Category Archives: Europe

G-7 Throws Greece Under the Bus

Some observers thought that Greece might get a break in the G-7 summit this weekend. While the G-7 has one more day to run, the statements coming out of the summit strongly and uniformly back the creditor position.

Syriza Commits to Deep Austerity in Its Proposal to Creditors

Greece has already offered to continue with a program of significant austerity. No wonder the creditors are close to agreeing to that part of the government’s proposal.

Tsipras Fighting Two Front War as Revolt Within Syriza Intensifies, Forcing IMF Payment Delay, Cancellation of Negotiating Session

As Tsipras’ options narrow thanks to the revolt in his party, it is also becoming harder for even Merkel to forestall a default.

The Economics of Parallel Currencies

As Greece’s cash crunch continues and its negotiations are moving slowing and tending towards an impasse, it becomes more and more likely that the beleaguered borrower will issue some sort of scrip in order to fund operations while remaining in the Eurozone. How and how well might that work?

Satyajit Das: My Big Fat Greek Crisis

Yves here. Das published this post in February and I thought it would be useful to reprise it for three reasons. First, it has held up well to the passage of time. Second, for latecomers to the Greek saga, it summarizes the background, the stances of the parties, and key economic and financial considerations. Third, the section starting “Controlled Warfare” (about 2/3 of the way through the post) summarizes the consequences to the lenders of a Grexit. Those risks are why almost no one thought we’d wind up where we are now, with two sides issuing ultimatums a mere two days before a possible Greek default, and why most of the financial media still believes a deal will get done.

Greece’s Creditors Meet to Prepare Offer (Updated – Creditors Agree on Uncompromising Terms)

Greece’s creditors met to agree on a last-ditch offer. But it turns out “last ditch” reaffirmed their current position and removed IMF’s debt relief proposal.

Greece’s Shortening Negotiating Runway and Possibly Erroneous Assumptions

Le Monde published a defiant op ed by Alex Tsipras over the weekend. The wee problem is that Greece is well past the point where political appeals will work.

Why a Greek Default is Likely to Strengthen the Hand of Austerians

Many fear that a Greek default would lead voters elsewhere in Europe to favour default over austerity. In contrast, this column argues that it is more likely to have the opposite effect

Wolf Richter: When Betting on QE Suddenly Goes Wrong

Central banks think they’re omnipotent – until they aren’t.

Greece: An Endgame Finally in Sight?

The noose continues to tighten on Greece.

Michael Hudson: Ukraine’s “Operation Vulture” and Labor Protests

Hudson’s so-called “Operation Vulture,” the strip-mining of what little is left of a functioning economy in Ukraine, comes straight out of the neoliberal playbook.

A Parallel Currency for Greece: Part II

Yves here. I’m quite interested in reader reactions to this scheme. My big reservation is that the amount of the scrip devised by the authors, the TCC, has to be limited to the an amount of discount of future tax payments that is deemed to be credible. Given that Bill Mitchell has estimated that Greece […]