What Greece Needs to Prosper

Edmund S. Phelps, the 2006 Nobel laureate in economics, is Director of the Center on Capitalism and Society at Columbia University and author of Mass Flourishing.

http://www.project-syndicate.org/commentary/what-greece-needs-to-prosper-by-edmund-s--phelps-2015-08

NEW YORK – Some economists overlook the modern idea that a country’s prosperity depends on innovation and entrepreneurship. They take the mechanistic view that prosperity is a matter of employment, and that employment is determined by “demand” – government spending, household consumption, and investment demand.

Greece may seek up to 24 billion euros in first new aid tranche: paper

Sat Aug 1, 2015 2:18pm EDT Related: WORLD, GREECE

ATHENS

Reuters

 REUTERS/RONEN ZVULUN

Greece may seek 24 billion euros in a first tranche of bailout aid from international lenders in August to prop up its banks and repay debts falling due at the ECB, a pro-government Greek newspaper said in its early Sunday editions.

Athens is now in talks with the European Commission and the International Monetary Fund to secure up to 86 billion euros ($94.48 billion) in bailout aid. It will be its third bailout since 2010.

Tsipras Survives for Now as Party Rebels Blast Greece Rescue

by Nikos ChrysolorasEleni Chrepa

July 31, 2015 — 10:53 AM EEST Updated on July 31, 2015 — 12:05 PM EEST

Bloomberg

Greek Prime Minister Alexis Tsipras staved off an immediate challenge to his premiership, though failure to appease his party’s hard-left fringe brought early elections into view.

After 12 hours of talks, the central committee of the anti-austerity Syriza party decided in the early hours of Friday to hold an emergency congress in September, in which Tsipras’ move to accept a strings-attached rescue program from international creditors will be put to the vote. Leaders of the party’s Left Platform protested that will be too late to stop the bailout, but failed in their bid to force a party congress this weekend.

Italy is the most likely country to leave the euro

Washington Post

By Matt O'Brien July 30 at 2:56 PM

What do you call a country that has grown 4.6 percent—in total—since it joined the euro 16 years ago? Well, probably the one most likely to leave the common currency. Or Italy, for short.

It's hard to say what went wrong with Italy, because nothing ever went right. It grew 4 percent its first year or so in the euro, but almost not at all in the 15 years since. Now, that's not to say that it's been flat the whole time. It hasn't. It got as much as 14 percent bigger as it was when it joined the euro, before the 2008 recession and 2011 double-dip erased most of that progress. But unlike, say, Greece, there was never much of a boom. There has only been a bust. The result, though, has been the same. As you can see below, Greece and Italy have both grown a meager 4.6 percent the past 16 years, although they took drastically different paths to get there.

Bailout Money Goes to Greece, Only to Flow Out Again

By JACK EWING and LIZ ALDERMANJULY 30, 2015

The New York Times

FRANKFURT — The Greek businessman was nervous as he carried a suitcase stuffed with cash through passport control at the Athens airport a few months ago. But the distracted and overworked customs officials waved him through.

A few hours later the man touched down in Frankfurt, where he quickly deposited the money in a German bank.

Το αφανές κόστος της «επανάστασης»

ΠΟΛΙΤΙΚΗ 30.07.2015 : 12:38

Του Πάσχου Μανδραβέλη

Εφημερίδα Καθημερινή

Θέλουμε να ελπίζουμε ότι ανάμεσα σ’ αυτούς που χόρευαν και πανηγύριζαν το βράδυ του δημοψηφίσματος (5.7.2015) στο Σύνταγμα δεν ήταν κάτοικοι των υποβαθμισμένων περιοχών της δυτικής Αθήνας. Κι αυτό διότι τα γέλια θα τους βγουν ξινά. Οχι μόνο επειδή η κυβέρνηση «κοινωνικής σωτηρίας» τούς πότιζε επί έναν μήνα τοξικά του Ασπρόπυργου, χωρίς να κάνει το παραμικρό. Θα έχουν κι άλλες επιπτώσεις στην καθημερινότητά τους από τη «μεγαλοπρεπή διαπραγμάτευση» του κ. Γιάνη Βαρουφάκη και την «αριστερή αντίσταση» του κ. Παναγιώτη Λαφαζάνη. Το μετρό, για παράδειγμα, ένα έργο πνοής για την πρωτεύουσα και σωτήριο για τα χαμηλά βαλάντια, μπαίνει στο χρονοντούλαπο της τραπεζικής αργίας, που τόσο αφρόνως και ηρωικώς προέκρινε η κυβέρνηση.

Greece’s Alexis Tsipras Faces Battle to Avoid Syriza Split

Ruling party’s central committee to decide whether to hold inner-party referendum

The Wall Street Journal

By NEKTARIA STAMOULI and  VIKTORIA DENDRINOU

Updated July 29, 2015 12:57 p.m. ET

10 COMMENTS

ATHENS—Greece’s ruling Syriza party is sliding toward a split as far-left dissidents resist Prime Minister Alexis Tsipras’s acquiescence to creditors’ demands, endangering his fragile government and complicating the country’s bailout negotiations.

Pressed by left, Greece's Tsipras vows 'thus far and no further'

ATHENS | BY RENEE MALTEZOU AND ANGELIKI KOUTANTOU

Thu Jul 30, 2015 2:00am BST Related: WORLD

Reuters

Greek Prime Minister Alexis Tsipras, struggling to contain a revolt in his left-wing Syriza party, said on Wednesday that his government would not implement reform measures beyond those agreed with lenders at a euro zone summit this month.

Tsipras faces a tough Syriza central committee session on Thursday with many activists angered by his acceptance of bailout terms more stringent than those voters rejected in a July 5 referendum.

In a clear warning to Syriza rebels, Tsipras said he could be forced to call early elections if he no longer had a parliamentary majority, and suggested an emergency party congress could be held in early September.

Tsipras Seeks to Avert Party Split as Greece’s Creditors Arrive for Talks

By NIKI KITSANTONISJULY 29, 2015

The New York Times

ATHENS — As representatives of Greece’s international creditors started arriving on Wednesday in the Greek capital for a new round of tough negotiations, Prime Minister Alexis Tsipras said the country would get relief from its huge debt burden as early as November. He also hit out at dissenters within his party, saying that securing a new bailout deal was a priority.

Amid growing opposition within his leftist Syriza party over the prospect of fresh austerity required under Greece’s third financial rescue in five years, Mr. Tsipras accused dissenters of seeking to manipulate the result of this month’s referendum on bailout terms by claiming it was tantamount to a mandate for a Greek exit from the eurozone. “The Greek people voted no to a bad deal, they did not vote for an exit from the euro,” he said.

The Threat That Could Save the Euro

By confronting Athens with the possibility of an exit from the currency, Berlin may finally have prompted overdue reforms.

The Wall Street Journal

By MICHAEL HEISE

July 28, 2015 1:54 p.m. ET

Greece may have reached a preliminary settlement with its creditors, but peace and stability have not yet been restored in the eurozone. Recriminations are still flying between Greece and its creditors, and negotiations for a third bailout package will be fraught with difficulty. Meanwhile, the creditor countries are themselves split. Some, like Germany, insist that the principles underlying monetary union are more important than the membership of any one country. Others, such as France, say that more flexibility is needed to keep the euro together.

Merkel's Bavarian ally says Grexit would cause 'utter chaos'

Wed Jul 29, 2015 3:38am EDT Related: WORLD, GREECE

BERLIN

Reuters

A Greek exit from the euro zone would cause "utter chaos" but would have to be accepted if Athens was not willing to implement reforms, Chancellor Angela Merkel's Bavarian ally Horst Seehofer told German newspaper Die Welt on Wednesday.

"No one can predict the consequences of a Grexit other than that a lot of Greece's debts would have to be written off and at the same time monetary help would be necessary," Seehofer, state premier of Bavaria, said to the paper.

Opinion: After Greece, everyone will want a Plan B to leave the euro

Published: July 29, 2015 3:00 a.m. ET

Market Watch

MATTHEW LYNN'S LONDON EYE

It sounds like a Jason Bourne movie. The Varoufakis Legacy, however, named after the recently departed Greek finance minister, might well be slightly more exciting that the fourth installment in the Bourne series was. Featuring hi-tech hacking, a sinister German villain, a complex financial heist, blackmail, bullying and last-minute rescues, it has every element of an action movie, minus only a high-speed car chase through the streets of Athens.

The entertainment value aside, however, Yanis Varoufakis also leaves behind him a far-more significant legacy, and one that will shape the course of the eurozone economy for at least a decade ahead.

Greece Isn't a Morality Tale

2 JUL 29, 2015 2:00 AM EDT

By Mark Buchanan

Bloomberg

One of the more troubling elements of the recent drama over Greece's debt was the urge by many to see a deficiency of national character, rather than euro-zone economics, as the problem. Right-leaning opinion, not only in Germany but around the world, put the trouble down to Greek corruption and, worse, laziness:  The bad people of Greece retire too early and produce less per capita than the European average, despite working longer hours.

Ρωμιο -Anonymous χάκερς

28-7-2015  12:33

Του Πάσχου Μανδραβέλη

Καθημερινή

Ας​ το πούμε όσο πιο ευγενικά και ήπια μπορούμε: ο άνθρωπος είναι για δέσιμο. Οχι γιατί είχε σχέδιο δραχμής, που κανείς δεν του ζήτησε, ούτε επειδή τα είπε φόρα παρτίδα σε μια τηλεδιάσκεψη η οποία μαγνητοσκοπείτο και το ήξερε. Είναι για δέσιμο επειδή πίστευε ότι με ένα χάκερ και την ασύγκριτη -για τον ίδιο- ευφυΐα του, το ελληνικό κράτος θα άλλαζε εν μια νυκτί και θα γινόταν ένας υπεραποτελεσματικός μηχανισμός που θα μπορούσε να διαχειριστεί τη μετάβαση σε άλλο νομισματικό σύστημα.

Greece Made Preparations to Exit Euro

By JACK EWING and NIKI KITSANTONISJULY 27, 2015

The New York Times

FRANKFURT — Already struggling with internal conflict, Greece’s government is facing new criticism over secret preparations that would have allowed the country to leave the euro if necessary.

In a recording released on Monday, Greece’s former finance minister detailed a contingency plan to create an alternative banking system that could switch to a new currency. The system would be “euro-denominated but at the drop of a hat it could be converted into a new drachma,” the former finance minister, Yanis Varoufakis, said on the recording of a July 16 interview with an influential investment organization.

Tsipras’s Paradox Is Six Months of Pain and Enduring Popularity

by Maria Petrakis

July 27, 2015 — 12:00 AM EEST

Bloomberg

His party is split, government undermined and the economy lies in tatters. Yet in the rubble of Greece, Prime Minister Alexis Tsipras reigns supreme.

In the six months since he became prime minister, Tsipras breezed past challengers at home, new and old, as he followed an election victory with backing for his anti-bailout message in a referendum. After yielding to his European peers, next month he may be signing a third financial rescue that he opposed, while capital controls keeping money in Greece remain.

Escaping the Greek Debt Trap

5 JUL 27, 2015 2:00 AM EDT

By Barry Eichengreen , Peter T. Allen & Gary Evans

Greece's debt is unsustainable. The International Monetary Fund has said so, and it's hard to find anyone who disagrees. The Greek government sees structural reform without debt reduction as politically and economically toxic. The main governing party, Syriza, has made debt reduction a central plank of its electoral platform and will find it hard to hold on to power -- much less implement painful structural measures -- absent this achievement.

Moreover, tax increases and spending cuts by themselves will only deepen the Greek slump. Other measures are needed to attract the investment required to jump-start growth. Reducing the debt and its implicit claim on future incomes is an obvious first step.

Greek PM Tsipras under pressure over covert Syriza drachma plan reports

ATHENS | BY ANGELIKI KOUTANTOU

Sun Jul 26, 2015 9:05pm EDT Related: WORLD, GREECE

Some members of Greece's leftist government wanted to raid central bank reserves and hack taxpayer accounts to prepare a return to the drachma, according to reports on Sunday that highlighted the chaos in the ruling Syriza party.

It is not clear how seriously the plans, attributed to former Energy Minister Panagiotis Lafazanis and former Finance Minister Yanis Varoufakis, were considered by the government and both ministers were sacked earlier this month. However the reports have been seized on by opposition parties who have demanded an explanation.

Greece's Debt May Not Be So Daunting

11 JUL 20, 2015 3:13 PM EDT

By Leonid Bershidsky

Bloomberg

Greece's debt burden has taken on mythological attributes and questions about the dominant narrative have become a form of heresy. I, too, have repeated the line that "even the IMF considers Greece's debt unsustainable." Yet that is a half-truth and it has the potential to distort policy.

The assertion comes from a June 26 International Monetary Fund document that Greece's former finance minister, Yanis Varoufakis, called a "fascinating read." In his bombastic style, he went on to assert: "Never before has a veritable institution advocated policies that clashed so mercilessly with its own research. Never before has the IMF agreed, on economic analysis, with a government it sought to devastate."

Greece Said to Make ECB Debt Deadline as Banks Reopen

by Eleni ChrepaPaul GordonCarolynn Look

July 20, 2015 — 2:01 AM EEST Updated on July 20, 2015 — 4:22 PM EES

Bloomberg

Greece’s government said it’s repaying 6.8 billion euros ($7.4 billion) to creditors and depositors queued at reopened banks in the first signs of stabilization after last week’s bailout deal.

The country ordered payments on Monday to the European Central Bank, the International Monetary Fund and the Greek central bank, a Greek Finance Ministry official said on condition of anonymity. The euro rose on the news.

Repaying the ECB was the deadline Greece couldn’t afford to miss because a default would probably have forced the central bank to pull support from Greek lenders, all but ensuring the exit from the currency union. While banks reopened Monday, Greek financial markets will remain closed at least through Wednesday, two officials said.