The International Monetary Fund (IMF) believes that the only way to reduce Greek debt to a sustainable level is by a debt haircut involving the country’s government creditors. But Germany refuses to consider the proposal. Reality is on the IMF’s side.
An elegant appearance is important to Christine Lagarde. The head of the IMF wears her short hair carefully coiffed, and diamonds glitter on her manicured fingers. When she talks about [...]
For all you know, Angela Merkel is even now contemplating how to break up the euro.
Surely Germany’s long-suffering chancellor must be tempted, given the endless eurobickering over rescues that later turn out to be inadequate.
How she must tire of fighting her country’s corner, only to be branded weak by critics at home.
How she must resent sacrificing German wealth, only to be portrayed as a Nazi in some of the very countries [...]
The Germans are making “a tragic, historical mistake,” says George Soros of the country’s refusal to offer something like a Marshall Plan to its troubled neighbors. In an outstanding interview, Soros stands much of the conventional wisdom regarding the crisis on its head. “(Merkel) is trapped (realizing) the euro is not working, but she cannot change the narrative she has created.”
With the EU summit set to start on Thursday, [...]
George Soros, the billionaire investor, has warned Germany it has three months to save the eurozone or risk the destruction of the European Union and a “lost decade”.
Speaking at a conference in Italy Mr Soros said the eurozone’s fate lay firmly with Germany, which he urged to agree to measures which would help the region’s ailing banking system and ease borrowing costs among the most troubled member states.
“In my judgment [...]
by Tyler Durden
In one of the most fascinating psychological shifts, there has been a massive shift in the perspective of the Greek electorate since the election two weeks ago. Almost as if the size of the actual votes for Syriza, the far-left anti-bailout party, gave citizens ‘permission’ to be angry and vote angry. The latest opinion polls, as per Credit Suisse, show the center-right New Democracy party crashing from 108 seats to [...]
By Ambrose Evans-Pritchard
8:57PM BST 08 May 2012
The political dam has broken in Europe. German Chancellor Angela Merkel
no longer has enough allies in the club of EU prime ministers to impose her hairshirt agenda.
Her methodical plans are disintegrating on every front.
The immediate fate of Greece – and the euro – is in the hands of a boyish motorcycle Marxist. Syriza leader deal Alexis Tsipras has vowed to tear up the hated Memorandum, [...]
From his new op-ed piece for the Financial Times:
Far from abating, the euro crisis has recently taken a turn for the worse. The European Central Bank relieved an incipient credit crunch through its longer-term refinancing operations. The resulting rally in financial markets hid an underlying deterioration; but that is unlikely to last much longer.
The fundamental problems have not been resolved; indeed, the gap between creditor and debtor countries continues to widen. The crisis [...]
The FT’s Peter Spiegel has scoped up some additional details from the 10 page debt sustainability analysis that is at the basis of the latest Greek bailout talks. Some of the critical details:
“even under the most optimistic scenario, the austerity measures being imposed on Athens risk a recession so deep that Greece will not be able to climb out of the debt hole over the course of the new €170bn bail-out.“
A German-led group [...]
By David Marsh, MarketWatch
LONDON — In the high pressure looking-glass world of the euro, nothing is quite what is seems. Good old Isaac Newton’s third law of physics comes into play. Every action brings an equal and opposite reaction. The much-approved long-term €489 billion bank liquidity assistance of the European Central Bank (ECB) implemented before Christmas — with another money auction due on Feb. 29 — has made the [...]
European officials rushed to finalise details of a €130bn Greek bail-out on Monday amid signs Germany and its eurozone allies may not be prepared to approve the deal at a finance minsters’ meeting on Wednesday, despite Athens backing new austerity measures.
Senior European Union officials said they believed Greece had met the demands of the troika of international creditors – the European Commission, International Monetary Fund, and European Central Bank [...]
European negotiators have asked Greek debt holders to accept a 60 per cent cut in the face value of their bonds, a hardline stance that far exceeds losses agreed in a deal between private investors and eurozone authorities three months ago.
The stance, delivered to a consortium of international banks at the weekend by Vittorio Grilli, Italian treasury chief and lead eurozone negotiator, is a victory for German-led northern creditor [...]
By Michael Pettis
Creditors nations are worried. Their obligors seem determined to take steps, they claim, to undermine or erode the value of their obligations – at the expense, of course, of the creditors.
Over the past two years we have become pretty used to the spectacle of Chinese government officials warning the US about its responsibility to maintain the value of the huge amount of US treasury [...]
While it is not exactly clear what has caused the substantial sell off in the EURUSD over the past several hours, even with the explicit support of China of all insolvent European states, the news that the German constitutional court in Karlsruhe is about to commence hearing a lawsuit contesting the legality of the Greek bailout is certainly not helping the euro. As Athens [...]
Image: Wikimedia Commons
Kicking the can down the road on the Greece crisis is only going to make things worse, not better, according to Societe Generale’s Albert Edwards.
Edwards cites Anatole Kaletsky, a columnist at The Times, who sums up the situation as such:
….as time goes on, a durable solution, or even an orderly restructuring, becomes less likely, whereas EU politicians and most market commentators believe the opposite—that [...]
Requesting anonymity in return for speaking, senior French financial officials have disclosed their interpretation of why and how Dominique Strauss-Kahn known as “DSK” in France, fell suddenly from world power as head of the IMF. Cited on French blog sites, these officials see nothing less than a threat to world monetary stability and the integrity of the global economy, behind the dramatic sleaze operation that [...]
Greece in dire straits again – the EU and IMF racing to assemble massive bailout #2:
(Reuters) – The European Union is working on a second bailout package for Greece in a race to release vital loans next month and avert the risk of the euro zone country defaulting, EU officials said on Monday.
Greece’s conservative opposition meanwhile demanded lower taxes as a condition for reaching a political consensus [...]
Reuters reports that while America was out camping, barbecuing and all around vacationing, the European Union was feverishly working on a second bailout package, holding another round of emergency talks with the Greek government, to prevent a June 29 default by Greece when money runs out. Alas, it is now too late: with austerity protests now a daily event, the political opposition has the [...]