Grexit and the Morning After

 MAY 25, 2015 9:24 AM

The New York Times

By Paul Krugman

We just had another electoral earthquake in the euro area: Podemos-backed candidates have won local elections in Madrid and Barcelona. And I hope that the IFKAT — the institutions formerly known as the troika — are paying attention.

The essence of the Greek situation is that the actual parameters of a short-run deal are clear and unavoidable: Greece can’t run a primary budget deficit, because nobody will lend it new money, and it won’t (and basically can’t) run a large primary surplus, because you can’t squeeze even more blood from that stone. So you would think that an agreement for Greece to run a modest primary surplus over the next few years would be easy to reach — that is what will happen, so why not make it official?

Greece Rules Out Capital Controls if Bailout Talks Fail

By THE ASSOCIATED PRESSMAY 25, 2015, 8:24 A.M. E.D.T.

The New York Times

ATHENS, Greece — Greece's government on Monday ruled out restricting access to bank accounts and the free movement of money if there is no breakthrough soon in tortuous talks with bailout creditors and its dwindling cash reserves dry up.

The possibility of imposing capital controls — part of a chain of events that could lead to Greece leaving the euro if things take a disastrous turn — "simply does not exist," said Gabriel Sakellaridis, spokesman for the radical left-led government.

Less Than Surprising News; Greece Can't Make The June IMF Payments, Default Looms

By Tim Worstall, Contributor

MAY 24, 2015 @ 5:57 PM

Forbes

This isn’t exactly the most surprising news we’re going to be told today but Greece is announcing that it simply won’t be able to meet the upcoming repayments due to the IMF in June. We’ve all known that at some point this moment would come: without the unlocking of the final tranche of the earlier, seconed, bailout there was no imaginable manner in which Greece could make all the payments due over the summer. Not unless some miracle happened with tax revenues that is, and as the country’s back in recession that’s not going to happen either.

Greece Urges Creditors to Compromise as IMF Payment Nears

Bloomberg

by Marcus Bensasson

4:41 PM EEST

May 23, 2015

Greece called on the country’s creditors to compromise on demands to break an impasse over the release of funds for its cash-strapped economy as a deadline neared for payments due next month to the International Monetary Fund.

The Heat Is on Greece’s Alexis Tsipras, From Inside and Out

By NIKI KITSANTONIS

MAY 24, 2015

The New York Times

ATHENS — With Greece in the final stretch of negotiations with its creditors, aimed at unlocking rescue loans the country needs to avert an imminent default, Prime Minister Alexis Tsipras faces growing pressure from the ranks of his own party.

Greek Talks Break Up as Earlier Optimism Evaporates

by Arne DelfsJonathan StearnsHelene Fouquet

(Bloomberg) -- Late-night negotiations between the Greek, French and German government leaders ended without any sign of a breakthrough that will unlock bailout funds and ensure Greece’s future in the euro region.

With time running out for a deal to free up the remaining 7.2 billion-euro ($8 billion) tranche of aid, talks between Prime Minister Alexis Tsipras, President Francois Hollande and Chancellor Angela Merkel broke up shortly before 1 a.m. on Friday in the Latvian capital Riga with the three agreeing only to stay in close contact.

Greece To Be Granted A Bailout Extension; Eurozone Lacks Credibility

MAY 22, 2015 @ 1:22 AM

Stephen Pope

CONTRIBUTOR

Forbes

Since the general election of January 25th when the Syriza led coalition government  was elected it has has failed on six occasions to present to its international creditors a meaningful set of reforms that would have paved the way for the next tranche of bailout money to be advanced and so avoid a default.

The far left of centre government has known the timetable and yet has been totally shambolic in the propositions its has offered to the European Union. It has argued against austerity whilst expecting international sources of finance to simply let the struggling nation off the hook.

These investors are getting killed in Greece

By Ivana Kottasova

 CNN Money

http://money.cnn.com/2015/05/21/investing/greece-investors-losses/

Meet the Greekoholics: The investors who are losing big money in Greece but can't kick the habit.

Most international investors shunned Greece a long time ago, scared off by its never-ending debt crisis. But a bunch of brave -- or possibly shrewd -- fund managers have defied the consensus and bet big on the country, which continues to flirt with default and exit from the euro.

They love it when things are not looking rosy.

The Way Out for Greece

21 MAY 21, 2015 12:01 AM EDT

By Konstantine Gatsios & Dimitrios A. Ioannou

Bloomberg

A widely told narrative of the economic crisis in Greece holds that it is the product of excessive austerity, imposed by arrogant outsiders who misread the situation. The only way out, the story goes, is to break the resulting recessionary spiral with a policy of fiscal stimulus.

This account doesn't stand up to scrutiny and needs to be countered if the current brinkmanship over Greece's bailout is to end well.

Greece should quit euro 'temporarily': Ifo's Sinn

Dhara Ranasinghe

2 Hours Ago

CNBC

Cash-strapped Greece should be allowed to leave the euro zone temporarily, the president of Germany's influential Ifo Institute for Economic Research told CNBC on Thursday.

Talk that Greece is on the brink of a debt default that could trigger its exit from the euro zone has grown this week. A senior ruling party official said on Wednesday that Greece would be unable to make a payment to the International Monetary Fund on June 5 unless it received more aid from its creditors.

Greek Finances to Stagger On Longer Than You Think

While Greece says a deal is near, the country has enough money to last weeks, maybe even two months.

 Bloomberg

by Ben Sills

1:16 PM EEST

May 19, 2015

Greece will probably struggle through June before finally running out of money in early July.

That's the assessment of economists at Bloomberg Intelligence, who concluded that Greek lenders have enough collateral to keep emergency funds flowing from the European Central Bank for another eight weeks, so long as policy makers don't tighten the terms of liquidity. Tax revenue may be enough to keep the government afloat for about the same amount of time, economists Jamie Murray and David Powell said in a research note. The 3.5 billion-euro ($3.9 billion) payment due to the European Central Bank on July 20 may be the end of the road.

Euro, bond yields tumble as ECB hints at faster pre-summer buying

LONDON | BY MARC JONES

Tue May 19, 2015 7:27am EDT

Reuters

The euro tumbled on Tuesday and the region's stocks and bonds jumped after the European Central Bank signalled it would speed up its 1 trillion euro bond-buying programme for the next two months ahead of an expected summer lull.

World stocks were already testing all-time highs after another jump in Chinese stocks and a record close on Wall Street, and European markets shot up after top ECB policymaker Benoit Coeure talked of adjusting the bank's buying programme.

Greece's Turn to Resist a Referendum

MAY 18, 2015 2:00 AM EDT

By Mohamed A. El-Erian

Bloomberg

In 2011, overwhelming opposition from Greece's European partners forced Prime Minister George Papandreou to withdraw a proposal for a referendum seeking a “clear mandate” from voters to carry out European Union-backed policies. Last week, the opposite scenario unfolded: Germany suggested that the Greek government hold a plebiscite on whether to accept creditors' demands for economic reforms or ultimately leave the euro zone. This time, however, it was Greece that demurred.

This role reversal reveals at least three consequential aspects of the changes, real and perceived, in the interactions between Greece and its European partners:

Greece’s Debt Battle Exposes Deeper Eurozone Flaws — Horizons

4:32 pm ET

May 17, 2015 EUROPE

By  MICHAEL J. CASEY

The Wall Street Journal

To understand why Greece and its creditors have failed to put its debt burden on a sustainable path, look beyond the headlines about the intransigence of the left-wing government in Athens and the tested patience of officials in Berlin and Brussels.

Blame lies with the monetary union’s flawed political structure, where a highly integrated financial system coexists with fragmented and unpredictable governance. That structure means it’s dangerous to assume that bigger eurozone economies such as Spain or Italy won’t also see a revival of investor concerns about their own debt levels when the European Central Bank ends its monetary support for the region’s bond markets.

Greece must choose between 2 catastrophes

The Guardian

LARRY ELLIOTT, THE GUARDIAN

MAY 17, 2015, 10:03 AM

Yanis Varoufakis rues the day when Greece joined the euro.

The Greek finance minister says his country would be better off if it was still using the drachma. Deep down, he says, all 18 countries using the single currency wish that the idea had been strangled at birth but understand that once you are in you don't get out without a catastrophe.

All of that is true, and explains why Greece is involved in a game of chicken with all the other players in this drama: the International Monetary Fund, the European commission, the European Central Bank and the German government.

Greek Endgame Nears for Tsipras as Bank Collateral Hits Buffers

Bloomberg

by Nikos ChrysolorasVassilis Karamanis

12:00 AM EEST

May 18, 2015

Greek banks are running short on the collateral they need to stay alive, a crisis that could help force Prime Minister Alexis Tsipras’s hand after weeks of brinkmanship with creditors.

As deposits flee the financial system, lenders use collateral parked at the Greek central bank to tap more and more emergency liquidity every week. In a worst-case scenario, that lifeline will be maxed out within three weeks, pushing banks toward insolvency, some economists say.

Greece Remains Defiant as It Seeks Deal With Creditors This Week

by Paul TugwellRebecca Christie

4:09 PM EEST

May 17, 2015

Bloomberg

Greece’s government said it won’t back down on election pledges to end austerity even while seeking to agree on a deal with creditors as soon as this week to unblock financing and avert a default.

“We’re striving for a mutually beneficial agreement by Friday,” Nikos Filis, spokesman for the parliamentary group of Prime Minister Alexis Tsipras’s Syriza party said Sunday in comments broadcast on Mega TV. “Our mandate from the Greek people is to reach an agreement where we stay in the euro area without harsh austerity measures,” he said, adding that “tough negotiations” will take place before a summit meeting of European Union leaders in Riga, Latvia, on May 21-22.

Germany urges Greece to undertake reforms to unlock funds

Sun May 17, 2015 9:09am EDT

BERLIN | BY MICHELLE MARTIN

 Reuters

German politicians kept up the pressure on Greece over the weekend to implement reforms, with Economy Minister Sigmar Gabriel warning Athens in an interview that a third aid package would not be on the cards unless the Greeks made some changes.

Greece is fast running out of cash and talks with its lenders have been deadlocked over their demands for Greece to implement reforms, including pension cuts and labor market liberalization.

Greek Prime Minister Rejects Further Austerity or Labor Changes

The New York Times

By NIKI KITSANTONIS

MAY 15, 2015

ATHENS — Greece’s prime minister, Alexis Tsipras, said in a speech on Friday that his government wanted a deal with the country’s creditors but that it would not enforce additional austerity measures, like further pension cuts.

Mr. Tsipras said Greece wanted a “unified agreement” that would restructure its huge debt, a thorny issue not on the agenda of the current talks.

Greece Aid Accord Looks Elusive as Tsipras Sticks to Red Lines

Bloomberg

by Paul TugwellChristos Ziotis

2:16 PM EEST

May 16, 2015

An agreement between Greece and its international creditors to unblock financing and avert a default looked elusive after Greek Prime Minister Alexis Tsipras said he won’t strike a deal at any cost.

“There’s no doubt that an agreement must be reached,” Tsipras said late Friday at a conference in Athens. “But those who think that the Greek side’s resistance can be tested or that its red lines will fade as time passes, would do well to forget it.”