Rolling coverage of political and economic events in Greece and beyond, as Martin Schulz visits AthensIntroduction: First official EU visit to AthensBank shares bounce backGreece want to link debt payments to growthChina unhappy about privatisation freezeFT: Russian links cause alarm in Europe 11.18am GMT One blog reader, James Wilkins of Thessaloniki, isn’t impressed that Martin Schulz will meet with four opposition leaders as well as prime minister Tsipras today:The decision of Schulz to meet leaders of political parties who have just been resoundingly defeated in a democratic election will only inflame the situation. It will make many Greeks angry. I fear that the EU, and the Eurozone in particular, is incapable of responding to events that do not fit in with its narrative. 11.15am GMT Greek banks stocks are on something of a tear this morning, as the Athens market recovers.Shares in Eurobank have surged by 18%, recovering most (but not all) of yesterday’s huge losses.Someone caught the falling knife by the handle: Greek bank shares up 13% this morning after 27% fall yday 10.58am GMT Standard & Poor’s decision to lower Greece’s credit rating outlook to negative last night is driving Greek bond yields steadily higher:Greek 3-yr bond yield above 18% - above the level which prompted the May 2010 first bailout of the country. 10.39am GMT Martin Schulz tweets that he’ll be meeting several Greek political leaders today, not just the winner of Sunday’s election.I am on the way to #Greece today where I will meet PM @atsipras, and party leaders Samaras, Theodorakis, Venizelos, and Papandreou 10.20am GMT The chief of the Eurogroup (eurozone finance ministers) confirms that he will meet with the senior members of the Greek government tomorrow afternoon. Happy news; he and finance minister Varoufakis will give a statement to the press corps.Friday in the afternoon in Athens meeting PM Tsipras, vPM Dragasakis, Mins Varoufakis and Stathakis, co-Min Tsakalotos. (1/2)+/- 4.30 (Greek time) short press statement Dijsselbloem and Varoufakis at Greek FinMin. Accreditation through Greek FinMin. (2/2) 10.00am GMT Greek government bonds continue to weaken in the financial markets. That has pushed the yield, or interest rate, on its five-year debt up to 15% -- compared to around 5% when it was sold last April.Greek borrowing costs are surging again today. pic.twitter.com/QSI8rjXMxU 9.44am GMT From Athens, Helena Smith reports that Syriza is making much of Barack Obama’s backing last night. The US, generally, has taken a much more pragmatic approach to Greece than Europe (perhaps because it doesn’t hold billions of euros of Greek debt?). Finance minister Yanis Varoufakis co-authored a book with Jamie Galbraith, a close friend with whom he spent much time when he was seconded to the University of Texas at Austin, entitled: A modest proposal for resolving the euro zone crisis. Over the summer I met the economist/political science professor Barry Eichengreen at Berkeley University, who follows Greece closely, and said despite being nine time zones away from Athens was an avid reader of this blog. “The Greek crisis has not gone away. It’s no longer acute. Its chronic,” he had said. How his words resonate today! 9.38am GMT A handy reminder of holds Greece’s debt:Greek debt crisis rears its ugly head: Who has the most to lose? http://t.co/H2MZM43kue pic.twitter.com/8JXA0ejkhq 9.36am GMT Greece’s decision to freeze the privatisation of the Piraeus Port has not gone down well in Beijing.Chinese media warned Tsipras over halting the privatisation of the Piraeus port, for which China’s COSCO group has bid, saying he was in a similar position to the Greek mythological figure of Phaeton, who was given the reins of the sun only to lose control and nearly destroy the earth. 9.24am GMT The Athens stock market is calm this morning, after yesterday’s sensational selloff which wiped a third off the value of its banking sector.The main ATG index has risen by 1.4%, led by financial stocks. 9.23am GMT Francesco Papadia, who used to run the ECB’s Open Market operations, reckons a deal is possible.....Beyond posturing an agreement is possible on #Greece: structural measures against debt alleviation. But will this agreement be reached? 9.22am GMT Some Greek newspapers appear to have the inside line on the government’s negotiating strategy (see financial portal Euro2day and newspaper Efsyn, which is sympathetic to Syriza)They say that PM Tsipras and finance minister Varoufakis will argue that Greece’s bond payments should be “frozen” until the country is growing steadily. #Greece Gov't leaks its plan for negotiations w the Eurozone: 1. Growth-based loan payments 2. Lower primary surpluses yet balanced budgetsIt is obvious the Greek gov tries to move out of the corner. Major road block: The extension of the bailout agrmnts. Hardliners won't accept 9.16am GMT Germany’s jobless rate has hit a new record low, underlining the sharp economic differences across Europe.The number of people unemployed across Germany fell by 9,000 in January. And with December’s figures revised lower, the German unemployment rate is now a record low of 6.5%.German Unemployment Data (Jan): Unemployment Change -9K v -10K exp, prev -27K rev to -25K Rate 6.5% v 6.5% exp, prev 6.5% rev to 6.6% 9.09am GMT European Parliament President Martin Schulz is expected to arrive in Athens at noon, or 10am GMT. 9.03am GMT Apparently Barack Obama also urged Alexis Tsipras to get some rest.During their telephone call last night, the US president told the new Greek prime minister that:“I started young as well, and now my hair has turned grey”.Good News! #Obama calls #Tsipras to offer support "I also started young; Now my hair has turned grey" http://t.co/BOGJ2qoLMr via @TheTOC_eng 8.52am GMT Germany’s economy minister, Sigmar Gabriel, has warned Greece not to ‘burden’ the rest of Europe with its problems.He was speaking in the Bundestag (parliament) this morning - here’s the headlines: 8.47am GMT The selloff in Greek government debt is continuing this morning, as investors continues to ditch its bond.This is pushing up the yields (or interest rates) on the bonds further into dangerous levels. The three-year Greek bond is how yielding 17%(!), showing that traders see it as particularly risky.Some radio silence from #Greece gov would be advisable pic.twitter.com/pDZld4Tlp7 8.39am GMT A senior European Central bank policymaker has ruled out giving Greece any relief on the debt held by the ECB.Benoît Cœuré, ECB executive board member, told Italy’s Corriere della Sera newspaper that it was impossible to give Greece more time to repay its loans. Greece’s debt is made up of various components. As regards the government bonds purchased by the ECB as part of the Securities Markets Programme launched in 2010, we cannot grant even an extension of maturities: it would be like granting a loan to the country and that is prohibited by the treaties.As regards loans given to Athens by European countries, that’s not for us to decide. Interview Benoît Cœuré with Corriere della Sera http://t.co/v9XtMRKmvn 8.26am GMT There’s a(nother) row brewing over whether Greece officially opposes sanctions on Russia.Yesterday, energy minister Panagiotis Lafazanis veered off his brief, to declare that:“We are against the embargo that has been imposed against Russia. Greece has no interest in imposing sanctions on Russia. We have no differences with Russia and the Russian people.”Our Foreign Minister, Nikos Kotzias, briefed us that on his first day at the job he heard in the news bulletins that the EU had approved new sanctions on Russia unanimously. The problem was that he, and the new Greek government, were never asked! So, clearly, the issue was not whether our new government agrees or not with fresh sanctions on Russia. The issue is whether our view can be taken for granted without even being told of what it is!Painful. @yanisvaroufakis is finding that EU, & media camp followers, have no 'respect for our national sovereignty' http://t.co/voUpkGYLhO 8.16am GMT The new Greek government’s relationship with Russia are also causing a stir in Europe this week.The Financial Times reports this morning that EU leaders are fuming behind closes doors:European and Nato intelligence officials are now poring over links between the Kremlin and senior figures from Syriza and its coalition partner, the Independent Greeks party.The fact that the first foreign official Mr Tsipras invited to the Maximos Mansion in Athens on Monday was Andrey Maslov, Russia’s ambassador, speaks to their concerns. 8.03am GMT Overnight, US president Barack Obama phoned Alexis Tsipras to congratulate him on his victory.“The president noted that the United States, as a longstanding friend and ally, looks forward to working closely with the new Greek government to help Greece return to a path of long-term prosperity,”.“The two leaders also reviewed close cooperation between Greece and the United States on issues of European security and counterterrorism.” 7.56am GMT Good morning, and welcome to our rolling coverage of the Greek election, and other key developments across the financial markets, the world economy, the rest of the eurozone, and business.#greece @MartinSchulz gets uppity with @tsipras_eu .off to athens to read the riot act. taking german journos to ensure he makes headlinesBank of England governor attacks #Eurozone austerity. Urges Eurozone to spend its way out of stagnation. http://t.co/PC3SJImAa0“Greece must comply with Europe......there is no question of cancelling the debt”.“We respect the popular vote in Greece, but Greece must also respect others, public opinion and parliamentarians from the rest of Europe.” Continue reading...
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