Why Europe Will Cave to Greece

45 JAN 28, 2015 1:00 AM EST

By Clive Crook

Bloomberg

A prediction for you: Greece and the European Union will split the difference in their quarrel over debt relief. What's uncertain is how their respective governments will justify the new deal, and how much damage they'll inflict on each other before accepting the inevitable.

EU governments, with Germany in the lead, are saying that debt writedowns are out of the question. Debts are debts. Greece's newly elected leader, Alexis Tsipras, calls the current settlement "fiscal waterboarding" and says his country faces a humanitarian crisis. His government won't pay and wants much of the debt written off. Neither side is willing to give way. 

Το Σύμφωνο Τσίπρα-Καμμένου

ΠΟΛΙΤΙΚΗ 12:45

Πάσχος Μανδραβέλης

Εφημερίδα Καθημερινή

Αν ο κ. Γιώργος Παπανδρέου είχε χιούμορ θα έκανε μια πολύ πιο λιτή δήλωση: «Ανθ’ ημών Πάνος Καμμένος». Το αναφέρουμε, όχι επειδή «Το Κίνημα» θα μπορούσε να είναι ένας λογικός Αριστερός εταίρος του ΣΥΡΙΖΑ, αλλά διότι -αν το καλοσκεφτούμε- και οι «Ανεξάρτητοι Ελληνες» είναι επίσης κόμμα από διάσπαση. Παρ’ όλα αυτά έδειξαν μια αξιοσημείωτη αντοχή. Αυτή είναι η τρίτη εκλογική αναμέτρηση που τους βάζει στη Βουλή. Δεν γνωρίζουμε ποιο κομμάτι της σοφίας του ελληνικού λαού παράγει τέτοιες επιλογές, αλλά το πρόβλημα δεν είναι μόνο αυτό. Ο ιδεολογικός αχταρμάς των ΑΝΕΛ επικονιάζει και ευρύτερους χώρους, με πρώτο αυτόν του ΣΥΡΙΖΑ.

Greece: Think Flows, Not Stocks

 JANUARY 26, 2015 7:26 PM

Paul Krugman

The New York Times

How should we think about the bargaining that may or may not now take place between the new Greek government and the troika? (No bargaining if the troika basically says no concessions.) Most discussion is framed in terms of what happens to the debt. But as both Daniel Davies and James Galbraith point out — with very different de facto value judgments, but never mind for now — at this point Greek debt, measured as a stock, is not a very meaningful number. After all, the great bulk of the debt is now officially held, the interest rate bears little relationship to market prices, and the interest payments come in part out of funds lent by the creditors. In a sense the debt is an accounting fiction; it’s whatever the governments trying to dictate terms to Greece decide to say it is.

This Man Will Make Greece Leave Europe

The victory of Alexis Tsipras and the Syriza party in Greek elections is the stuff that dreams are made of. But economies? Not so much.

By Barbie Latza Nadeau

Syriza’s Post-Election Challenge: An Empty Greek Treasury

Victorious Antiausterity Party Led by Alexis Tsipras Has Limited Time to Strike Deal With Greece’s Creditors

The Wall Street Journal

By MARCUS WALKER

Updated Jan. 25, 2015 8:11 p.m. ET

The clock is ticking for Syriza—the victorious antiausterity party in Greece’s elections—to strike a deal with creditors to keep Greece solvent and in the euro.

Η ανατομία μιας ήττας

ΠΑΣΧΟΣ ΜΑΝΔΡΑΒΕΛΗΣ

ΠΟΛΙΤΙΚΗ 26-1-2015 13:12

Εφημερίδα ΚΑΘΗΜΕΡΙΝΗ

"... η συγκυβέρνηση έτρεφε την ίδια αλλεργία στις μεταρρυθμίσεις και απλώς δεν μπορούσε να το πει δυνατά..."

GLOBAL MARKETS-Far-left victory in Greece bruises European markets

Mon Jan 26, 2015 4:17am EST

Reuters

* Syriza victory in Greece stokes concerns over Europe instability

* ECB QE, hopes for compromise with lenders limit market reaction

* European shares fall, periphery borrowing costs rise

* Euro stabilising after hitting 11-year low

By Marius Zaharia

Despite Initial Tremors, Markets Shake Off Greek Election Results

By DAVID JOLLY and NEIL GOUGHJAN. 25, 2015

The New York Times

PARIS — Financial markets on Monday took in stride the result of Greek parliamentary elections, which handed a decisive victory to the left-wing Syriza party a day earlier.

Syriza and its outspoken leader, Alexis Tsipras, had campaigned against the austerity measures imposed on Greece by its international creditors.

Tsipras Wins and Sets Greece on Collision Course With Euro Partners

By Nikos Chrysoloras and Marcus Bensasson  Jan 26, 2015 9:42 AM GMT+0200

Bloomberg

Greek Prime Minister-elect Alexis Tsipras set up a confrontation with his European peers as he prepared to form a coalition dedicated to ending austerity, saying the era of bowing to international demands for budget cuts is over.

Tsipras issued the challenge to Greece’s euro-area partners after his Syriza party won a historic victory in Sunday’s elections by harnessing a public backlash against years of belt-tightening, job losses and hardship. Tsipras, who is two seats shy of an absolute majority in Greece’s 300-seat chamber according to the latest results from the Interior Ministry, said his priority “will be for Greece and its people to regain their lost dignity.”

U.S. Futures Slip as Euro Fluctuates on Greece; Oil Falls

By Nick Gentle and Yuko Takeo  Jan 26, 2015 8:53 AM GMT+0200

Bloomberg

U.S. equity-index futures slid and Treasuries rallied as the euro fluctuated near a more-than 11-year low after Greek voters handed victory to a party that’s pledged to renegotiate the terms of an international bailout. Asian stocks dropped with crude oil and industrial metals.

Standard & Poor’s 500 Index futures sank 0.6 percent by 3:51 p.m. in Tokyo and the yield on 30-year Treasuries fell to a record. The 19-nation euro dropped to as low as $1.1098, the lowest since September 2003, before gaining 0.1 percent. The MSCI Asia Pacific Index (MXAP) lost 0.3 percent. U.S. crude declined 1.6 percent and nickel slid 2.2 percent in London. China’s yuan headed for its biggest two-day drop since 2008 versus the dollar.

Euro, stocks slip as Greece set to reject austerity

BY HIDEYUKI SANO

TOKYO Mon Jan 26, 2015 1:26am EST

(Reuters) - The euro skidded to an 11-year low and stock prices fell on Monday as Greece's Syriza party promised to roll back austerity measures after sweeping to victory in a snap election, putting Athens on a collision course with international lenders.

The euro fell to an 11-year low of $1.1098 EUR= on the vote outcome before recovering to $1.1186, still down 0.2 percent from last week.

Greece votes on whether to dump austerity, take on lenders

BY ANGELIKI KOUTANTOU AND JAMES MACKENZIE

ATHENS Sun Jan 25, 2015 9:58am EST

(Reuters) - Greeks voted on Sunday in an election expected to bring to power the radical leftist Syriza party, which has pledged to take on international lenders and roll back painful austerity measures imposed during years of economic crisis.

Barring a huge upset, Syriza, which has led opinion polls for months, will be the biggest party and aims to form the first euro zone government openly committed to cancelling the austerity terms of its EU and IMF-backed bailout program.

All eyes on Fed, Greece after ECB fires bazooka

BY INGRID MELANDER

PARIS Sun Jan 25, 2015 4:39am EST

(Reuters) - After the surprises from central banks which rocked markets at the start of the year, the U.S. Federal Reserve will be watched as closely as ever this week to see that it doesn't stray from its own policy path.

The atmosphere will already be tense as the fallout from Sunday's snap election in Greece settles and concern has grown in some quarters that central banks, which played such a big part in guiding economies through the financial crisis, are becoming less predictable.

Greece Is About To Make A Leap Into The Unknown

AFP

GUY JACKSON, AFP

JAN. 25, 2015, 12:31 AM

Business Insider

Athens (AFP) - Greece votes Sunday in a snap general election that could bring the radical left Syriza party to power and pose the most severe challenge yet to austerity policies in struggling eurozone countries.

Electing Syriza and their 40-year-old leader Alexis Tsipras would represent a leap into the unknown, but many Greeks appear prepared to take a chance after years of hardship.

Greece: Austerity, Relief or Exit?

9:26 AM EST JAN 23, 2015

By Marcus Walker

The Wall Street Journal

Greece’s elections on Sunday take place against the background of rising tensions between the small nation and its main creditors, eurozone governments and the IMF, about the country’s strict bailout regimen. Polls point to a win for leftwing opposition party Syriza over the ruling conservatives of New Democracy. Would a Syriza-led government start a game of chicken with Germany and other creditors that could lead to havoc and a Greek exit from the euro? Or can a compromise be found? Here’s our crystal ball.

Q: Who will lead the next Greek government?

Very likely Syriza (whose leader, Alexis Tsipras is pictured above), the leftwing opposition party, unless the conservative incumbent, Premier Antonis Samaras, pulls off the biggest upset victory since Harry Truman in 1948. Syriza might win an absolute majority in Parliament, but polls suggest it will fall just short, requiring support from another party. A pact with centrist To Potami (The River) or center-left Pasok could make the government more pragmatic in talks with Greece’s international creditors. A pact with the nationalist Independent Greeks could make it more hardline.

Syriza’s Rise Fueled by Professors-Turned-Politicians

Party in Lead in Greek Election Polls Hones Economic Platform With Cadre of Left-Wing Academics-Turned-Politician

The Wall Street Journal

By CHARLES FORELLE

Jan. 23, 2015 3:32 p.m. ET

159 COMMENTS

NAOUSA, Greece—Wearing suit pants and a jacket, Costas Lapavitsas stood Wednesday afternoon on the floor of a steel-fabricating shop here and addressed a few dozen workers and small-business owners who smoked while sitting in plastic chairs. “I am not a career politician,” he began.

Indeed. Mr. Lapavitsas ’s political career is only a few weeks old. In Greece’s elections Sunday, he is a parliamentary candidate for the leftist opposition party Syriza, which leads Prime Minister Antonis Samaras ’s conservative party in the polls and could roil politics throughout Europe if it wins.

Eurogroup chief Dijsselbloem issues warning to Greece before election: magazine

BERLIN Fri Jan 23, 2015 5:15am EST

 "And that also means: any country that need support to finance its economy and public expenditures must stick to those conditions."

Tsipras urged Greeks to give Syriza an outright victory in Sunday's vote so the country could turn its back on four years of austerity under the terms of the EU/IMF bailout.

How Greece and Germany Brought Europe’s Long-Simmering Crisis Back to a Boil

A Game of Chicken Between the Greek Government, Creditors Helped Put Radical-Left Opposition Party Ahead in Polls

The Wall Street Journal

“…the austerity Europe has imposed on Greece as the price of rescue loans…”

“snap elections Sunday, … could return the country to the brink of exit from the euro…”

“Mr. Samaras, a suave conservative who swings between statesmanship and populism…”

“…Wolfgang Schäuble …wanted to boot Greece out of the euro…”

“…Mr. Samaras faced a younger, left-wing version of himself: Syriza leader Alexis Tsipras , who blamed the crisis on austerity, not austerity on the crisis…”

“…Eurozone finance officials now think Greece will need a longer bailout. Sunday’s election winner must bridge an even bigger gap….”

By MARCUS WALKER and  MARIANNA KAKAOUNAKI

Updated Jan. 21, 2015 9:17 p.m. ET

What Good Are Economists?

Robert J. Shiller

http://www.project-syndicate.org/commentary/are-economists-good-by-robert-j--shiller-2015-01

NEW HAVEN – Since the global financial crisis and recession of 2007-2009, criticism of the economics profession has intensified. The failure of all but a few professional economists to forecast the episode – the aftereffects of which still linger – has led many to question whether the economics profession contributes anything significant to society. If they were unable to foresee something so important to people’s wellbeing, what good are they?

A “Merkel Plan” for Europe

JAN 19, 2015

By Bill Emmott

http://www.project-syndicate.org/commentary/europe-modern-marshall-plan-by-bill-emmott-2015-01

LONDON – Ever since Europe’s economic crisis erupted more than four years ago, politicians and pundits have clamored for a grand solution, often invoking the example of America’s postwar Marshall Plan, which, starting in 1948, helped to rebuild Western Europe’s shattered, debt-ridden economies. But the political moment has never been ripe. That could be about to change.

Europe’s situation today bears some similarities to the 1940s. Burdened by the public debts resulting from past mistakes, eurozone governments know what they need to do but not how to do it. They mistrust each other too much to collaborate. Meanwhile, demand in most of the European Union is weak, ruling out the economic growth needed to repay debts and offer hope to the 25 million unemployed.