The euro crisis

The Economist

Bazooka or peashooter?

Greece’s new bail-out helps, but should have gone further

WHEN Henry Paulson, America’s then treasury secretary, readied a plan to prop up Fannie Mae and Freddie Mac, two teetering housing agencies, in the summer of 2008, he spoke of having a “bazooka” in his pocket. In their response to the sovereign-debt crisis, Europe’s policymakers have tended to favour the peashooter. Their latest salvo in defence of Greece on July 21st produced some favourable initial reports, but the bang has faded. In a strange inversion of the crisis to date, the new bail-out plan seems to have helped the weaker peripherals and hurt the stronger ones.

Moody's warns it may downgrade its Spanish bond rating

BBC 29-7-11

Moody's has warned it may downgrade the credit rating of Spanish government bonds, saying last week's second rescue package for Greece had done little to ease debt concerns in the eurozone.

The rating agency said it was reviewing Spain's current Aa2 grade, adding that if it was downgraded, it would probably be by just one level, to Aa3.

UPDATE 2-China may help fund Greek bond buybacks-finmin source

There are signs that China interested in buybacks - source

* Greek finmin met China's IMF representative in Washington

* Analyst says may be wishful thinking

By George Georgiopoulos and Lefteris Papadimas

ATHENS, July 29 (Reuters) - China could provide loans to Greece to fund government bond buybacks in the secondary market to help cut the country's debt burden, a Greek finance ministry official said on Friday, but analysts were sceptical.

Greece to get September bailout from bilateral loans

(Reuters) - Greece will get its next 8 billion euro tranche of emergency loans from the euro zone and the International Monetary Fund in September as planned, provided it meets agreed criteria, the spokesman for the Eurogroup President said on Friday.

"There is no problem at all. The troika will only be in Athens from mid-August onwards and deliver their report at the beginning of September and that is when the decision (on the next disbursement) will be taken," Guy Schuller said.

Greek Deal Facilitates Worsening Relations

The Wall Street Journal

Frau "nein" becomes Frau "ja," and the euro zone is saved. So we are told by the 17 Heads of State after a meeting that even the tough-minded analysts at Jefferies International concede "exceeded expectations."

Of course, past meetings helped set the expectations bar quite low. Still, let's not quibble: Because German Chancellor Angela Merkel and French President Nicolas Sarkozy decided that some progress had to be made lest Greece bring down Italy, Spain, and perhaps the euro, the Heads put their heads together and staved off—deferred would be a better word—a crisis that was about to burst on the euro zone, primarily because Ms. Merkel won her battle to have private-sector investors share the pain.

Greece Gets New Bailout as U.S. Nears Brink

The Wall Street Journal

Plan to Contain Crisis Likely Means First Euro-Zone Default

By CHARLES FORELLE, PATRICIA KOWSMANN and COSTAS PARIS

BRUSSELS—Euro-zone leaders agreed Thursday on a new €109 billion ($157 billion) bailout for Greece and new steps to prevent its debt crisis from metastasizing across the Continent—in a plan expected to trigger the first debt default by a nation using the common currency.

The meeting also produced a stark and open-ended declaration: The wider euro zone is committed to financing countries that take bailouts—thus far, Greece, Ireland and Portugal—for as along as it takes them to regain access to private lenders.

What Constitutes a Greek Default? And Who Decides?

The wall street journal

By ART PATNAUDE

The euro-zone crisis is bringing ratings agencies once again into sharp focus, with euro-zone governments eager to avoid anything that could be considered a default as they try to restructure Greece's debt. After several failed attempts, euro-zone officials are now saying the plan could be to allow a default.

But how do the credit ratings agencies decide whether a Greek restructuring plan constitutes a default? Who are the decision makers? And what criteria do they use to make such a decision?

A Guide to the New Deal in Athens: How a 'Selective Default' Works

Q:Thursday's deal by euro-zone leaders means Greece is likely to be declared in "selective default" by credit-rating firms. What does this mean?

A: It's a technical assessment that means investors in some Greek bonds will be worse off as a result of the deal. It implies holders of other bonds are still being repaid in full and on time.

Q:How significant is it?

Is the Big Greek Deal Really Big?

•           JULY 22, 2011, 7:24 AM ET

By Stephen Fidler

Winston Churchill said Americans will always do the right thing, but only after exhausting all the alternatives. So, perhaps, the leaders of the euro zone, who gathered for yet another emergency summit in Brussels on Thursday, finally did the right thing—or at least recognized the gravity of their predicament.

Their problem is that the time they have taken in the process of exhausting all the alternatives has extracted a heavy cost.

Fitch Default Warning Pares Back Market Rally

The wall street journal

LONDON—Europe's financial markets modestly welcomed the latest euro-zone agreement Friday on a new financing package for Greece and measures to prevent contagion from spreading.

However, a warning from Fitch Ratings Inc. later Friday that the role of the private sector in the Greek bailout plan would constitute a "restrictive default" dented enthusiasm.

EU Leaders Offer $229 Billion in New Greek Aid

“We doubt that this package alone will bring an end to recent contagion effects…”

Jonathan Loynes, chief European economist at Capital Economics Ltd

By Simon Kennedy and Jonathan Stearns - Jul 22, 2011 7:53 AM GMT+0300

Euro-area leaders redoubled efforts to end the 21-month sovereign bond crisis as they erected a firewall around Spain and Italy and risked temporary default to lighten Greece’s debt burden.

Euro Bonds May Be the Best Bet to Resolve the European Debt Crisis: View

Bloomberg

The bond markets are sending Europe’s leaders an unmistakable message: The opportunity to contain the euro area’s debt crisis is slipping away. If they want to save the union and its currency, the leaders will have to consider something far more ambitious than what’s been spelled out so far. Perhaps the unspecified agreement French President Nicolas Sarkozy and German Chancellor Angela Merkelreportedly reached last night on Greek debt marks the beginning of a wider -- and bolder -- effort.

Toward a Greek default

The economist

Jul 21st 2011, 14:38 by R.A. | WASHINGTON

AS EUROPEAN leaders gather in Brussels to settle on a new plan to address Greece's debts and—they hope—the broader issue of market confidence in the euro zone, details of a potential deal are emerging. It appears that German Chancellor Angela Merkel and French President Nicolas Sarkozy met last night with European Central Bank head Jean-Claude Trichet in an attempt to iron out their differences. A framework for an agreement was reportedly reached and will be presented at today's summit. No specifics are available, but a few key issues appear to have been settled.

First, it looks as though a haircut for Greek creditors is now likely.

German-French Harmony on Greece

Compromise on Bondholders' Role Clears Path for a New Bailout Deal

By MARCUS WALKER

The Wall Street Journal

BERLIN—German Chancellor Angela Merkel, under mounting pressure in and outside Germany to show stronger leadership in the euro-zone debt crisis, reached a late-night compromise with France over a fresh bailout for Greece ahead of a crucial European summit planned for Thursday.

Treasuries Drop for 2nd Day as Greek Accord Damps Safety Demand

Bloomberg

By Lucy Meakin and Wes Goodman - Jul 21, 2011 11:02 AM GMT+0300

Treasuries fell for a second day as talks between German ChancellorAngela Merkel and French President Nicolas Sarkozy boosted optimism the European Union will help Greece avoid a default.

Longer-maturities led the decline after Merkel and Sarkozy reached a joint position on Greece before euro-region leaders meet today to discuss the region’s debt crisis. The U.S. will today auction $13 billion of 10-year inflation-protected securities and announce the sizes of three note sales scheduled for next week, after the administration indicated it may reach a compromise on the debt ceiling to avert a default.

Bunds Fall, Greek Notes Rise on U.S., European Fiscal Optimism

Bloomberg

By Garth Theunissen and Emma Charlton - Jul 20, 2011 7:01 PM GMT+0300

German bunds fell while securities from the euro region’s most fiscally strained nations rose on optimism that European leaders meeting tomorrow will take steps to contain the region’s debt crisis.

Top E.U. Official Joins Chorus Warning of Greek Fallout

The New York Times

By STEPHEN CASTLE

Published: July 20, 2011

BRUSSELS — On the eve of a crucial summit of euro area leaders, a senior European Union official said Wednesday that failure to act decisively on Europe’s debt crisis could have global repercussionsThe warning from José Manuel Barroso, president of the European Commission, came as the French President Nicholas Sarkozy was heading to Berlin for a pre-summit meeting with the German Chancellor Angela Merkel.

How to Contain Debt Crisis in Europe: Giavazzi and Kashyap

Bloomberg

With Italy now paying the same rates as Spain to finance its debt, the European crisis has reached a critical stage.

To prevent the possible demise of the single currency, the European Union now must come up with a credible plan to address the future of the euro area. Only a proposal that takes into account the following four painful realities would be credible and stand a chance of persuading markets to resume financing on a sustainable basis.

Papandreou Sees Make-or-Break Time in Crisis

Bloomberg

By Maria Petrakis - Jul 20, 2011 12:00 AM GMT+0300

Greek Prime Minister George Papandreou says Europe’s leaders need to show tomorrow that they can resolve the European Union debt crisis to avoid a contagion enveloping Italy and Spain.

“It could be a make-or-break moment for where Europe is going,” Papandreou said during an interview in his Athens office at Parliament yesterday. “Markets are saying pretty much what I’m saying too: that Greece is doing what it can, but that Greece is not going to be able to carry the weight of all of Europe and the other problems that Europe has.”

Euro Weakens Versus Yen as European Leaders Prepare to Meet on Debt Crisis

Bloomberg

By Monami Yui and Candice Zachariahs - Jul 20, 2011 9:04 AM GMT+0300

The euro fell against the yen before French President Nicolas Sarkozyand German Chancellor Angela Merkel meet amid concern European leaders will fail to reach a solution to the region’s debt crisis at a summit tomorrow.

Eurozone crisis: What would a break-up look like

Nearly everything that eurozone leaders have done in response to the euro crisis has been done in the name of preventing contagion.

But guess what. It's already here. Because (nearly) everything those leaders have done, after large amounts of dithering, has ended up making the situation worse.

In the past 24 hours we have seen: Spanish and Italian bond yields head over 6%; the value of shares in three of Britain's leading banks fall by 6-7% yesterday, as a result of European stress tests which they passed; and the gold price hit an all-time record of $1600 per ounce. (British bank shares have since gone back up again).

Phew. It makes you wonder where we'd be now, if Europe's leaders had NOT been so focussed on limiting contagion.

In liberalized Greek workplace, dancers swirl freely

(Reuters) - If you want to be a dancer in Greece, you can now swirl freely into your new career. But if your heart is set on opening a pharmacy, things are not that easy.

As part of its overhaul of the economy to send investors a message it is making changes to tackle its debt crisis, the Greek government is opening up professions but the jobs market is still far from an even playing field.

Athens has promised international lenders to untangle a web of rules on about 135 "closed" professions, allowing anyone who wants to drive a Greek taxi, open a bakery or guide tourists on the Acropolis to do so without restriction as of July 2.

Debt Worries Roil Markets

Investors Fear Contagion of Greek Crisis, Washington Stalemate Over Deficit

By TOM LAURICELLA, MATTHEW PHILLIPS and E.S. BROWNING

The Wall Street Journal

Worries about government debt rocked capital markets on both sides of the Atlantic Monday, as fears that the Greek crisis will spread combined with concerns at the standoff over the U.S. debt ceiling.

The selloff started in Europe, hitting bonds and stocks in countries regarded as vulnerable to contagion from Greece, and spread to the U.S. where the Dow Jones Industrial Average ended at its lowest level since late June after a wild session.

EU Struggles to Convince on Greek Deal

Bloomberg

By Jeffrey Donovan - Jul 19, 2011 3:00 AM GMT+0300

European leaders are struggling to convince investors that they will agree on a second Greek bailout at a summit this week as record bond yields threaten to boost financing cost at sales of Spanish and Greek debt.

European Union government chiefs plan to meet for the second time in a month on July 21, aiming to break a deadlock over a new Greek rescue that has spooked investors. Spanish and Italian bonds yields surged yesterday, piling pressure on officials to end the turmoil. Spainand Greece sell as much as 5.75 billion euros ($8.1 billion) of bills today.

No consensus as Europe limps toward Greece summit

(Reuters) - European government officials and commercial bankers struggled to reconcile competing proposals for a second bailout of Greece on Monday, just three days before a summit meeting called to prevent the crisis from spreading through the region.

French government spokeswoman Valerie Pecresse said she believed the summit of the euro zone's 17 national leaders scheduled for Thursday in Brussels would agree on a rescue of Greece, supplementing a 110 billion euro ($154 billion) bailout launched in May last year.

But after three weeks of preparatory talks, it was unclear how a consensus could be reached on a way for private owners of Greek government bonds -- banks, insurers and other investors -- to contribute to the bailout by taking cuts in the face value of their holdings.

Pressure rises for Greek debt buy-back, swap

By Annika Breidthardt and George Georgiopoulos

ATHENS/BERLIN | Mon Jul 18, 2011 2:51am EDT

(Reuters) - German Chancellor Angela Merkel called on Sunday for private investors to make a major contribution to bailing out Greece, as pressure rose for radical action to cut the country's debt burden.

Officials proposed a range of schemes for Europe's bailout fund, the European Financial Stability Facility, to finance a buy-back or a swap in which private owners of Greek government bonds -- banks, insurers and other investors -- would accept cuts in the face value of their holdings.

European Central Bank Executive Board member Lorenzo Bini Smaghi suggested the EFSF be allowed to provide funds for a buy-back of bonds from the market, where prices have in some cases fallen 50 percent from levels at which the debt was issued.

The Clash of Generations

By THOMAS L. FRIEDMAN

Published: July 16, 2011

I REALIZE that I should be in Washington watching the debt drama there, but I’ve opted instead to be in Greece to observe the off-Broadway version. There are a lot of things about this global debt tragedy that you can see better from here, in miniature, starting with the raw plot, which no one has described better than the Carnegie Endowment scholar David Rothkopf: “When the cold war ended, we thought we were going to have a clash of civilizations. It turns out we’re having a clash of generations.”

Euro Declines Before Summit on Debt Concern; Swiss Franc Rises to Record

Bloomberg

By Masaki Kondo - Jul 18, 2011 9:05 AM GMT+0300

The euro fell the most in a week against the dollar and slid to a record versus the Swiss franc on concern European leaders will fail to agree on measures to contain the region’s debt crisis at a summit this week.

The 17-nation currency dropped for the first time in four days versus the yen after European Central Bank President Jean- Claude Trichet reiterated his opposition to any restructuring of Greek debt. The franc strengthened for a seventh day against the euro and the dollar as a decline in Asian stocks boosted demand for safer assets. Australia’s dollar weakened for a third day as traders added to bets the central bank will cut interest rates over the next 12 months.

ECB's Bini Smaghi favours EFSF debt buybacks

(Reuters) - Allowing the EFSF bailout mechanism to buy back bonds from the secondary market would help deal with Europe's debt crisis, European Central Bank Executive Board member Lorenzo Bini Smaghi told a Greek newspaper.

Euro zone policymakers are exploring ways to extend a rescue deal for overborrowed Greece and give it more time to repair its public finances. At the same time, authorities are trying to prevent the debt crisis from escalating in the bloc's periphery.

Europe Sets Summit on Greek Debt

The Wall Street Journal

BERLIN—European leaders will convene on Thursday for an emergency summit on Greece, in a quest to resolve the festering debt crisis threatening ever more euro-zone countries.

The summit will aim to approve a plan for private-sector involvement in financing the Greece government, senior European officials said.

Such an agreement would resolve the last major stumbling block to a fresh bailout package for Athens, needed to prevent the country from defaulting on its roughly $500 billion of debt.

Euro-zone governments and the European Central Bank have been arguing for three months about whether banks and other bondholders should be made to share the burden of funding Greece, with the ECB and some national capitals arguing that imposing costs on private investors could wreck the market's confidence in many other euro countries.

Greek Haircut Is ‘Unavoidable’, Merkel Adviser Franz Tells Focus

Bloomberg

By Oliver Suess - Jul 16, 2011 11:39 AM GMT+0300

Wolfgang Franz, head of German Chancellor Angela Merkel’s council of economic advisers, said it’s “unavoidable” that investors in Greek debt will have to forfeit some repayments and interest, Focus magazine reported, citing an interview.

Investors could swap Greek debt for discounted bonds issued and guaranteed by the European Financial Stability Facility, Focus cited Franz as saying.

Several Ways to Chip Away at Greece's Debt Mountain

The Wall Street Journal

Euro-zone finance ministers admitted for the first time this week that they must reduce the burden that Greece's enormous government debt is placing upon the country's economy.‪

Easier said than done.

The ministers said Monday they will explore "steps to reduce the cost of debt-servicing and means to improve the sustainability of Greek public debt."

A "sustainable" debt burden is one that a debtor will be able to repay in full and on time, and that will eventually start to fall as a proportion of economic output. It's a term of art, rather than science. The International Monetary Fund continues to claim that Greece's public debt, forecast to rise above an enormous 160% of gross domestic product, is sustainable—even in the face of financial market incredulity.

Europe shifts to examine broad, radical steps on Greece

Reuters

Thu Jul 14, 2011 9:59am EDT

 Threat to Italy, Spain causes change in approach

* Greece, Ireland see shift towards "comprehensive" solution

* Way cleared to have private sector pay

* But this might still not cut debt to manageable level

* New emphasis on defending banks, stimulating growth

By John O'Donnell - BRUSSELS, July 14 (Reuters) - Alarmed by a worsening of the euro zone debt crisis, policymakers and bankers are examining radical proposals to rescue Greece that include a sharp cut in its debt burden, ways to prop up banks and a new emphasis on boosting Greek growth, official and banking sources say.

Greek 2-Year Yields Hit Record Ahead of Tests

Bloomberg

By Garth Theunissen and Emma Charlton - Jul 15, 2011 1:10 PM GMT+0300

Greek and Irish two-year notes led declines by securities from Europe’s most indebted nations, while German bunds rose before the publication of stress tests that may show European banks need more capital.

Yields on two-year Greek and Irish debt reached euro-era records, while German 10-year yields headed for a second straight week of declines as investors favored the safest assets amid concern the region’s debt crisis is worsening. Regulators will release test results for 91 banks to help reassure investors that the region’s lenders have enough capital. Standard & Poor’s yesterday became the second ratings company this week to warn that it may cut the U.S.’s top credit grade.

Italy and the euro

On the edge

The Economist, Jul 14th 2011

By engulfing Italy, the euro crisis has entered a perilous new phase—with the single currency itself now at risk

FOR more than a year the euro zone’s debt drama has lurched from one nail-biting scene to another. First Greece took centre stage; then Ireland; then Portugal; then Greece again. Each time European policymakers reacted similarly: with denial and dithering, followed at the eleventh hour with a half-baked rescue plan to buy time.

Europe Said to Face IMF Doubts on Greek Aid Without Debt Cut

Bloomberg

By James G. Neuger - Jul 14, 2011 5:57 PM GMT+0300

European finance ministers are concerned that the International Monetary Fund will curb its share of a Greek rescue of as much as 115 billion euros ($163 billion) unless the plan includes deep cuts in Greece’s debt burden, two people with knowledge of the talks said.

A program that fails to generate a sustainable reduction in Europe’s biggest debt load may require governments to finance a bigger share of the three-year lifeline, said the people, who declined to be named because the talks are in progress. The IMF has provided one third of the three previous euro bailouts, including Greece’s in 2010.

Solution Is at Hand—With a Little Courage

By SIMON NIXON

The Wall Street Journal, July 13 2011.

The darkest hour is just before dawn—and these are undoubtedly dark days for the euro zone. Italian and Spanish bonds have hit record euro-era spreads over German bunds; shares in many banks from peripheral euro-zone countries are now at post-Lehman lows; the euro has fallen sharply against the dollar and Swiss franc. Few now doubt a Greek default risks triggering a "Lehman moment" for the euro zone and the global economy. Yet a comprehensive solution to the euro crisis could be activated in days. All it requires is political courage.

Europe’s wakeup call

Le Monde Diplomatique

BY SERGE HALIMI

The economic, and democratic, crisis in Europe raises questions. Why were policies that were bound to fail adopted and applied with exceptional ferocity in Ireland, Spain, Portugal and Greece? Are those responsible for pursuing these policies mad, doubling the dose every time their medicine predictably fails to work? How is it that in a democratic system, the people forced to accept cuts and austerity simply replace one failed government with another just as dedicated to the same shock treatment? Is there any alternative?

A substantial problem

Jul 12th 2011, 16:28 by Charlemagne | BRUSSELS

The Economist

AS ministers, officials and journalists stagger out of the Justus Lipsius building tonight, the unofficial word is that European leaders will be summoned here on Friday to finalise the deal that finance ministers could not conclude.

The statement issued last night was a study in vagueness (see my earlier post), but the outlines of a compromise are becoming clearer: in exchange for a willingness by private bond-holders to support some form of debt rollover for Greece, euro-area members will have to support Greece in buying back its bonds from the secondary market.

IMF Sees Longer Greek Downturn

By JENNY PARIS And IAN TALLEY

The Wall Street Journal

LONDON—Greece must press ahead with its fiscal reform and privatization agenda in a timely and determined manner in order to bring its debt back to sustainable levels, the International Monetary Fund said Wednesday.

"There's no room for slippages," said Poul Thomsen, deputy director of the IMF's European Department and mission chief to Greece, in a conference call with journalists.

In its staff report reviewing Greece's performance under the current joint European Union/IMF loan program, the fund warned that any deviation from policy conditions Greece has promised to implement would likely mean failure.

Greek Debt Deadlock Spreads Fears

The Wall Street Journal

By CHARLES FORELLE

BRUSSELS—Top euro-zone politicians, engaged for months in a string of meetings that have failed to bring agreement on how to provide more aid to Greece, are trying furiously to stamp out the flames of contagion licking at Italy and Spain.

Fears have also ricocheted elsewhere: Ireland's prime minister said Wednesday in his parliament that it was time for European Union leaders to "grasp the nettle" of the debt crisis, adding that Moody's Investor Service's move late Tuesday downgrading Ireland's debt to junk status was caused by the bloc's failure to respond adequately.

Greece Gets World’s Lowest Rating by Fitch

Bloomberg

 By Lorenzo Totaro and Marcus Bensasson - Jul 14, 2011 2:00 AM GMT+0300

Greece’s credit rating was cut three levels to Fitch Ratings’ lowest grade for any country in the world as the company followed rivals and said that a default is a “real possibility.”

The move to CCC from B+ “reflects the absence of a new, fully funded and credible” program by the International Monetary Fund and the European Union, the ratings company said yesterday in a statement in London. It also reflects “heightened uncertainty surrounding the role of private creditors in any future funding, as well as Greece’s weakening macroeconomic outlook.”

Family Differences, Global Issues

By LANDON THOMAS Jr.

Published: July 12, 2011

The New York Times

ATHENS — In a sun-drenched room at the foundation here that is named for his father, Nick Papandreou pondered the task confronting his older brother, George: dismantling the Greek welfare state largely erected by their father, Andreas Papandreou.

\ “This is his moment,” Nick Papandreou, a 54-year-old Princeton-educated economist, said of George,Greece’s current prime minister. “Although it does happen to come at the worst time in Greek history.”

Europe, IMF need to act soon to avoid contagion: IIF

By John O'Donnell

BRUSSELS | Tue Jul 12, 2011 1:07pm EDT

(Reuters) - Euro zone countries and the IMF need to show they can deliver a rescue plan for Greece, including a debt buyback, in coming days to avoid financial markets "spinning out of control," a bank lobby group said.

The Institute of International Finance (IIF), which is leading negotiations on behalf of banks and insurers with billions of euros of exposure to Greekbonds, made the warning in a draft paper delivered to European finance ministers, dated July 10 and seen by Reuters.

Highlights: IMF says Greece must work harder on implementation

ATHENS | Wed Jul 13, 2011 12:30pm EDT

(Reuters) - Poul Thomsen, the International Monetary Fund's mission chief for Greece, gave a news conference on Wednesday to present the multilateral lender's latest review of Greece's efforts to deal with its debt burden.

Following are highlights of comments by Thomsen:

ON REFORMS

"Reforms were slowing down and need reinvigoration. To have further progress in bringing down the deficit, Greece needs to go ahead with structural reforms." "The medium-term program is very impressive. There is hardly a part of society that is not affected. It is a difficult program, one that will be asking for some sacrifices, but the burden of adjustment is fairly distributed."

Germany digs in heels over Friday summit on Greece

By John O'Donnell and Sarah Marsh

BRUSSELS/BERLIN | Wed Jul 13, 2011 12:28pm EDT

(Reuters) - Euro zone plans for a leaders' summit on a second Greek rescue were thrown into doubt by Germany on Wednesday, raising fears markets may exploit a policy vacuum with a new onslaught on the bloc's high debtors.

Berlin stuck to its line that Greece was funded until September so there was no rush to finalize the details of a second package. "There are no concrete plans for a special summit," a German government spokeswoman said.

Commerzbank CEO: Greek Restructure Is Feasible

The Wall Street Journal

By WILLIAM LAUNDER

FRANKFURT—A restructuring of Greek debt would be "rocky but feasible" for Greece and could include private creditors replacing more than €50 billion in Greek debt backed by the euro zone, Martin Blessing, chief executive of Germany's Commerzbank AG, said Tuesday in an interview with newspaper Frankfurter Allgemeine Zeitung.

Mr. Blessing's comments mark what is probably the first public occasion that a senior-level private banker has pushed for a restructuring of Greek debt, and amid persisting concerns about how to provide a new bailout package for Greece involving private bondholders' support.

Moody's cuts Ireland to junk, warns of second bailout

12-7-2011

 (Reuters) - Moody's cut Ireland's credit rating to junk on Tuesday, warning that the debt-laden country would likely need a second bailout -- just the latest move amid heightening concerns about Europe's ability to address its debt crisis and prevent it from spreading.

Moody's move comes a week after it slashed Portugal to junk status with a similar warning about the need for a second round of rescue funds. It reflects the credit rating agency's view that any further financial assistance from Brussels will require private investors to share part of the pain, possibly through a debt rollover or swap.

European finance ministers have acknowledged for the first time that some form of Greek default may be needed to cut Athens' debts, and if that materializes, Ireland's rating, never before in junk territory, could be set for a further round of cuts.

Countdown

The row over the debt ceiling is going down to the wire

jul 7th 2011 | WASHINGTON, DC | from the print edition

THE stand-off over America’s debt ceiling has entered strange territory: pretty much everyone agrees the limit will be raised, but it is becoming ever harder to see just how. The Treasury reckons it will run out of cash on around August 2nd. But with time running short, the parties seem as far apart as ever.

A substantial problem

Jul 12th 2011, 16:28 by Charlemagne | BRUSSELS

AS ministers, officials and journalists stagger out of the Justus Lipsius building tonight, the unofficial word is that European leaders will be summoned here on Friday to finalise the deal that finance ministers could not conclude.

The  statement issued last night was a study in vagueness (see my earlier post), but the outlines of a compromise are becoming clearer: in exchange for a willingness by private bond-holders to support some form of debt rollover for Greece, euro-area members will have to support Greece in buying back its bonds from the secondary market.

The way to end the Greek farce

JUL 12, 2011 10:10 EDT

Reuters 

By Hugo Dixon

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The Greek crisis is fast descending into farce. The position of Germany, the euro zone’s main lender, is increasingly absurd. It is adamant that there will be no restructuring of Greek debt — at least, until 2013. And yet it is equally insistent that Athens’ private-sector creditors should contribute up to 30 billion euros to a new, 120 billion euro bailout. That would effectively amount to a half-cocked restructuring.

America's debt

Shame on them

The Republicans are playing a cynical political game with hugely high economic stakes

Jul 7th 2011 | from the print edition

IN THREE weeks, if there is no political deal, the American government will go into default. Not, one must pray, on its sovereign debt. But the country will have to stop paying someone: perhaps pensioners, or government suppliers, or soldiers. That would be damaging enough at a time of economic fragility. And the longer such a default went on, the greater the risk of provoking a genuine bond crisis would become.

Greek fire

The Economist

Jul 12th 2011, 15:08 by Charlemagne | BRUSSELS

ONE CAN understand the anger of George Papandreou, the Greek prime minister. He has faced down riots, mass protests and party rebellion to push through a second austerity and reform package. But a second bail-out from the euro zone that was supposed to tide Greece over until 2014 has yet to materialise (although it did get a €12 billion ($17 billion) tranche of loans to keep going until September).

Last night's euro-zone statement was filled with promises of action, but the details remain slippery (see my post). Indecision is causing contagion; contagion is affecting bigger countries, like Italy. And the contagion of Italy threatens to ravage all of the euro zone, including Greece.

Mr Papandreou's letter to Jean-Claude Juncker, who presides over the Eurogroup of finance ministers, sums up the mismanagement of the euro-zone crisis more eloquently than most. It is worth reading. A long excerpt below:

Which way things are going?

My estimations of the situation (they reflect my personal views).

Selecting default

The Economist June 11^th 23:48

FOR THE first time since the start of the Greek debt crisis more than a year ago, the finance ministers of the euro area are ready to consider a default by Greece. They did not say so explicitly, of course, but the omissions from their statement tonight were eloquent.

Stocks, Euro Pare Losses, Italy Bonds Gain

Global stocks trimmed declines, a day after the biggest selloff since March, and the euro pared losses after Italy and Greece sold debt and European governments worked to halt the region’s credit crisis.

The MSCI All-Country World Index fell 0.7 percent at 10:56 a.m. in New York, recovering from an earlier plunge of as much as 1.4 percent. The Standard & Poor’s 500 Index slipped 0.1 percent after futures on the gauge tumbled as much as 1.8 percent before U.S. exchanges opened. The euro was down 0.2 percent at $1.3964 after slumping as much as 1.4 percent. Italian bonds reversed losses, sending 10-year yields down 15 basis points to 5.53 percent. Sugar and zinc led gains in the S&P GSCI Index of commodities as it reversed early losses.

Europe considers Greek default, leaders to meet

(Reuters) - European Union leaders are poised to hold an emergency summit after finance ministers acknowledged for the first time that some form of Greek default may be needed to cut Athens' debts and stop contagion to Italy and Spain.

"There will be an extra summit this Friday," a senior euro zone diplomat told Reuters, suggesting policymakers have been seized with a new sense of urgency after markets started targeting Italian assets.

Italian, Spanish, Portuguese Bonds Slump

By Garth Theunissen and Emma Charlton - Jul 11, 2011 1:28 PM GMT+0300

Italian and Spanish bonds tumbled and German bund yields sank to a seven-month low as contagion from Greece’s debt crisis threatened to spread to bigger economies, stoking demand for the safest assets.

The spreads investors demand to hold Italian, Portuguese and Spanish debt over bunds widened to euro-era records. The European Central Bank is seeking to double a fund to 1.5 trillion euros ($2.14 trillion) to cover an Italian crisis, Die Welt reported yesterday, citing senior central bankers. EU leaders are prepared to accept a Greek default on some obligations, the Financial Times said yesterday.

Democratization Can't Save Europe

The Need for a Centralization of Power

An Essay by Herfried Münkler

Spiegel Online International

Despite the myriad problems currently facing the European Union, democratization is not the answer. Rather, the EU's elites need to improve -- and power has to be taken away from the periphery.

Europe's political elites are a pathetic sight at the moment, from their contradictory reactions to the rebellions in the Arab world to their timid handling of the euro crisis. Either they persist in doing nothing or they flee from one falsehood to the next, all in the expectation that this will enable them to gain control over the markets. Now that the European elites have had to produce proof of their long-held claim that Europe is a capable player on the global political and economic stage, they have done nothing but flounder. And because they refuse to believe that this is the case, they celebrate every stumbling move as the salvation of Europe and the euro. The poor image Europe is currently projecting is largely the result of the impotence of its elites .

Italian Debt Adds to Fears in Euro Zone

The New York Times

By STEPHEN CASTLE

Published: July 10, 2011

LONDON — Top European officials planned to meet on Monday to wrestle with threats to the currency union as fears mounted that Italy could become a victim of the debt crisis even as discussions stalled over a second bailout for Greece. Finance ministers in the euro zone had previously scheduled two days of talks to begin on Monday afternoon in Brussels, with an emphasis on how to resolve Greece’s troubles. Over the weekend, a meeting of more senior officials was set for Monday morning.

A spokesman for Herman Van Rompuy, president of the European Council, denied that senior officials would discuss the state of Italy’s finances, which many investors consider increasingly precarious. But another official, who requested anonymity because he was not authorized to speak publicly, said Italy would probably be on the agenda.

ECB Is Heading for Some Hefty Icebergs

The By IRWIN STELZER

The Wall Street Journal

The Argentine government and the euro-zone policy makers have much in common: both have pistols at the ready, and aimed at unwanted messengers.

Argentina's government says the country's inflation rate is 9.7%. Most independent economists put the figure at 20%. So the government has filed criminal charges against one consulting firm, MyS for "publishing false information about inflation data," part of a coordinated campaign against independent economists.

EU Calls Top Officials to Meet on Greece Aid

The Wall Street Journal

By RIVA FROYMOVICH

European Union President Herman Van Rompuy has called a meeting of top EU policy makers Monday to discuss plans for a second bailout package for Greece, EU officials said on Sunday.

The gathering comes as Europe continues to struggle with a contentious issue: whether and how Greece's private-sector creditors should share the burden when the anticipated second aid package is doled out to the debt-burdened country.

Greece Needs ‘Endgame’ From EU to Enact Deficit Cuts, Canada’s Martin Says

Bloomberg
Former Canadian Prime Minister Paul Martin, who slashed his nation’s debt in the decade through 2005, said Europe needs to show Greece how austerity will pay off in the medium term to successfully push through budget cuts.

Letter to the Greeks

JUN 29, 2011 09:38 EDT

By Hugo Dixon
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Dear Greeks,The anger you feel about your plight is understandable. You are staring at several unpalatable alternatives, all of which will involve big cuts in living standards for years to come. But the options you face are not all equally bad. You must avoid an emotional reaction that leaves you in an even worse state — and you must ostracise those who resort to violence.

What Obama Wants

By PAUL KRUGMAN

Published: July 7, 2011

On Thursday, President Obama met with Republicans to discuss a debt deal. We don’t know exactly what was proposed, but news reports before the meeting suggested that Mr. Obama is offering huge spending cuts, possibly including cuts to Social Security and an end to Medicare’s status as a program available in full to all Americans, regardless of income. Obviously, the details matter a lot, but progressives, and Democrats in general, are understandably very worried. Should they be? In a word, yes.

Some of the Wall Street Journal reader's opinions about the Greek Crisis...

The Greeks Have Little Wiggle Room

While Andy Kessler's proposal for restructuring Greek debt by backing it with Greek assets is attractive ("The 'Brady Bond' Solution for Greek Debt," op-ed, June 29), it raises a significant question that he does not address.

Beware of Greeks Bearing New AAA-Rated Gifts

 Jonathan Weil

Structured finance helped turn Greece into a disaster zone. It seems only natural that Greece would look to structured finance once again to buy time.

The spark that accelerated Greece’s debt crisis early last year was the revelation that Greek authorities had used some fancy derivative trades a decade ago to mask the true size of the country’s debt. Today it’s Greece’s creditors who are dreaming up the wacky financial engineering, in hopes that the European Union can keep pretending the nation isn’t bankrupt.

Was it worth it?

Jul 4th 2011, 14:10 by R.A. | WASHINGTON

STEVE WALDMAN asks the burning question:

Suppose that Greece had never adopted the Euro and the terms of its external borrowing had remained subject to “market discipline”, as it had been in the 1990s. Would Greece today be better off or worse off, in real terms, looking forward?

Debt crises

Europe and America, increasingly alike

Jul 6th 2011, 13:52 by M.S.

The Economist

GIDEON RACHMAN had a good thumb-sucker in yesterday's Financial Times arguing that the current political-economic crises in America and Europe are basically two sides of the same crisis. "In Washington they are arguing about a debt ceiling; in Brussels they are staring into a debt abyss. But the basic problem is the same. Both the US and the European Union have public finances that are out of control and political systems that are too dysfunctional to fix the problem," Mr Rachman writes. I have some quibbles about the way he frames the economic issues as a generalized problem of "an unsustainable and dangerous boom in credit", viz homeowner credit in America and the overdrawn borrowing of Greece and Italy in Europe.

Is democracy an economic liability?

Jul 6th 2011, 17:01 by R.A. | WASHINGTON

The Economist

OVER at Democracy in America, a colleague embarks on an interesting discussion highlighting the similarities between the institutional roots of economic troubles in Europe and America. Then, alas, he goes astray:

I actually think the issue goes beyond the increasing unwillingness of Chinese authorities to even pretend to listen to Western complaints about human rights. Unless you buy the Nouriel Roubini argument, and I don't, China is going to be the world's largest economy within ten or 15 years, bigger than America or the euro-zone. And, in case anyone has failed to notice, it's a Communist country.

Hedge Funds Move Past Greece With Bets That Sovereign Debt Crisis Expands

By Katherine Burton and Saijel Kishan - Jul 7, 2011 7:00 AM GMT+0300

Hedge funds that trade bonds and loans are increasing bets that Europe’s sovereign debt crisis will spread to Portugal, Spain and Italy, even after Greece won a temporary reprieve with 12 billion euros in aid.

“Nothing you’ve seen so far has dealt with solvency, just liquidity,” said Simon Finch, head of credit trading at CQS UK LLP, a London-based hedge fund that oversees $11 billion.

Finch, who has bought and sold corporate bonds and loans for 18 years, has stepped up trading in mobile-phone, utility and toll-road companies in the three countries. He expects their governments will be forced to slash spending to pay off lenders, slowing growth and reducing discretionary consumer outlays.

CQS is among the hedge funds that say investors are underestimating the odds of distress or even default not only by Portugal, whose credit rating was downgraded this week to junk status by Moody’s, but also by the bigger Italy and Spain. The funds are moving beyond a direct wager that sovereign debt values will tumble, targeting potential fallout in the corporate-debt market and the banking industry.

German Move Roils Talks on Greece

Revived Proposal for Bond Swaps Raises Question on Plans for Encouraging Private-Sector Creditors to Help in Bailout

By STEPHEN FIDLER in Brussels, SEBASTIAN MOFFETT in Paris and BRIAN BLACKSTONE in Frankfurt

European governments' plan for private-sector creditors to help Greece's next bailout without triggering a default were thrown into doubt Wednesday, as senior German officials resurrected a once-rejected proposal that would cost investors more.

Spot the pattern

Jul 5th 2011, 18:55 by R.A. | WASHINGTON

HERE'S a chart showing the yields on 10-year Greek debt over the past three months. See the pattern?

The abuses of austerity

A new plan to cut Greece’s debt looks doomed to fail

SOME years back a Greek finance minister, fed up with his country’s waste and extravagance, claimed that he could save money by shutting down the national railway and driving its passengers around in taxis. He was accused of hyperbole but seems, rather, to have been guilty of understatement. In 2009 the Greek railway collected just €174m ($250m) in fares and other revenues. Meanwhile, it spent €246m on wages and lost a total of €937m.

Portugal Rating Cut on Possible Greek Follow

Moody’s Investors Service cut Portugal’s credit rating to below investment grade on concern the southern European country will need to follow Greece in seeking a second international bailout.

The long-term government bond ratings were lowered to Ba2, or junk, from Baa1, and the outlook is negative. Discussions to involve private investors in a new rescue plan for Greece make it more likely that the European Union will require the same pre-conditions in the case of Portugal, Moody’s said in a statement.

“That’s very significant because not only does it affect current investors, but it is likely to discourage new private- sector lending going forward, and therefore reduce the likelihood that a country like Portugal will be able to regain access to the capital markets at a sustainable cost,” Anthony Thomas, a senior analyst at Moody’s in London, said in a telephone interview yesterday.

Greek Rescue Snarled by Sales

By STEPHEN FIDLER And MATTHEW KARNITSCHNIG

Europe's hopes for a significant contribution by private bondholders to a new bailout for Greece are fading, as it becomes clear that banks have sold off a substantial proportion of their Greek government-bond holdings despite pledges by some of the institutions not to do so.

Greece has about €64 billion ($93 billion) of benchmark bonds coming due in the next three years, among other liabilities, and euro-zone leaders had hoped that private lenders would voluntarily take on longer maturities in order to improve the country's battered finances

Greek Finance Minister Moves From Crisis to Crisis

By LANDON THOMAS Jr. and RACHEL DONADIO

Published: July 5, 2011

ATHENS — As he approached the end of another 16-hour workday, Evangelos Venizelos had one question on his mind: Will Europe come up with the money that Greece so desperately needs? As the new Greek finance minister, Mr. Venizelos is the man in charge of steering a nearly bankrupt economy back on track — and, perhaps, preventing another global financial crisis.

No sooner had he presided over the close passage of a new austerity bill last week, than he was contending with the growing controversy over how much money private banks would contribute by taking on more Greek debt.

Greek Opposition Slams Tax Rises

Samaras—Potential Contender for Prime Minister—Says Bailout Plan Is 'Failure

By ALKMAN GRANITSAS And MARCUS WALKER

ATHENS—The international plan to fix Greece's finances is failing and needs a rethink, the head of Greece's main opposition party said in an interview.

Instead of strangling the Greek economy with tax increases, Europe and the International Monetary Fund should let Greece cut taxes to jump-start growth, said Antonis Samaras, leader of the center-right New Democracy party and possibly the country's next prime minister.

The austerity program for Greece "is a failure," Mr. Samaras said in an interview with The Wall Street Journal, his first with international media since becoming Greece's opposition leader. Citing Greece's poor tax revenues amid a worsening recession, he said: "I think our lenders will have to change their policy. My question is why do we have to go further down the drain in the meantime?"

Πρόγραμμα Οικονομικής Προσαρμογής της Ελλάδας

 Τέταρτη Επανεξέταση – 'Ανοιξη 2011

ΠΕΡΙΛΗΨΗ

Κοινό κλιμάκιο της Ευρωπαϊκής Επιτροπής, της Ευρωπαϊκής Κεντρικής Τράπεζας και του Διεθνούς Νομισματικού Ταμείου συναντήθηκε με τις ελληνικές αρχές στην Αθήνα από 3 Μαΐου έως 2 Ιουνίου και από 21 έως 23 Ιουνίου 2011. Το κλιμάκιο αξιολόγησε τη συμμόρφωση προς τους όρους της τέταρτης επανεξέτασης βάσει του Προγράμματος Οικονομικής Προσαρμογής.

Κατά το τελευταίο έτος το πρόγραμμα οικονομικών πολιτικών φάνηκε να είναι το κατάλληλο πρόγραμμα συνδρομής προς την Ελλάδα ώστε η χώρα να περιορίσει τις μακροοικονομικές και δημοσιονομικές της ανισορροπίες. Οι στόχοι του προγράμματος είναι η αποκατάσταση της δημοσιονομικής διατηρησιμότητας, η διατήρηση της χρηματοπιστωτικής  σταθερότητας και της ενδεδειγμένης ρευστότητας του τραπεζικού τομέα καθώς και η αποκατάσταση της ανταγωνιστικότητας.

The Economic Adjustment Programme for Greece Fourth Review – Spring 2011

Full text: http://ec.europa.eu/ellada/pdf/20110704economicadjprogrammegreece.pdf

Greek fiscal survival vital for euro zone FinMin

(Reuters) - Greece will stave off default not only for its own sake but because its survival is vital for the euro zone and the global economy, Greek Finance Minister Evangelos Venizelos told Reuters on Monday.

With help from its EU partners and fresh determination, the debt-ridden euro zone member will regain its fiscal sovereignty as soon as possible and aims to return to markets in the middle of 2014, as expected, the minister said.

S&P Says Bank Plan Opens Door to Default

By STEPHEN FIDLER in Brussels and COSTAS PARIS and NEELABH CHATURVEDI in London

European efforts to encourage private investors to contribute to a new international bailout for Greece hit new problems Monday when the Standard & Poor's rating company said the leading proposal under consideration would likely bring the country into default.

S.&P. Warns Bank Plan Would Cause Greek Default

PARIS — Greece risks being judged in default on its debt obligations if banks are forced to bear part of the pain, Standard & Poor’s said Monday, suggesting that current proposals for rescuing the euro zone’s weakest member may have to be reconsidered.

In particular, a plan proposed by the French government and banks “could require private sector debt restructuring in a form that we would view as an effective default,” S.&P. said in a statement.

The rating agency also said it was cutting its long-term rating on Greece three notches deeper into junk territory, to CCC from B.

Η αλλαγή του πολιτικού Παραδείγματος

 Κυριακή, 03 Ιούλιος 2011 10:33

Πάσχος Μανδραβέλης

Η Ελλάδα βρίσκεται ακριβώς στην περίοδο «κρίσης Παραδείγματος» και στην αναζήτηση μιας νέας θεώρησης των πολιτικών και κοινωνικών πραγμάτων.

________________________________________

Ένα από τα ερωτήματα που κυκλοφορούν είναι «αν και κατά πόσον το πολιτικό σύστημα που μάς οδήγησε σ' αυτή την κρίση μπορεί και να μάς βγάλει από αυτή». Δύσκολο ερώτημα, διότι όπως έλεγε και ο μεγάλος φυσικός Νιλς Μπορ «οι προβλέψεις είναι δύσκολες, ειδικά όταν αφορούν το μέλλον».

Αλλά, πάλι, το ερώτημα εμπεριέχει μια μπαγαποντιά. Πολλοί από όσους θέτουν το ερώτημα θεωρούν αξιωματικά ότι το πολιτικό σύστημα είναι κάτι που βρίσκεται έξω από τις κοινωνικές διεργασίες και αυτονομημένο κατάφερε να μάς οδηγήσει στην κρίση. Ταυτόχρονα, όμως, θεωρούν ως το μέγιστο αμάρτημα αυτού τού πολιτικού συστήματος τον «φόβο τού πολιτικού κόστους». Δηλαδή κατηγορούν το πολιτικό σύστημα ότι δεν έδρασε επαρκώς αυτόνομα από την κοινωνική θέληση, ώστε να λάβει τα «αντιλαϊκά μέτρα» που απαιτούνταν για να μην οδηγηθούμε στην κρίση.

S&P warning adds default threat to Greece's bailout

(Reuters) - Greece would likely be in default if it follows a debt rollover plan pushed by French banks, S&P warned on Monday, deepening the pain of a bailout that one European official said will cost Athens sovereignty and jobs.

European politicians and bankers had expressed confidence last week that the French proposal would not trigger a default, but ratings agency Standard & Poor's said it would involve losses to debt holders, most likely earning Greece a "selective default" rating. "It is our view that each of the two financing options described in the (French banks') proposal would likely amount to a default under our criteria," S&P said.

French banks, major holders of Greek sovereign debt, proposed voluntarily renewing some of the bonds when they fall due, but on different terms.

Greece Awaits Further Rescue

Εuro-zone finance ministers signed off on a new slice of bailout money for Greece, avoiding a financial meltdown this month, but left themselves with a heavy task ahead to work out details for a new rescue package for the country.

The ministers' agreement in a teleconference call on Saturday evening leaves only the expected approval of the board of the International Monetary Fund before €12 billion ($17.4 billion) is handed over to Athens. The payment is expected by July 15.

Geithner mulls departing Treasury post: sources

1-7-2011

(Reuters) - Treasury Secretary Timothy Geithner is considering stepping down later this year, but will not make a decision until contentious negotiations over the U.S. debt ceiling are completed, people familiar with his thinking said on Thursday.

Geithner said he would remain in his Treasury post "for the foreseeable future" and sidestepped a direct question about his career plans after a flurry of media reports that he was mulling leaving the Obama administration.

Τα συμπεράσματα από ένα βίντεο

Πάσχος Μανδραβέλης

 Παρασκευή, 01 Ιούλιος 2011 08:40

Ένα βίντεο εξαπλώθηκε προχθές με αστραπιαία ταχύτητα σε ολόκληρο το Διαδίκτυο. Εμφάνιζε δύο άνδρες να φυγαδεύονται από τους αστυνομικούς. Ο ένας είχε μπαταρισμένο κεφάλι, μαύρη μπλούζα στο πρόσωπο και κρατούσε βέργα dexion. Ο άλλος φορούσε ιατρική μάσκα.

Το βίντεο, λογικά, εξαπλώθηκε διότι κάτι μύριζε. Ταυτόχρονα όμως, και χωρίς να γίνει κάποιος έλεγχος των γεγονότων, απλώθηκε και το συμπέρασμα: Ιδού οι «προβοκάτορες», «ασφαλίτες», «παρακρατικοί» που δημιουργούν τα επεισόδια. Μάλιστα, η μπλούζα στο πρόσωπο, που είναι αθωωτικό στοιχείο για κάθε διαδηλωτή («την φορούσε για να προστατευτεί από τα δακρυγόνα»), στην περίπτωση των δύο ήταν ενοχοποιητικό: «Φως φανάρι! Πρόκειται για τους ταραξίες κουκουλοφόρους».

Το χειρότερο έλλειμμα που αφήνει η μεταπολίτευση είναι στη λογική. Κανείς, για παράδειγμα, δεν αναρωτήθηκε: τι σόι συνωμοσία (κράτους - παρακράτους) είναι αυτή που αφενός μένει μυστική επί τριακονταετία και αφετέρου ένα επεισόδιό της διαδραματίζεται καταμεσής στην Πλατεία Συντάγματος και μπροστά σε δεκάδες κάμερες;

Twist in Strauss-Kahn Case

Questions Are Raised About Accuser's Veracity; Hearing Is Set on Terms of Bail

By MICHAEL ROTHFELD And CHAD BRAY

The sexual-assault case against former International Monetary Fund leader Dominique Strauss-Kahn appeared to be weakening Thursday as prosecutors and his defense team prepared to raise questions about the credibility of the maid who accused him, people close to the case said.

Problems with the prosecution's main witness are expected to be made public at a last-minute court hearing scheduled for Friday morning before State Supreme Court Justice Michael Obus. Defense lawyers are likely to ask the judge to end house arrest and electronic monitoring, two restrictive conditions of Mr. Strauss-Kahn's bail.

Ανατροπή στην υπόθεση Στρος Καν;

DW 1-7-2011

Ραγδαίες είναι οι εξελίξεις στην υπόθεση του πρώην ισχυρού άνδρα του ΔΝΤ. Δημοσίευμα των New York Times υποστηρίζει ότι το κατηγορητήριο εναντίον του βρίσκεται υπό κατάρρευση.

Σύμφωνα με την εφημερίδα οι ανακριτές έχουν σοβαρές αμφιβολίες για την αξιοπιστία του υποτιθέμενου θύματος καθώς τα όσα υποστηρίζει η καμαριέρα παρουσιάζουν ανακολουθίες. Η γυναίκα δεν φαίνεται να πείθει για τις συνθήκες κάτω από τις οποίες έγινε ο υποτιθέμενος βιασμός ενώ έχει επανειλημμένως πέσει σε αντιφάσεις.

What have we become?

The Economist 1-7-2011

Some Greeks are angry about their paralysed, corrupt country. Others just want the good times to come back

THEY had been warned. As Greece’s 300 legislators debated, and finally approved, an internationally backed financial-rescue plan with many clear downsides—it will pile pain onto hapless firms and citizens who already pay taxes, for instance, and so subsidise those who do not—some dire pronouncements on the possible consequences of saying “no” to the world were ringing in their ears.

A group of 18 Greek economists (mostly from the nation’s academic diaspora, in flight from the cronyism and disorder that mar campuses back home) listed some of the likely results if the country opted for autarky: in other words, if it stopped paying its debt and rejected the idea of moving, with foreign help, towards fiscal and administrative health.