Posted by Kendall Harmon

Germany made headlines this week by letting Bernie Ecclestone, the Formula One chief, pay $100 million to end his bribery trial. In Greek justice, money talks in a different way: Some inmates jailed for minor offenses are allowed to buy their freedom, at an average rate of five euros per day.

With the rich at a clear advantage, Greek Orthodox priest Gervasios Raptopoulos has devoted his life to paying off the prison terms of penniless inmates.

The soft-spoken 83-year-old has helped more than 15,000 convicts secure their freedom over nearly four decades, according to records kept by his charity. The Greek rules apply only to people convicted of offenses that carry a maximum five-year sentence, such as petty fraud, bodily harm, weapons possession, illegal logging, resisting arrest and minor drugs offenses.

Read it all.

Filed under: * Christian Life / Church LifeParish MinistryMinistry of the Ordained* Culture-WatchPrison/Prison Ministry* International News & CommentaryEuropeGreece* Religion News & CommentaryOther ChurchesOrthodox Church* TheologyEthics / Moral TheologyPastoral Theology

0 Comments
Posted August 10, 2014 at 12:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

David de Gea Double save toward the end of the first half saved the game; it was so great to see Rooney and Van Persie combining well for a change.

Filed under: * Culture-WatchMenSports* International News & CommentaryEngland / UKEuropeGreece

0 Comments
Posted March 19, 2014 at 4:29 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The summer solstice, 21 June, is one of the most important dates in the calendar for many followers of ancient religions, and it's a special time for people in Greece who worship the country's pre-Christian gods.

"I love the energy this place has," says Exsekias Trivoulides who has pitched his tent on what he considers to be the holy site of Mount Olympus.

Trivoulides is a sculptor who studied art history and classics, and these days, he is living his passion....

Read it all.

Filed under: * Culture-WatchHistoryReligion & Culture* International News & CommentaryEuropeGreece* Religion News & CommentaryOther Faiths

0 Comments
Posted June 21, 2013 at 5:31 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The police were not among [Elder] Loizos' supporters. They said they received thousands of complaints about his "Elder Pastitsios" Facebook page... [that] criticized Elder Paisios as xenophobic and close-minded. [It also mocked the monk's name — Paisios became Pastitsios, like the Greek pasta dish].

Last September, they arrested him and charged him with blasphemy, which carries up to six months in prison.

Many Greeks saw his case as a theocratic stifling of free speech. It was the first of two blasphemy arrests in recent months.

Read it all.

Filed under: * Culture-WatchHistoryLaw & Legal IssuesReligion & Culture* Economics, PoliticsPolitics in General* International News & CommentaryEuropeGreece

0 Comments
Posted January 4, 2013 at 8:00 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Greece could generate budget revenues amounting to 5 percent of national output annually if it reforms tax collection and clamps down on tax cheats, the European Union's tax chief told a Greek newspaper.

Athens plans reforms next year to combat rampant tax evasion as it struggles to shore up public finances and achieve a primary budget surplus, both necessary to continue receiving bailout aid from international lenders.

The euro zone agreed on Thursday to provide nearly 50 billion euros ($64 billion) in long-delayed aid to Greece, averting a catastrophic default and securing its survival in the zone after months of doubt and political turmoil.

Read it all.

Filed under: * Culture-WatchLaw & Legal Issues* Economics, PoliticsEconomyTaxesPolitics in General* International News & CommentaryEuropeGreece* TheologyEthics / Moral Theology

0 Comments
Posted December 15, 2012 at 10:28 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

At their meeting Dar es Salaam last month, the FCA primates council discussed the feasability of holding a second meeting five years after the inagural gathering in Jerusalem. African leaders proposed holding Gafcon II in Jerualem, but Arab Anglicans asked that another location be selected due to the political instability in the region.

One person present at the discussion said the criterium used by the primates in selecting the site that it be related to a place in the Bible, that Anglicans from the developing world be able to obtain visas to attend the meeting, and that the costs not be prohibitive.

Read it all.

Filed under: * Anglican - EpiscopalGlobal South Churches & Primates* International News & CommentaryEuropeGreece

4 Comments
Posted November 4, 2012 at 5:48 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

To those who were surprised that the European Union received the Nobel Peace Prize, I say: “Think twice.” This was not only a deserved award for Europe’s contribution to bringing peace and stabilizing democracies in the recent past. The Nobel Committee was also sending a clear warning to contemporary leaders. I could almost hear them saying: “On this difficult odyssey, don’t abandon ship. In today’s world, the EU is too valuable to squander.”

It was an indirect but powerful rebuttal to the dangerous nationalist and populist rhetoric some politicians have adopted when describing the recent financial crisis.

This message couldn’t have come at a better time.

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankHousing/Real Estate MarketLabor/Labor Unions/Labor MarketThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted November 1, 2012 at 5:45 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Ulf Bastian tramped into Christengemeinde Elim Pentecostal church in Hamburg, Germany, parading his punk-rocker duds: hair dyed a shocking bright color, black leather jacket, torn jeans and a T-shirt screaming the angry message, “Hate Mankind.” His ex-girlfriend, who had become a born-again Christian (and is now his wife), urged him to attend.

“I thought she was crazy,” he says. “I did not want to be part of Christian people.”

Still, the Holy Spirit coaxed him to return a second time. Arriving late, he grabbed a chair in the last row. The worship music and pastor’s preaching about sin and the cross of Christ hit home. Weeping, he rushed to the altar at the end of the service and told the pastor, “I need forgiveness.”

Read it all.

Filed under: * Culture-WatchReligion & Culture* Economics, PoliticsImmigration* International News & CommentaryEuropeGreece

0 Comments
Posted October 11, 2012 at 5:45 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Greece is teetering on the edge of collapse with its society at risk of disintegrating unless the country's near-empty public coffers are shored up with urgent financial aid, the country's prime minister has warned.

Almost three years after the eruption of Europe's debt drama in Athens, the economic crisis engulfing the nation has become so severe that democracy itself is now imperiled, Antonis Samaras said.

"Greek democracy stands before what is perhaps its greatest challenge," Samaras told the German business daily Handelsblatt in an interview published hours before the announcement in Berlin that Angela Merkel will fly to Athens next week for the first time since the outbreak of the crisis.

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

4 Comments
Posted October 6, 2012 at 2:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

...Rajoy is the victim of his electoral success: his majority government, ironically, is weaker for not including regionalist partners. The Catalan government sees the dissatisfaction with Madrid’s handling of the crisis as an opportunity: it may give the regionalists enough of a boost at the polls to force Madrid to hand them more autonomy, in other words, control of taxes. If Catalonia had control over its own taxes, the argument goes, the region would not have needed a bailout.

Rajoy’s choices are limited: he either refuses Catalan demands for more autonomy and risks enflaming Catalan nationalist sentiment, or agrees to increased autonomy, and risks enflaming Spanish nationalist sentiment.

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankHousing/Real Estate MarketLabor/Labor Unions/Labor MarketStock MarketThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceSpain

0 Comments
Posted September 26, 2012 at 8:00 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

An overwhelming majority of Greeks believe new austerity measures the government has promised its international lenders in exchange for more financial aid are unfair and hurt the poorest sections of society, a poll showed on Saturday.

Near-bankrupt Greece needs the European Union and International Monetary Fund's blessing on measures worth nearly 12 billion euros ($16 billion) to unlock its next tranche of aid, without which it faces default and a potential exit from the euro zone.

Read it all.

Filed under: * Culture-WatchHistoryPsychology* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeHousing/Real Estate MarketLabor/Labor Unions/Labor MarketTaxesThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

1 Comments
Posted September 22, 2012 at 11:00 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

German Chancellor Angela Merkel faces one of the toughest choices of her career in the coming weeks: whether to risk the unraveling of the euro zone, or her government.

After a summer lull, Greece is again Ms. Merkel's biggest headache.

The Greek government, struggling with depression-like conditions that have pushed the economy to the brink, is likely to need many billions of euros of additional aid to avoid bankruptcy.

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010GermanyGreece

0 Comments
Posted August 22, 2012 at 7:31 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

....for this very practical woman there is also a practical reason to start contingency planning for a break-up: it is looking ever more likely. Greece is buckling (see article). Much of southern Europe is also in pain, while the northern creditor countries are becoming ever less forgiving: in a recent poll a narrow majority of Germans favoured bringing back the Deutschmark. A chaotic disintegration would be a calamity. Even as Mrs Merkel struggles to find a solution, her aides are surely also sensibly drawing up a plan to prepare for the worst.

This week our briefing imagines what such a “Merkel memorandum” might say (see article). It takes a German point of view, but its logic would apply to the other creditor countries. Its conclusions are stark—not least in terms of which euro member it makes sense to keep or drop. But the main message is one of urgency. For the moment, breaking up the euro would be more expensive than trying to hold it together. But if Europe just keeps on arguing, that calculation will change....

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010GermanyGreece

1 Comments
Posted August 11, 2012 at 12:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The anger within the three parties of the ruling coalition is understandable. These are the parties of the German taxpayer, after all, and ever since the sovereign debt crisis began they have been reciting the mantra that the eurozone is not and will not become a “transfer union”; that there will be no mutualisation of debt; that Mediterranean sloth and tax evasion will not be rewarded by payments from hardworking, honest Nordic Germany.

If this sounds racist, it’s because the debate is tinged on all sides by nationalist stereotypes. The German middle class feels it has been had and the country is digesting Moody’s downgrading of its credit rating. “Is this what we get for saving the Greeks?” asks the tabloid Bild. Good question....

It is impossible to explain to a German who has had her retirement age upped to 67, or an unemployed German whose benefits have been cut to balance the budget, why billions of euros should go south to support governments that didn’t have the guts to slash social spending or who let their citizens retire to the beach at 55.

Read it all (requires subscription).

Filed under: * Culture-WatchPsychology* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankForeign RelationsPolitics in General* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010GermanyGreeceItalyPortugalSpain

0 Comments
Posted July 31, 2012 at 5:31 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Greece has fallen behind with its budget cuts and is asking lenders for more time to meet the conditions of the 130 billion euro aid package. But that would require fresh help of up to 50 billion euros, SPIEGEL has learned. Neither Berlin nor the IMF are prepared to make that money available.

Germany and other important international creditors are not prepared to extend further loans to Greece beyond what has already been agreed, German newspaper Süddeutsche Zeitung reported on Monday. In addition, SPIEGEL has learned that the International Monetary Fund (IMF) too has signalled it won't take part in any additional financing for Greece.

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

1 Comments
Posted July 23, 2012 at 6:59 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

With Chancellor Angela Merkel cheering every step of the way, Germany dominated Greece — on the soccer field.

The Germans reached the European Championship semifinals for a record seventh time by beating Greece 4-2 Friday in a match played amid the contentious political backdrop between the countries.

But just as in the real world, where Germany has been a major contributor to economic bailouts for Greece, the three-time champions were in control at the Arena Gdansk. And after the match, Merkel visited the players in the changing room.

Read it all.

Filed under: * Culture-WatchMenSports* International News & CommentaryEuropeGermanyGreece

0 Comments
Posted June 23, 2012 at 8:00 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Greece's conservative New Democracy party eked out a slim victory in Sunday's elections and will seek to form a pro-austerity coalition government with other parties to take the immediate steps needed to comply with strict financial targets set by its international lenders.

The outcome is likely to ease fears—at least temporarily—of a Greek exit from the 17-nation euro zone, but political uncertainty is likely to continue as parties embark on contentious coalition talks, which, even if successful, may not result in a lasting government.

Read it all and there is a lot more .

Filed under: * Economics, PoliticsEconomyEuroForeign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted June 17, 2012 at 4:01 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Greece beat Russia 1-0 in Warsaw with a first-half goal from captain Giorgos Karagounis to reach the quarter-finals, a result that sent the Russians home after the Czech Republic beat co-hosts Poland on a similar scoreline in Wroclaw.

Greece, winning for the first time in the tournament, went through as runners-up and will play the winners of Group B in the last eight.

Midfielder Karagounis, winning his 120th cap to equal the record for his country, made Russia pay for a flurry of missed chances when he scored against the run of play deep into first-half stoppage time.

Read it all.

Filed under: * Culture-WatchMenSports* International News & CommentaryEuropeCzech RepublicGreece

0 Comments
Posted June 16, 2012 at 4:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The mainstream parties "looted Greece, and afterward they took the Greek flag and they offered it to Angela Merkel," the German chancellor, Mr. [Alexis] Tsipras said in a campaign rally in Athens Thursday.

Though Syriza's message has caught on, not all of the disaffected are ready to embrace the party. Anna Konstantoulaki, a third-year Spanish-literature student at the University of Athens, voted in May for a tiny party. She doesn't know what to do now. She is upset with mainstream parties but not sure Mr. Tsipras is capable of running the country.

"I am very confused," she says. "The last few days, I can't stop thinking about what is going to happen." She adds: "I'm scared, actually."

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankG20 The Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted June 16, 2012 at 8:00 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The hundreds of billions of dollars that banks, insurance companies and other international investors poured into this country after the advent of the euro financed roads and houses, raised wages and helped Constantine Choutlas sustain a 1,000-person construction firm with projects such as building the athletes’ village for the 2004 Olympics.

What it did not do was build a competitive economy, and when the rest of the world woke up to that fact and the money rushed away, so did Choutlas’s business.

“You could see it wouldn’t last. The country was just borrowing money,” Choutlas, whose Proodeftiki Technical has been scaled back to a handful of employees, said as he jabbed a finger in the air for emphasis. “Nobody, nobody, nobody, said lets take a look at where we are going.”

Read it all.

Filed under: * Culture-WatchHistoryPsychology* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in General* International News & CommentaryEuropeGreece

0 Comments
Posted June 14, 2012 at 3:18 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

An essential element of Greece’s recovery plan has been to collect more taxes from a population that has long engaged in tax avoidance. The government is owed 45 billion euros in back taxes, tax officials in Athens said, only a fraction of which will ever be recovered.

To understand the difficulty, just talk to Nikos Maitos, a longtime official in Greece’s financial crimes investigation unit.

When he and a team of inspectors recently prowled the recession-hit island of Naxos for tax evaders, a local radio station broadcast his license plate number to warn residents.

Read it all.

Filed under: * Culture-WatchLaw & Legal Issues* Economics, PoliticsEconomyTaxesThe Banking System/SectorForeign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted June 7, 2012 at 5:15 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

On consecutive days last week, two of the most powerful figures in Europe — Mario Draghi, president of the European Central Bank, and Olli Rehn, the most senior economic official in Brussels — warned that the future of the euro zone was in doubt. In the words of Mr. Rehn, the union might well disintegrate unless policy makers took steps to bind the euro’s 17 nations closer together.

Coming as they did from two men at the very soul of the European project, the reprimands were a stark reminder of just how much the Spanish financial meltdown had shaken the confidence of the European brain trust, to say nothing of investors from New York to Beijing.

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreecePortugalSpain

0 Comments
Posted June 3, 2012 at 3:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Two of the world’s biggest trade credit insurers have stopped providing cover for exporters to Greece in highly unusual moves reflecting their concern the country might leave the eurozone.

Brokers said the decisions by Euler Hermes and Coface were the only instances they could recall of trade credit insurers pulling out altogether from a European country.

Read it all (subscription required).

Filed under: * International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

1 Comments
Posted May 30, 2012 at 1:59 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

What will become of the European Union? One road leads to the full break-up of the euro, with all its economic and political repercussions. The other involves an unprecedented transfer of wealth across Europe’s borders and, in return, a corresponding surrender of sovereignty. Separate or superstate: those seem to be the alternatives now.

For two crisis-plagued years Europe’s leaders have run away from this choice. They say that they want to keep the euro intact—except, perhaps, for Greece. But northern European creditors, led by Germany, will not pay out enough to assure the euro’s survival, and southern European debtors increasingly resent foreigners telling them how to run their lives.

This has become a test of over 60 years of European integration....

Read it all.

Filed under: * Culture-WatchHistory* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItalyPortugalSpain

1 Comments
Posted May 27, 2012 at 2:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

...while this might come as a surprise to Greeks suffering under extreme austerity, some say Lagarde's approach to the eurozone is less draconian than the IMF's traditional policy towards developing world economies. Is it easier to impose harsh demands upon small economies, but much harder to tell difficult truths to the big ones – particularly fellow Europeans? "No," she says firmly. "No, it's not harder. No. Because it's the mission of the fund, and it's my job to say the truth, whoever it is across the table. And I tell you something: it's sometimes harder to tell the government of low-income countries, where people live on $3,000, $4,000 or $5,000 per capita per year, to actually strengthen the budget and reduce the deficit. Because I know what it means in terms of welfare programmes and support for the poor. It has much bigger ramifications."

So when she studies the Greek balance sheet and demands measures she knows may mean women won't have access to a midwife when they give birth, and patients won't get life-saving drugs, and the elderly will die alone for lack of care – does she block all of that out and just look at the sums?

Read it all.

Filed under: * Economics, PoliticsForeign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

1 Comments
Posted May 26, 2012 at 7:35 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

With Greece’s membership in the euro zone teetering, fears of bank insolvency rising and Europe’s leaders bickering about what to do, the euro crisis is once again intensifying and threatening to undermine fragile growth globally.

At a summit meeting in Brussels on Wednesday, regional leaders failed to signal any significant new steps to stimulate the sputtering regional economy or resolve the competing agendas of President François Hollande of France, who favors stronger action to spur growth, and his German counterpart, Chancellor Angela Merkel, who has opposed aggressive moves to ease the pressure on Europe’s weakest economies.

Yet, the urgency for a solution to the region’s debt crisis, now in its third year, may never have been greater.

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreece

1 Comments
Posted May 24, 2012 at 6:15 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

...I do think that it would ultimately be better if the eurozone broke up. This might not involve a complete reversion to national currencies. A hard core of euro-users, centred on Germany, might survive. But the current euro will have to go.
It is true that the transition from here to there will be painful and dangerous. My colleague Martin Wolf laid out an updated version of the full horror scenario in Friday’s FT – involving a breakdown of law and order in Greece, and financial collapse across Europe. How could anyone responsibly run that risk?

The answer is that the alternatives to eurozone break-up are inherently implausible and deeply unattractive.At the weekend G8 leaders called for Greece to stay in the eurozone. Their present plan seems to involve some magical mix of stimulus and austerity that restores both budgetary balance and growth. But even if they can agree a real plan and even if it works – and neither outcome is likely – the eurozone’s structural problems would remain.....

Read it all (requires subscription).

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreece

1 Comments
Posted May 22, 2012 at 6:35 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The immediate future of the global economy, including Australia, now depends on Europe, and whether it can restore confidence to markets. If European leaders can resolve their tangle of problems, growth is ahead of us. If they can't, all bets are off.

Pessimism comes more naturally than optimism. It is now five years since we first heard the phrase ''the sub-prime crisis'', which rang the end of a golden era of debt-financed growth. Since then, we've had years of recurring crises, summits and resolutions that promised to solve the problems, but haven't.

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankStock MarketThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--* International News & CommentaryAustralia / NZEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreece

0 Comments
Posted May 22, 2012 at 5:15 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The leaders of the Group of 8, emphasizing growth as well as fiscal discipline at their meeting on Saturday, made a strong plea for Greece to stay in the euro zone and the European Union.

And no wonder.

Despite efforts at official reassurance, no one really knows the consequences of a Greek exit from the euro zone, or how rapidly big countries like Spain and Italy, and their banks, will feel the effects....

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted May 20, 2012 at 4:04 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Like the single market before, ...[the Euro] was conceived primarily as glue to bind Europe more closely together, tie Germany’s prosperity to that of its neighbors and prevent a third world war from the Continent, which had brought us two. A few engineering flaws wouldn’t be allowed to get in the way of such an important project.

A little over a decade since the first euro bills hit the shops in Madrid and Berlin, the euro’s design flaws have pushed much of the European Union into a deep economic pit. And political imperative is again being deployed as a major reason to stick to the common currency. “This enormously important motivation is often underestimated by outsiders,” argued the Financial Times columnist Martin Wolf, the most sober analyst of Europe’s economic maelstrom....

The main problem is that while leaders eagerly embraced the monetary bond, they rejected its necessary complement: a central budget that would transfer money from successful regions to underperforming ones, as the United States government sends tax dollars collected in Massachusetts to pay for unemployment benefits in Nevada.

The euro fed the illusion that Greece, Spain and Italy were as creditworthy as Germany or the Netherlands, propelling a decade-long credit boom in Europe’s less-developed periphery. And it was spectacularly ill-designed to deal with the shock when capital flows to those nations suddenly stopped. Weak countries not only had to rely on their own devices; they had to do so without a currency or a monetary policy of their own to absorb the blow....

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItalyPortugalSpain

2 Comments
Posted May 19, 2012 at 8:31 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Homeward bound after the Trojan War, Odysseus of Greek myth had to pick a path through seas harboring a monster with six heads and a whirlpool that digested ships whole. Now, whether modern Greece exits the euro — potentially triggering global economic turmoil in the process — depends on the tough choices of Ivi Moreti and her 11 million countrymen.

Should the 60-year-old widow leave her nest egg of euros in a wobbly Greek bank and risk it being seized and converted into a devalued national currency? Or should she withdraw it all, joining what could become a panic forcing Greece out of the euro anyway by bringing down the financial system?

Who should she vote for June 17, when this nation mired in political chaos holds its second election in two months? A party willing to largely accept the crippling bailout conditions that have taken a bite out of her pension and run the economy into the ground? Or the rising rebels promising to buck the austerity imposed on Greece by its bigger neighbors, , a course that might cause total economic collapse?

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyEuroEuropean Central BankThe Banking System/SectorForeign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted May 19, 2012 at 8:00 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Brussels is preparing plans for Greece to quit the euro, a senior official has revealed, as analysts warned that the country’s exit would cost European taxpayers at least €225bn (£180bn).

European Union trade commissioner Karel De Gucht said that both the European Commission and the European Central Bank (ECB) were working behind the scenes on contingency plans for a break-up.

“Today there are in the European Central Bank, as well as in the Commission, services working on emergency scenarios if Greece shouldn’t make it. A Greek exit does not mean the end of the euro, as some claim,” he said.

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted May 18, 2012 at 4:01 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

There could be immediate risks to the Spanish and Italian economies: Tens of billions of dollars have left those nations in recent months as investors doubt their ability to both control rising public debt and boost their economies from recession. A Greek departure from the euro would, officials and analysts fear, push the lack of confidence in the euro zone to another level, accelerate that capital flight and leave one or both nations close to economic collapse.

It is a pattern reminiscent of what happened in Latin America and Asia in the 1990s, and it is the most likely way that a Greek exit from the euro could ignite a global round of financial contagion. The risks were highlighted Thursday when the Moody’s rating agency cut its assessment of Spanish banks, saying it had less confidence in the ability of the Spanish government to support the country’s financial system.

Read it all.

Filed under: * Economics, PoliticsEconomyEuroEuropean Central BankThe Banking System/SectorPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010GreeceItalySpain

0 Comments
Posted May 18, 2012 at 5:55 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The head of Greece's radical left party—throwing down a gauntlet that could increase tensions between Greece and its frustrated European creditors—said he sees little chance Europe will cut off funding to the country but that if it does, Athens will stop paying its debts.

A financial collapse in Greece would drag down the rest of the euro zone, said Alexis Tsipras, the 37-year-old head of the Coalition of the Radical Left, known as Syriza, and potentially the country's next prime minister. Instead, he said, Europe must consider a more growth-oriented policy to arrest Greece's spiraling recession and address what he called a growing "humanitarian crisis" facing the country.

"Our first choice is to convince our European partners that, in their own interest, financing must not be stopped," Mr. Tsipras said in an interview with The Wall Street Journal. He said Greece doesn't intend to take any unilateral action, "but if they proceed with unilateral action on their side, in other words they cut off our funding, then we will be forced to stop paying our creditors, to go to a suspension in payments to our creditors."

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted May 17, 2012 at 11:02 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

A senior Greek Protestant has warned that minority denominations "face disaster" due to the country's worsening economic crisis.

"Heavy taxation, high unemployment and all our other difficulties are fast-forwarding us to collapse," said Dimitrios Boukis, general secretary of the Greek Evangelical church, which has 29 congregations in two regional synods in Greece and other communities abroad.

"We receive no state support and are fully dependent on our members, and we're already short of pastors because we can't afford them. The pastors we have are having to handle everything because we can't employ staff, so some congregations will end up without any spiritual care."

Read it all.

Filed under: * Christian Life / Church LifeParish Ministry* Culture-WatchReligion & Culture* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/Sector* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece* Religion News & CommentaryOther Churches

0 Comments
Posted May 16, 2012 at 6:10 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

There would be massive global pressure on Europe to handle the exit in a grown-up fashion, with backstops in place to stabilize Greece. The IMF would step in.

The German finance ministry is already drawing up such plans, and quite correctly so (unfortunately roping in the British too to spread the losses, which is a thorny subject).

Needless to say, the real danger is contagion to Portugal, Ireland, Spain, Italy, Belgium, France, and the deadly linkages between €15 trillion in public and private debt in these countries and the €27 trillion European banking nexus.

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreece

4 Comments
Posted May 16, 2012 at 5:51 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Greece may be forced to leave the euro if the country refuses to implement spending cuts agreed with the European Union, Angela Merkel warned.

Raising the spectre of a Greek exit, the German chancellor said “solidarity for the euro” was threatened by the ongoing political crisis in Athens.

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010GermanyGreece

1 Comments
Posted May 15, 2012 at 5:15 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The euro crisis is entering its final stages. Economic pain is now interacting with political resistance to produce intense financial pressure. I expect Greece to leave the euro – and perhaps very soon.

It could happen voluntarily, but both the Greek people and Greek politicians are still clinging to the idea that they can put an end to austerity yet still stay in the euro. In order to try to achieve that, a new government may call the eurozone's bluff.

At that point, the other eurozone members would face an awkward choice. Doubtless there would be voices in favour of providing the money, willy nilly. That might well be the French position. But if the eurozone gives way on this, what chance would there be of painful austerity being continued, not just in Greece but also in Portugal, Spain, Italy and Ireland? The northern countries would face the prospect of pouring money into a bottomless pit.

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankForeign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItalyPortugalSpain

3 Comments
Posted May 15, 2012 at 5:00 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Speaking exclusively to The Sunday Telegraph, Theodoros Pangalos said he was "very much afraid of what is going to happen" after Greek voters rejected the deal in elections last Sunday.

"The majority of the people voted for a very strange mental construction," he said. "We want to be in the EU and the euro, but we don't want to pay anything for the past."

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorForeign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

2 Comments
Posted May 13, 2012 at 1:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The chief danger is not for Greece. It is for the rest of the eurozone. If the German political establishment is unwise enough to force Greece out of EMU on the assumption that the country is a special case, it will be disabused of this illusion very quickly.

Total debt levels are 100pc of GDP higher in Portugal, and the country has roughly the same current account deficit. The only difference is that Portugal began its austerity death cure later and has not yet had time to enter into the full vortex of debt-deflation and collapse. Give it a few more months.

Spain and Italy are 20pc overvalued against northern Europe....

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorForeign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010GermanyGreece

0 Comments
Posted May 12, 2012 at 10:27 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Greece's political turmoil showed no signs of abating Tuesday as hopes faded that leading political parties can form a coalition government after Sunday's splintered election result, increasing the possibility that Greeks will be called back to the polls as early as next month.

The inconclusive vote and ensuing coalition talks, combined with concerns about the emergence of a Socialist president in France who opposes German-led austerity measures for the euro zone, has revived speculation that Greece would leave the euro, stoking new worries about the fragility of Europe's monetary union.

Read it all.

Filed under: * Economics, PoliticsEconomyEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted May 8, 2012 at 3:32 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Greece's center-right New Democracy party looks set to get the first chance to form a new government Monday, but party leader Antonis Samaras will have a complicated task after an election where angry voters punished politicians for backing harsh government budget cuts.

No party is likely to have anything approaching a majority, leaving the politically and economically volatile nation even more in flux.

The Greek stock market plunged about 7% Monday morning....

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

3 Comments
Posted May 7, 2012 at 5:10 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Much depends on the reaction of investors in debt issued by European nations, said Dimitri Papadimitriou, president of the Levy Economics Institute at Bard College. If they fear that the crisis response is losing momentum, they will likely demand higher interest rates — not just from Greece, but from other nations seen as carrying too much debt.

The result would be rising borrowing costs for Greece as well as countries that haven't received bailouts, like Italy and Spain. Rising borrowing costs sent global stock markets diving last year. Uncertainty about the path forward in Europe may mean a return to extreme market volatility after several months of relative calm.

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankStock MarketThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreece

0 Comments
Posted May 6, 2012 at 5:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Greek conservatives won at the polls Sunday in a national election but fell far short of enough seats to take power, deadlocking parliament and deepening unease over the country’s economic future and its continued membership in the Eurozone.

With 30% of the votes counted, Antonis Samaras and his center-right New Democracy party had 20.3% of the vote, far from the support needed to secure an outright majority in Greece’s 300-seat parliament. The Socialists took a brutal beating, with support for their new leader and former Greek finance minister, Evangelos Venizelos, plummeting to 14.1%, down a shocking 30 percentage points from the party’s landslide victory in 2009.

Read it all.

Filed under: * Economics, PoliticsEconomy* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted May 6, 2012 at 4:02 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

No new surveys have been allowed to be published for two weeks and pollsters warn the result may be a surprise.

"We voted for them since the 1980s and we feel cheated," municipal worker Christina Theodorakou, 50, said of the two big parties. She has seen her monthly salary cut by 500 euros since the crisis began.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/Sector* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

1 Comments
Posted May 4, 2012 at 3:49 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

On Monday, a 38-year-old geology lecturer hanged himself from a lamp post in Athens and on the same day a 35-year-old priest jumped to his death off his balcony in northern Greece. On Wednesday, a 23-year-old student shot himself in the head.

In a country that has had one of the lowest suicide rates in the world, a surge in the number of suicides in the wake of an economic crisis has shocked and gripped the Mediterranean nation - and its media - before a May 6 election.

Read it all.

Filed under: * Culture-WatchPovertyPsychologySuicide* Economics, PoliticsEconomy* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

8 Comments
Posted April 29, 2012 at 12:48 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

If Spain’s crisis deepens Europe’s recession, it could tip the entire world economy into a stubborn slump. The ramifications would be enormous, including: reduced odds of Barack Obama’s reelection, assuming a weaker U.S. recovery; less political cohesion and more social unrest in Europe (even now, the European Union’s unemployment rate is 10.2 percent); and growing pressures in many countries for economic nationalism and protectionism.

Spain is suffering a hangover from what economist Desmond Lachman of the American Enterprise Institute calls “the mother of all housing booms.”

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankHousing/Real Estate MarketLabor/Labor Unions/Labor MarketThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItalySpain

0 Comments
Posted April 23, 2012 at 5:16 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

[The] Greece youth unemployment rate has risen to 51.1%. It was 39% in 2010, 28.9% in 2009, 26.3% in 2008, 24.5% in 2007

--Alberto Nardelli as cited in this morning's Telegraph.

Filed under: * Culture-WatchTeens / YouthYoung Adults* Economics, PoliticsEconomyLabor/Labor Unions/Labor Market* International News & CommentaryEuropeGreece

3 Comments
Posted March 8, 2012 at 6:04 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

European leaders are braced for the eurozone’s first ever sovereign default this week as Greece’s efforts to secure a €206bn (£172bn) “voluntary” bond swap looks increasingly unlikely.

Authorities in Athens are ready to enforce the controversial collective action clauses, or CACs, to impose the restructuring deal on all bondholders as the number of voluntary agreements look set to fall short of the required amount.
Credit rating agencies have warned they will declare Athens to be in default if the CACs are triggered which would be a dramatic culmination to a three-year rollercoaster ride for Athens, the eurozone and global markets.

Read it all.

Filed under: * Economics, PoliticsEconomyEuroEuropean Central BankThe Banking System/Sector* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

2 Comments
Posted March 3, 2012 at 5:02 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

European leaders have approved their latest aid package for Greece, raising hopes that the worst phase of the sovereign debt crisis is over and a persistent source of stress on global markets has been removed.

But Greece's 130 billion euro ($172 billion) bailout highlights the weaknesses in Europe's response to the crisis, some analysts say. The worry is that these problems could flare up and undermine recovery efforts in countries like Italy, Spain, Ireland and Portugal.

"I don't want to be a Cassandra, but the idea that it's over is an illusion," said Kenneth S. Rogoff, a professor of economics at Harvard University and co-author of "This Time Is Different: Eight Centuries of Financial Folly." "I am amazed by the short-term psychology in the market."

Read it all.

Filed under: * Culture-WatchHistoryPsychology* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted February 22, 2012 at 9:04 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The mood is growing surly in the south of Europe as austerity measures take hold. With unemployment at 20 percent in some countries – and youth unemployment as high as 50 percent – warnings are growing sharper about a troubling rise of populist feeling....

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted February 20, 2012 at 10:32 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Almighty and everlasting God, who by the power of the Holy Spirit didst move thy servant Cyril and his brother Methodius to bring the light of the Gospel to a hostile and divided people: Overcome, we pray thee, by the love of Christ, all bitterness and contention among us, and make us one united family under the banner of the Prince of Peace; who liveth and reigneth with thee and the Holy Spirit, one God, now and for ever.

Filed under: * Christian Life / Church LifeChurch HistorySpirituality/Prayer* International News & CommentaryEuropeGreece

2 Comments
Posted February 14, 2012 at 4:38 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

It would be Europe’s worst nightmare: after weeks of rumors, the Greek prime minister announces late on a Saturday night that the country will abandon the euro currency and return to the drachma.

Instead of business as usual on Monday morning, lines of angry Greeks form at the shuttered doors of the country’s banks, trying to get at their frozen deposits. The drachma’s value plummets more than 60 percent against the euro, and prices soar at the few shops willing to open.

Soon, the country’s international credit lines are cut after Greece, as part of the prime minister’s move, defaults on its debt.

As the country descends into chaos, the military seizes control of the government.

This scary chain of events might never come to pass. But the danger that Greece or some other deeply damaged country in the euro zone could leave the single-currency union can no longer be ruled out.

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

7 Comments
Posted December 12, 2011 at 4:14 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Even as the euro zone hurtles towards a crash, most people are assuming that, in the end, European leaders will do whatever it takes to save the single currency. That is because the consequences of the euro’s destruction are so catastrophic that no sensible policymaker could stand by and let it happen.

A euro break-up would cause a global bust worse even than the one in 2008-09. The world’s most financially integrated region would be ripped apart by defaults, bank failures and the imposition of capital controls....The euro zone could shatter into different pieces, or a large block in the north and a fragmented south. Amid the recriminations and broken treaties after the failure of the European Union’s biggest economic project, wild currency swings between those in the core and those in the periphery would almost certainly bring the single market to a shuddering halt. The survival of the EU itself would be in doubt.

Yet the threat of a disaster does not always stop it from happening. The chances of the euro zone being smashed apart have risen alarmingly, thanks to financial panic, a rapidly weakening economic outlook and pigheaded brinkmanship. The odds of a safe landing are dwindling fast.

Read it all.

Filed under: * Culture-WatchGlobalizationHistoryPsychology* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankStock MarketThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItalyPortugalSpain

1 Comments
Posted November 26, 2011 at 4:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Obama, at any rate, felt that they would have little value. Instead, he confronted the Germans in Cannes with a suggestion so radical that it alarmed both Merkel and Schäuble. To save the common currency, Obama proposed that the Europeans follow the example of the American Federal Reserve, which buys up almost unlimited amounts of US treasury bonds when necessary.

The Germans pointed out feebly that the ECB operates within a completely different tradition than the Fed, and that it also pursues a different mission. But it is becoming increasingly clear to Merkel and her finance minister that, in the end, only the ECB will be able to save the euro if the crisis continues to escalate. It is the only European fiscal policy institution capable of taking action, and it also comes equipped with unlimited firepower. It can never run out of money, because it can simply print new money when needed.

This is an approach Germany's representatives in the ECB council have strongly resisted....But how long can the Germans resist the pressure from other members?

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItalyPortugalSpain

4 Comments
Posted November 9, 2011 at 6:37 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

In response to the package, the bond market has not changed its tune. The new 50% "haircut" to private sector investors in Greece hasn't altered the conviction of traders that the troubles in Athens will inevitably be contagious. Pricing of Spanish, Italian and even French bonds reflect this pessimistic outlook.

Europe's politicians are aware of what the markets have long known: Patches are destined to fail. But the urge to pass the hot potato without instituting meaningful structural change is, evidently, irresistible. So instead of muscular reforms, we see the same unsuccessful rescue packages supersized. Sunny optimism and mutual back-patting continue, paired with pep talks from the rescue fund controllers at the International Monetary Fund and the World Bank.

The latest steps don't end the Greek crisis. A Eurozone-wide problem requires a Eurozone-wide solution. The European Central Bank should be creating something along the lines of the U.S. TARP program, buying bonds to calm the volatility until a bold, permanent solution is crafted. Greece and the rest of Europe would ultimately survive the disintegration of the Eurozone and the death of the euro. But the end of a unified Europe would leave the entire world poorer.


Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankForeign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreece

2 Comments
Posted November 3, 2011 at 5:15 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Americans must not be smug about the suffering of Europeans—our financial system is thoroughly integrated with theirs. Moreover, the International Monetary Fund will most likely be involved in the event of future bailouts and will likely need large funds from its members, which ultimately means the taxpayers.

And, of course, the U.S. has its own large and growing public debt burden. We have not gone as far down the road to entitlements, but we are catching up. If you want to know how the debt crisis will play out here, watch the downward spiral in the EU.

Meanwhile, expect more volatility in financial markets. U.S. traders in particular simply have not grasped the enormity of the EU debt crisis.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankG20 Stock MarketThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--The U.S. GovernmentFederal ReserveForeign RelationsPolitics in General* International News & CommentaryAmerica/U.S.A.Europe--European Sovereign Debt Crisis of 2010FranceGermanyGreece

0 Comments
Posted November 2, 2011 at 5:46 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The crisis of the euro zone has finally hit the potholed road of real politics, with the Greeks now openly questioning whether their commitment to Europe and its single currency still matters more to them than control over their own future and economic well-being.

During the two-year financial crisis, the wealthier countries of northern Europe, led by Germany, have insisted that their heavily indebted brethren in the south radically cut spending in return for emergency loans. They have stuck to that prescription even though austerity has undermined growth and increased unemployment in Greece, Spain, Portugal and now Italy, betting that people in those countries will swallow the harsh medicine because their only alternative is to default and possibly leave the euro zone altogether.

The turmoil in the government of Prime Minister George A. Papandreou means that Greece is about to call that bet. Many Greek politicians appear to be calculating, at this late stage, that they have more to lose by sticking to Germany’s terms than by risking a messy default, and even going it alone with their old currency, the drachma, outside the euro zone.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankG20 Stock MarketThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--The U.S. GovernmentFederal ReserveThe United States Currency (Dollar etc)Treasury Secretary Timothy GeithnerForeign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreece

0 Comments
Posted November 2, 2011 at 5:31 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Germans expressed fury and frustration at Greek Prime Minister George Papandreou's shock decision to call a referendum on the latest aid package, with some saying the gamble would push Greece out of the euro zone.

"You can't help thinking that they should be grateful as Europe is trying to help," said Konstanze Pilge, a 26-year old student, walking near the Brandenburg Gate in central Berlin. "Now it looks like they are going to mess things up."

Papandreou dropped his bombshell on Monday evening, less than a week after European leaders agreed the outlines of a second bailout for Athens.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankG20 The Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreece

2 Comments
Posted November 1, 2011 at 6:05 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

...the real drama Thursday was in the meeting with the bankers, held in the offices of Herman Van Rompuy, the president of the European Council, in the huge modern building here where the summit meeting was being held. Besides Mr. Van Rompuy, Mrs. Merkel and Mr. Sarkozy, others present were Christine Lagarde, the former French finance minister who runs the International Monetary Fund; José Manuel Barroso, president of the European Commission; and Jean-Claude Juncker, chairman of the euro zone finance ministers.

While they gave in, the bankers, represented by Charles Dallara, managing director of the Institute of International Finance, praised the deal. Later on Thursday, he explained to reporters that the bankers, too, were frightened of setting off a credit event, activating credit default swaps and other complex financial instruments, with unclear but potentially dire consequences for the global financial system.

“We attached a great deal of significance to this being voluntary,” Mr. Dallara said. “We knew what it would take in our mind in terms of the basic elements to be voluntary. It was not at all times clear through the negotiations that all parties placed the same priority on this being voluntary,” he said, an indirect reference to the German chancellor.

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreece

0 Comments
Posted October 28, 2011 at 7:31 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

As Sir John Major wrote this morning in the FT, this does not solve EMU’s fundamental problem, which is the 30pc gap in competitiveness between North and South, and Germany’s colossal intra-EMU trade surplus at the expense of Club Med deficit states.

It is therefore unlikely to succeed. It means that Italy, Spain, Portugal, et al must close the gap with Germany by austerity alone, risking a Fisherite debt deflation spiral. As I have written many times, this is a destructive and intellectually incoherent policy, akin to the 1930s Gold Standard. It risks conjuring the very demons that Mrs Merkel warns against.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreece

0 Comments
Posted October 27, 2011 at 5:40 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

European leaders have reached a "three-pronged" agreement described as vital to solve the region's huge debt crisis.

They said banks holding Greek debt accepted a 50% loss, the eurozone bailout fund will be boosted and banks will have to raise more capital.

Shares on European markets rose sharply on news of the deal.

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankG20 Stock MarketThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryAsiaChinaEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceSouth AmericaBrazil

0 Comments
Posted October 27, 2011 at 6:02 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The 14th crisis summit in 21 months starts with a meeting of all 27 European Union leaders at 6 p.m. The real business gets under way at 7:15 p.m. when chiefs of the 10 non-euro nations depart, leaving the rest to hash out a strategy that they already say requires more work.

The cancellation of a finance ministers’ meeting to precede the summit underscored the holes in the plan. The finance chiefs will now meet at an as-yet undetermined time after the summit to complete its main elements, including safeguarding banks and writing down Greek debt, according to an EU official.

Global exasperation with Europe’s response is deepening, with politicians from Australia to North America prodding the euro area to get ahead of the crisis before it infects the world economy.

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankG20 The Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010GreeceItalyPortugalSpain

0 Comments
Posted October 26, 2011 at 6:12 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Just when the eurozone governments thought it could not get worse for Europe's single currency, it did.

Shell-shocked EU finance ministers meeting in Brussels on Saturday were already reeling from the worst Franco-German rift for over 20 years and a fractious failure to resolve the problems that have brought Greece, and the euro, close to the brink.

But then a new bombshell hit as a joint report by the EU and the International Monetary Fund (IMF) warned that, without a default, the Greek debt crisis alone could swallow the eurozone's entire €440 billion bailout fund - leaving nothing to spare to help the affected banks of Italy, Spain or France....

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItalyPortugalSpain

0 Comments
Posted October 22, 2011 at 5:04 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

EU ministers were wrangling on Saturday over bolstering their banks, with some officials saying broad agreement was nearing but others warning that Spain, Italy and Portugal were objecting because of concerns over the costs involved.

"There is 24 against three - Italy, Spain and Portugal," said one euro zone diplomat. "They think it's too expensive. They don't want to pay it."

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010GreeceItalyPortugalSpain

0 Comments
Posted October 22, 2011 at 3:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The current crisis over the euro has deep roots in the imbalances between north and south, rich and poor, export-led and service-driven economies, tied together by a currency but few rules, and those rarely enforced.

A fix will require fundamental changes in the functioning of the bloc, with more interference in the workings of sovereign states. There would need to be a fiscal union, with a treasury and a finance minister capable of intervening in national budgets, and more unified tax and pension policies. But it is far from clear that the European Union can gather itself to take these fateful steps away from nationalist identities to a truly European model.

“We are today confronted by the greatest challenge our union has known in its entire history,” said José Manuel Barroso, the head of the European Commission. “It is a financial, economic and social crisis. But also a crisis of confidence — in our leadership, in Europe itself, in our capacity to find solutions.”

Read it all.

Filed under: * Culture-WatchHistory* Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreece

1 Comments
Posted October 20, 2011 at 6:20 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The 17 European Union nations that share the euro don’t have that much time, of course, to convince investors that they have a plan to hold the currency together and prevent a run on the Continent’s banks. Some analysts say they have less than five weeks, until the Group of 20 summit meeting in November; others say a bit longer.

But rapid action comes hard to a union that works in increments, with political agreement required at every step.

In the short term, Greece remains the central problem. Two bailouts have not been enough. Greek public debt continues to mount, and so does the pressure on the government to find more revenue and make more cuts. Europe’s strategy, to the extent it can be discerned, is to put off restructuring Greece’s debt as long as possible and build up enough backing for a bailout fund so that banks with large exposure to the sovereign debt of Greece and other troubled euro-zone countries, like Portugal, Ireland, Italy and Spain, can survive an all-but-inevitable Greek default.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankLabor/Labor Unions/Labor MarketThe Banking System/SectorForeign RelationsPolitics in General* International News & CommentaryEuropeGreece

0 Comments
Posted October 3, 2011 at 4:39 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Money flows are even more out of kilter. Cross-border liabilities have jumped from $15 trillion to $100 trillion in fifteen years, or 150pc of global GDP. This creates a very big risk.

"Gross financial flows can stop suddenly, or even reverse. They can overwhelm weak or weakly regulated financial systems," said Mr [Stephen] Cecchetti.

Well, yes, this is now happening. Did anybody think about this when they unleashed globalisation with its elemental deformity, free trade without free currencies?

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010GermanyGreece

0 Comments
Posted October 2, 2011 at 11:01 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Greece's government acknowledged Sunday that it will miss its deficit targets this year, but moved ahead with a controversial plan to slash thousands of public sector jobs to meet the demands of its international creditors.

"I want to repeat that we will be unswerving in our goal: to fulfill all that we have promised to ensure the credibility of our country," Prime Minister George Papandreou told an extraordinary cabinet meeting called to approve the country's 2012 draft budget as well as the job-cutting plan.

Read it all.

Filed under: * Economics, PoliticsEconomyLabor/Labor Unions/Labor MarketForeign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted October 2, 2011 at 7:26 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Sitting in the modest living room of the home she shares with her parents, husband and two teenage children, Stella Firigou fretted about how the family would cope with the uncertainties of an economy crashing all around them. But she was adamant about one thing: she would not pay a new property tax that was the centerpiece of a new austerity package announced this month by the Greek government.

“I’m not going to pay it,” Ms. Firigou, 50, said matter-of-factly, as she lighted a cigarette and checked her ringing cellphone to avoid calls from her bank about late payments on a loan. “I can’t afford to pay it. They can take me to jail.”

While banks and European leaders hold abstract talks in foreign capitals about the impact of a potential Greek default on the euro and the world economy, something frighteningly concrete is under way in Greece: the dismantling of a middle-class welfare state in real time — with nothing to replace it.

Read it all.

Filed under: * Culture-WatchHistory* Economics, PoliticsEconomyEuroEuropean Central BankPersonal FinanceTaxesThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

5 Comments
Posted September 25, 2011 at 4:02 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The reserve powers would be well advised to pull out all the stops to save Europe and its banking system. Together they hold $10 trillion in foreign bonds. If they agreed to rotate just 4pc of these holdings ($400bn) into Spanish, Italian, and Belgian debt over the next two years, they could offer a soothing balm. None has yet risen to the challenge. It is `sauve qui peut', with no evidence of G20 leadership in sight.

Once again, the US has had to take charge. The multi-trillion package now taking shape for Euroland was largely concocted in Washington, in cahoots with the European Commission, and is being imposed on Germany by the full force of American diplomacy.

It is an ugly and twisted set of proposals, devised to accomodate Berlin's refusal to accept fiscal union, Eurobonds, and an EU treasury. But at least it is big.

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankG20 The Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--The U.S. GovernmentFederal ReserveTreasury Secretary Timothy GeithnerForeign RelationsPolitics in General* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010GermanyGreeceItalySpain

1 Comments
Posted September 25, 2011 at 2:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Before the euro zone, individual countries issued bonds in their local currency and could print more of it, whether it be francs, lire or drachmas, if a crisis was making it difficult to pay off the loans.

Today, with the European Central Bank in charge of euros, governments in Athens, Rome and elsewhere no longer control the “printing press.” Yet even as individual governments lost the power to pay off debts by printing money, the politics and regulations of the euro zone encouraged banks, insurance companies and other financial firms to load up on government bonds — and countries to issue them.

The “persistence in sustaining risk-free status . . . has, in our view, directly contributed to the development and severity of recent market turmoil,” Achim Kassow, a member of the board of managing directors of Germany’s Commerzbank, wrote in a recent study of the bank rule for the European Parliament. “Both the course and the severity of the crisis can clearly be tied to incentives set by current regulation.”

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItalyPortugalSpain

0 Comments
Posted September 23, 2011 at 7:35 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Key indicators of credit stress have reached the danger levels seen before the Lehman Brothers failure three years ago, with Markit's iTraxx Crossover index – or "fear gauge" – of corporate bonds surging 56 basis points to 857 on Thursday....

The yield spread between Italian 10-year bonds and Bunds reached a fresh record of 408 basis points before the European Central Bank (ECB) intervened in late trading. It is near the level at which LCH.Clearnet raises margin requirements, the trigger that forced Greece, Portugal and Ireland to request bail-outs.

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankG20 The Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItalyPortugal

0 Comments
Posted September 22, 2011 at 8:28 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The agency said the country's net general government debt is the highest among A-rated sovereigns, and now expects it to peak later and at a higher level than it previously anticipated.

“In our view, Italy’s economic growth prospects are weakening and we expect that Italy’s fragile governing coalition and policy differences within parliament will continue to limit the government’s ability to respond decisively to domestic and external macroeconomic challenges,” S&P said in a statement.

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyEuroEuropean Central BankThe Banking System/Sector* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItaly

0 Comments
Posted September 19, 2011 at 6:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

It is apparent not only that US banks have lost confidence in their European counterparts and have started shutting them out of inter-bank funding markets, but also that US officials are busy making matters worse by seeking to shift blame for America’s dire domestic performance on to influences from this side of the Atlantic. “Seventy-five per cent of the dark things happening in the world economy are because of the eurozone,” one of Geithner’s team said at Marseille....

Markets are convinced of several things: that Greece is politically incapable of meeting the austerity demands imposed by the EU and the IMF, and is now locked into a spiral in which its debt position can only become worse as its economy deteriorates; that a default on Greek sovereign debt is therefore inevitable sooner rather than later, and will impose losses on European banks, including the likes of Société Générale and Crédit Agricole of France, which may in turn need to be bailed out by their governments; and that the eviction of a bankrupt and incorrigibly irresponsible eurozone member is not only a technical possibility but an economic necessity if the single currency is to survive at all.

Read it all.

Filed under: * Culture-WatchGlobalizationHistory* Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe U.S. GovernmentTreasury Secretary Timothy GeithnerPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreece

2 Comments
Posted September 19, 2011 at 9:30 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Anders Borg, the Swedish finance minister, said that “the politicians seem to be behind the curve all the time.” Citing a “clear need for bank recapitalization,” he added: “We really need to see some more political leadership.”

Despite the potentially grave consequences, the mood in Germany seemed to be turning increasingly in favor of letting Greece fail rather than bear the growing cost.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Foreign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010GermanyGreece

0 Comments
Posted September 18, 2011 at 2:27 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

European finance ministers ended a two-day meeting here Saturday without making substantial progress toward solving the region’s debt crisis, or any pledge to recapitalize Europe’s banks.

The meetings were highlighted by the appearance by Timothy F. Geithner, the United States treasury secretary, whose advice, and warnings, drew a tepid reaction from the euro zone’s finance ministers. And Mr. Geithner’s rejection Friday of a European idea for a global tax on financial transactions prompted a debate about whether Europe should go ahead on its own.

Meanwhile, with an October deadline looming for international lenders to agree to the release of around 8 billion euros, or $11 billion, of aid to Greece, without which it could default on its debt, George Papandreou, the Greek prime minister, canceled a trip to the United States.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted September 17, 2011 at 1:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Mrs. [Angela] Merkel, 57, faces far-reaching decisions about how to deal definitively with the debt crisis in Europe and, more immediately, whether to allow Greece to default or even to leave the currency union. American officials fear that if she does not act more decisively, bank lending could freeze up and the result would be another sharp financial downturn on both sides of the Atlantic.

Fears of a worsening debt crisis slammed European stocks on Monday, especially shares of French banks, forcing the French government to declare its support for its three largest financial institutions. The turmoil added to worries that the Greek crisis would prove difficult to contain without more robust action from Germany and, ultimately, its taxpayers.

The project of European integration, which began in the difficult years after World War II, is also on the line. If Greece were forced to abandon the euro, as more and more voices on the German right are demanding, it would be a jarring setback for solidarity on the Continent.

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeEuroEuropean Central BankThe Banking System/SectorPolitics in General* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010GermanyGreeceItalyPortugalSpain

0 Comments
Posted September 14, 2011 at 5:00 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Financial turmoil in Europe is no longer a problem of small, peripheral economies like Greece. What’s under way right now is a full-scale market run on the much larger economies of Spain and Italy. At this point countries in crisis account for about a third of the euro area’s G.D.P., so the common European currency itself is under existential threat.

And all indications are that European leaders are unwilling even to acknowledge the nature of that threat, let alone deal with it effectively.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe 2009 Obama Administration Housing Amelioration PlanThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItalySpain

5 Comments
Posted September 12, 2011 at 7:31 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Germany's Finance Ministry is studying the potential impact of a Greek debt default, working through scenarios which include Greece abandoning the euro to reintroduce the drachma, Germany's Der Spiegel magazine reported on Saturday.

Read it all.

Filed under: * Economics, PoliticsEconomyEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--* International News & CommentaryEuropeGermanyGreece

1 Comments
Posted September 10, 2011 at 5:02 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Mr. [Jürgen] Stark’s resignation, nearly three years before his term was up, is widely viewed as another fissure in the edifice of European unity, which has suffered as wealthier countries like Germany have been asked to underwrite poor performers like Greece.

“It’s a very bad sign,” said Daniel Gros, director of the Center for European Policy Studies in Brussels. “It means that the split within the E.C.B. that we thought was far down the road is here now.

“It puts a shadow over the E.C.B. and risks financial markets asking, ‘How long can they go on buying these Italian bonds?’ This indicates that the answer is, ‘Not as long as I had thought.’ “

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010GermanyGreece

0 Comments
Posted September 9, 2011 at 3:47 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Harvinder Sian from RBS said the sovereign humiliation of Greece by EU creditor states smacks of colonialism and can expect to meet fierce resistance. It may be tempting for Greece to precipitate a "hard default" before the second rescue package comes into force and switches a large stock of debt contracts from Greek law to English law, he said.

It is not clear who is in the stronger position in the latest round of brinkmanship between Greece and the German bloc. If pushed too far, Greece can set off a powderkeg. The International Monetary Fund says European banks are highly vulnerable and need to raise their capital by €200bn. Many of the weakest are in Germany.

The Greek crisis has spilled over into Cyprus, raising the risk that a fourth country will soon need an EU bail-out....

Read it all

Filed under: * Culture-WatchLaw & Legal Issues* Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorForeign RelationsPolitics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010GermanyGreece* TheologyEthics / Moral Theology

3 Comments
Posted September 9, 2011 at 5:00 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Tax evasion in Greece threatened to take organised form on Thursday when café and restaurant owners refused to pay a 10-point VAT rise, as a deep recession clashes with the government’s increasingly desperate search for revenue.

The steep rise in value added tax on the hospitality sector from 13 per cent to 23 per cent is part of a package of fiscal measures agreed in return for the country’s second financial rescue by European Union partners.

But for many of Greece’s ubiquitous cafés and souvlaki stands, which have already seen a 20-40 per cent decline in business in the past year as customers rein in spending, the VAT rise is the final straw....

Read it all.

Filed under: * Economics, PoliticsEconomyCorporations/Corporate LifeEuroEuropean Central BankTaxes* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted September 2, 2011 at 7:30 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

A half-hearted approach by the EBC will achieve little. Even full-blown "shock and awe" will only buy time. That's because the real instability stems from fears euro-zone governments will impose losses on those holding individual country bonds if debts prove unsustainable. Those fears are mounting as the growth outlook deteriorates. Italy's announcement of new austerity measures Friday may help address concerns over the deficit but could actually worsen the short-term challenge of growth.

That's why the second part of the crisis resolution requires a vast expansion of the euro zone's bailout facilities and most likely a move by European countries to guarantee European Financial Stability Facility's bonds, effectively turning them into genuine euro-zone bonds.

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/Sector* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010GreeceItalyPortugalSpain

0 Comments
Posted August 7, 2011 at 11:01 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Mohamed El-Erian, chief executive of the bond giant Pimco, said investors were selling risky assets like stocks “globally prompted by concerns about the weakening economic outlook, spreading contagion in Europe and insufficient policy responses.”

With Thursday’s dive, the three major American indexes had erased all of the gains made so far in 2011, with the S.&P. and Nasdaq markedly below the start of the year.

Read it all and take a look at this graph picture which says it all.

Filed under: * Economics, PoliticsEconomyEuroEuropean Central BankStock MarketThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010GreeceItalyPortugalSpain

2 Comments
Posted August 4, 2011 at 3:24 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

...another type of contagion is causing concern: the risk of problems spreading to big banks, especially in Italy and Spain.

The growing vulnerability of the giant banks in these two countries is spurring investor fears that Europe’s latest bid to get a handle on its festering debt crisis, adopted just a few weeks ago, has come up short.

The banks own so many bonds issued by their home countries that they are being weakened as the value of those bonds falls, amid concerns that the cost of government borrowing could become too expensive for Italy and Spain to bear.

Now there are signs that these concerns are, in turn, making it harder and costlier for the banks to borrow money to finance their day-to-day operations, a troubling trend that, at the worst, could lead to liquidity problems.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankStock MarketThe Banking System/Sector* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010GreeceItalySpain

0 Comments
Posted August 3, 2011 at 11:02 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Behind the paralysis in Washington and prevarication in Berlin lies a troubling thought. Political systems in thrall to 24-hour rolling news have lost the capacity to make difficult choices. Globalisation imposes wrenching change and simultaneously saps the ability of governments to adapt. Politicians find it easier to argue about taxing the rich or cutting Medicare and about central bank bond purchases versus default than to confront the consequences for western societies of the profound upheaval in the global economy.

So it is tempting to say all is lost – that a political and economic model built on western primacy is cracking under the strain of the shifting balance of international advantage. The American dream and European welfare state are bending to the competitive winds of globalisation.

Tempting but premature. It is too early to despair. What makes the crises in Washington and Europe so infuriating is the fact that, for all they demand hard decisions, they are susceptible to political solution. The missing ingredient is leadership.

Read it all.

Filed under: * Culture-WatchHistory* Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe U.S. GovernmentBudgetThe National DeficitPolitics in GeneralHouse of RepresentativesOffice of the PresidentPresident Barack ObamaSenate* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItalyPortugalSpain* TheologyEthics / Moral Theology

2 Comments
Posted July 22, 2011 at 11:32 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Three years ago, the collapse of Lehman Brothers, the US investment bank, triggered a domino effect that had calamitous consequences for the world. No one knew how many institutions had lent money to Lehman, or how many might be pulled down with the bank. Fear spiralled through the financial markets and central banks worked overtime to prop dominoes up. The result was a painful recession.

This time, some of the dominoes are nations. Greek debt is about three times the size of that of Lehman Brothers. Around half of it is held by foreign investors, who will be hit if Greece defaults. Add in Spain and Italy, which represent about 28 per cent of eurozone GDP, and the numbers get scary. Add in a leadership vacuum, and investors start asking why they should keep lending to countries such as Italy that are troubled but still solvent...

That Europe has reached its Lehman moment is substantially the fault of its myopic and reckless power elite.

Read it all (requires subscription).

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreece

0 Comments
Posted July 21, 2011 at 6:16 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Katerina Sokou, 37, a Greek financial journalist at Kathimerini, a daily newspaper, told me this story: A group of German members of the Bavarian Parliament came to Athens shortly after the economic crisis erupted here and met with some Greek politicians, academics, journalists and lawyers at a taverna to evaluate the Greek economy. Sokou said her impression was that the Germans were trying to figure out whether they should be lending money to Greece for a bailout. It was like one nation interviewing another for a loan. “They were not here as tourists; we were giving data on how many hours we work,” recalled Sokou. “It really felt like we had to persuade them about our values.”

Sokou’s observation reminded me of a point made to me by Dov Seidman, the author of the book “How” and the C.E.O. of LRN, which helps companies build ethical business cultures. The globalization of markets and people has intensified to a new degree in the last five years, with the emergence of social networking, Skype, derivatives, fast wireless connectivity, cheap smartphones and cloud computing. “When the world is bound together this tightly,” argued Seidman, “everyone’s values and behavior matter more than ever, because they impact so many more people than ever. ...We’ve gone from connected to interconnected to ethically interdependent.”

As it becomes harder to shield yourself from the other guy’s irresponsible behavior, added Seidman, both he and you had better behave more responsibly — or you both will suffer the consequences, whether you did anything wrong or not. This is doubly true when two different countries share the same currency but not the same government....

Read it all.

Filed under: * Culture-WatchGlobalizationHistory* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankStock MarketThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted July 21, 2011 at 6:00 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Five years ago, I was among those who argued that the probability of a collapse of the eurozone was close to zero. Last year, I wrote it was no longer trivial, but small. The odds have risen steadily since, not because of the crisis itself, but the political response. I now would put the odds of a break-up of the eurozone at 50:50. This is not because I doubt the pledge by the European Council to do whatever it takes to save the euro but because I fear it has left things too late. The council may be willing but it will not be able to deliver. As I argued last week, a eurozone bond is the only solution to the crisis. But this gets progressively more expensive, and politically less realistic, once bond spreads of large countries widen.

Read it all (requires subscription).

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in General* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItalyPortugalSpain

0 Comments
Posted July 18, 2011 at 11:02 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The European debt crisis has entered “uncharted territory,” rekindling concern it will spread eastward through banking and trade links, according to the European Bank for Reconstruction and Development.

Italy’s Unicredit SpA (UCG) and Intesa Sanpaolo SpA (ISP), two of eastern Europe’s biggest lenders, fell to the lowest in more than two years July 11 as political infighting threatened to delay efforts to cut the budget deficit in the country with Europe’s largest debt burden. European leaders this week failed to agree on a new aid package for Greece.

“We are in uncharted territory,” Erik Berglof, chief economist at the London-based EBRD, which invests in eastern Europe and Central Asia, said in a July 12 interview. “The source of the contagion seems to be in worse shape.”

Read it all.

Filed under: * Economics, PoliticsEconomyCurrency MarketsEuroEuropean Central BankG20 The Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010GreeceItalySpain

1 Comments
Posted July 15, 2011 at 6:40 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

European Council President Herman Van Rompuy has called an emergency meeting of top officials dealing with the euro zone debt crisis for Monday morning, reflecting concern that the crisis could spread to Italy, the region's third largest economy.

European Central Bank President Jean-Claude Trichet will attend the meeting along with Jean-Claude Juncker, chairman of the region's finance ministers, European Commission President Jose Manuel Barroso and Olli Rehn, the economic and monetary affairs commissioner, three official sources told Reuters.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorPolitics in General* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010GreeceItalySpain

0 Comments
Posted July 10, 2011 at 3:00 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The major advanced economies should not just be worried about Greece, it said, they should be worried about themselves. If the huge debt levels of the major economies prompt the world financial markets to wonder if those debts will be honoured, so that the markets take a set against sovereign debt in general, the majors, too, will be in big trouble.

But as the British economist Dr Diane Coyle reminds us in her new book, The Economics of Enough, it is worse than that.

We have known for years that the major advanced economies are facing immense pressure on their budgets from the ageing of their populations. They are committed to generous pension payments and healthcare spending for their retiring baby boomers at a time when, for many countries, their populations will be falling.

Read it all.

Filed under: * Culture-WatchAging / the ElderlyHealth & Medicine* Economics, PoliticsEconomyPersonal FinancePensionsTaxesPolitics in General* International News & CommentaryAmerica/U.S.A.England / UKEuropeGreece

0 Comments
Posted July 6, 2011 at 10:00 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The reason a currency union needs a political union is simple. The centre has to have some way of stopping parts of the union from borrowing too much in the common currency at the common interest rate. If some borrow too much they are free riders on the backs of the more prudent areas.

If they go on borrowing too much they undermine the credit rating of the whole area, and force up the cost of borrowing for the prudent parts. To achieve discipline, the centre also needs to send subsidies and payments to the poorer parts, to compensate them for their inability to devalue to price themselves back into a competitive position.

Today the single currency system is suffering from the double stresses of too much borrowing by countries such as Greece and Portugal, who have spent too much and raised too little in tax, and from the need of countries like Ireland to bail out their overstretched banking systems....

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in General* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreecePortugalSpain

0 Comments
Posted July 3, 2011 at 5:26 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Greece has approved an austerity bill that helps pull the debt-ridden country back from the brink of an immediate default. After days of public unrest and impassioned debate, the Greek parliament voted 155-138 on Wednesday in favor of the controversial bill, which authorizes $40 billion in brutal budget cuts and tax hikes over the next several years for a nation already reeling from previous belt-tightening measures.

The tense legislative showdown came as the country continued to squirm in the grip of a 48-hour nationwide strike and as tens of thousands of angry protesters thronged downtown Athens in noisy opposition to the austerity package. Police in riot gear scuffled with some demonstrators and tried to contain the kind of violence that on Tuesday left dozens of people injured, shop windows smashed and tourists running to escape tear-gas fumes.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankG20 The Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

1 Comments
Posted June 30, 2011 at 5:00 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

There are two ways the responsible parties can rectify their mistakes. One is to recognize that Greece should never have joined the euro. If it can’t or won’t swallow austerity measures, let it leave and default on its debts.

But the risks of allowing Greece to fail are similar to what the U.S. faced with the 2008 Lehman Brothers Holdings Inc. bankruptcy. Uncertainty about losses would very likely undermine confidence in European banks and in the governments that would have to bail them out. If Greece’s failure led to a credit freeze, that would threaten banks with insolvency and cause losses for institutions that hold those banks’ debts, including the money-market mutual funds entrusted with $2.7 trillion in U.S. savings....

The alternative path is only slightly less ugly and unfair. It would require the euro area, led by Germany and France, to assume much of Greece’s $495 billion (345 billion euros) in debt indefinitely and be prepared to take on the debts of Portugal and Ireland as well....

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in General* International News & CommentaryEurope--European Sovereign Debt Crisis of 2010Greece

0 Comments
Posted June 29, 2011 at 5:40 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Indeed, as well as not paying for their metro tickets, the people of Greece barely paid a penny of the underground’s £1.5 billion cost — a ‘sweetener’ from Brussels (and, therefore, the UK taxpayer) to help the country put on an impressive 2004 Olympics free of the city’s notorious traffic jams.

The transport perks are not confined to the customers. Incredibly, the average salary on Greece’s railways is £60,000, which includes cleaners and track workers - treble the earnings of the average private sector employee here.

The overground rail network is as big a racket as the EU-funded underground. While its annual income is only £80 million from ticket sales, the wage bill is more than £500m a year — prompting one Greek politician to famously remark that it would be cheaper to put all the commuters into private taxis.

Read it all.

Filed under: * International News & CommentaryEuropeGreece

0 Comments
Posted June 26, 2011 at 12:30 pm [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

...we all know that the EU's statistical scrutiny [of Greece] failed. More pertinent is the role that Brussels played in its failure. Upon joining the euro, the Greek government was like a child in a candy store. Credit was available to it at 4% interest rates, when previously it had paid as much as 18%. But which irresponsible adult gave Athens the keys to the store?

Back in January 1999 when the euro was born, Greece was not able to join because it didn't meet the euro zone's budgetary and inflationary standards. By June 2000 though, Greece was admitted to the club—despite press reports throughout that year that Greece had qualified by "limbo dancing," or making great efforts to meet euro-zone standards only to let things slide as soon as it was past the barrier.

The European Central Bank similarly expressed its concern prior to Greece's euro entry, noting that its debt levels were far above the prescribed limit. A respected Bonn University economics professor, Jürgen von Hagen, told the New York Times that at the time, there were already "clear indications that the Greeks were forging the data."

So where was the European Commission during this time?....

Read it all (emphasis mine).

Filed under: * Culture-WatchHistoryPsychology* Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in General* International News & CommentaryEuropeGreece

0 Comments
Posted June 25, 2011 at 9:44 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

The European Union seems to have adopted a new rule: if a plan is not working, stick to it....But their strategy of denial—refusing to accept that Greece cannot pay its debts—has become untenable...

An orderly restructuring [for which the Economist advocates] would be risky. Doing it now would crystallise losses for banks and taxpayers across Europe. Nor would it, by itself, right Greece. The country’s economy is in deep recession and it is running a primary budget deficit (ie, before interest payments). Even if Greece restructures its debt and embraces the reforms demanded by the EU and IMF, it will need outside support for some years. That is bound to bring more fiscal-policy control from Brussels, turning the euro zone into a more politically integrated club. Even if that need not mean a superstate with its own finance ministry, the EU’s leaders have not started to explain the likely ramifications of all this to voters. But at least Greece and the markets would have a plan with a chance of working.

No matter what fictions they concoct this week, the euro zone’s leaders will sooner or later face a choice between three options: massive transfers to Greece that would infuriate other Europeans; a disorderly default that destabilises markets and threatens the European project; or an orderly debt restructuring. This last option would entail a long period of external support for Greece, greater political union and a debate about the institutions Europe would then need. But it is the best way out for Greece and the euro. That option will not be available for much longer. Europe’s leaders must grab it while they can.

Read it all.

Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in General* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreecePortugalSpain

0 Comments
Posted June 25, 2011 at 9:22 am [Printer Friendly] [Print w/ comments]

Posted by Kendall Harmon

Investors are withdrawing cash from money market funds heavily exposed to short-term debt issued by European banks out of fear that a Greek default could spark contagion across the region’s financial sector.

At the same time there is increasing reluctance among US banks to lend to their European counterparts in the past two weeks because of growing worries over Greece, according to brokers and bank traders.

Read it all.


Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyCredit MarketsCurrency MarketsEuroEuropean Central BankThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--* International News & CommentaryEngland / UK--IrelandEurope--European Sovereign Debt Crisis of 2010FranceGermanyGreeceItalyPortugalSpain

1 Comments
Posted June 25, 2011 at 9:08 am [Printer Friendly] [Print w/ comments]




Return to blog homepage

Return to Mobile view (headlines)