Category - European Union

Defiant Varoufakis Says He’ll Quit If Greeks Endorse Austerity

Bloomberg Business, By Matthew Campbell & Guy Johnson, July 2

Yanis Varoufakis said Greece won’t “extend and pretend” that it can pay its debts, vowing to quit as finance minister if voters don’t support him in Sunday’s referendum.

With banks shuttered and Greece’s economy hobbled by capital controls, Varoufakis said in a Bloomberg Television interview in Athens that he would “rather cut my arm off” than sign a deal that fails to restructure Greece’s debt. The 54-year-old economics professor said he “will not” continue in his post if Greece endorses austerity in the plebiscite.

The minister’s comments illustrate the gulf between Greece’s government, which swept into office on a wave of discontent about budget cuts, and the creditors who are threatening to push it out of the euro. European governments led by Germany have condemned last weekend’s decision by Prime Minister Alexis Tsipras to pull out of talks and call a snap referendum on the conditions for financial aid. Polls suggest it’s too close to call.

“Maybe we’ll change the configuration of the government”

“We desperately want to stay in the euro,” Varoufakis said. “We are going to win on Sunday.”

Short video interview with Varoufakis at the link.

Via Zero Hedge: Varoufakis Will Resign If Referendum Passes, Says Would Rather “Cut Off Arm” Than Sign

Greece debt crisis: ECB ‘to end’ bank emergency lending

The European Central Bank is expected to end emergency lending to Greece’s banks on Sunday, the BBC understands.

BBC, June 28

Well-placed sources told BBC economics editor Robert Peston a decision to end the Emergency Liquidity Assistance (ELA) would be made by the ECB’s governing council later on Sunday.

Greek banks depend on ELA funds daily.

Greek Finance Minister Yanis Varoufakis said his government would consider overnight what measures to take “to minimise the burden on our people”.

Cutting the ECB lifeline could push Greece out of the euro.

Such an ECB cut would mean “Europe has failed”, Mr Varoufakis told the BBC’s World this Weekend.

Via Naked Capitalism: BBC: ECB to Stop Emergency Support of Greek Banks on Monday; Bank Holiday Likely

The Guardian: Greek crisis: Banks shut for a week as capital controls imposed – live updates

Greek banks will not open until July 7 in an attempt to avoid financial panic, after ECB capped the emergency funds keeping them running



Eurozone doomed whether Greece leaves or stays, study shows

The single currency is forcing its members further apart and cannot survive in its current form, new analysis shows

The Telegraph, By James Kirkup, June 21

The Eurozone is doomed and cannot survive in its current form, regardless of what happens to Greece, a major new study shows.

New research demonstrates that members of the single European currency are becoming more economically divergent, making a single rate of interest increasingly unsuitable for the bloc.

Political, social and cultural differences will also make it increasingly hard for the euro members to share a currency. Eventually, the Eurozone will have to either “integrate or disintegrate”, the analysis says.

The research, by economic consultants from the ECU Group, is part of Change, or Go, a wide-ranging study of Britain’s European Union membership and future prospects.

EU issues final warning to Greece as last-ditch talks achieve nothing

The Greek interior ministry has ordered governors and mayors to transfer all cash reserves to the central bank as bankruptcy closes in.

The Telegraph, By Ambrose Evans-Pritchard, June 11

The European Union has warned Greece in the clearest language to date that its patience is exhausted and the country will be abandoned to its fate unless it accepts creditor demands in short order.

Donald Tusk, the EU’s president, said the radical-Left Syriza government must stop spinning out the negotiations and face hard choices before Greece spirals irrevocably into default.

“There is no more time for gambling. The day is coming, I’m afraid, that someone says that the game is over,” he said.

The blunt language came as the International Monetary Fund pulled its officials out of the talks, citing a failure to break the deadlock after four months of wrangling. “There are major differences between us in most key areas. There has been no progress in narrowing these differences,” it said.

Why Syriza failed; Why Europe may fail with it

Hullabaloo / Down With Tyranny, By Gaius Publius, May 15

I haven’t written much about Greece lately, but there’s quite a story going on. It’s not that difficult to follow, but you have to be careful whom you read. Conventional wisdom (backed by corporate, pro-austerity media outlets here and abroad) says it’s a morality tale — bad Greeks who went into too much debt and now they can’t pay up. Good German bankers want their money and are reluctant to forgive bad deeds because it might encourage other debt-owing entities to seek debt relief as well. They’re calling that “moral hazard,” fear that a bailout might encourage more bad behavior. There must be consequences, or so they think.

The bottom line of those who tell this tale — Greece provides a place for lovers of austerity (like cuts to social programs) to point and sneer. Their refrain, which I’m sure you’ve heard, is “We don’t want to end up like Greece, do we?”

The reality of the Greek situation is different — not hard to understand, just different.
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France is Europe’s ‘big problem’, warns Mario Monti

Gallic nation threatens to blow Europe’s Franco-German axis apart, warns former Italian prime minister.

The Telegraph, By Szu Ping Chan, March 21

France has become Europe’s “big problem”, according to the former prime minister of Italy, who warned that anti-Brussels sentiment and the rise of populist parties in the Gallic nation threatened to blow the bloc’s Franco-German axis apart.

Mario Monti – who was dubbed “Super Mario” for saving the country from collapse at the height of the eurozone debt crisis – said France’s “unease” with the single currency had already created tensions between Europe’s two largest economies.

“In the last few years we have seen France receding in terms of actual economic performance, in terms of complying with all the European rules, and above all in terms of its domestic public opinion – which is turning more and more against Europe,” he told The Telegraph.

Huge Madrid march in support of anti-austerity party

Tens of thousands fill Spanish capital in support of Podemos, as anti-austerity message surges in polls.

Al Jazeera, January 31

Tens of thousands of people have marched in Madrid on Saturday in support of the anti-austerity party Podemos, whose surging popularity and policies have drawn comparisons with Syriza, Greece’s new leaders.

Protesters chanted “Yes we can!” as they made their way from Madrid city hall to the central Puerta del Sol square. Podemos and its anti-austerity message have been surging in polls ahead of local, regional and national elections this year. Podemos (“We Can”) was formed just a year ago but gained international attention after winning five seats in elections for the European Parliament last May.

Antonia Fernandez, a 69-year-old pensioner from Madrid, came to the demonstration with her family. Fernandez, who lives with her husband on a combined pension worth about $790 a month, said she used to vote for Spain’s Socialist party but had lost faith in it because of its handling of the economic crisis and its austerity policies. “People are fed up with the political class,” Fernandez said. “If we want to have a future, we need jobs,” she said.

Like Syriza, Podemos has found popular support by targeting corruption and rejecting a European austerity program aimed at lifting struggling economies out of a deep crisis. After his Syriza party swept to victory in a snap election on Jan. 25, Alexis Tsipras promised that five years of austerity, “humiliation and suffering” imposed on Greece by international creditors were over.

7 Keys to Understanding the Greek Elections

originally posted Jan 23

Huffington Post, By Pavlos Tsimas, January 22

On Sunday at 7:00 p.m. in Greece when the ballots are closing and the first exit polls are released in Berlin, Brussels, Madrid, London, Frankfurt and New York, all the political and financial decision-makers — and people who assist in making such decisions — will be staring at their computer screens, ready to read and interpret those numbers.

The upcoming elections in Greece are undeniably a global event, whose importance transcends Greece’s borders. The importance lies in the fact that these elections are part of a series of critical elections in Europe, from the British elections in May to Spain’s elections in November.
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Lithuania losing its litas to adopt the euro currency

Euronews, December 29

On January 1, 2015 Lithuania will be the last Baltic nation to join the growing number of EU states to have adopted the euro. Like Estonia and Latvia, Lithuania is hoping for more investment and lower borrowing.

The switch coincides with steps towards greater energy independence and requests for more NATO troops in Lithuania, marking a new shift away from Moscow. But half those polled in this state of three million do not welcome the euro.

“It is all a horror movie,” elderly Laima Krecikiene said outside a supermarket by the border. “Don’t you understand? Can you imagine how little money people in the villages have? Just look at the prices, they shot up in anticipation of the euro.”

[…]

When Lithuania adopts the euro, it will leave just 11 different currencies in the EU: Bulgaria’s lev, Britain’s pound, Croatia’s kuna, the Czech koruana, Denmark’s krone, Hungary’s forint, the Polish złoty, Romania’s leu, the Swedish krona and Swiss franc.

Greece formally dissolves parliament ahead of election

Reuters, By George Georgiopoulos, December 31

Athens – Greece formally dissolved parliament on Wednesday ahead of a general election on Jan. 25 that has cast its international bailout into doubt and set financial markets on edge just as the euro zone grapples with renewed signs of weakness.

The traditional decree calling new elections was posted on the door to parliament two days after lawmakers rejected Prime Minister Antonis Samaras’ candidate for president, automatically triggering a return to the polls.

The Jan. 25 vote will mark a showdown between Samaras’ conservative New Democracy party, which imposed unpopular budget cuts under Greece’s bailout deal, and the leftwing Syriza party of Alexis Tsipras, who wants to cancel austerity measures along with a chunk of Greek debt.

Opinion polls show Syriza holding a lead over New Democracy, although its margin has narrowed to about three percentage points in the run-up to the vote.

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