The economics of bluffing

Buttonwood

When political leaders turn into option-writers

May 30th 2015 |

The Economist

WILL Greece default on its debts and leave the euro? Will Britain decide to leave the European Union? Politicians in the two countries have threatened, implicitly or explicitly, to take these drastic steps if their European colleagues do not offer them inducements to stay.

Greece delivers reform plan to EU, warns on cost of failure

Tue Jun 9, 2015 7:15am EDT Related: ITALY, GREECE

ATHENS/BRUSSELS | BY RENEE MALTEZOU AND JAN STRUPCZEWSKI

Reuters

Greece handed its creditors new proposals on unlocking funds to keep the country from default, with Prime Minister Alexis Tsipras offering hope for a deal and warning the cost of failure would be enormous.

The reform proposals mark a further attempt by Tsipras to compromise with lenders as time runs out to reach a deal to prevent his country going bankrupt.

Greece Said to Submit Revised Budget Plan in Bid for Funding

by Nikos Chrysoloras

June 9, 2015 — 10:53 AM EEST Updated on June 9, 2015 — 11:59 AM EEST

Bloomberg

The Greek government submitted a three-page budget proposal to its creditors in Brussels in a bid to unlock bailout funds, two international officials with direct knowledge of the discussions said.

The document covered only fiscal targets, one of the people said. Greece gave its creditors a separate note, also three pages long, on how to address the country’s financing needs, in which the government asked to use funds from the European Stability Mechanism to repay about 6.7 billions euros ($7.6 billion) of bonds held by the European Central Bank that come due in July and August, the people said.

Merkel-Schaeuble Differences Over Greece Talks Said to Widen

by Birgit JennenRainer BuerginBrian Parkin

June 8, 2015 — 7:16 PM EEST Updated on June 9, 2015 — 12:40 PM EEST

Bloomberg

A split between German Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble is widening over Greece as the funding standoff goes down to the wire, said people familiar with the matter.

Merkel is ready to make concessions to keep Greece in the euro because of geopolitical concerns, while Schaeuble is willing to let the country exit the euro unless its government takes measures to ensure the country’s long-term survival in the monetary union, said the people, who asked not be identified speaking about internal party discussions.

Εδώ, οι καλές διαπραγματεύσεις...

ΠΟΛΙΤΙΚΗ 07.06.2015 : 18:43

Από τον Πάσχο Μανδραβέλη

Εφημερίδα Καθημερινή

Και σε ποιον ακριβώς πλανήτη ζούσε μέχρι πρότινος ο αναπληρωτής υπουργός Οικονομικών κ. Ευκλείδης Τσακαλώτος, που δήλωσε «σοκαρισμένος από το τελεσίγραφο των δανειστών»; Δεν διάβαζε εφημερίδες; Δεν είχε ακούσει τίποτε για τη σθεναρή τους στάση απέναντι στην κυβέρνηση Σαμαρά; Δεν πήρε χαμπάρι τίποτε στις «διαπραγματεύσεις» όπου συμμετείχε ως πρωταγωνιστής; Μήπως βρισκόταν σ’ έναν άλλο κόσμο τον οποίο θεωρούσε εφικτό; Και επιπλέον: τι εμπιστοσύνη μπορούμε να έχουμε σε μια διαπραγματευτική ομάδα, όταν ο επικεφαλής της δεν μπορεί να προβλέψει και «σοκάρεται» από τις εξελίξεις;

Greece talks of compromise as Merkel warns time is short

Mon Jun 8, 2015 5:03pm EDT Related: GREECE

ATHENS/KRUEN, GERMANY | BY RENEE MALTEZOU AND NOAH BARKIN

Reuters

Greece proclaimed a new willingness to compromise with its international creditors on Monday, as German Chancellor Angela Merkel warned that time was running out for a reform-for-aid deal to keep the country in the euro.

Three days after Prime Minister Alexis Tsipras told his parliament the latest proposal from the EU and IMF was "absurd", the Greek government said it was ready to negotiate a settlement acceptable to both sides by the end of this month - when Greece's bailout program expires and it faces the prospect of default on its debts.

Pensions in Greece Feel the Pinch of Debt Negotiations

By SUZANNE DALEYJUNE 8, 2015

The New York Times

ATHENS — Vasiliki Meliou did not want to retire at 53, but she had little choice, she said, after the state-owned bank she worked for was sold three years ago.

To stay at the bank carried the risk of being laid off, and with Greece’s unemployment rate above 25 percent, she doubted she would ever find another job.

GREECE: 'Fasten your seat belts'

By MIKE BIRD

Market Watch

JUN. 8, 2015, 2:51 AM

The deadline for a deal to resolve Greece's ongoing drama seemed to be pushed back last week. But new stresses could appear as early as this week if there is no noticeable progress on the talks.

Last week Greece decided to combine the four debt payments it owed to the International Monetary Fund (IMF) in June — worth about €1.5 billion ($1.66 billion, £1.09 billion) collectively — into one, which will be due at the end of the month.

Scientists Drop Science Bomb on Climate-Change Skeptics

By Jonathan Chait

The New York Times

Over the last couple of years, the conservative movement, which loves science, has had a completely scientific-based reason for skepticism about climate change. The Earth’s temperature seemed to be rising at a slower rate than scientists had predicted. The global warming “pause,” as it was inaccurately called — it was actually “getting warmer at a slower-than-expected rate,” rather than an actual pause — served as grist for a massive flow of coverage expressing skepticism about scientific models and climate change.

European Leaders Voice Frustration With Greece in Debt Crisis

By ALISON SMALEJUNE 7, 2015

The New York Times

GARMISCH-PARTENKIRCHEN, Germany — World leaders on Sunday increased the pressure on Europe to resolve the crisis over Greek debt, hours after one of the chief European negotiators expressed exasperation with the way the Greek leader was handling the talks.

Chancellor Angela Merkel of Germany, host of the Group of 7 summit meeting in the Bavarian Alps, told the public broadcaster ZDF that she and the French president, François Hollande, had spoken to Prime Minister Alexis Tsipras of Greece by telephone late Saturday and had briefed other leaders attending the gathering on the conversation.

Greece and Creditors Head for the Brink

Hardened positions mean the scope for compromise looks vanishingly small

By SIMON NIXON

June 7, 2015 5:27 p.m. ET

14 COMMENTS

No one can be sure how the Greek drama will end, not least because it is no longer clear who, if anyone, is in control. Both sides have been bombarded for months by well-meaning advice to show flexibility and compromise to avoid an economic calamity in Greece and a geopolitical disaster for the eurozone and the world. Instead, positions have hardened to the point where the scope for compromise now looks vanishingly small.

If You Think Greece’s Crisis Will End Soon, Think Again

by Ian WishartNikos ChrysolorasAndrew Mayeda

June 8, 2015 — 1:01 AM EEST Updated on June 8, 2015 — 10:38 AM EEST

Bloomberg

Frustrated by Greece’s cat and mouse game with its creditors? Get used to it.

Even if Prime Minister Alexis Tsipras clinches as much as 7.2 billion euros ($8 billion) from a bailout tranche creditors are withholding, he’s going to need another cash infusion shortly thereafter.

What will ensue is a renewed battle after almost five months of trench warfare. The beleaguered country requires a third bailout of about 30 billion euros, according to Nomura International Plc analysts Lefteris Farmakis and Dimitris Drakopoulos. The final bill will depend on whether fellow euro member states grant Greece any debt relief, and what form that relief would take, they said.

Tsipras says any aid must be on his terms rather than those of governments whose taxpayers have forked out billions in the past five years to keep Greece in the euro. The standoff has triggered an unprecedented liquidity squeeze, pushing the country’s economy back into recession, and thus raising the total sum of additional loans Greece may need after its current euro-area-backed bailout expires this month.

Opinion: Pushing Greece out could be Europe’s final act

 June 6, 2015 9:37 a.m. ET

From MarketWatch.com

By JOSEPH E. STIGLITZ

NEW YORK (Project Syndicate) — European Union leaders continue to play a game of brinkmanship with the Greek government. Greece has met its creditors’ demands far more than halfway. Yet Germany and Greece’s other creditors continue to demand that the country sign on to a program that has proven to be a failure, and that few economists ever thought could, would, or should be implemented.

European Officials Vent Frustration Over Greece’s Debt Before G-7 Summit, Vow to Maintain Sanctions on Russia

Diverse agenda set to be overshadowed by crises in Ukraine and Greece

The Wall Street Journal

By ANTON TROIANOVSKI

Updated June 7, 2015 12:07 p.m. ET

22 COMMENTS

GARMISCH-PARTENKIRCHEN, Germany—European officials vented frustration with Athens and vowed to maintain sanctions on Russia at the outset of a summit in which world leaders are trying to avoid a new trans-Atlantic split over Ukraine and an escalation of Greece’s debt crisis.

European Parliament President Urges Greece to Back Austerity Deal

Martin Schulz says consequences would be ‘dramatic’ if Greece rejects creditors’ proposal

The Wall Street Journal

By EYK HENNING

June 7, 2015 4:35 a.m. ET

FRANKFURT—The President of the European Parliament on Sunday urged Greece to accept the austerity measures creditors have called for in return for relaxing bond-repayment rules.

“I can only warn the Greek government...not to reject [our] extended hand,” Martin Schulz told German weekly Welt am Sonntag. He said the time for striking an agreement was running out and the consequences of a final refusal by Greece would be “dramatic.”

EU's Juncker rebukes Greece's Tsipras, urges swift proposals

Sun Jun 7, 2015 6:07am EDT

KRUEN, GERMANY

Reuters

European Commission President Jean-Claude Juncker accused Greek Prime Minister Alexis Tsipras on Sunday of distorting proposals by international creditors for a cash-for-reform deal to save Athens from default and urged him to put forward alternative proposals swiftly to allow negotiations this week.

Αυτό είναι σοβαρό

Τετάρτη, 03 Ιουνίου 2015

Γράφτηκε από τον  Κ.Π. Αναγνωστόπουλο

Ο κ. Βαρουφάκης τα 'κανε θάλασσα. Στο πιο σημαντικό, στο πιο κρίσιμο έργο της ζωής του προτίμησε να παίξει τον εαυτό του και όχι να ανταποκριθεί στις απαιτήσεις του ρόλου του. Γιατί; Διότι δεν κατάλαβε ότι «Αυτό είναι σοβαρό.» Και μάλιστα ιδιαζόντως σοβαρό, διότι οι αποφάσεις και η συμπεριφορά του είχαν (και έχουν ακόμη) να κάνουν με τη ζωή των άλλων.

Greece Raises Stakes in Showdown as Payment to IMF Deferred

by Nikos ChrysolorasVassilis KaramanisPaul Tugwell

June 5, 2015 — 9:53 AM EEST Updated on June 5, 2015 — 11:22 AM EEST

Bloomberg

Prime Minister Alexis Tsipras raised the stakes in Greece’s showdown with creditors, rejecting demands for more austerity to receive bailout funds and opting for an unconventional deferral of International Monetary Fund payments.

Tsipras told German Chancellor Angela Merkel and French President Francois Hollande during a call Thursday night that a list of demands needed to unlock bailout funds hammered out earlier this week by officials from the IMF and the euro area can’t be a basis for a deal, said a Greek official, who asked not to be identified discussing private talks.

The force assaulting the euro

The Economist

Free exchange

Europe’s ageing population poses a long-term threat to monetary union

Jun 6th 2015 |

THE euro area has been doing better of late: growth of 0.4% in the first quarter (1.6% on an annualised basis) was the strongest in the two-year recovery; unemployment has fallen to 11.1%, its lowest in three years; and inflation is positive again. There has even been a surge of hope that Greece’s membership of the currency may yet be preserved. But even if a deal is stitched together to keep Greece in, the euro will soon face a broader crisis. The slow growth and strained government finances of recent years will soon be dramatically amplified by demography. And the member facing the most severe onslaught is not a small Mediterranean country but Germany, the euro area’s muscleman.

Three Things To Buy After Greece Restructures Or Defaults On Its Debt

JUN 4, 2015 @ 7:51 PM 9,191 VIEWS

Forbes

By Henry To, contributor

 In two recent articles published earlier this year (“Chances of Greek Euro Exit Have Not Diminished” and “What To Buy if Greece Exits the Euro Zone”), I discussed:

1) Why the Greek economy—given its huge debt load (at 317% of GDP), its vast economic differences with its fellow euro zone member countries, as well as Germany’s refusal to directly subsidize its spending—cannot operate efficiently or grow as a member of the European Monetary Union (EMU). As such, Greece is better off in the long-run by exiting the EMU;