Italy is on the brink of financial and political meltdown and leader Matteo Renzi may be abut to push t over the edge by calling a referendum on constitutional reform in October, potentially plunging the already beleaguered European Union into fresh chaos.
Juan Toro of the International Monetary Fund (Fmi), said: “It is necessary to take significant measures in the recovery of credit.” Continue reading
At the cost of national sovereignty and against the will of the Greek people, who just last week voted no in a referendum, the land where democracy was born capitulates and falls under dictatorship.
In politics, when two parties (or more) with starkly contrasting ideologies (i.e. Republicans and Democrats) agree on a deal, 99.9% of the time it’s the citizens who pay the price.
Don’t expect the Marxist Tsipras government to stay in power long.
A Greek exit from the eurozone has been avoided after a weekend of tough talks, but the political cost of arriving at a deal is likely to be felt for years to come.
After 18 hours of negotiations, culimnating six months of wider talks, euro leaders emerged bleary-eyed on Monday morning (13 July) to announce a deal that will, eventually, see Greece get a new bailout if it takes painful reforms and if it agrees to intense scrutiny at every step of the way.
The immediate result was summed up by European Commission president Jean-Claude Juncker.
“There will be no Grexit”, he said. Continue reading
As said before, Greece isn’t going anywhere — and apparently Greece would rather capitulate and be placed under German and Troika command than bow out and face imminent total collapse within days or weeks. It would lead to a violent overthrow of the Tsipras government whereas Alexis would likely still be soon replaced for defying the Greek “No” referendum vote, or, the will of the people. Capitulation will still lead to a draining of the Greek taxpayer bank accounts as per bailout requirements.
Why have the Greeks signed up to harsher austerity?
Prime Minister Alexis Tsipras is banking on securing an agreement with his creditors to keep the country in the euro. By agreeing to carry out many of the tough reforms and spending cuts he has so far resisted, he hopes to get a big concession on relieving part of the country’s debt.
Is this worse than the deal voters rejected in the referendum?
We’ve long said that negotiations between Greece and its creditors are more a matter of politics than they are a matter of economics or finance.
From the troika’s perspective, breaking Greece and forcing PM Alexis Tsipras to concede to pension cuts and a VAT hike is paramount, and not necessarily because anyone believes these measures will put the perpetually indebted periphery country on a sustainable fiscal path, but because of the message such concessions would send to Syriza sympathizers in Spain and Portugal. In short, the troika cannot set a precedent of allowing debtor nations to obtain austerity concessions by threatening to expose the euro as dissoluble. Continue reading
The situation in Greece has escalated meaningfully since last week. After the IMF effectively threw in the towel and sent its negotiating team back to Washington on Thursday, EU and Greek officials agreed to meet in Brussels over the weekend in what was billed as a last ditch effort to end a long-running impasse and salvage some manner of deal in time to allow for the disbursement of at least part of the final tranche of aid ‘due’ to Greece under its second bailout program. Talks collapsed on Sunday however as Greek PM Alexis Tsipras, under pressure from the Left Platform, refused (again) to compromise on pension reform and the VAT, which are “red lines” for both the IMF and for Syriza party hardliners. Continue reading
Athens takes creditor by surprise, saying it will bundle together €1.6bn of debt payments due to International Monetary Fund and settle up on 30 June
Greece has moved closer to default and possible exit from the eurozone after telling the International Monetary Fund it would not be making a debt repayment of €300m (£219m) due on Friday.
A crisis that has been going on for more than five years entered a new phase when Athens surprised the IMF by saying it intended to bundle up four payments in June totalling €1.6bn and make them all at the end of the month.
The move came as the Greek government reacted angrily to what was seen as an ultimatum from its creditors – including the IMF – that demanded further austerity and unpopular reforms to VAT, pensions and wage bargaining as the price for €7.2bn in fresh financial help.
According to Bloomberg, the Greek government is €400 million short of the amount needed for payment of pensions and salaries this month, citing a Kathimerini report.Surprisingly, this takes place even as Greece’s IKA, OGA pension funds have been informed by the government that amount needed for payment of pensions will be deposited today, while the Greece’s OAEE pension fund has said payment of pensions won’t be a problem.
In other words, someone is not telling the truth: either there is enough money or there isn’t. And if the latter case is valid, then either the government or the pensions are now openly lying to the population. Continue reading