Category Archives: Europe

John Helmer: IMF Makes Ukraine War-Fighting Loan, Allows US to Fund Military Operations Against Russia, May Repay Gazprom Bill

For the first time, an IMF loan is funding a country at war, and one that is an impossible basket case economically. It’s hard not to conclude that the IMF largesse served to solve the wee problem of getting Congress to approve funding for US adventurism in Ukraine.

Is There an Easy Way Out? Private Marketable Debt and Its Implications for a Eurozone Break-up

What are some of the more granular costs and risks of a Eurozone exit? This post looks at France as a test case.

Yanis Varoufakis: Presenting an Agenda for Europe at Ambrosetti

If you followed Yanis Varoufakis before he became a household word (at least in Europe and in finance circles), you’ll recognize that he is making a layperson-friendly case for the Eurozone reforms that he, Stuart Holland, and Jamie Galbraith call A Modest Proposal. A new wrinkle is that he argues that the scarcity of bonds eligible for QE argues for one of its ideas, infrastructure spending funded by the EIB (those bonds would presumably be eligible for QE purchases).

Michael Hudson on the IMF’s Tender Ministrations in Ukraine and Greece

This RT interview with Michael Hudson focuses on the appalling state of the Ukraine economy and the role of the IMF, both in its policy-violating rescue package there and on a more general basis.

Michael Hudson: Quantitative Easing for Whom?

Michael Hudson recaps the theory, or perhaps more accurately, political justifications for quantitative easing, as opposed to how it works in practice.

Penciling Out Greece’s Payment Deadlines and Budget Needs

Yves here. Unlike many other comments on the state of Greece’s finances, this post takes a stab at Greece’s ongoing budget needs as well as its various debt due dates. Note that one uncertainty flagged here has been resolved in Greece’s favor. The Greek government will receive €550 million this month from the Hellenic Financial Stability Facility.

Edwards: “Core Inflation In The US Would Be Just As Low As In The Eurozone If Measured On The Same Basis”

Core inflation is telling a very different story than headline inflation, leading the ECB to diverge markedly from the Fed’s posture.

Rob Parenteau: Why Understanding Money Matters in Greece

As Greece staggers under the weight of a depression exceeding that of the 1930s in the US, it appears difficult to see a way forward from what is becoming increasingly a Ponzi financed, extend and pretend, “bailout” scheme. In fact, there are much more creative and effective ways to solve some of the macrofinancial dilemmas that Greece is facing, and without Greece having to exit the euro. But these solutions challenge many existing economic paradigms, including the concept of “money” itself.

Troika Tightening the Noose on Greece as Government Cash Crunch Worsens

“I begin to discern the profile of my death.” That arresting sentence, culled from early drafts, served as the anchor for one of the finest novels ever written, Margarite Yourcenar’s Memoirs of Hadrian.

The Troika and Eurogroup look to be working towards the Greek government to start having similar thoughts. However, given the high level of popular support for Syriza, and press reports that Greek citizens fully expect that the new government to at best only be able to deliver on a small portion of its campaign promises, the end game for Greece is looking more and more likely to be a failed state rather than a more neoliberal-friendly government.

Impotent Western Sanctions Fail To Disrupt Russian Energy Exports

Who has won and lost from the Western sanctions against Russia?

John Helmer: Cyprus is More Important to Russia than Greece, but Not This Important

What is the significance of Cyrprus’ military basing agreement with Russia for Russia’s naval and air forces in the Mediterranean?

Do Greece, the Troika, and the Eurogroup Actually Have a Deal?

Ambrose Evans-Pritchard has a new article on Greece’s scramble to find the funds to meet it March IMF payments, which are €1.5b in total, with €300 due on Friday. Note that IMF payment dates aren’t as hard and fast as credit card due dates; the agency allows borrowers some leeway if they have a clear intent to pay.

Nevertheless, Evans-Pritchard’s most important observation may be the one at the close of his article:

Whatever piece of paper they signed in Brussels 10 days ago, the two sides are still talking past each other.

In other words, the two sides disagree profoundly as to what the memo means. And that may mean that in reality, there is no deal at all.

Greek Kolotumbas Increasing at Disconcerting Rate

I’m at risk of getting whiplash from watching the speed at which Greece is changing its position on key issues. And while I’d be delighted to be proven wrong, there are reasons to think this pattern does not bode well for the government’s ongoing negotiations.

John Helmer: What is Russia’s Answer to Greece’s Plan B? Smile, Blow the Whistle, Pass the Red Card

Helmer’s post confirms our view that Russia will not rescue Greece, and for many of the same reasons that we’ve stated.

The Alternative in Greece

Let us begin with what should be indisputable: the Eurogroup agreement that the Greek government was dragged into on Friday amounts to a headlong retreat.