Friday, August 31, 2012

Why A Grexit Is Not Going To Happen

by George Kesarios

Seeking Alpha

August 31, 2012

The recent Grexit rhetoric is not restricted to German officials, but to all European politicians across the board. My guess is that a lot of it has to do more with internal consumption politics in many European countries than with reality.

To try to make you understand why a Grexit is next to impossible, let's think about what will happen if Greece is actually kicked out of the European Monetary Union (EMU).

Aside from the legal issues, if Greece is indeed kicked out of the euro, that means that the deposits in euros which Greek citizens have in Greek banks will have no value. Actually, they will have some value, but not the current value of the euro.

This also means that if another country were to be kicked out of the euro, then the deposits of that country's citizens will also be worth something other than the euro's current value. In both cases, the value of the deposits will be worth a whole lot less.

As you understand, if Greece were to indeed be kicked out of the EMU, then that would set a precedent and that would mean that other countries, under certain circumstances, would also be able to be expelled. So if Greece gets kicked out, my hunch is that we would see a bank run of historic proportions all across Europe.

Which means that the euro would collapse, because depositors and investors would be running scared, speculating who will be next, probably buying dollars in the short term. In any case, I foresee a massive exodus from the euro across the board, including investors and depositors in Germany.

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How to Prevent Euro Zone Contagion

by Kristina Peterson

Wall Street Journal

August 31, 2012

European Central Bank President Mario Draghi canceled his plans this week to attend the Kansas City Federal Reserve’s economic symposium in Jackson Hole, Wyo. But central bankers and academics gathering are discussing the crisis he faces.

Preventing the financial turmoil in one country from spreading to others — a process called contagion — requires different measures in the euro zone than in other regions, finds Kristin Forbes, an economics professor at Massachusetts Institute of Technology‘s Sloan School of Management, in a paper to be presented at the conference on Friday.

Because the 17 countries in the euro zone share a currency and a central bank, they can’t individually adjust to shocks outside their borders through currency devaluation or monetary policy. That makes it more important for euro-zone countries to maintain flexible economies that can adjust quickly, she writes. That also may provide a little more justification for taking policy actions to help stop a chain of bad events that could unleash widespread damage, she writes. European leaders have been arguing for many years over what to do to stop the spread of rising government bond yields, capital flight, bank losses and other financial problems through the region.

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Read the Paper

For Greece a tear

Economist
August 31, 2012

The political mayhem which overtook Greece in the 1960s was avoidable and, in some ways, unexpected. Although the embers of a bitter left-right civil war were still smouldering, Hellenes began that decade in an upbeat mood. There seemed a decent chance that democracy would put down stronger roots in the land of its birth as prosperity grew.

Instead, one disaster followed another. The country’s future was furiously contested not only by scheming politicians but by other groups: street demonstrators, a politicised monarchy, the American embassy and foreign spooks. All this is subject to careful, intelligent analysis in a new biography of Andreas Papandreou by Stan Draenos, an American-based Greek historian and political scientist.

Using archives and interviews Mr Draenos studies every twist in the early political career of the man who later stormed to power as Greece’s first socialist leader in 1981. The book traces Papandreou's return to Greece in 1959 as an American-trained academic, his metamorphosis into a political firebrand, his imprisonment in 1967, followed a few months later by his expulsion from Greece and exile in Sweden. (The family's Swedish experience helped to mould Andreas’s son, George Papandreou, into a moderate social-democratic leader whose government fell victim to the euro crisis last year.)

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Federalism or Bust for Europe?

by Jean Pisani-Ferry

Project Syndicate

August 31, 2012

August was quieter than feared on the European bond markets. So, while resting on Europe’s beaches and mountains, policymakers could take a step back from the sound and fury of the last few months and think about the future. Is the eurozone sleepwalking into becoming a United States of Europe? Is it exploring uncharted territory? Or are its constituent nation-states drifting apart?

To answer these questions, the best starting point is the US. The model of a federal union that emerged from its history consists of a single currency managed by a federal agency; closely integrated markets for products, labor, and capital; a federal budget that partly, but automatically, offsets economic disturbances affecting individual states; a federal government that assumes responsibility for tackling other major risks, not least those emanating from the banking sector; and states that provide regional public goods but play virtually no role in macroeconomic stabilization.

This model served as a template for the European Union’s architects, notably for the creation of a unified market and a common currency. But, in several respects, Europe has diverged significantly from the American model.

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Τράπεζες και τραπεζίτες

του Τάσου Τέλλογλου

Protagon.gr

31 Αυγούστου 2012

Ο κ. Παναγιώτης Λαφαζάνης μίλησε στην αρμόδια επιτροπή της Βουλής για «ληστεία του ελληνικού λαού» σε όφελος των τραπεζιτών όταν ο υπουργός Οικονομικών κ. Γιάννης Στουρνάρας μίλησε για τους όρους της ανακεφαλαιοποίησης των τραπεζών. Η ρητορική είναι δωρεάν βεβαίως διότι ο κ Λαφαζάνης δεν μπορεί να αγνοεί ότι οι ελληνικές τράπεζες εχουν πάρει 150 δισεκατομμύρια από την ΕΚΤ και ότι χάρη σε αυτά παραμένουν σε λειτουργία -διαφορετικά θα είχαν κλείσει, οι θέσεις εργασίας και οι καταθέσεις θα είχαν εξαφανισθεί. Δεν είναι ίσως σωστό να λέγεται δημόσια αλλά σήμερα το δημόσιο δεν είναι σε θέση χωρίς την Ευρώπη να υλοποιήσει την εγγύηση των καταθέσεων για την οποία εχει δεσμευθεί.

Και για αυτό δεν ευθύνονται κυρίως οι Τράπεζες αλλά το κράτος και οι ψηφοφόροι των κομμάτων που – πολλοί ασφαλώς από αντικειμενική αδυναμία - δεν είναι συνεπείς προς τις υποχρεώσεις τους, δεν πληρώνουν δηλαδή. Από την επόμενη πολυπόθητη δόση, 25 (από τα 31 δισεκατομμύρια) θα δοθούν για την ανακεφαλαιοποίηση των τραπεζών. Η αρχική επιδιωξη ορισμένων διοικήσεων ιδιωτικών τραπεζών να γίνει η ανακεφαλαιοποίηση με τους όρους τους δεν «περασε» χάρη στην παρεμβαση της ΤτΕ και του κ Στουρνάρα.

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Thursday, August 30, 2012

The Roadmap to Banking Union: A Call for Consistency

by Karel Lannoo

Centre for European Policy Studies

August 30, 2012

The proposal to move to a full banking union in the eurozone means a radical regime shift for the EU, since the European Central Bank will supervise the eurozone banks and effectively end ‘home country rule’. But how this is implemented raises a number of questions and needs close monitoring, explains CEPS CEO Karel Lannoo in this new Commentary.

Read the Paper

Οι έξυπνοι με τις εύκολες λύσεις

του Στέφανου Κασιμάτη

Καθημερινή
30 Αυγούστου 2012

«Εσείς τι θα κάνατε για να πετύχετε τους στόχους στους οποίους λέτε ότι αποτυγχάνει η κυβέρνηση;» Είναι η ερώτηση που ευλόγως ακολουθεί το στερεότυπο, μακρόσυρτο κήρυγμα κατά της πολιτικής του Μνημονίου από τον μονίμως περιοδεύοντα στα ραδιοφωνικά μικρόφωνα βουλευτή του ΣΥΡΙΖΑ, του οποίου το όνομα δεν έχει σημασία. Εκείνος τότε παίρνει το σύνηθες, γλοιώδες, δασκαλίστικο ύφος του -αυτό που υποτίθεται ότι ταιριάζει με την ηθική και πνευματική ανωτερότητα της Αριστεράς- και, χαμηλώνοντας λίγο την ένταση της φωνής, σαν να πρόκειται να μας αποκαλύψει το μεγάλο μυστικό, αρχίζει να εξηγεί στα «παιδάκια» του ραδιοφωνικού ακροατηρίου ότι θα πατάξουν τη φοροδιαφυγή με ένα δίκαιο φορολογικό σύστημα, θα κόψουν στο Δημόσιο τις «περιττές σπατάλες» (λες και υπάρχουν... αναγκαίες σπατάλες) και άλλα ηχηρά παρόμοια.

Είναι τα συνήθη φούμαρα αυτά· τα ακούμε χρόνια τώρα από κυβερνήσεις είτε της Κεντροαριστεράς είτε της Κεντροδεξιάς. Είτε με τη μορφή του «άλλου δρόμου» (τρίτου, τέταρτου, πέμπτου; - έχω χάσει πια το μέτρημα...) είτε στην εκδοχή της ηθικής προσταγής για «σεμνότητα και ταπεινότητα», η ουσία τους συμπυκνώνεται πάντα στον βλακώδη ισχυρισμό ότι υπάρχει κάποιος δήθεν μαγικός τρόπος -ο οποίος, παρεμπιπτόντως, ποτέ δεν εξηγείται σαφώς και πουθενά αλλού δεν έχει εφαρμοσθεί- να φτιάξουμε καλύτερους ανθρώπους. Αυτό ήταν πάντοτε η απάντηση των κυβερνήσεων της πασοκαρίας, πράσινης και γαλάζιας, μπροστά στα προβλήματα. Ως στάση είχε την εξήγησή της: ούτε οι μεν ούτε οι δε ήθελαν να αλλάξει τίποτε, διότι πολύ απλά δεν ήθελαν να πάψουν να νέμονται τα οφέλη από τη σχέση κράτους, κόμματος και οικονομίας, που με τα χρόνια είχε εξελιχθεί σε ένα σύμπλεγμα σχεδόν αξιεδάλυτο. Σχεδόν, όπως είπα - διότι έπειτα ήλθε η κρίση και ο μύθος που ζούσαμε στην Ελλάδα τελείωσε.

Οχι όμως και για την Αριστερά του Τσίπρα: γι’ αυτούς ο μύθος δεν έχει τελειώσει. Διότι, καθώς οι άλλοι ψελλίζουν ως επί το πλείστον ακαταλαβίστικες ασυναρτησίες, για να κρυφτούν από την αλήθεια που τους εκθέτει, η Αριστερά του Τσίπρα το μόνο που έχει να εισφέρει στη συζήτηση για το τι κάνουμε τώρα είναι τη δική της εκδοχή της φουμαρολογίας του παρελθόντος. Ποια ανώδυνη εξοικονόμηση πόρων, δηλαδή, μπορούν να κάνουν οι φωστήρες του ΣΥΡΙΖΑ και γιατί δεν μπόρεσαν να την κάνουν οι κυβερνήσεις των δύο τελευταίων χρόνων; Μήπως επειδή τους αρέσει και το μαστίγιο της τρόικας να νιώθουν και τις κατώτερες συντάξεις να κόβουν και τις υποχρεώσεις του Δημοσίου προς τους ιδιώτες να αφήνουν απλήρωτες; Εχουν την απαίτηση, με άλλα λόγια, να πιστέψουμε ότι τα τρία κόμματα που συγκυβερνούν σήμερα είναι οι μαζοχιστές της αυτοκαταστροφής, ενώ ο ΣΥΡΙΖΑ είναι οι έξυπνοι με τις εύκολες λύσεις; Μόνον οι ανόητοι θα το πίστευαν...

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Democracies and debt: Voters are now facing a harsh truth

Economist
September 1, 2012

Almost half the world’s population now lives in a democracy, according to the Economist Intelligence Unit, a sister organisation of this newspaper. And the number of democracies has increased pretty steadily since the second world war. But it is easy to forget that most nations have not been democratic for much of their history and that, for a long time, democracy was a dirty word among political philosophers.

One reason was the fear that democratic rule would lead to ruin. Plato warned that democratic leaders would “rob the rich, keep as much of the proceeds as they can for themselves and distribute the rest to the people”. James Madison, one of America’s founding fathers, feared that democracy would lead to “a rage for paper money, for an abolition of debts, for an equal division of property and for any other improper or wicked projects”. Similarly John Adams, the country’s second president, worried that rule by the masses would lead to heavy taxes on the rich in the name of equality. As a consequence, “the idle, the vicious, the intemperate would rush into the utmost extravagance of debauchery, sell and spend all their share, and then demand a new division of those who purchased from them.”

Democracy may have its faults but alternative systems have proved no more fiscally prudent. Dictatorships may still feel the need to bribe their citizens (eg, via subsidised fuel prices) to ensure their acquiescence while simultaneously spending large amounts on the police and the military to shore up their power. The absolute monarchies of Spain and France suffered fiscal crises in the 17th and 18th centuries, and were challenged by Britain and the Netherlands which, though not yet democracies, had dispersed power more widely. Financial problems contributed to the collapse of the Soviet Union.

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Ξαφνικός έρωτας για την Ελλάδα;

του Σήφη Πολυμίλη

Το Βήμα

30 Αυγούστου 2012

Λέτε να μας αγάπησαν ξαφνικά οι ευρωπαίοι και οι δηλώσεις υπεράσπισης ακολουθούν η μια μετά την άλλη;Πως γίνεται εκεί που μέχρι πριν λίγες εβδομάδες βρισκόμαστε μονίμως στο στόχαστρο κάθε λογής πολιτικολογούντων και δημοσιολογούντων,να έχει αντιστραφεί το κλίμα και σχεδόν οι πάντες να αναγνωρίζουν και να επενδύουν στην παραμονή της Ελλάδας στην ευρωζώνη;

Μόνο χθες είχαμε το γάλλο πρωθυπουργό να δηλώνει ότι οι ευρωπαίοι είναι «αποφασισμένοι να κάνουν τα πάντα για να βεβαιωθούν ότι η Ελλάδα θα παραμείνει στο ευρώ",τον ηγέτη των γερμανών σοσιαλδημοκρατών να προειδοποιεί ότι " πλανάται όποιος νομίζει ότι η έξοδος της Ελλάδας από το ευρώ θα διευκολύνει την κατάσταση» και βέβαια να μην ξεχάσουμε τη θλίψη της κυρίας Μέρκελ για τον πόνο που υφίστανται οι έλληνες πολίτες...

Προφανώς ούτε μας αγάπησαν, ούτε μας λυπήθηκαν περισσότερο ξαφνικά.Φαίνεται όμως ότι επιτέλους κάτι αρχίζει να κινείται στην Ευρώπη ,ότι μια πιο παρεμβατική πολιτική βρίσκεται στα σκαριά, που μπορεί να δώσει και σε μας την ευκαιρία που αναζητούμε ,για να πάρουμε μια ανάσα.

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Europe's Love-Hate Relationship With Financial Markets

by Richard Barley

Wall Street Journal

August 29, 2012

Why does Europe persist in biting the hand that funds it?

European Council President Herman Van Rompuy this week warned of "defiance" by financial markets as countries undertake much-needed policy adjustments. The idea that markets are somehow attacking the euro zone has been understandably popular among politicians seeking to apportion blame. But it is one that should have been discarded by now.

Mr. van Rompuy didn't explain exactly what this "defiance" consisted of. But he said Europe was ready to help Spain further if it persists, in other words, if investors continue to shy away from buying Spanish bonds. Mr. van Rompuy argues that the measures being undertaken by Europe and Spain will clarify the situation of Spain's banking system, restore confidence and stimulate the Spanish economy.

The trouble is institutional investors have reason to be skeptical. It is hardly "defiance" to decline to put other people's cash at risk in Spanish government bonds, given the euro zone's history of grand solutions to the debt crisis that have failed. In fact, given the high level of yields, it is painful for investors not to hold Spanish bonds if they are benchmarked against indexes that include Spain.

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Wednesday, August 29, 2012

Greece grinds on

Financial Times
Editorial
August 29, 2012


The late-summer diplomacy over Greece is so far having less impact on the country’s future in the eurozone than its economic situation, which continues to change – mostly for the worse, but also in ways that may defy the sceptics.

Antonis Samaras, the Greek prime minister, last week met with German chancellor Angela Merkel and French president François Hollande. They reiterated their broad support for Greece’s place within the single currency, but offered no help beyond the current rescue programme. In particular, they declined – for now – to grant Mr Samaras’s request to stretch out remaining austerity measures over four years instead of two.

This was predictable. Berlin (if not the Bundesbank) and Paris have aligned themselves with the European Central Bank’s preparations to intervene in government bond markets and are well advised to see how that plays out before their next move. Offering Athens anything before the creditor troika finishes its assessment this autumn is politically impossible at home and tactically unwise vis a vis Mr Samaras’s government. If Athens shows it means business, however, the extension should be granted but with no extra funding.

As the wheels of diplomacy whir on, the cogs of the Greek economy are grinding out a new reality. Austerity and a European slowdown have depressed the economy and kept pushing headline deficit goals out of reach. But Athens has done more than many think. Unit labour costs are falling and the primary deficit – before debt service costs – is almost gone.

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The European Tragedy

by Stephen Davies

Freeman

September 2012

People are closely watching the slow-motion train wreck that is the crisis of the eurozone—that is, the economic travails of Greece, Spain, Ireland, Portugal, and Italy (known collectively as the PIIGS). The problem with much of the discussion in the United States is that both of the main camps are right about some things but wrong about others because neither fully grasps the real nature and cause of the crisis in Europe.

One view holds up the Europeans as a warning to the United States of the consequences of government profligacy. The problem, so the argument goes, is crushing sovereign debt brought about by excessive government spending over many years funded by borrowing rather than taxation. The rising yields on sovereign debt reflect that investors now realize the European governments are bankrupt and cannot be relied on to service their accumulated debt, much less repay it. As yields rise the burden of debt becomes greater until the only ways out are either default or fiscal stringency with a combination of tax increases and cuts in government spending to bring stability. This is also the view, it would appear, of the German finance ministry and much of the German public.

The contrary view is that the European crisis is indeed a warning to the United States—of the dreadful consequences of austerity. For this camp the experience shows the folly of responding to the financial crisis of 2007–08 with cuts in government spending and efforts at balancing the books. These efforts are self-defeating because they will aggravate the economic contraction and reduce government revenues while increasing spending (because of “automatic stabilizers” such as unemployment benefits), worsening the government’s finances. The correct response to the economic slowdown in Europe, therefore, is a Keynesian one of increasing government spending and widening deficits, at least in the short term, until the economy recovers.

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The Euro Crisis Is Back From Vacation

by Adam Davidson

New York Times

August 28, 2012

In June, it seemed as if any day might bring about the collapse of the Greek economy and with it, the entire euro zone and its decade-old currency. Then in July and August, it seemed as if everyone was on vacation. Now they’re back — finance officials and political leaders have been flying all over Europe to meet with one another — and along with them the crisis that has been raging for the last two years. Here is a guide to the new season’s most intriguing (and terrifying) story lines.

1. What’s the first big matchup?

This month, Greece’s Parliament needs to approve an additional 11.5 billion euros in spending cuts for 2013-14. If it does, it will most likely prompt big protests in the streets. If it doesn’t, the so-called troika (the European Commission, the I.M.F. and the European Central Bank) won’t lend Greece the money to keep its economy afloat. If all sides get through September intact, they’ll still be at loggerheads during the next phase of budget negotiations.

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Tuesday, August 28, 2012

Milton Friedman's prophetic article written 15 years ago: "The Euro: Monetary Unity To Political Disunity?"

by Milton Friedman

Project Syndicate

August 28, 1997

A common currency is an excellent monetary arrangement under some circumstances, a poor monetary arrangement under others. Whether it is good or bad depends primarily on the adjustment mechanisms that are available to absorb the economic shocks and dislocations that impinge on the various entities that are considering a common currency. Flexible exchange rates are a powerful adjustment mechanism for shocks that affect the entities differently. It is worth dispensing with this mechanism to gain the advantage of lower transaction costs and external discipline only if there are adequate alternative adjustment mechanisms.

The United States is an example of a situation that is favorable to a common currency. Though composed of fifty states, its residents overwhelmingly speak the same language, listen to the same television programs, see the same movies, can and do move freely from one part of the country to another; goods and capital move freely from state to state; wages and prices are moderately flexible; and the national government raises in taxes and spends roughly twice as much as state and local governments. Fiscal policies differ from state to state, but the differences are minor compared to the common national policy.

Unexpected shocks may well affect one part of the United States more than others -- as, for example, the Middle East embargo on oil did in the 1970s, creating an increased demand for labor and boom conditions in some states, such as Texas, and unemployment and depressed conditions in others, such as the oil-importing states of the industrial Midwest. The different short-run effects were soon mediated by movements of people and goods, by offsetting financial flows from the national to the state and local governments, and by adjustments in prices and wages.

By contrast, Europe’s common market exemplifies a situation that is unfavorable to a common currency. It is composed of separate nations, whose residents speak different languages, have different customs, and have far greater loyalty and attachment to their own country than to the common market or to the idea of "Europe." Despite being a free trade area, goods move less freely than in the United States, and so does capital.

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A German Sovereign Wealth Fund to save the euro

by Daniel Gros and Thomas Mayer

Vox

August 28, 2012

Large German trade surpluses are ingrained in the Eurozone’s structure, but private sector mechanisms for dealing with the corresponding capital account deficit are broken. The unavoidable result has been large official capital account deficits by Germany (the bailouts) and the Eurosystem (Target2 balances). This column proposes the creation of a Germany sovereign wealth fund that would restart the private recycling of Germany’s excess savings – eventually cleaning out the Target2 imbalances and depreciating the euro in the process.


Since the early 1950s, German savings have tended to exceed investment with the inevitable result that that Germans have, on net, been investing in foreign assets.
  • Most of these excess savings have been intermediated by the domestic banking system.
The banks have difficulties investing German surpluses abroad given that they finance themselves through deposits in the national currency and thus cannot take exchange rate risk. The resulting exchange rate adjusted tended to keep the surplus under 1% to 2% of GDP most of the time.
  • With the advent of the euro, exchange rate risk within the Eurozone disappeared and German surpluses vis-à-vis EZ partner countries could and did become much larger.
  • Large surpluses seem to have become structurally ingrained at a whopping 6% of GDP; that is more than a quarter of national savings.
As the sovereign debt and banking crisis took the Eurozone in its grip, the appetite of German private investors for Eurozone public and private debt diminished sharply. Investment outside the Eurozone was not an alternative given that a large number of German savings are still intermediated by banks and must thus remain denominated in euro.

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Monday, August 27, 2012

Η έκθεση της τρόικας

του Τάκη Μίχα

Protagon.gr

27 Αυγούστου 2012

Δεν υπάρχει καμία αμφιβολία ότι η αναμενόμενη τον Σεπτέμβριο(;) έκθεση της τρόικα θα παίξει καθοριστικό ρόλο τόσο στην εξέλιξη της ιστορίας της Ελλάδας όσο και στην εξέλιξη της ευρωζώνης.

Οσον αφορά την Ελλάδα τα πορίσματα της έκθεσης δεν θα επηρεάσουν απλά το αν θα δοθεί στην Ελλάδα επιμήκυνση όσον αφορά την επίτευξη των στόχων στους οποίους έχει συμφωνήσει. Αυτό είναι ένα τελείως δευτερεύον θέμα. Τα πορίσματα της έκθεσης θα παίξουν καθοριστικό ρόλο για την παραμονή της Ελλάδας στην ευρωζώνη. Οχι επειδή μία τυχόν αρνητική έκθεση θα δώσει την ευκαιρία στους «εχθρούς» να μας «τιμωρήσουν», όπως διατείνεται η λαϊκή σοφία, αλλά επειδή απλούστατα μια τέτοια εξέλιξη θα πείσει τις χρηματαγορές ότι η έξοδος από το ευρώ είναι πλέον μη αντιστρέψιμη. Αυτό σημαίνει σε απλά ρωμέικα ότι κανένας δυνητικός επενδυτής, Ελληνας ή ξένος, δεν πρόκειται να επενδύσει στην Ελλάδα γνωρίζοντας ότι το κεφάλαιο του μπορεί να μειωθεί από την μία ημέρα στην άλλη κατά πιθανώς 50%. Και από την στιγμή που δεν θα υπάρχουν επενδύσεις όσα (καθυστερημένα) μέτρα και να λάβεις, όσες δηλώσεις συμπαράστασης και να γίνονται από τους ξένους ηγέτες, ανάκαμψη δεν πρόκειται να υπάρξει. Με αποτέλεσμα την νομοτελειακή εγκατάλειψη του ευρώ.

Όμως μία αρνητική για την Ελλάδα έκθεση της τρόικα θα έχει σημαντικές επιπτώσεις και στην ευρωζώνη. Στον βαθμό που θα ενισχύσει τις προσδοκίες των αγορών για έξοδο της Ελλάδας από το ευρώ, η συνεχιζόμενη παραμονή της θα δρά τελείως αποσταθεροποιητικά για την υπόλοιπη ευρωζώνη. Το θέμα δεν είναι ότι δεν θα γίνονται μόνο επενδύσεις στην Ελλάδα αλλά ούτε και στην υπόλοιπη ευρωζώνη καθώς όλοι θα περιμένουν να δούν τις επιπτώσεις που θα έχει η προεξοφλούμενη έξοδος της Ελλάδας. Απ' αυτή λοιπόν την σκοπιά η συνεχιζόμενη μετά από μία αρνητική έκθεση παραμονή της Ελλάδας στην ευρωζώνη θα είναι βαθύτατα «τοξική» για τις υπόλοιπες χώρες και θα οδηγήσει σε μαζική έξοδο κεφαλαίων από τις χώρες της ευρωζώνης. Ο κίνδυνος για την ευρωζώνη από την συνεχιζόμενη παραμονή της Ελλάδας θα αρχίσει να φαντάζει πολύ μεγαλύτερος από τις τυχόν επιπτώσεις μιάς εξόδου. Η έξοδος της Ελλάδας θα αρχίσει να θεωρείται ως «λύτρωση» και όχι πιά ως αρχή μεγαλυτέρων δεινών.

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Has ‘Europe’ Failed?

by Nicholas Sambanis

New York Times

August 26, 2012

Last week, European leaders met in Berlin amid new signs of an impending recession and an emerging consensus that Greece could leave the euro zone within a year — a move that would have dire consequences for the currency’s future.

There are many reasons behind the crisis, from corruption and collective irresponsibility in Greece to European institutional rigidities and the flawed concept of a monetary union without a fiscal union. But this is not just a story about profligate spending and rigid monetary policy. The European debt crisis is not just an economic crisis: it is an escalating identity conflict — an ethnic conflict.

The European Union was a political concept, designed to tame a bellicose Germany. Strong economic interdependence and a common European identity, it was thought, would be cultivated by the institutions of the union, as Europeans benefited from the economic prosperity that integration would create.

Elites could sell that concept to their publics as long as Europe prospered and had high international status. But the union has lost its shine. It is slowing down and aging. Its longtime ally, the United States, is shifting attention to East Asia. Its common defense policy is shallow.

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To πανεπιστήμιο της Βόννης, ο Σαμαράς και η Μέρκελ (Συνέντευξη του Manfred Neumann)

του Τάσου Τέλλογλου

Protagon.gr

27 Αυγούστου 2012

Τώρα που τελείωσε το τούρ του πρωθυπουργού στις ευρωπαϊκές πρωτεύουσες, όπου μεταξύ των άλλων είχε να παλέψει με τον εαυτό του στην αντιπολίτευση, κάτι που αναγνώρισε στο Βερολίνο («ουδείς αναμάρτητος», ίσως η πιο ανθρώπινη δημόσια φράση του στην περιοδεία) είναι καλό να ξανακοιτάξει κανείς τα «βασικά μεγέθη» και επιχειρήματα στη Γερμανία, έτσι όπως προκύπτουν από τη συζήτηση στην ίδια τη χώρα, τα κέντρα που ασκούν πραγματική εξουσία και διαμορφώνουν τη δημόσια αντιπαράθεση. Την ημέρα που ο κ Σαμαράς περνούσε την πόρτα της καγκελαρίας, ο Μάνφρεντ Νώυμαν (Manfred Neumann), ο πιο σημαντικός ίσως από τους καθηγητές οικονομικών, που συμβουλεύουν κέντρα εξουσίας στη Γερμανία, έπαιρνε δημόσια θέση για μία ακόμα φορά για την κρίση της Ευρωζώνης. Ο Νώυμαν εχει το προνόμιο να είναι ο επιβλέπων καθηγητής και αργότερα επικεφαλής στο Ινστιτούτο των δύο διαδοχικών διοικητών της γερμανικής κεντρικής Τράπεζας, του Αξελ Βέμπερ, τον οποίο η Μέρκελ τον προοριζε για διοικητή της Ευρωπαικής Κεντρικής Τράπεζας -και δέν εγινε- και του σημερινού διοικητή της γερμανικής κεντρικής Τράπεζας Γένς Βάηντμαν, πρώην οικονομικού της συμβουλου.

Μιλώντας στους Αντρέα Ρεξερ και Μάρκους Ζύντρα της Sueddeutsche Zeitung, ο Νώυμαν προτείνει μια Ελλάδα με διπλό νόμισμα, υποστηρίζει ότι είναι πιθανότερο να βγεί η Γερμανία απο το ευρώ απο το να εγκαταλείψει η Ιταλία το κοινό νόμισμα και προειδοποιεί οτι «ο γερμανός εκατομμυριούχος θα ρωτά πάντα πόσο φόρο πληρώνει ο Ελληνας εκατομμυριούχος» προσθέτοντας οτι η Ελλάδα δέν εχει ισχυρή κυβέρνηση και ισως για αυτό αναγκαστεί να εγκαταλείψει το ευρώ.

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Sunday, August 26, 2012

The German people will decide Europe's fate

by Hans Kundnani

Guardian

August 26, 2012

As speculation about a Greek exit from the eurozone continues, Germany is pushing ahead with plans for a new treaty that will transform the European Union.

According to this week's Spiegel, Angela Merkel wants European leaders to agree by the end of the year to hold a constitutional convention in order to fashion a new legal basis for the EU – even though most other member states are opposed to the idea of another tortuous and risky treaty negotiation so soon after the failed European constitution and the Lisbon treaty. The plan could dramatically reshape the EU in Germany's image – or lead to it falling apart.

On Friday Merkel rejected Greece's plea for more time to implement austerity measures while affirming that she still wanted it to remain in the euro. There had been some signs that German anger about Greece had dissipated – Bild published a surprisingly positive interview with the Greek prime minister, Antonis Samaras, last week – but at the same time confidence is growing that a Greek exit from the euro could be contained. Figures such as Volker Kauder, the parliamentary leader of the Christian Democrats, and Philipp Rösler, vice-chancellor and leader of the Free Democrats, the junior partner in Merkel's coalition government, have said they no longer fear a Greek exit.

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Banks’ continuing damage to Europe

Financial Times
Editorial
August 26, 2012


The eurozone debt crisis was caused more by private credit excesses – particularly in the banking sector – than by public sector profligacy. The damage that a dysfunctional banking system has inflicted on Europe’s economy is not finished but now the banks are lending too little where earlier they were lending too much.

A new study from the Central Bank of Ireland reveals the difficulties small and medium enterprises in Ireland – but also in other eurozone peripheral countries – face in accessing bank credit. The paper uses European Central Bank and other data to show that Irish SMEs’ demand for credit is comparable to the average across the monetary union. But the number of businesses whose loan applications are rejected, or which face harsh or prohibitive terms or do not even apply for credit because they expect to be turned down, is among the highest in the eurozone.

This story matches that of other troubled euro members such as Spain and Greece. Outside construction, Spain retains many competitive companies in the private non-financial sector. But those that can viably expand complain that banks no longer give the necessary credit. Thus, with a quarter of the labour force unemployed, companies that could hire are prevented from doing so.

The Greek economy is a much bigger disaster than Spain’s. Even in Greece, however, some companies can do business – especially those involved in exports that benefit from the austerity programme’s painful grinding down of labour costs. But foreign suppliers and clients worried about Athens leaving the euro offer no forbearance to Greek companies, which are instead becoming completely dependent on domestic credit from a still-insolvent banking system.

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The ECB must still do its bit to help solve the crisis

by Wolfgang Münchau

Financial Times

August 26, 2012

Can the European Central Bank solve the eurozone crisis on its own? The answer is clearly No. But without ECB intervention, the crisis is insoluble. So what should the goals of such an operation be? And how should this be accomplished?

I would consider three goals, subject to two constraints. The first and most important is to get rid of market expectations of a eurozone break up. Whatever the ECB’s governing council decides on September 6, it must be big enough to squash expectations that Spain or Italy will leave the eurozone. A Greek departure is different. This programme is not about Greece.

Second, it must be part of an overall resolution strategy. Mario Draghi is right to say that ECB support should depend on an official application for support. But this is when it gets tricky. How will the president of the ECB adjust his programme if a country fails to meet the criteria? And who decides?

Third, he has to address the issue of investor subordination. If the ECB’s holdings are considered senior to those of other investors, it may never be possible to get private investors back into those countries.

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Τελευταία ευκαιρία εξυγίανσης του Δημοσίου

της Μιράντας Ξαφά

Καθημερινή

26 Αυγούστου 2012

Τη στιγμή που γράφεται αυτό το άρθρο δεν έχει ακόμα συναντηθεί ο πρωθυπουργός κ. Σαμαράς με την κ. Μέρκελ και τον κ. Ολάντ, είναι όμως προφανές ότι τίποτε δεν πρόκειται να συμφωνηθεί πριν η κυβέρνηση ξαναφέρει το πρόγραμμα σταθεροποίησης σε τροχιά και εξασφαλίσει τη θετική αξιολόγηση της τρόικας. Είναι επομένως αποκαρδιωτικό ότι έξι μήνες μετά την υπογραφή του δεύτερου Μνημονίου, οι ίδιοι που το υπέγραψαν αναζητούν ακόμη τα 11,6 δισ. ευρώ σε περικοπές δαπανών που συμφώνησαν. Οι Ευρωπαίοι εταίροι μας και το ΔΝΤ δεν πρόκειται να διαπραγματευτούν αλλαγή των όρων της συμφωνίας με την Ελλάδα αν δεν έχουν πειστεί ότι το έλλειμμα θα γίνει σχετικά σύντομα πλεόνασμα ώστε να μη χρειαστεί και τρίτη διάσωση μετά από λίγα χρόνια.

Το Μνημόνιο μας προσφέρει μια μοναδική ευκαιρία να προχωρήσουμε στην αναδόμηση της οικονομίας και του κράτους με την οικονομική και τεχνική υποστήριξη των εταίρων μας και του ΔΝΤ. Πρέπει επί τέλους η δημόσια διοίκηση να μπει στην υπηρεσία των πολιτών και όχι των συντεχνιών και συνδικαλιστών που μάχονται για καθαρά ιδιοτελείς λόγους στο όνομα του δημοσίου συμφέροντος. Πρέπει οι αγορές να απελευθερωθούν και η γραφειοκρατία να απαλειφθεί για να μπορέσουμε να αξιοποιήσουμε τα συγκριτικά πλεονεκτήματα της χώρας. Μέτρα άμεσης απόδοσης για την επιδιωκόμενη ανάκαμψη της οικονομίας είναι η απεμπλοκή επενδυτικών σχεδίων σε ενέργεια, ΑΠΕ, ανακύκλωση, τουρισμό κ.λπ. από τα γρανάζια της γραφειοκρατίας, όπως προσπαθεί να κάνει ο κ. Χατζηδάκης. Συγχρόνως, χρειάζεται επανεξέταση των διαδικασιών από μηδενική βάση και θεσμοθέτηση απλών, κατανοητών και λίγων κανόνων. Από τη στιγμή που εγκρίνεται μια επένδυση, κανείς δεν πρέπει να έχει το δικαίωμα να τη σταματήσει.

Το πρόσφατο ηλεκτρονικό βιβλίο του κ. Πάγκαλου Τα φάγαμε όλοι μαζί μας φέρνει αντιμέτωπους με τις πρακτικές και νοοτροπίες που κατέστησαν δυνατή τη χρεοκοπία - την ηθική κατάπτωση, την απαξίωση των θεσμών, την έλλειψη λογοδοσίας και υπεύθυνης ηγεσίας. Αλόγιστες παροχές που δόθηκαν κάτω από την πίεση των συνδικάτων, σπατάλη και διαφθορά που έμειναν ατιμώρητες, διαρκείς απεργιακές κινητοποιήσεις και διαδηλώσεις για τη διατήρηση των κεκτημένων, συνθέτουν την εικόνα της Ελλάδας της μεταπολίτευσης. Το πολιτικό προσωπικό της χώρας προτίμησε να κλείνει τα μάτια σε απαράδεκτες πρακτικές για να αποφύγει τις σκληρές επιλογές που οι συνθήκες επέβαλλαν (π.χ. Καραμανλής, 2004: «Δεν θα ανοίξω το ασφαλιστικό την πρώτη τετραετία»). Το βιβλίο δείχνει με γλαφυρό τρόπο πόσο λανθασμένη είναι η άποψη ότι η σημερινή κρίση μπορεί να ξεπεραστεί χωρίς τη ριζική αναθεώρηση των αξιών και συμπεριφορών που μας έφεραν εδώ.

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Θεόδωρου Γ. Πάγκαλου, Τα Φάγαμε Όλοι Μαζί

Οι νέοι βιώνουν χειρότερα την κρίση

του Ιάσονα Μανωλόπουλου

Καθημερινή

26 Αυγούστου 2012

Χ​​ώρες με βαθιά προβλήματα, όπως η Ελλάδα, που διακρίνονται για τους λαϊκιστές πολιτικούς τους ποτέ δεν ξεμένουν από «πολέμους»... Η πολιτικολογία επικεντρώνεται κυρίως στις συγκρούσεις ανάμεσα στην Ελλάδα και την τρόικα, τον ιδιωτικό και τον δημόσιο τομέα, την Αθήνα και την επαρχία, τους ντόπιους και τους μετανάστες.

Υπάρχει μια τεράστια σύγκρουση που υποβόσκει χωρίς να πολυσυζητιέται: η σύγκρουση ανάμεσα στις γενεές. Ωφελημένοι από την πιστωτική έκρηξη, την άνοδο στις τιμές των ακινήτων και τα κλειστά επαγγέλματα, ήταν οι μεγαλύτεροι σε ηλικία. Τις δυσμενείς επιπτώσεις του χρέους, της εκτύπωσης χρήματος και των μέτρων λιτότητας τις βιώνουν δυσανάλογα οι νέοι.

Αυτό το μοτίβο το βλέπουμε σε ολόκληρη τη Δύση. Οπως παρατήρησε το 1790 ο θεωρητικός της πολιτικής επιστήμης, Εντμουντ Μπερκ: «Η κοινωνία είναι όντως ένα συμβόλαιο. Το κράτος είναι ένας συνεταιρισμός, όχι μόνο ανάμεσα στους ζωντανούς, αλλά ανάμεσα στους ζωντανούς, τους νεκρούς και σε όσους πρόκειται να γεννηθούν».

Στον δυτικό κόσμο αρχίζουν συζητήσεις για το αν έχει αθετηθεί το κοινωνικό συμβόλαιο μεταξύ των γενεών. Μήπως η γενιά του «baby boom» (της μεταπολεμικής έκρηξης των γεννήσεων) -η «γενιά του ’60», όπως ονομάζεται στην Ελλάδα- έχει φερθεί με εξαιρετικά εγωιστικό τρόπο; Υποστηρίζεται ότι, αφού ωφελήθηκε από τη δωρεάν παιδεία, τις καλές υπηρεσίες υγείας και τις διαρκώς αυξανόμενες συντάξεις, τώρα, που αποτελεί την ομάδα ψηφοφόρων που επηρεάζει περισσότερο από κάθε άλλη την κυβέρνηση, στερεί τα οφέλη αυτά από τη νεότερη γενιά. Η τάση αυτή μπορεί να παγιωθεί, αφού στις περισσότερες χώρες είναι πιθανότερο να ψηφίζουν οι μεγαλύτεροι. Μήπως οδεύουμε, λοιπόν, προς μια γεροντοκρατία - μια κοινωνία όπου κυβερνούν οι ηλικιωμένοι και για τους ηλικιωμένους; Υπάρχουν ενδείξεις ότι μια ολόκληρη γενιά έδρασε σαν τεράστια συνδικαλιστική οργάνωση, εξασφαλίζοντας για λογαριασμό της δυσανάλογα γενναιόδωρα οφέλη σε βάρος άλλων. Ωστόσο, σχεδόν σε κάθε συζήτηση περί ανισότητας ανάμεσα στις γενεές ελλοχεύει ο κίνδυνος της υπεραπλούστευσης, δεδομένου ότι στο εσωτερικό κάθε γενεάς παρατηρούνται τεράστιες παραλλαγές.

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Για την αυτογνωσία μας

του Θάνου Βερέμη

Καθημερινή

26 Αυγούστου 2012

Oυδέν κακόν αμιγές καλού. H δημοσιονομική και κοινωνική κρίση που ζούμε προκάλεσε την πιο γόνιμη συζήτηση για το ελληνικό οικονομικό και κοινωνικό φαινόμενο από την εποχή της πρώτης μεταπολεμικής διετίας. H δυσπραγία μας, απαλλαγμένη από τη διάσπαση που προκαλούσαν στην προσοχή των ειδικών οι συγκυρίες της ανασυγκρότησης, του ανένδοτου αγώνα, της δικτατορίας και της μεταπολιτευτικής ευζωίας, μας ανάγκασε επιτέλους να εγκύψουμε στις δομικές μας αδυναμίες. O συλλογικός τόμος Aπρονοησία και νέμεση. Eλληνική κρίση 2001-2011 (The Athens Review of Books, 2012) με επιμέλεια Mανώλη Bασιλάκη, αποτελεί κιβωτό αυτογνωσίας. Oι μελέτες που περιέχονται στον τόμο αυτό έχουν ξεπεράσει δεξιές και αριστερές αγκυλώσεις για να πουν τα πράγματα με το όνομά τους. Mερικοί από τους συνεργάτες βρέθηκαν σε δημόσιες θέσεις, ένας μάλιστα από αυτούς είναι ο σημερινός υπουργός Oικονομικών, όμως οι περισσότεροι διέφυγαν την προσοχή των πολιτικών μας ηγετών. Oλοι τους προσφέρουν τον λίθο τους για να οικοδομηθεί συστηματικά η ερμηνεία τού τι πήγε στραβά σε τούτο τον τόπο.

Πολλοί επισημαίνουν την εξάρτηση μεγάλου τμήματος της κοινωνίας από το κράτος, ώστε να σοβεί μια επικίνδυνη αντιπαράθεση των ομάδων που επωφελούνται από το status quo με εκείνους που καταβάλλουν ακέραιο το κόστος αυτής της ανωμαλίας.

Kαι ενώ σαν τους Mοιραίους του Bάρναλη περιμένουμε τον παράκλητο ηγέτη που θα μας σώσει από το σημερινό αδιέξοδο, πλησιάζουμε επικίνδυνα το ενδεχόμενο «μιας βίαιης εξαθλίωσης» (Mιχ. Mητσόπουλος, σ. 297).

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Saturday, August 25, 2012

Spetses, the tycoons' playground where gulf between rich and poor grows wider

by Vanessa Thorpe

Guardian

August 25, 2012

On a jetty alongside the town beach a loud phone call disturbs the peace of a handful of Spetses residents lying in the sun before taking their daily swim – one free pleasure that is still available to all. A rich weekender from Athens booms ostentatiously into his mobile, directing a man behind the wheel of a sizeable speedboat. "Just ignore the line of buoys," he says, "and steer straight over to me so we can talk." The instruction provokes a furious reaction from locals, who yell out angrily that boats are never allowed to come so close to the swimmers. A nasty row flares up – a sign of growing social tensions on an island where poor locals live cheek-by-jowl with the holidaymaking rich.

Antonis Samaras, the Greek prime minister, spent last week pleading with European leaders for more time to implement the severe austerity programme that is, ultimately, the condition for Greece remaining in the euro. Back home, and on islands such as Spetses, those well-off Greeks who remain financially cushioned from the effects of the deepening crisis, and from the fresh austerity measures due to be imposed next month, are the targets of growing fury.

The Saronic isle, with its pretty horse buggies and flowery villas, has been chosen as the location for a new Greek tourism advert, designed to reassure international visitors that the beaches and the bobbing fishing boats are still waiting for them, despite the economic meltdown. Yet the place is also a microcosm of the country's troubles: 30 square miles that encompass unimaginably big gaps in income.

While Athenians can enjoy browsing in the expensive deli that has replaced the souvlaki outlet in the square, the majority of Spetsiots can no longer afford to eat in local restaurants. The price of food in supermarkets and shops has soared.

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Δεν χρειαζόμαστε επιπλέον χρήματα;

του Τάσου Τέλλογλου

Protagon.gr

25 Αυγούστου 2012

Ως τον Νοέμβριο του 2012 το Βερολίνο ξέρει ότι δεν μπορεί – θέλει δεν θέλει (και δεν το θέλει) να προκαλέσει την εξοδο της Ελλάδας από το Ευρώ. Στις χθεσινές ελληνογερμανικές συζητήσεις ο υπουργός Οικονομικών Βόλφγκανγκ Σόιμπλε ρώτησε την ελληνική αντιπροσωπεία αν η Ελλάδα θα είναι σε θέση να τηρήσει την υποχρέωσή της για χρέος στο 120% του ΑΕΠ το 2020. Θυμίζουμε ότι ο στόχος αυτός είναι απόλυτα συνδεδεμένος με το αν το ΔΝΤ θα συνεχίσει να χρηματοδοτεί το ελληνικό πρόγραμμα. Αν το ΔΝΤ δεν είναι βεβαιο για την τήρηση αυτού του στόχου τότε είτε θα ζητήσει από την ΕΚΤ και τις άλλες κεντρικές τράπεζες να «κουρέψουν» τα δικά τους ελληνικά ομόλογα (υψους 60 δις) είτε θα ζητήσει από την κ Μέρκελ και τους αλλους επιπλέον χρήματα.

Η κυρία Μέρκελ δεν πρόκειται να ζητήσει από τη Βουλή της μία νέα ψηφοφορία για επιπλέον χρήματα προς την Ελλάδα. Αν όμως για παράδειγμα το ποσό για την ανακεφαλαιοποίηση των Τραπεζών «εξομοιωθεί» με την αντίστοιχη βοήθεια στην Ισπανία, τότε το αποτέλεσμα θα είναι ίδιο σε ογκο και ίσως μεγαλύτερο από το κούρεμα των ελληνικών ομολόγων στο σύστημα της ΕΚΤ. Σε αυτή την περίπτωση θα χρειασθεί βεβαίως ψηφοφορία στο γερμανικό κοινοβούλιο αλλά και υπαγωγή των ελληνικών ανακεφαλαιοποιημένων τραπεζών στο σύστημα της ευρωπαικής τραπεζικής εποπτείας -κάτι που δεν είναι βεβαιο ότι οι ελληνικές τράπεζες και οι ευρωπαικοί θεσμοί, για διαφορετικούς λόγους, θέλουν. Στο Βερολίνο πιστεύουν ότι τα «νούμερα δεν βγαίνουν» και αυτό εκφράσθηκε ξεκάθαρα στην ελληνική αντιπροσωπεία, που δεν αρνείται το συμπέρασμα αλλά αποδίδει το πρόβλημα σε όσα προηγήθηκαν. Ενα από αυτά ηταν ότι οι κκ Σαμαράς και Βενιζέλος είχαν συμφωνήσει την περασμένη ανοιξη με τον τότε πρωθυπουργό Παπαδήμο σε αυτά τα «νούμερα». Ενα δεύτερο ήταν ότι από τον Μάρτιο μέχρι σήμερα εγιναν πολλές ασκήσεις επί χάρτου και λίγα πρακτικά βήματα.

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Life Is Expensive in Euro Zone's Weakest Nations

Wall Street Journal
August 24, 2012

The crisis afflicting the euro zone's weakest economies can be described simply: Everything became too expensive.

Labor costs rose too high, which is why wages needed to fall. But so did the cost of groceries, transportation, housing and dozens of other goods and services. Fast-rising prices in the crisis-hit countries sapped their economic competitiveness during the first decade of the euro, eventually causing growth to suffer and unemployment to rise.

Has the problem been fixed? Not really. Going into the third year of the region's debt crisis, prices in the euro-zone "periphery"—southern Europe, Ireland and the Baltic countries, which peg their currencies to the euro—are still too high. That is a big problem for policy makers hoping economic growth can return to the periphery in a year or two.

Why the focus on prices? The euro zone's first decade saw inflation in the periphery run consistently higher than in Germany—transforming Germany into the bloc's low-cost production center. To regain competitiveness after the crisis, prices in the periphery needed to fall relative to Germany and the other strong euro-zone countries, such as the Netherlands and Austria.

For some countries, such as Greece, that probably meant outright deflation. For others, such as Spain, it probably meant just a significantly lower inflation rate than Germany.

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Germany Tells Athens to Stick to Plan

Wall Street Journal
August 24, 2012

German Chancellor Angela Merkel said she wants to keep Greece in the euro zone through a regime of painful austerity, after Greek Prime Minister Antonis Samaras made an impassioned appeal that after six years of recession his beleaguered country needs breathing room.

The two leaders were speaking at a news conference Friday after talks in the Berlin chancellery, capping a week in which Berlin and Athens exchanged verbal blows in the media over whether Greece should be allowed to slow down its efforts to overhaul its economy and cut its deficit. Mr. Samaras has argued in a series of high-profile interviews that Greece needs time to get its economy growing again. Ms. Merkel insists Greece stick to its commitments.

"I want Greece to remain a part of the euro zone and that's what I am working on," Ms. Merkel said. "We expect from Greece that the promises that were made are implemented, that actions follow words."

The chancellor didn't comment directly on the time extension, but said Germany doesn't pass "premature judgments" and would wait for a report from creditor inspectors.

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Friday, August 24, 2012

In Euro Crisis, Fingers Can Point in All Directions

New York Times
August 24, 2012

The debate about how to distribute the cost of preserving the euro often centers on a fundamental question that is unspoken but implicit: Who caused this crisis anyway?

A hint: It wasn’t just the Greeks.

In Germany, however, the prevailing stereotype is that the dissolute Greeks squandered the privileges of euro zone membership. There is a palpable resentment among German taxpayers who feel they are being asked to pay for the sins of the Greeks as well as the Spaniards and Italians.

It is, of course, not that simple. While it is true that a series of Greek governments bears a large share of the guilt for the euro crisis, for mismanaging their economy and finances, there are plenty of other culprits. They include the German and French banks that lent Greece money and fueled the Spanish housing bubble, and the European political leaders who, more than a decade ago, introduced the euro even though they knew it had basic flaws.

The circle of perpetrators could also include the fickle bond investors who underpriced the risk of Greek debt before 2010 and whose volatile reaction to even minor events has lately been wreaking havoc with Spanish and Italian borrowing costs and, by extension, those countries’ economies. It could include the bank regulators and national governments that created incentives for European banks to load up on European government bonds.

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Greece and Germany, and Not Much Has Changed

by Paul Vigna

Wall Street Journal

August 24, 2012

The euro crisis seemed to take the summer off, but it’s coming back. Greece Prime minister Antonis Samaras has been out trying to get some eased terms for his nation, but a visit to Germany and Chancellor Angela Merkel didn’t bear much fruit.

Dow Jones’ Katie Martin reports on this morning’s Markets Hub.



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Greece and the Euro: Out of time?

Economist
August 24, 2012

Megan Greene, director of economic research at Roubini Global Economics, discusses whether Greece will be granted more time to carry out austerity reforms.

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Greek Request for 'More Time Equals More Money'

Spiegel
August 24, 2012

Greek Prime Minister Antonis Samaras, who met with German Chancellor Angela Merkel on Friday, says his country needs more time to meet its obligations. German editorialists argue that asking for more time amounts to asking for more money and insist that Greece should stick to the schedule.


Greek Prime Minister Antonis Samaras had been expected to make his case for more time to meet austerity targets in his meeting with German Chancellor Angela Merkel in Berlin on Friday. Samaras has said he wants an additional two years, until 2016, to trim €11.5 billion ($14.3 billion) from the Greek budget.

But if Samaras had been hoping for quick concessions from Berlin, he didn't get them. Although Merkel reassured Samaras that she wanted Greece "to stay in the euro zone," she gave no sign of wanting to grant Athens more time to meet the terms of the bailout.

Merkel did, however, say that Germany would not "make premature judgments" about Greece's reform efforts, but would await "reliable evidence," a reference to the report by the so-called troika -- made up of officials from the the European Commission, the European Central Bank and the International Monetary Fund -- which is expected in September or October. "We know that great sacrifices are being demanded from Greece's citizens," Merkel said, adding that Berlin supported the efforts of the new Greek government under Samaras.

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Europeans to Debate Further Aid for Greece

New York Times
August 23, 2012

Vacation is over early this year in the euro zone, with Greece and its shaky future back on the table and Spain waiting in the wings to ask for help from European bailout funds.

The political debate in Germany over the euro has resumed at a heated level, Italy is preparing for a spring election and the new Socialist government of France must come to grips with how it will meet its own deficit targets for next year when growth is close to zero.

“September promises to be pretty dramatic in the euro zone,” said Megan Greene, director of European research at Roubini Global Economics.

The first problem for euro zone leaders is Greece. After two rounds of legislative elections, the Greeks finally gave the center-right leader Antonis Samaras enough votes to form a coalition without the leftist party Syriza, and he has spent the summer trying to find another $14.5 billion in spending cuts and new revenue over 2013 and 2014 to qualify for the next round of bailout money it needs to stay solvent.

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Thursday, August 23, 2012

A Message to our Readers spending their summer vacations in Greece: PLEASE ALWAYS ASK FOR A SALES RECEIPT AFTER EVERY TRANSACTION!

From The New Yorker
Dear friends,

We hope you enjoy your time in Greece. We really appreciate your decision to spend your vacations and money in our beautiful country, especially because your support at this time is more than welcome.

However, if you really want to support the Greek economy and the Greek people you should always ask for a sales receipt after any transaction. When you rent a room, enjoy Greek food in a tavern, have a cocktail at a bar, ride a taxi or buy gifts from a souvenir shop, do not forget to ask for a sales receipt. Even if you buy a small bottle of water, a diet Coke or a newspaper ask for a sales receipt (Απόδειξη / Apodeixi in Greek).

If the store owner refuses to give you a receipt, if he/she offers instead a lame excuse for “not being able to give you a receipt at this time” and especially if he/she asks you to “pay more” if you need a receipt, you should immediately contact a police officer and report exactly what happened.

You will notice that many store owners and entrepreneurs in Greece are more than happy to give you a sales receipt – they do this automatically after the transaction – you don’t even have to ask. These people are not fools. They are responsible Greek citizens.

On the other hand you should help us punish and marginalize the shameless tax evaders. Their selfish opportunistic behavior is one of the causes of Greece’s ordeal. Do not let them get away by stealing taxes from the Greek people but also from you. Their behavior is criminal but also antisocial and they should be punished for that.

This is an initiative by the contributors of GreekCrisis.net aimed at the readers of this blog. We will greatly appreciate it if you could share this text in any way you can (Facebook, Twitter, etc.)

We understand that we are at the end of this summer. However, your help will be instrumental every time you visit Greece. Please help us restore fairness and the Rule of Law in the Greek marketplace.

We wish you a great rest of the summer!

Aristides Hatzis & Yulie Foka-Kavalieraki

The Crisis of Europe: How the Union Came Together and Why It’s Falling Apart

by Timothy Garton Ash

Foreign Affairs

September/October 2012

May 10, 1943: German forces are destroying the Warsaw ghetto. Facing armed resistance from Polish Jewish fighters, they set fire to it house by house, burning some inhabitants alive and driving others out from the cellars. "Today, in sum 1,183 Jews were apprehended alive," notes the official report by the SS commander Jürgen Stroop. "187 Jews and bandits were shot. An indeterminable number of Jews and bandits were destroyed in blown-up bunkers. The total number of Jews processed so far has risen to 52,683." An appendix to this document contains the now-famous photograph of a terrified small boy in an outsize cloth cap, his hands held high in surrender. Marek Edelman, one of very few leaders of the Warsaw ghetto uprising to survive, concluded a memoir published immediately after the war with these words: "Those who were killed in action had done their duty to the end, to the last drop of blood that soaked into the pavements. . . . We, who did not perish, leave it up to you to keep the memory of them alive -- forever."

Fast-forward exactly 60 years, to May 10, 2003, a month before Poland holds a referendum on whether to join the European Union. At a "yes" campaign rally in Warsaw, a banner in Poland's national colors, red and white, proclaims, "We go to Europe under the Polish flag." Outside the rebuilt Royal Castle, a choir of young girls in yellow and blue T-shirts -- echoing the European flag's yellow stars on a blue background -- breaks into song. To the music of the EU's official anthem, which is drawn from the final movement of Beethoven's Ninth Symphony, they sing, in Polish, the words of the German poet Friedrich Schiller's "Ode to Joy." Soon these young Poles will be able to move at will across most of a continent almost whole and free, to study, work, settle down, marry, and enjoy all the benefits of a generous European welfare state, in Dublin, Madrid, London, or Rome. "Be embraced, ye millions! This kiss to the entire world! Brothers, a loving father must live above that canopy of stars!"

To understand how a predicted crisis of European monetary union became an existential crisis of the whole post-1945 project of European unification, you have to see Europe's unique trajectory from one May 10 to the other. Both the memories of World War II and the exigencies of the Cold War drove three generations of Europeans to heights of peaceful unification that were unprecedented in European history and unmatched on any other continent. Yet that project began to go wrong soon after the fall of the Berlin Wall, as western European leaders hastily set course for a structurally flawed monetary union.

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Will Actions Follow Words in Europe?

by Mohamed A. El-Erian

Huffington Post

August 23, 2012

Thank you Germany, Italy, Spain and, especially, the European Central Bank. They all said enough to provide markets and investors with a tranquil August so far. The question now is whether they will be able and willing to pivot -- from reassuring words to the series of actions required to enable this tranquility to grow deep roots.

Let us start with some key facts. By the close on July 25th, Europe finances were at a critical level -- again. The yield on 10-year Spanish bonds had surged to 7.3%, rendering the country's debt dynamics highly unstable; and it was probably only a matter of days before it would have lost market access.

With Spain tottering, there were concerns that Italy could not be that far behind. Accordingly, the 10-year yield there had risen to 6.4 percent, fueling concerns that it too would eventually need a bailout.

Such recourse to European funding packages by two of the eurozone's largest economies would have probably overwhelmed creditors' willingness to lend. It would have also undermined the economic and financial fabric of Europe's historic economic integration initiative.

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Europe's tough message for Greece

Reuters
August 23, 2012

The leaders of France and Germany, Francois Hollande and Angela Merkel, are expected to present a united front towards Greece and tell Athens it can't expect any leeway unless it sticks to the terms of its bailout agreement. Joanna Partridge reports.


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Ιδιωτικοποιήσεις με δημόσιο χρήμα;

του Τάσου Τέλλογλου

Protagon.gr

23 Αυγούστου 2012

Τόσο ο πρόεδρος του Eurogroup, χθες το βράδυ, όσο και ο κ. Αντώνης Σαμαράς στη συνέντευξη που δημοσιεύεται σήμερα το πρωί στην Sueddeutsche Zeitung του Μονάχου, μίλησαν για την ανάγκη να προχωρήσουν με πιο γρήγορους ρυθμούς οι ιδιωτικοποιήσεις. Και οι δύο αναφέρθηκαν στη ζημιά που κάνουν Γερμανοί πολιτικοί και άλλοι εκπρόσωποι του προτεσταντικού βορρά όταν θέτουν το ζήτημα της παραμονής ή όχι της Ελλάδας στο ευρώ: Κανείς δεν επενδύει σε μία χώρα που δεν γνωρίζει το νόμισμά της. Αυτές είναι οι ευθύνες των άλλων.

Υπάρχουν όμως ορισμένα ερωτήματα για τη διαδικασία των ιδιωτικοποιήσεων που αφορούν εμάς ή μάλλον κάποιους από εμάς. Αναρωτήθηκε ο κ. Σαμαράς στη συνέντευξή του στη γερμανική εφημερίδα γιατί πρέπει το κράτος να είναι επιχειρηματίας σιδηροδρομικών μεταφορών ή να διαθέτει γραφεία στοιχημάτων; Θα έρθουν λοιπόν κάποιοι ιδιώτες να δραστηριοποιηθούν σε αυτούς του κλάδους. Γιατί πρέπει αυτοί οι ιδιώτες να έχουν εγχώριους εταίρους για να μπουν στην ελληνική αγορά, γιατί δεν μπορούσε π.χ. η ιταλική εταιρεία στοιχηματισμού να μπει στην ελληνική αγορά χωρίς Έλληνα συνέταιρο, που δεν διαθέτει απ' όσο γνωρίζουμε παρόμοια τεχνογνωσία;

Περισσότερα

Greece Faces New Pressure on Cuts

Wall Street Journal
August 22, 2012

A top European official on Wednesday warned that Greece faced a "last chance" in proving its credibility to international creditors, and said a decision on Athens's proposal to extend deadlines on overhauls wouldn't come until after inspectors visit next month.

Speaking after a meeting with Greek Prime Minister Antonis Samaras, Eurogroup chief Jean-Claude Juncker said Greece must step up its efforts to cut its budget deficit and enact economic overhauls.

"As far as the immediate future is concerned, the ball is in the Greek court," he said. "In fact this is the last chance and Greek citizens have to know this."

But he reiterated his hopes that Greece would remain in the euro.

"I am totally opposed to the exit of Greece from the euro area," he said, adding that Greece's departure would pose a "major risk" for the currency bloc.

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Time for Germany’s Bundesbank to Put Up or Shut Up

Bloomberg
Editorial
August 23, 2012


The future of the euro and maybe of the European Union itself will turn in the next few weeks on a disagreement between Mario Draghi, president of the European Central Bank, and Jens Weidmann, head of the Bundesbank. Draghi wants the ECB to do “whatever it takes” to preserve the single currency. Weidmann doesn’t.

A question arises: How did the Bundesbank, representing just one nation among the 17 members of the euro area, ever acquire the veto over ECB policy it is apparently allowed to wield?

There are two main answers. First, when the Bundesbank ruled the roost as Germany’s central bank, its reputation was peerless. In some ways the ECB was modeled on it, and the habit of deference persists. But while the Bundesbank still calls itself a central bank, its role now is to serve as a regional office of the ECB.

Second, Germany is the biggest economy in the euro area. But so what? Votes on the ECB’s governing council are distributed not by shares of euro-area gross domestic product or ECB capital. The ECB was purposely designed so that every country in the system sends a member to the council; each of those members has one vote.

Germany doesn’t actually have a veto; it just talks as though it does, and the rest of the council usually goes along. Don’t be fooled; Germany understands the limit of its power. Some of its politicians have started complaining about it, saying it’s wrong that Malta has as much voting power as Germany and the rules should be changed. They are worried that Germany’s minority view on the council might soon be voted down.

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Wednesday, August 22, 2012

Athens Shows Its Commitment to Austerity

Spiegel
August 22, 2012

Many German politicians accuse Greece of not doing enough to cut spending. But studies show that, measured in relative terms, Athens has carried out the most brutal austerity program in the EU's history. Prime Minister Antonis Samaras is making it clear that he wants to change his country's culture of cronyism.


When Antonis Samaras travels to Berlin on Friday, his role will be clear: Greece's conservative prime minister is coming as a supplicant who is being forced to ask for more financial assistance in Germany for his hard-hit nation.

Still, calls for more time to implement austerity measures in Greece have already met with resistance in a broad section of the German government. "Europe and the euro cannot be allowed to fail because people refuse to implement reforms," Economics Minister Philipp Rösler told SPIEGEL ONLINE on Sunday. And the accusation being heard in the run-up to Samaras' important meeting with German Chancellor Angela Merkel is that the Greeks are exactly these kinds of reform refuseniks.

However, the reality is much different. Measured according to GDP, the Greeks are clearly making much deeper cuts than all other crisis-hit countries in the euro zone. This was recently confirmed by a study from the central bank of Ireland, which itself has a reputation as a model cost-cutter. The report finds that, since 2010, Greece has responded to pressure from the European Union and the International Monetary Fund by slashing expenditures and raising taxes worth the equivalent of 20 percent of GDP -- which represents the most brutal belt-tightening program in the history of the EU. This achievement is particularly noteworthy given the fact that it has taken place in the midst of a severe recession.

Given these circumstances, why do there continue to be doubts about the seriousness of the Greeks' efforts? On the one hand, this results from the fact that, despite all the cuts, Greece's debt burden will continue to grow if its economy doesn't grow as well. On the other hand, media reports about phantom retirees or bureaucratic chaos continue to create the impression that ongoing waste in other areas will negate all of the successful belt-tightening efforts.

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Greece Back in Focus; Investors Not Pleased

by Cynthia Lin and Stephen L. Bernard

Wall Street Journal

August 22, 2012

Greece is once again stirring up worries for investors.

The nation’s prime minister is set to meet with euro-zone leaders to assess the progress of reforms required to receive financial bailouts. Greek Prime Minister Antonis Samaras has said his country needs more time to implement spending cuts and other reforms.

Dow Jones Newswires is reporting Greece’s new government has a proposal that would give it two more years to meet its deficit targets. But the proposal may provoke intense disagreements among the country’s creditors on how to cut its debt mountain down.

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Europe should choose whether it wants Greece in or out

by Jean Pisani-Ferry

Financial Times

August 22, 2012

For the third time in three years the Europeans’ stance on Greece is economically inconsistent.

The first time was in 2009-2010 after then prime minister George Papandreou indicated that he would need to file for assistance from the International Monetary Fund. The European response was to reject the principle of IMF intervention while not offering an alternative to it. It took several months until an agreement was found, in May 2010, to combine European and IMF conditional support.

The second time was in 2010-2011 when Greece’s solvency became the urgent issue at hand. Two camps emerged. One advocated swift debt restructuring, emphasising that Greece was a unique case and that markets could be convinced that no other European country would follow suit. The other one stressed the adverse spill-over effects of a default and favoured keeping Athens afloat through cheap loans. The compromise was to lend at penalty rates while letting markets expect that restructuring would perhaps come, but at a later date. Each of the two positions was internally consistent but the compromise was not. It took more than a year, until the second half of 2011, to recognise this contradiction.

The third time is now. Again, Europe is divided. One camp, well represented in northern Europe, considers that Greece should leave the eurozone because it is not fit for purpose either economically or politically. This view is actually held by both eurosceptics (who want to demonstrate that exit is possible) and europhiles (who hope to win over opposition to further integration). The latter camp, more vocal in France and southern Europe, is adamant that the integrity of the eurozone must be preserved, because Greece’s departure would have adverse contagion effects on other southern countries.

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Greece's pensioners face looming poverty

by Chloe Hadjimatheou

BBC News

August 22, 2012

Few in Greek society have escaped the effects of the country's austerity programme. But it is Greece's elderly who may be suffering the most. Falling pensions, rising taxes and pressure on family support networks are causing stress for many.

Leo is a stout 64-year-old whose twinkly eyes are framed by a mane of long grey hair and a bushy beard.

Last year, unable to make ends meet, he joined the ever-growing numbers of homeless on the streets of Athens.

Although his son, who is in his 20s, supports Leo in every way he can, his own circumstances prevent him being able to house his father.

But Leo counts himself lucky because he has a bed in one of the few shelters in the capital.

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Greece can unbind itself from torment

Letter by Desmond Lachman

Financial Times

Editorial
August 23, 2012


Sir, In arguing his case that Greece should not be ejected from the euro, George Pagoulatos appeals to the ancient Greek myth of the noble Iphigenia, who was sacrificed by her father so that his warships might have a fair wind to Troy (“Greece should not be sacrificed for the euro”, August 16).

In Greece’s present day context, one has to wonder whether it might not have been more apt for Prof Pagoulatos to have considered the alternative Greek myth about the punishment Zeus meted out to Prometheus by binding him to a rock and having an eagle eat out his liver on a daily basis.

For much in the same way as Prometheus was bound to a rock and had an eagle administer him daily punishment, Greece is now bound to the euro and has the troika administer to it daily punishment through excessively severe budget austerity that has already plunged the Greek economy into a depression of epic proportions.

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The Eurozone Crisis Continues

by Austin Bay

Real Clear Politics

August 22, 2012

The Olympic games, ancient Greece's gift to the contemporary sports world, ended with a closing ceremony featuring British pop stars, aging rock icons and classical musicians. The show's promoters described it as a "mash-up" of British music.

Now the summer party's over, and the prospect of a eurozone smash-up has returned to the headlines, as key European Union leaders and international lenders meet to discuss modern Greece's fiscal menace to the eurozone and the global economy.

The menace to the eurozone is most immediate. Though Greece is by no means the sole culprit in the eurozone crisis, Greece is the eurozone's foremost economic mess. It is likely the zone's foremost political mess.

Greece's fractious government, organized in late June, yokes the center-right New Democracy Party, the Socialist Party and the Democratic Left Party in an uncomfortable coalition. To their credit, the troika understands that Greece must cut its government budget, begin to reduce its long-term public debt, reform the tax system, attack corruption and encourage private enterprise.

Yes, even Greece's old socialists now know that the private sector is where real, sustaining wealth is created.

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Germany Doesn’t Help Europe by Undermining the Euro

by Clive Crook

Bloomberg

August 22, 2012

Investors are bracing themselves for yet another euro-area moment of truth. How many does that make?

The European Central Bank’s policy-making body meets Sept. 6 amid speculation that it will try to strengthen the euro system by capping borrowing costs for Spain and other distressed governments. Even as rumors, denials and clarifications swarm around that question, Europe’s finance ministries are also deciding whether to give Greece more time to mend its public finances.

These two issues, Greece’s solvency and the integrity of the euro system, are increasingly being muddled together. That’s dangerous. It’s vital to keep them separate. Europe’s prospects would improve at a stroke if one notion could be stamped out -- that the European Union will ease Greece and other possible defaulters out of the euro system unless they try harder to balance their books.

Greece is still insolvent and in the end another Greek default is probably unavoidable. This needn’t -- and mustn’t -- mean that Greece exits the euro. Another default would be a far smaller setback for Greece and the rest of the system than a Greek exit, and the two outcomes are perfectly separable. Yet ministers and officials keep talking as though one implies the other.

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Tuesday, August 21, 2012

Three Thorny Paths to Saving the Euro

Spiegel
August 21, 2012

Greece may soon face bankruptcy, but what would happen after that? If governments and central banks want to preserve the euro, they might have to take some very risky steps -- each with its own potential dangers. Europe has begun searching for the lesser of several evils.


Will Greece obtain fresh aid or slide into bankruptcy? Those will be the fundamental issues at stake when Greek Prime Minister Antonis Samaras travels to France and Germany this week for meetings with French President François Hollande and German Chancellor Angela Merkel. Even though the talks won't result in official decisions, the two most important politicians in the euro zone will know after these meetings just what they can still expect from Greece -- and they will draw the necessary conclusions.

For the currency union as a whole, however, the Greek tragedy itself is merely a prelude to the real battle to save the euro. If Greece actually did go bankrupt or left the currency union, the main priority for the rest of the bloc would be to use every means possible to prevent a further dissolution of the euro zone -- even if these means have some quite problematic aspects.

The key issue will be to prevent the remaining crisis countries from suffering the same fate as Greece. The main priority will be to prevent the yields on Spanish and Italian government bonds from rising any further. Spain already has to pay very high risk premiums compared with Germany. For 10-year German government bonds, investors last week demanded an interest rate of about 1.4 percent. For Spanish bonds, the rate was 6.7 percent.

As a result, Spanish interest rate payments are rising even though the government is doing all it can to cut spending. That is making it even harder for Spain to break out of the vicious circle of debt, austerity and recession.

Experts fear that if Greece becomes insolvent, investors will panic and demand higher interest rates from Spain or Italy. That would force the two countries to seek external aid.

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