Greece and the economic crisis 2015
NEWS ARCHIVE - April 17 - April 20
April 20, 2015
IMF says Greek talks gaining momentum as default looms - Cityam"Greek finance minister Yanis Varoufakis has warned of the contagion costs surrounding a "Grexit".
"Anyone who toys with the idea of cutting bits of the Eurozone hoping the rest will survive is playing with fire," he told La Sexta, a Spanish TV channel, in an interview recorded 10 days ago.
"Some claim that the rest of Europe has been ring-fenced from Greece and that the ECB has tools at its disposal to amputate Greece, if need be, cauterize the wound and allow the rest of [the] Eurozone to carry on."
"I very much doubt that is the case. Not just because of Greece but for any part of the union."
"Once the idea enters peoples' minds that monetary union is not forever, speculation begins ... who's next? That question is the solvent of any monetary union. Sooner or later it's going to start raising interest rates, political tensions, capital flight."
Endless nightmare? Why Greece is on the brink - Economic Times
"Don't you think they want us to fail?"
That's the question I kept hearing during a brief but intense visit to Athens. My answer was that there is no "they" - that Greece does not, in fact, face a solid bloc of implacable creditors who would rather see default and exit from the euro than let a leftist government succeed, that there's more goodwill on the other side of the table than many Greeks suppose.
And I came away from the visit fearing that Greece and Europe may suffer a terrible accident, an unnecessary rupture that will cast long shadows over the future."
Greece’s far-right Golden Dawn leaders snub court as criminal trial begins - euronews
"The leaders of Greece’s far-right Golden Dawn party refused to show up at court on Monday at the start of a landmark trial in which the elected politicians are accused of forming a criminal gang.
The trial was adjourned soon after starting. It will convene again on May 7 and is expected to drag on for months. If found guilty, the defendants face up to 20 years in prison.
...Large numbers of witnesses, lawyers, journalists and dozens of police packed the rowdy courtroom inside the heavily guarded Korydallos prison, near Athens. Dressed in a cream-coloured suit, Giorgos Roupakias, who confessed to the stabbing, was led in handcuffed.
But Mihaloliakos and the party’s senior officials were absent and represented by their lawyers."
Europe Braces for Messy Greek Endgame - WSJ
"It’s still possible that Greece can remain in the eurozone—though that is no longer the base case for many policy makers. At the very least, most fear the situation is going to get much, worse before it gets any better. No one now expects a deal to unlock Greek bailout funding at this week’s meeting of eurozone finance ministers in Riga—originally set as the final deadline for a deal. The new final, final deadline is now said to be a summit on May 11.
But among European politicians and officials gathered in Washington DC last week for the International Monetary Fund’s Spring Meetings, there was little optimism that a deal will be agreed by then.
...The bottom line is that Athens won’t get any money unless it can reach a deal that satisfies the IMF that Greek debt is on a sustainable path and that it has a medium-term funding plan in place. The eurozone won’t disburse its own bailout funds without a deal that carries this IMF seal of approval."
April 19, 2015
ECB's Mario Draghi Makes A Dreadful Mistake Over Greece And The Euro - Forbes
"....Syriza insists that Greece deserves a new debt deal: they might well be right on that too. However, they also want that deal on their terms, not those the Eurogroup wants to impose upon them. Specifically, the Eurogroup wants to see substantial moves towards structural reform of the economy. And the specific ones that they want are anathema to a hard left party like Syriza. At which point that Great Big Cluebat is needed. For if Greece doesn’t agree to those structiral reforms then there won’t be a new debt deal. And that, almost inevitably, will lead to default. But default, in and of itself, isn’t all that large a problem. No one is saying that it would be fun or simple but, well, Greece has been in default on its foreign debts for some 50% of its existence as an independent country. It’s something that can be managed. And Greece is also around and about running a primary budget deficit so it could default and not have to impose monstrous austerity if it did so.
...look at what Draghi is saying: there’s no leaving the euro. Thus the threat of turfing Greece out of the euro (if anyone wanted to do it it would be by stopping EULA, the way in which the Greek banks are propped up) if it does default doesn’t exist. At which point, Greece gets something it might not mind all that much, default, without getting what it really doesn’t want, exit from the euro."
Greece wants EU/IMF deal but impasse could bring referendum - Yahoo
"Ongoing talks are not expected to produce a deal for the approval of euro zone finance ministers at their next meeting in Riga on April 24 as progress is painfully slow. "Our objective is a viable solution inside the euro," Yannis Dragasakis told the paper. "We will not back off from the red lines we have set." Asked whether the government had thought of calling a referendum or even going to the polls if talks become deadlocked, Dragasakis said this could be a possibility, although the government's goal was to reach an agreement. "
Greek default necessary but Grexit is not - Financial Times
"The big question — whether Greece will leave the eurozone or not — remains unanswerable. But I am now fairly certain it will default.
...The economic case for a debt default is overwhelming. It is hard to see how Greece can ever service its debts as agreed. Even in the creditor countries few people are under illusions about Athens’ long-term debt-servicing capacity. Full servicing would require huge primary surpluses — that is, surpluses before payment of interest on debt. It would leave Greece trapped in a debt depression for a long time. The scheduled primary surplus for 2016 is 4.5 per cent, which is bordering on the insane. Athens absolutely needs to default.
...On whom could, or should, Greece default? It could default on its citizens by not paying public-sector wages or pensions. That would be morally repugnant and politically suicidal for the Syriza-led government. In theory, it could default on the two loans it received from its EU partners, though it is not due to start repaying the first of those until 2020, and the second in 2023. It could also default on the remaining private-sector bondholders but that would not be a good idea. Greece might need private sector investors later.
It could also default on the IMF and the European Central Bank. The IMF is expecting a series of repayments. The ECB wants its money back in the next few months on debt it holds on its books. Defaulting on the IMF and ECB is the only option that would bring genuine financial relief in the short term. Nobody has ever done that. It might trigger Grexit.
Then again, it might not. Default is not synonymous with exit. There is no EU ruling that says you have to leave the eurozone when you default on your debt."
April 18, 2015
Russia to loan Greece ‘up to $5bn’ to join Turkish pipeline - RT
"Russia is planning to pay Greece a large multibillion advance against future profits from operating a gas pipeline that would pump Russian fuel through Turkey and Greece to the rest of Southern Europe, German magazine Spiegel reported.
The energy deal may be signed as soon as Tuesday next week, said a report citing a senior source in the Greek government. Figures quoted range from $3 billion to $5 billion."
EU sets 'decisive' 11 may deadline for Greece - Euro observer
"Forget the 24 April Eurogroup meeting in Riga. The new deadline to find an agreement between Greece and its lenders is now the next Eurogroup planned on 11 May.
In an interview with the Financial Times Friday (17 April), EU commissioner for economic and financial affairs Pierre Moscovici said Greece must "speed up" work on reforms and that the 11 May meeting "certainly must be decisive".
"The April 24 meeting in Riga must not be a wasted moment; it must be a useful moment in which we see concrete progress in catching up with those reforms". This is the first time a top EU official has clearly indicated a date for an agreement on Greek reforms to unblock a €7.2 billon loan to the cash-strapped country."
Greece seeks Chinese, Russian cash - Bangkok Post
"Greek officials are pulling out all the stops — including feelers to China and Russia — to find 15 billion euros (US$16.2 billion) to avoid default, according to Greek media reports.
The weekly newspaper Karfi quoted government officials as saying that the country hoped China would lend 10 billion euros, in the form of a prepayment for future use of the port of Piraeus and as an advance on its investment in Greece's railway operator.
The country is also hoping for an additional 3 billion to 5 billion euros from Russia, according to the weekly Agora, also quoting officials. That would serve as an advance payment for fees linked to a planned gas pipeline dubbed Turkish Stream. The pipeline would bring Russian gas to the Greek-Turkish border.
Greek Prime Minister Alexis Tsipras spoke with Russian President Vladimir Putin earlier this month about extending the pipeline onto Greek territory so the gas could then be shipped on to Central Europe.
...However, questions linger, such as whether the European Union would approve the deal to bring the pipeline into Greece and whether there is a way to release money for a project that has yet to receive such approval."
April 17, 2015
Greece scrapes bottom of barrel in hunt for cash to stay afloat - Reuters"Officials from Greece and the lenders are meeting in Brussels on Saturday for a new round of negotiations ahead of a key euro zone finance ministers' meeting in Riga on April 24.
"This is the last bit of cash that the Greek state has," a senior finance ministry official, who requested anonymity, told Reuters.
Euro zone officials have voiced scepticism about previous Greek warnings of empty coffers, although even they acknowledge a crunch is nearing.
For months, the government has been borrowing from different parts of the state administration, including the Athens subway system, to pay the wages and pensions of public sector workers. Now, however, it is reaching the end of the line."
Greece running out of time to avoid collapse - CNN Money
"Markets are beginning to freak out over Greece, again.
Greece needs about 1.7 billion euros to pay pensions and wages by the end of April, and one billion for payments to the International Monetary Fund by May 12.
There is still 7.2 billion euros left in the 240 billion euro Greek bailout fund -- a lifeline the country needs to avoid "Grexit," or crashing out of the euro.
But the money will only be released if Greece's creditors are happy with its plans for economic reforms -- and there are still big differences over the labor market, pensions, sales tax and privatization."
NEWS ARCHIVE - April 2015
Greece's Golden Visa program
