European Economy


What a splendid currency is the euro!

From Citi: The Euro Summit proposal does not include a clear commitment to debt restructuring, and essentially blames previous policy failures for Greece’s ‘insurmountable’ debt problems. It notes that “there are serious concerns regarding the sustainability of Greek debt. This is due to the easing of policies during the last twelve months, which resulted in


The Greek resolution, such as it is

Starting back in 2011 I posted rather frequently about the macroeconomic situation in Europe. My basic premise for what we would see in its future was best summed up with the following sentence. Periphery nations weakening, France in the middle, Germany outperforming, but the whole ship slowly sinking. Given recent history that seems to have


Greek bailout moves forward

The pillaging of Greece moved forward overnight with progress across a range of measures. The EFSM bridging loans are falling into place: The EU is tomorrow likely to approve the use of the European Financial Stabilisation Mechanism (EFSM) to provide a €7bn bridge loan to Greece to hold it over until its full bailout programme is agreed. Non-Eurozone


Greece deal under intense assault

The IMF raised the heat on the Greek bailout last night releasing a statement that they want out of the deal, maybe pressured by the US, unless there is debt relief. They also said they informed the EU of their position prior to negotiations with Greece and it would appear they were openly ignored. Without


Greek humiliation deepens

The IMF can see just how bad is Greek humiliation, from Reuters: Greece will need far bigger debt relief than euro zone partners have been prepared to envisage so far due to the devastation of its economy and banks in the last two weeks, a confidential study by the International Monetary Fund seen by Reuters


Greece chooses violence

The Greek deal has been struck with complete national humiliation its core principle, including the transfer of 50 billion euros in state-owned assets abroad. The deal is far worse than that rejected in the referendum ipso facto it has an ice block’s chance in Hell of surviving domestic politics. Indeed, violence is now the base case. Bloomie has


Greece writhes

From ekathemerini: Greek Prime Minister Alexis Tsipras is set to begin a bruising week by clearing out party rebels opposed to an austerity package that will have to go through parliament within days, people close to the government say. With Greece’s future in the eurozone in the balance and European partners demanding immediate action to


Greece brought a latte to a gunfight

The weekend’s European news could not be more extraordinary. A superb opinion piece by Yanis Varafoukas in The Guardian brought everything to a head: In 2010, the Greek state became insolvent. Two options consistent with continuing membership of the eurozone presented themselves: the sensible one, that any decent banker would recommend – restructuring the debt and reforming


And now for Grexit

Not much to report on Greece today except to say that not much has changed. The Greek Government is preparing a proposal that Germany is unlikely to accept. Here are a couple of useful flow charts, first from Deutsche via Zero Hedge on negotiations: Grexit looks the more likely to me. And from Bloomie on the key dates:


Grexit front and centre

The US doesn’t want a Grexit, from the FT: US Treasury secretary Jack Lew has raised the pressure on European leaders to grant some debt relief to Greece to help avoid its exit from the eurozone and what Washington sees as an unnecessary hit to the global economy. Warning that a Greek meltdown would cause hundreds


Do not trust markets on Grexit

From the FT: Athens is to submit a new proposal to eurozone authorities for a third bailout by Wednesday morning after Greek negotiators stunned some eurozone finance ministers by arriving at their meeting without a revised economic reform proposal. Despite the apparently abortive start to what had been billed as a last-ditch effort to salvage


EZ gives Greece one last chance, lol

From the FT: Athens will be given a final chance to present a new reform plan to eurozone leaders on Tuesday night despite a hardening attitude to Greece in many capitals after the emphatic rejection of previous bailout terms in Sunday’s referendum. But eurozone officials said leaders were unlikely to agree to restart rescue talks


Yanis driven out

Fresh from the blog of Yanis Varoufakis: The referendum of 5th July will stay in history as a unique moment when a small European nation rose up against debt-bondage. Like all struggles for democratic rights, so too this historic rejection of the Eurogroup’s 25th June ultimatum comes with a large price tag attached. It is, therefore,


Greece mulls printing counterfiet euros

From Ambrose Evans-Pritchard: Top Syriza officials say they are considering drastic steps to boost liquidity and shore up the banking system, should the ECB refuse to give the country enough breathing room for a fresh talks. “If necessary, we will issue parallel liquidity and California-style IOU’s, in an electronic form. We should have done it


Greece says “no” in landslide

With 60% of the Greek referendum vote counted it appears to be over: Who could have known that a sovereign people would tell a foreign power with whom they were previously at war to shove their blackmail demands? Here is Deutsche with where we go from here: NO, Scenario #N1. Soft deal This, in our


Your Greek primer

It appears the Greek referendum that begins today is too close to call: From Credit Suisse via Forexlive here’s the scenarios: 1- “Victory of the “No” camp, would immediately cast markets in uncharted territory. The vote alone might not necessarily trigger a systemic reaction, but we would expect the increase in uncertainty to weigh on


Markets go long Greek happiness

The FT makes the Greek situation as clear as is possible: Greece’s prime minister accused Europe’s leaders of attempting to “blackmail” Greek voters, just hours after apparently holding out an olive branch to the country’s creditors by accepting most of the terms of the economic reform plan they had tabled last weekend. Eurozone officials said they


Greek polling backs “no” vote



Greece defaults, sorta (updated)

From RT: International Monetary Fund has confirmed it didn’t receive €1.5 billion from Athens that were due by the end of June 30, Brussels time. Greece becomes the first developed country to default on its international obligations. IMF spokesman Gerry Rice said in a statement that Greece had asked for a repayment extension earlier on


It’s all good in Greece!

All day I’ve been reading feel good pieces about Greece. At Dad’s Army first Alan Kohler and then old man Gotti, at Fairfax it’s Phil Baker,  The Pascometer and even Chris Joye is into it this afternoon: If Greece votes to accept the troika’s deal there will likely be a prompt settlement given the collateral damage


Grexit is upon us

Greece is set to default on its IMF loan: And from Yanis’ own blog The Eurogroup Meeting of 27th June 2015 will not go down as a proud moment in Europe’s history. Ministers turned down the Greek government’s request that the Greek people should be granted a single week during which to deliver a Yes or No answer


Greece at the brink

Courtesy of FTAlphaville comes more views on Greece. Beat Siegenthaler of UBS: According to media reports the ECB has issued a statement saying that ELA would be kept at current levels as of last Friday. This means that Greek banks may not have sufficient cash to open tomorrow Monday as normal. As a result, there


Greece blinks

I’ve been waiting for some clarity after the winding up of the Greek Eurogroup emergency meeting before posting and it appears we the following from AP: Greece has accepted the principle of extending its current bailout programmewhich expires at the end of the month so as to keep it afloat while a long-term debt solution


Goldman on Greek scenarios

From Goldman Sachs: Our central case that a deal will come only after (or thanks to) the introduction of capital controls, a technical default on the IMF and issuance of IOUs/and a further build-up of arreas. The logic is that it is only when the cash constraint is fully binding and associated economic and financial


Greece confronts the final deadline (again!)

So here we are again. D-day for Greece…. until the next one. Well maybe not this time. The Eurogroup has called meeting for 3pm Monday ahead of emergency EU leaders summit to be held 7pm. There is obviously further negotiating occurring in the lead up to that event in the hope of a last minute deal


Geopolitics will trump economics in Greece

By John Browne, cross-posted from EuroPacific Capital Inc Based on the continued failure of the negotiating parties to make any substantive progress in the talks over Greek debt payments, the financial world is tied up in knots over a possible Greek exit from the European Union. The uncertainty has manifested in both high and low


Greece to see return of the Colonels?

by Chris Becker Talk of Grexit seems to be turning into reality as the days and hours go on towards the June 30 deadline. One of the major reforms enacted by Athens was to turn the large deficit into a surplus (admittedly, a surplus sans interest payments), but interestingly one area not touched in the