Greece’s coalition government appears to be paring down its expectations for any substantial renegotiation of its bailout terms. Athens is concerned about the absence of the necessary goodwill among its eurozone partners to support an overhaul of the loan agreement. Yet, all Greek economic indicators, including the ones that point to another worse-than-expected contraction this year, scream for a substantial reworking of the package. The government’s only hope is that after almost three years of talking at cross purposes, Greece and the key European players quickly discover a way to speak a common language.
Ahead of this week’s European Union leaders’ summit and the latest visit from the troika inspectors, due to start on Sunday, the nascent coalition was steeling itself for tough negotiations with its lenders. There was a fundamental flaw to its strategy, though. Greece was preparing for political bartering when its partners were only interested in an economic discussion. Continue reading
Posted in Economy, European Union, Greece
Tagged Antonis Samaras, euro, European Union, eurozone, Greece, Greek bailout, Greek crisis, Greek economy, IMF, Recession, reforms, Unemployment
Christine Lagarde may not have wanted to imply that Greeks were suffering payback for years of living large and that the world should have more sympathy for people in Niger because they’re much worse off and at least they pay their taxes, but that’s certainly what the International Monetary Fund managing director appeared to suggest in her interview with The Guardian on Saturday.
A few hours later, and after she had been condemned by Greek leaders and thousands of people posting on her Facebook page, Lagarde clarified her comments: she was “very sympathetic to the Greek people and the challenges they are facing.” She added that a comment regarding widespread tax evasion in Greece was a reference mainly to “the most privileged.” By then, though, the damage had been done.
I took part in a radio discussion on Thursday with KCRW presenter Warren Olney. The subject was: Greece, a country left with no good choices.
The panel included Russel Shorto, the author who wrote a very good piece about Greece called ‘The Way Greeks Live Now’ for the New York Times Magazine: http://www.nytimes.com/2012/02/19/magazine/the-way-greeks-live-now.html?_r=1&scp=1&sq=Russel%20Shorto&st=cse
The other two participants were Charles Wyplosz from the International Center for Money and Banking Studies and Jennifer McKeown of Capital Economics.
It made for a very interesting discussion both with regards to the limited economic options Greece has but also about the country’s tarnished image.
Please listen if you get the chance:
Illustration by Manos Symeonakis
Of all the European leaders, Economic Affairs Commissioner Olli Rehn is perhaps the last you would expect to have a finger on society’s pulse. Yet it was the Finnish technocrat who produced the most apt analogy at the end of an epic Eurogroup session that ended on Tuesday morning with eurozone finance ministers agreeing a new bailout for Greece.
“In the past two years and again this night, I’ve learned that ‘marathon’ is indeed a Greek word,” Rehn told reporters. There seemed to be an exquisite timing to the marathon reference, even though most journalists were too bleary-eyed at that point to appreciate it. Marathon can refer to one of two things: one of the most decisive battles in history, in which the ancient Greeks repelled the threat of the Persians and a disastrous future, or the long-distance race which marks the lung-busting effort of messenger Pheidippides to inform the Athenians of victory over the invading army.
Posted in Economy, European Union, Greece
Tagged Debt restructuring, Eurgroup, eurozone, Greece, Greece recession, Greek bailout, Greek crisis, Greek debt crisis, Greek haircut, Olli Rehn, PSI
Collapsing buildings seem to be a good metaphor for Greece during these dark days. A number of edifices in Athens are likely to be demolished after being gutted by fire during rioting on Sunday night. The vandalism and violence destroyed what was a large and peaceful demonstration against the austerity measures in Greece’s latest loan agreement with the European Union and International Monetary Fund. The deal was approved by MPs but the turmoil this process caused within Greece’s parties emphasized that the country’s political structure is also crumbling.
While the expulsion of 43 MPs from PASOK and New Democracy for not approving the bailout was the most visible sign of a political system that is reaching the end of its days, the last week laid bare much greater inadequacies. No matter how many lawmakers are jettisoned from this hot air balloon, it won’t get off the ground again.
Posted in European Union, Greece, Greek politics
Tagged Democratic Left, European Union, eurozone, Greece, Greece democracy, Greek bailout, Greek crisis, Greek debt crisis, Greek politics, IMF, KKE, LAOS, New Democracy, PASOK, SYRIZA