How the world sees Greece
 Kathimerini | Greek Oligarch Arrested in Fraud Inquiry New York Times In a rare show of muscle, Greek authorities on Thursday arrested Lavrentis Lavrentiadis, a high-profile oligarch, at his home in an affluent Athens suburb in a criminal case that has underscored growing concerns in Greece over graft and crony capitalism. Greek businessman arrested over Proton banking scandal |
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BREAKING NEWS: Suspended Greece Police Officer Fired 13WHAM-TV Greece, N.Y. - Suspended Greece Police K9 Officer Sam Ross has been fired from his job following an internal investigation into charges he provided alcohol to a minor on three separate occasions. The minor is also facing charges for allegedly ... Greece Police Officer accused of serving alcohol to a minor fired by department Greece Police officer fired |
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 Wall Street Journal | HEARD ON THE STREET: Greece Steps Away From 'Grexit' - WSJ.com Wall Street Journal Greece hasn't known too many good days recently, but Thursday was certainly one of them. Euro-zone finance ministers finally agreed to the immediate release of €34.3 billion ($44.8 billion) of aid to Greece, with another €14.8 billion following by the ... Greece aid clears final hurdle - Dec. 13, 2012 Greece bailout funds approved UPDATE 1-Greece gets new EU aid, declares "Grexit" era dead |
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 Kathimerini | Greece will 'exit the crisis stronger' says PM Kathimerini Speaking at a news conference in Brussels ahead of a European Union leaders' summit, Samaras said the disbursement of the money would allow the government to pay over the next few months all of the arrears it had built up with citizens and suppliers, ... |
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News Summary: EU backs banking union, Greece aid - NewsTimes Danbury News Times BANKS AND GREECE: The European Union nations agreed Thursday on the groundwork for a full-fledged banking union. Greece's euro partners also approved billions in bailout loans that will prevent the country from going bankrupt. MINISTERS DEAL: ... |
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Greek businessman arrested over Proton banking scandal Reuters ATHENS (Reuters) - Prominent Greek businessman Lavrentis Lavrentiadis was arrested on Thursday over his alleged involvement in a banking scandal, a court official and a police source said. Lavrentiadis was arrested at his home in a seaside suburb of ... |
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European leaders seal agreement to put the European Central Bank in supervisory authority over financial institutions in the single currency area
European leaders were expected to push ahead with plans for winding up or shoring up weak eurozone banks on Thursday night, hours after sealing agreement to put the European Central Bank in supervisory authority over financial institutions in the single currency area.
In what was being hailed as one of the most important and systemic responses in three years of battling to save the currency, finance ministers early on Thursday embarked on the first stage of a eurozone "banking union", burying acute Franco-German differences to establish the first single banking supervisor.
A two-day summit which opened on Thursday sought to build on the momentum, discussing calls for new legislation on eurozone banks' "resolution" to be drafted by next year.
But more ambitious schemes, drawn up by the summit chair, president Herman Van Rompuy, to move towards a eurozone fiscal and political federation were watered down and delayed amid strong German resistance to any pooling of risk and costs among the currency's 17 countries.
A draft communique on the summit's decisions said that a "single resolution authority will be required, with the necessary powers to ensure that any bank can be resolved with the appropriate tools."
The European commission, according to the draft, was told to draw up legislation for dealing with weak banks over the next year and the law should come into force in 2014. There was also talk of a common eurozone deposit guarantee scheme, the third plank in the banking union scheme, safeguarding people's savings anywhere in the single currency area.
The Germans are balking at that notion, however, and are also wary of pooling responsibility for weak banks in other countries as the common scheme would see German banks being taxed to pay for bad banks elsewhere.
"Common bank resolution is difficult for them," said a senior diplomat, adding that the Dutch and the Finns, hawkish allies of the Germans on the euro crisis, were also reluctant to take on "mutualisation" of risk in the eurozone.
Berlin has told Brussels to steer clear of tabling proposals on eurozone risk-sharing and cost-sharing before chancellor Angela Merkel contests an election for a third term next September.
The proposed banks resolution regime is supposed to help cut the invidious link between failing banks and weak sovereigns that is seen as having contributed hugely to the sovereign debt crisis in countries such as Spain and Ireland.
"The single most important integrative step for the eurozone in 2013 is going to be the work to create a common resolution authority," said Mujtaba Rahman, European analyst at Eurasia Group.
Under the single supervisory regime agreed on Thursday by finance ministers, though still to be finalised in talks with the European parliament, the ECB in Frankfurt is put in authority over up to 200 of the eurozone's 6,000 banks initially. A German campaign to restrict the scope of the supervisor won over French resistance.
After more than 14 hours of fractious negotiations, the ministers agreed on the single supervisor as the first stage of a more comprehensive banking union. The next two stages may turn out to be more difficult to realise because of German-led reluctance to bow to the mutualisation of risk involved. But without them, it will also be difficult to see the new regime being effective, officials and diplomats say.
The idea was first proposed in June when France, Italy, and Spain exploited the euro drama to hijack Germany into agreeing that the eurozone's bailout fund could be used to recapitalise directly ailing banks, say in Spain.
The Germans were arm-twisted into agreeing, but insisted the recapitalisation could only take place if eurozone banks were placed under ECB authority. Within hours of that huge concession, the Germans got cold feet and have been rowing back ever since, seeking to delay the bank supervisor and restrict its powers and scope.
It will be another 15 months before the new regime starts operating properly. Germany's finance minister, Wolfgang Schäuble, ascribed the time needed to the ECB, stressing that Mario Draghi, the ECB president, wanted a year to get the new system up and running.
The UK chancellor, George Osborne, whose key aim from outside the eurozone was to safeguard the UK financial sector against ECB and eurozone interference by being automatically outvoted on rule changes, standards-setting, and regulation, claimed he got a good deal for Britain.
"The safeguards we have secured protect Britain's interests and the integrity of the European single market," said Osborne. "We've always said a banking union was a necessary part of a more stable single currency for the eurozone, but also that single market for the whole of the European Union must be safeguarded. The agreement Britain has secured does that."
Despite the progress on common bank regulation, the summit shaped up to be a humiliation for Van Rompuy at the hands of the Germans. His earlier proposals for eurobonds have been scrapped and demands last week for a eurozone "fiscal capacity" or special budget and insurance scheme were also dropped, although the draft still talked of a eurozone "shock absorption capacity." Van Rompuy's first draft communique for the summit, envisaging a three-stage process towards a more complete monetary union, has had to be comprehensively rewritten while his proposals were belittled as a "useful input" rather than as the "basis" for the debate.
Merkel did not rule out supplying "financial incentives" for eurozone countries pledging to undertake structural reforms of their economies, policed by Brussels. But she added: "This should not be misunderstood. This can't be used as a pretext for delivering new sources of money. That's not on for Germany."
The leaders also disbursed more than €34bn in bailout funds to Greece, six months after it was due, while postponing a decision on a bailout for Cyprus until next month.
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When the words "jobs" and "Europe" are in the same sentence these days, it's usually not good news. Unemployment in the euro zone hit a record high last month, with 11.4 percent, or 18.2 million people, out of work. More than half of younger workers in Spain and Greece are unemployed. Frustrations over the state of the economy have given rise to violent far-right groups in Greece and protests over job cuts in Spain, including a strike by employees at the luxury Parador hotels, which are set in historic castles and palaces.
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 euronews | Merkel makes rousing Bundestag speech praising Greece debt reduction efforts euronews Ahead of attending the EU summit in Brussels on Thursday, German Chancellor Angela Merkel struck a note of optimism as she addressed the German Bundestag – praising both the deal to give the European Central Bank supervisory powers and debt ... |
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 Deutsche Welle | Greek PM: Greece Has Major Chance to Grow - WSJ.com Wall Street Journal Greek Prime Minister Antonis Samaras said Thursday that Greece has real growth prospects after five straight years of recession, following the euro zone's decision to approve a mammoth EUR49.2 billion loan payment. Mr. Samaras told reporters before the ... IMF Says Europeans Won't Let Greek Debt Expand Beyond Target Eurozone Approves Greek Aid, New Bank Regulation « VOA Breaking News Eurozone finance ministers approve Greek aid disbursement |
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There has always been a debate about whether it is possible to have a single market without a single currency. Critics of the euro have always asked: why not?
Europe's crisis has entered a quiet phase, which is no accident. The current period of relative calm coincides with the approach of Germany's federal election in 2013, in which the incumbent chancellor, Angela Merkel, will be running as the woman who saved the euro.
But the crisis will be back, if not before Germany's upcoming election, then after. Southern Europe has not done enough to enhance its competitiveness, while northern Europe has not done enough to boost demand. Debt burdens remain crushing, and Europe's economy remains unable to grow. Across the continent, political divisions are deepening. For all of these reasons, the specter of a eurozone collapse has not been dispatched.
The consequences of a collapse would not be pretty. Whichever country precipitated it – Germany by threatening to abandon the euro, or Greece or Spain by actually doing so – would trigger economic chaos and incur its neighbours' wrath. To protect themselves from the financial fallout, governments would invoke obscure clauses in EU treaties in order to slap temporary controls on capital flows and ring-fence their banking systems. They would close their borders to stem capital flight. It would be each country for itself.
Would the European Union survive? The answer depends on what one means by the EU. If one means its political organs – the European commission, the European parliament, and the European Court of Justice, then the answer is yes. These institutions are now a half-century old; they are not going away.
As for the single market, the EU's landmark achievement, there is no question that a eurozone breakup would severely disrupt its operation in the short run. Trucks would be halted at national borders. Banking and financial systems would be balkanized. Workers would be prevented from moving.
But what would happen then? There has always been a debate about whether it is possible to have a single market without a single currency. Critics of the euro have always asked: why not?
Under this scenario, the Single European Act, signed in 1986, would remain in place. Member states would be obliged to restore free movement of goods, capital, services, and people – the EU's "four freedoms" – as quickly as possible. Given the clear benefits that Europe has derived from the single market, they would have every incentive to do so.
Proponents of the single currency object that if Europe has separate national currencies, it will have separate banking systems, each with its own lender of last resort. So much, then, for a single market in financial services, or for harmonizing regulation and removing trade barriers behind the border. Free trade in goods and free movement of capital and labor would not survive the euro's collapse, these diehard Europhiles warn. We may yet find out if they are right.
And what about the acquis communautaire, the body of law that enshrines member states' obligations not just in terms of economic policies, but also in terms of democracy, the rule of law, and fundamental human rights? The intent of the acquis is not simply to make Europe more prosperous, but to make it more civilized. Spain, Portugal, and Greece had to establish functioning democracies before applying for EU membership. Even now, Hungary and Romania feel peer pressure and face sanctions from their EU partners when they engage in dubious electoral practices, compromise their courts' independence, or discriminate against minorities.
The co-operation needed to make that peer pressure effective might conceivably survive the euro's collapse. But finger-pointing about which country was responsible for Europe's damaging financial disruption would make it difficult for the members to maintain a common front. It seems likely that the acquis would lose much of its force.
A final way of thinking about the EU is as the "ever closer union" referred to in the Treaty of Rome and echoed in the Maastricht Treaty. "Ever closer union" means an EU that moves ineluctably from economic and monetary union to banking union, then to fiscal union, and finally to political union. This is what European leaders had in mind when they created the euro. They hoped that establishing a monetary union would generate irresistible pressure for the creation of an EU that functioned in all respects as a cohesive economic and political bloc.
Europe's leaders were right about the pressure. Monetary union without banking union will not work, and a workable banking union requires at least some elements of fiscal and political union. But they were wrong about the irresistible part. There is no inevitability about what comes next.
Europe can either move forward, toward deeper integration, or it can move backward, toward national sovereignty. Its leaders and, this time, its people need to decide. It is on their decision alone that the future of both the euro and the EU depends.
Copyright: Project Syndicate, 2012
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Europe's Headway on Greece, Banks Masks Deeper Divisions Bloomberg European policy makers made headway in fighting the three-year-old debt crisis, keeping Greece's lifeline intact and laying the groundwork for a bank supervisor to prevent financial miscues. Finance ministers declared the two-front victory hours before ... |
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 Economic Times | Greece jobless rate rises to 24.8% Bangkok Post Greece's unemployment rate rose to 24.8 percent in the third quarter from 23.6 percent in the previous three month period, the ASE national statistics agency said Thursday. Over three-fifths, or 62.6 percent of the jobless were long-term unemployed ... Greece jobless rate up to 26 percent |
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