Category Archives: Europe

Outlook Darkens for Syriza and Greece

Greece’s finances look to be more precarious than previously thought, which puts Syriza in an even weaker bargaining position.

Obama, Treasury Pushing Back Against Troika Grexit Threats; Bernie Sanders Presses for Fed to Prod ECB

The Administration realizes the risk of Grexit is real and is trying to fend that off. But even if they succeed, don’t expect that to add up to much in the way of relief for Greece.

Is Syriza About to Score a Tactical Win Against the Troika?

Those who were hoping that Syriza would be cowed by the ECB’s aggressive moves to shut Greece out of bond markets and Eurozone finance ministers’ unified resistance to the new government’s proposals are no doubt frustrated by its refusal to capitulate. On Sunday, Greek prime minister Alexis Tsipras gave a rousing speech reaffirming Syriza’s plans.

Bernie Sanders Asks Janet Yellen to Explain Her Apparent Inaction on Greece

Last week, we wondered why the Fed was tacitly supporting the ECB shellacking of Greece. It appears the same thing occurred to Senator Bernie Sanders.

Michael Pettis: Syriza and the French Indemnity of 1871-73

Get a cup of coffee. This is a fabulous, readable but nevertheless carefully argued and therefore long post on the drivers of the Eurzone crisis and what the parameters for a sensible resolutions are.

John Helmer: The Political Motivation of Chancellor Merkel’s Embrace of Yulia Tymoshenko, and War

Two-front wars in Europe aren’t good for Germany.

Why is Yellen Supporting the ECB Attack on Greece?

As we describe in our earlier post today on Greece, the ECB’s hit job on Greece is an continuation of the destructive and ultimately self-defeating practice of letting the pet needs of banks trump those of governments and social orders. The ECB is willing to turn Greece into a failed state out of what looks like sheer brutality, with the apparent rationalization that punishing Greece will serve pour decourager les autres, meaning the other periphery countries, and potentially even France, that are calling for relief from failed austerity policies.

ECB to Greece: Drop Dead

Even by the standards of bank thuggishness, the move by the ECB against Greece last night was a stunner. Americans have become used to banks taking houses under dubious pretexts when both the investors and borrowers would do better with a writedown. But to see the ECB try take a country is another matter entirely. As one seasoned pro said, “If anyone had tried something like this against a country with a decent sized military, the tanks would be rolling.”

Will the Cavalry Ride Over the Hill in Time for Greece?

We’ve cautioned readers that Greece is in a very weak bargaining position relative to its financial overlords in the Troika. As much as Finance Minister Yanis Varoufakis is making sound, logical arguments and presenting proposals that if anything are too accommodating, despite initial cool reactions, many of Greece’s soi disant partners are diehard neoliberals and/or are politically constrained. Varoufakis is approaching them as if they can deal in good faith, when their idea of “good faith” comes from a punitive parallel universe.

Three important meetings today will provide a better sense of whether Greece is gaining any political ground in its uphill battle to roll back austerity.

The ECB Tightens the Choke Chain on Greece

We said that the ECB held the trump cards in dealing with Greece, via being able to impose conditions on its access to the Emergency Liquidity Authority. We thought the ECB would send an initial signal as to how opposed it was to Finance Minister Yanis Varoufakis’ bold proposals in whether it imposed conditions and how severe those were on the Greek Central bank’s request to access ELA funds, which it is sure to approve to tomorrow.

It turns out the ECB isn’t waiting that long to let its views be known.

Greek Finance Minister Varoufakis Retreats on Debt Writedowns, Public Spending Promises

We’ve said that Greece had a weak negotiating position in trying to get a better deal from its creditors. That is playing out before our eyes. Greek Finance Minister Yanis Varoufakis has stepped down some of his early proposals even before formal talks have begun. This is a sad but predictable situation, since the Germans and the other members of the northern bloc are not at all willing to cut Greece much if any slack, since that would lead bigger, more powerful countries to try to slip the yoke of austerity.

The tragic thing about this situation is that Varoufakis is simply describing economic reality and has a number of sound ideas for how to make conditions better for Greece, which in the end will also lead to better results for its lenders.

The ECB Ready to Put a Choke Chain on Syriza

Is Syriza’s bold promise of hope for Greeks about to become a false dawn?

Syriza Walks Back Initial Defiance

Victims of austerity and their allies around the world may be placing too much hope in Syriza.

Greece Shows the Limits of Austerity in the Eurozone. What Now?

Mario Seccareccia, professor of economics at the University of Ottawa, has been outspoken in his warnings that austerity policies have the potential to smash economies and spread untold human misery. He has challenged deficit hawks and emphasized the need for strong government investment in things like jobs, education, health care, and infrastructure if economies are to prosper. Here he talks about why what happened to Greece was entirely predictable, why the Greeks were right to reject austerity in the recent election, and what challenges the country faces in forging a sustainable path forward with the left-wing Syriza party at the helm.