usual 10-year calculation) in spending cuts and tax hikes:
Second, Greece has accepted roughly a 25 percent cut in nominal private-sector labor costs, or more than 30 percent relative to the euro average, far more than anyone else:
You can make a pretty good case that the costs of this adjustment were so large that Greece would have been better off exiting the euro in 2010. You can make an even better case that Greece would have been much better off if it had never joined in the first place. But at this point these are sunk costs. If Greece can negotiate a halfway reasonable compromise, one that more or less pauses further austerity, it’s hard to see that the risks of exit would be worth it.
And the creditors would be equally well served by such a compromise.
So is it going to happen? Well, it’s the right thing to do — which tells you nothing.
|
