How the world sees Greece
Really Depressing Numbers Out of Greece Huffington Post (blog) We should feel a mix of great sadness and heightened concern upon seeing the latest unemployment numbers out of Greece. According to the data released today, the official unemployment rate rose to a stunning 25.4% in August, setting a new record. |
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In the heart of Europe, a democracy now teeters on the edge
In spring 2010, as Athens wrangled with the IMF and the rest of Europe for what would turn out to be a €110bn emergency loan, a revealing, chilling phrase slipped out. When Greece's then-premier, George Papandreou, begged for easier borrowing terms, he was told by Angela Merkel that the deal had to hurt. According to a well-sourced report in the Wall Street Journal, the German chancellor said: "We want to make sure nobody else will want this."
She certainly made good on her side of the deal: Greece has spent the past two years on a financial life-support that has kept its government ticking over, but which has destroyed its economy and pushed its entire democracy to the brink of collapse. This week, Athens re-enacted what has become a traditional ritual. Under duress from its troika of creditors (the IMF, the European commission and the European Central Bank), the government identified more areas for cuts and deregulation: another 8,000 civil servants to be sacked by next Christmas, yet more slashing of pensions and wages and of the minimum wage. Meanwhile, the country went on a general strike and petrol bombs were lobbed at the Vouli, the parliament, even as MPs voted through the package. If the government also passes its 2013 budget this Sunday, it will get another chunk of cash to keep paying salaries and other bills.
The price of the severest austerity programme ever imposed on postwar western Europe has been severe. Greece's economy is in severe depression: this year its annual national income is projected to be 23% below what it was in 2009, that is to say that nearly a quarter of everything the economy used to produce has disappeared over three years. Partly as a result, the debt burden will soon be three times GDP. Unemployment has skyrocketed, with one in two young people out of work.
Extreme policies in; extremist politics out. From being a rump just three years ago, the neo-Nazi Golden Dawn now effectively polices parts of Athens and has infiltrated the official police force. The centre has collapsed: after acceding to Mrs Merkel's terms, Mr Papandreou's Pasok has gone from being a reliable centre-left party of government to a husk of its former self. Journalists who threaten to show any independence of mind, such as the admirable Kostas Vaxevanis are hounded by officials.
In the heart of Europe, a democracy now teeters on the edge. True, most of the blame for this is that of a corrupt Greek elite that has dominated politics, business and media for many decades. But the rest of the eurozone is also guilty: first for enforcing impossible austerity, then for turning a blind eye to the predictable results. Mrs Merkel was surely right: no other country – in Europe or elsewhere – would want this.
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 Telegraph.co.uk | The Greek books are still being cooked Telegraph.co.uk While all eyes were focused on the US presidential race, Europe has been busy cooking up another fudge over Greece. Now in its sixth year of recession, with spiralling joblessness and an administrative system close to collapse, this is a country in a truly ... Germany Says Quick Greek Aid Unlikely Greece passes new spending cuts amid protests Only the Greeks can rebuild Greece |
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Canadian Dollar Declines After Europe Ministers Delay Greek Aid Bloomberg “The headline out of Greece about delaying aid was negative, setting the euro under pressure and the Canadian dollar is just caught in the crossfire,” David Tulk, chief macro strategist at Toronto-Dominion Bank's TD securities unit in Toronto, said in ... |
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 PBS | MARKET COMMENT: Greek Woes Weigh on Europe Stocks Wall Street Journal The Stoxx Europe 600 index fell 0.2% to close at 270.58 in choppy trading, adding to a 1.4% loss on Wednesday. The index started the session on a strong footing, after the Greek parliament late Wednesday narrowly approved a batch of austerity measures. The Greek Crisis: Why Super Mario Draghi Can't Save Europe ECB Announces New Euro Banknotes Using Greek Myth for Security European Markets Finished Mixed After Greek Vote |
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 Kathimerini | Greece, the skids The Economist (blog) GREECE faced massive strikes turned riots yesterday as its government passed a new round of fiscal consolidation, designed to shrink the budget €18.5 billion by 2016. The contents of the austerity plan hardly seems like the stuff to drive Greeks to ... Greece waits on pins and needles EU keeps Greece waiting for loan Greece first step is made |
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From the gulf between rich and poor, to welfare reform, old arguments are failing to find answers for a world in flux
Politics has never been so fascinating. It drips from the ceiling. It oozes up through the floor. It reeks across the internet. Reading politics, being informed about it, participating in it, should be the compulsory national service of the 21st-century state. Yet never can the toolkit of political debate have been so empty and the task of understanding the world so titanic.
America has just undergone a monumental exercise in democracy. But no one can now tell whether the result means that the country will decline into "singularity" or soar to a new supremacy. Nor can anyone say whether America has "turned left", merely by sticking with Barack Obama and rejecting Mitt Romney. All that happened was that the Democrats persuaded more minorities to come out and vote, while an awesome debt remains.
Across the Pacific, China is progressing its epic experiment in non-democratic revolution. The outcome must have huge significance for other "half-free" states in Asia and Africa. Western visitors moan, with more than a touch of hypocrisy, about China's civil and human rights. But it is like Britons complaining about the Paris streets during the French revolution.
Elsewhere in Asia, the Muslim world is no less engrossing, enmeshed in a cultural upheaval with which few westerners can sympathise or engage. The only certainty is the fragility of reform and the counter-productivity of outside interference. We do not know what we should do, but feel some ancient "white man's" urge to do something.
In Europe, the political agony is no less acute. The continent seems fated to resume the turmoil between nationalism and supra-nationalism of the first half of the 20th century, albeit on an economic rather than a military plane. As in China, a grand experiment in sub-continental governance faces its greatest test. The refusal of the Brussels elite to see danger in federal union, notably in imposing a single currency on disparate states, is subjecting Greeks and Spaniards to a savage and punitive poverty. One more attempt to create a pan-European empire is turning into the financial equivalent of "bombing them back to the stone age".
Most Britons still respond to these issues by turning to some "blue remembered hills" in their political upbringing. They fish about in their pockets, take out an ancestral slide-rule and read off the answers from left to right according to taste.
This no longer works. Tories and Labour may bang the antique drum in parliament and print, but they have no idea how to drag the economy back from recession. Standing Keynes on his head, both parties went along with deficit expansion during the boom, and now champion deficit reduction in recession. It makes no sense, yet appears immune to its failure to work.
The welfare consensus may hold, but austerity has denied both left and right any coherent policies on pensions, families, housing, schools, planning, energy or law and order. Not even badgers and ash trees are spared the resulting hesitancy. The right has no answer to the widening gulf between rich and poor. The left has no answer to the chronic need for welfare targeting and means testing. When the right makes changes to health policy, housing subsidies or deregulation, the left howls. When the left proposes higher property taxes or fewer prisoners, the right howls. These are mere tribal grunts.
The one industry to benefit from all this is global risk aversion. America's defence and security establishment, now employing one in five US workers, seems to be the tail that wags every dog, foreign as well as domestic. No presidential hopeful in the 2012 election dared advocate a cut in defence, despite America facing a big deficit and no conceivable threat to its security or integrity.
Risk aversion in Britain has a more imperialist tinge. A craving for a "world role" echoes in the interventionism of David Cameron and Ed Miliband, both platitudinising about "what we want to see" and "punching above our weight". Bereft of the old lodestars, politicians of left and right become the "useful idiots" of sectional groups and commercial interests. Across Europe the game is now going to those who know exactly what they really want, to separatists, racists, tax evaders, securocrats and lobbyists. In the kingdom of the blind the beady-eyed are free.
For all this, I do not find the collapse of an ideological route map depressing. I rather find it exhilarating, difficult and important. The world's great conflicts may be of unprecedented immediacy, but they are not immovable objects facing irresistible forces. They are part of the churning cauldron of human affairs.
I believe – through some rational gene – that these conflicts are best resolved through the creaking mechanism of democracy. But, as China apologists such as Martin Jacques are writing with growing plausibility, this is neither a complete answer, nor one likely to be adopted everywhere. When this week Obama implied that God is an American, I felt very uncomfortable. It was the sort of claim made by the pre-Reformation church.
The right response is not to surrender to the complexity of it all. It is not to agree with the Zen master who said, "The struggle between 'for' and 'against' is the mind's worst disease." It is to lie down with a cold compress on the head and plunge ever deeper into the struggle. That is what America's voters have just done in all their craziness. Whatever the society and whatever the risk, the citizen's one duty is always to argue the toss.
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Further help cannot be ruled out says minister as lender is handed third bailout amidst mounting losses
Franco-Belgian bank Dexia has been given a third bailout as the repercussions of the banking crisis continue to shake the financial system four years on.
The French and Belgian governments will pay €5.5bn (£4.4bn) to take near-full control of the bank, once the world's biggest municipal lender, after it reported a nine-month loss of €2.39bn.
The institution lost €11.6bn last year due to its exposure to sovereign debt across Europe, and contributed to Belgium's credit rating being downgraded after the French and Belgian governments guaranteed €90bn of loans.
The latest bailout involves Belgium paying €2.9bn and France €2.6bn, leaving them guaranteeing 51.4% and 45.6% of the bank's debts respectively. The remaining 3% is held by Luxembourg. Belgium's finance minister, Steven Vanackere, said he could not rule out a future bailout: "Is it a total guarantee? People who give such a guarantee are unwise."
The bank is still exposed to government debts across the eurozone with €38.5bn outstanding in Italy, €24.1bn in Spain, €3.8bn in Portugal, €1.7bn in Ireland and €405m in Greece – although Greek exposure has been reduced by 74%.
The deal, agreed on Wednesday night, will give the French and Belgian governments a holding of around 94%.
The bank said it was necessary to "avoid the materialisation of a systemic risk in the case of bankruptcy of the Dexia Group".
In the bank's first bailout in 2008 it received €6bn of help from France and Belgium. Last year the bank, which provides backing for more than 40 private finance initiative projects in the UK, persuaded France and Belgium to guarantee loans worth up to €90bn, due to its €3.4bn exposure to Greek debt putting off rival banks from lending it any money. That deal was allowed on condition Dexia cut operations and sold off subsidiaries.
A sell-off of assets at a loss has hit Dexia's bottom line, with the company revealing a €599m loss on the sale of its Turkish business DenizBank and a €466m loss from selling its Dexia Municipal Agency.
Dexia Municipal Agency was sold for €8.7bn, while Russian firm Sberbank bought DenizBank for €2.8bn. Its Belgian bank was nationalised and its Luxembourg unit was sold to a Qatari consortium led by the country's royal family.
Any deal on the bailout must first be agreed by the European Commission, which is wary of raising sovereign debt. Belgian debt is already at nearly 100% of GDP. There has been tension with the commission over past bailouts, with bureaucrats citing anti-competition rules and delaying the decision.
Last year's guarantee to the bank led to credit rating agency Moody's downgrading Belgium's credit rating from AA1 to AA3 on a negative outlook.
The agency said in December that the second Dexia bailout was a main factor in its decision. It said: "There is a significant risk that the dismantling of the Dexia group, and especially the run-off process of Dexia Credit Local, will result in increases in government debt metrics, although Moody's notes that the precise extent of any increase remains highly uncertain … Moody's estimates these current exposures as representing close to 10% of the country's GDP."
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 Daily Beast | The Grinch Of Europe Daily Beast The legislators also voted to cap salaries at the Bank of Greece at €5,000 a month—around $6,400 in U.S. dollars—meaning that even the country's most highly-trained financial workers will take home less than $3,800 after taxes. They voted to hike the ... Only the Greeks can rebuild Greece Greece passes new spending cuts amid protests Eurozone crisis live: Thousands protest peacefully during Greek general strike ... |
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 BDlive | Stocks Decline, Euro Weakens to Two-Month Low on Greece Businessweek Euro-area finance ministers will await a full report on Greece's compliance with the terms of its bailout, a European Union official said. Greek Prime Minister Antonis Samaras mustered support in Parliament to approve austerity measures needed to ... Stocks Decline, Euro Weakens to Two-Month Low on Greece Concern London open: Stocks edge higher after Greece votes on austerity |
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 Voice of America | Germany Says Quick Greek Aid Unlikely Voice of America German Finance Minister Wolfgang Schaeuble said Thursday he does not expect eurozone finance chiefs meeting next Monday to immediately release another $40 billion rescue package to the Athens government, as Greek leaders had hoped after agreeing ... |
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 San Francisco Chronicle | HOC warns cuts will lead to disintegration of Greek sport Yahoo! Sports ATHENS (Reuters) - Budget cuts could lead to the "disintegration of Greek sport" the country's beleaguered Olympic Committee (HOC) said on Thursday. The HOC issued a plea to the state to reconsider drastic spending cuts for sport and warned that ... Greek Olympic Committee says 2013 state funding cuts will leave federations ... Greek Olympic Committee: Budget cuts killing sport Greek debt crisis spells tragedy for sport - federations |
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 Telegraph.co.uk | Only the Greeks can rebuild Greece Financial Times By voting through another four years' worth of austerity measures, the Greek parliament has made a further step on the painful road that the eurozone promises leads to salvation. Yet to Greece's citizens, every move seems to push the goal further into the ... Greek Parliament approves austerity cuts Debt crisis: Greek parliament passes austerity bill - live Thousands Protest Greek Austerity Package Ahead of Vote |
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 The Guardian (blog) | Eurozone faces brinkmanship on Greece Financial Times Eurozone leaders face a new round of brinkmanship over Greece's €174bn bailout after international lenders failed to bridge differences on how to reduce Athens' burgeoning debt levels, pushing the country perilously close to defaulting on a €5bn debt ... Greece bailout release unlikely at Monday's euro meeting despite Parliament's ... Greece is ripe for radical change The Grinch Of Europe |
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Forex: EUR/GBP falls on EU-Greece NASDAQ FXstreet.com (Barcelona) - The decision to release the €31.5B aid tranche to Greece is unlikely to be taken on the EU ministers meeting of November 12 in Brussels and be postponed to late November after getting Troika's full report of Greek developments. Greece Aug Unemployment Rate (MoM) rises to 25.4% vs 24.8% (Jul) |
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