There was an unusual sense of calm among eurozone leaders at last week’s summit in Brussels. The pain from the constant headache of the debt crisis seemed to have been dulled by a 1-trillion-euro aspirin. The European Central Bank’s decision last week to launch a second round of longer-term refinancing operations (LTRO), with eurozone banks borrowing more than 500 billion euros to top up their liquidity, appears to have calmed the markets and politicians. So much so that French President Nicolas Sarkozy essentially declared the crisis to be over.
Putting aside the questionable enthusiasm of a president seeking a second term in upcoming elections, the December LTRO, when the ECB also lent more than 500 billion euros, and last week’s liquidity operation have at the very worst bought the eurozone some time. Some of the LTRO money was spent by the banks on snapping up their government’s bonds, which has led to yields dropping for countries like Italy and Spain, which were facing unsustainable borrowing costs.
Posted in Economy, European Union, Greece
Tagged Bundesbank, Drachma, ECB, ELA, Emergency Liquidity Assistance, euro, European Central Bank, Greek banks, Greek default, Jens Weidmann, Longer Term Liquidity Operations, LTRO, Mario Draghi
“I don’t want to hear your life story when you ask a question,” BBC presenter and debate moderator Zeinab Badawi warned the large audience at the Hellenic Cosmos theater in Athens on Tuesday night before the cameras started rolling for one of the most interesting discussions the city is likely to host this year. It was certainly not a night for personal tales. This was about the story of a country and its dramatic fall from grace and economic stability.
The subject of the debate – organized by Intelligence Squared – was whether Greece should remain in the euro or return to the drachma. What exquisite timing that the debate should take place on the same day the Eurogroup agreed on a new bailout for Greece, one which some think will be enough to keep the country in the single currency and others believe is bound to drive Greeks back to the drachma.
Posted in Economy, European Union, Greece, Greek politics
Tagged Costas Lapavitsas, Denis Macshane, Drachma, euro, European Union, eurozone, Greece, Greek crisis, Greek debt, Greek default, Intelligence Squared, Miranda Xafa, Nouriel Roubini
Animated illustration by Manos Symeonakis
There is a wonderful short documentary doing the rounds on the Internet at the moment courtesy of The New York Times. Directed by Errol Morris, the film focuses on the presence of the so-called “Umbrella Man” at the assassination of US President John F. Kennedy. With the help of private detective and former philosophy professor Josiah Thompson, Morris paints the picture of the apparently sinister presence of a man holding a black umbrella on a sunny day in Dallas exactly at the point where Kennedy was shot.
However, Thompson goes on to point out that the Umbrella Man eventually came forward and explained that he was holding the umbrella as a protest against the appeasement policy of JFK’s father, Joseph P. Kennedy, when he was US ambassador to Britain before the Second World War. The umbrella was a visual reference to the British prime minister at the time, Neville Chamberlain, who also carried one.
Posted in European Union, Greece, Greek politics
Tagged Drachma, euro, European Union, eurozone, Greece, Greece austerity, Greece retirement, Greece tax evasion, Greece working hours, Greek bailout, Greek crisis, Greek debt crisis, Greek public sector, Greek spending, Greek statistics, International Monetary Fund
Prime Minister Lucas Papademos has returned to Greece after holding talks in Brussels, Luxembourg and Frankfurt with European Union officials aimed at securing further emergency loans. It remains unclear whether he has done enough — or indeed if he can do enough on his own — to secure further funding.
There have been no such problems for Greece’s debt-plagued bailout brother Portugal, which on November 16 was told it would be receiving its third installment of a 78-billion-euro emergency loan package. While Greece is hanging on for the 8 billion euros it needs by mid-December to prevent bankruptcy, Portugal has already received exactly the same amount.
Posted in Economy, European Union, Greece
Tagged Austerity, debt crisis, Drachma, Escudo, euro, eurozone, Greece, International Monetary Fund, Portugal, Recession, Unemployment