Germany and France Strike Deal to Rescue Greece from Debt Crisis
THE TELEGRAPH: Germany and France have agreed a deal to “safeguard financial stability” for Greece and the wider eurozone following crisis talks at a European Union summit.

Political agreement on general principles was thrashed out during tense negotiations between Germany, France, Greece and the European Central Bank on Thursday morning.

”There is an agreement on the Greek situation. We will communicate now the agreement to the other leaders,” Mr Van Rompuy said.

Jose Manuel Barroso, the European Commission President, said that Greece would receive support in return for and aligned to progress on sweeping austerity cuts.

”Greece needs to do whatever is necessary, including additional measures, to ensure that the deficit reduction targets for this year are met,” said an official. ”Secondly, in that case the euro zone members should be ready to safeguard financial stability in the euro zone area as a whole.”

The EU summit was delayed to buy time as Germany and France brokered frantic negotiations with the ECB and Commission to save the eurozone by putting together a rescue package for Greece. >>> Bruno Waterfield in Brussels | Thursday, February 11, 2010

Markets Target Euro as Doubt Swirls Over Greece
TIMES ONLINE: The leaders of France and Germany agreed today to work together to tackle the Greek debt crisis but failed to reassure jittery European financial markets.

Both the euro and Greek government bonds enjoyed a moment of respite after reports that the new EU President, Herman Van Rompuy, had brokered a bailout deal in a meeting this morning with President Sarkozy, Chancellor Angela Merkel and Jean-Claude Trichet, head of the European Central Bank.

“Euro area member states will take determined and co-ordinated action if needed to safeguard stability in the euro area as a whole," Mr Van Rompuy told reporters in Brussels, reading from a statement agreed by all 16 eurozone states. "The Greek government has not requested any financial support."

But as the EU's 27 leaders went into summit talks this afternoon, the lack of detail began to weigh with market traders looking for action - and hard cash - not words. The euro, which has lost some 10 per cent in value against the dollar since late 2009, initially rose slightly on Mr Van Rompuy's statement to $1.3755 before falling back $1.3688.

"It just looks like a pledge of solidarity, but no actual details of a program which is why the euro is still in the doldrums,” said Neil Mackinnon, global macro strategist at VTB Capital. “Unless, there’s further news out later this afternoon, the markets will consider the EU summit response as a disappointment." >>> Philippe Naughton and David Charter in Brussels | Thursday, February 11, 2010

Germany, Forced to Buoy Greece, Rues Euro Shift
THE NEW YORK TIMES: BERLIN — As Europe edges toward emergency guarantees to stem market panic over one of the most profligate members of the euro bloc, the country that the region turns to for leadership, Germany, is suffering from growing doubts about the European experiment it long championed.

Reluctant German leaders now find themselves forced to help Greece remain solvent, or risk watching markets attack one weak member after the next, from Portugal to Spain to Italy, threatening the stability of the euro, the European currency Germany fought so hard to create.

On Thursday, European leaders meeting in Belgium announced they had agreed to a political statement to try to reassure bond markets and head off the crisis, and said that finance ministers would work through the details next week.

Earlier, in a conference call with the finance ministers from the 16 countries that use the euro and the president of the European Central Bank, Jean-Claude Trichet, officials said that some action had to be taken to calm markets and take pressure off Greece. It appeared clear that Germany, with an assist from France, would have to take the lead. “The Germans are the only ones with deep pockets,” said Daniel Gros, director of the Center for European Policy Studies in Brussels. “If it was just Greece, they could consider letting them go down the drain, but it threatens the entire euro zone.”

Berlin has been mostly silent on the matter. That is partly to put pressure on Greece, as civil servants struck there Wednesday to oppose cutbacks that the government has promised in order to rein in its enormous budget deficit.

But a bailout will be politically awkward for Chancellor Angela Merkel’s government. It is precisely the financial millstone that opponents warned about when Germany gave up its treasured mark, a move that a majority of people here, in contrast to their political leaders, opposed at the time.

“If the German government would just transfer money to Greece, people in Germany would feel their worst fears had come true,” said Thomas Mayer, chief economist at Deutsche Bank. >>> Nicholas Kulish | Wednesday, February 10, 2010

Watch New York Times video 1: Financial Crisis Deepens in Greece >>>

Watch New York Times video 2: Greeks Strike Amid Financial Crisis >>>

Crisis Spreads in Europe: Debt Downgrades in Portugal, Greece Sow Fear of Contagion; World Markets Hit
THE WALL STREET JOURNAL: Europe's hopes of containing Greece's credit crisis dimmed as the country's debt woes spread to Portugal, sparking a selloff in markets across the globe and testing the European Union's ability to protect its common currency.

The euro tumbled to its lowest point in a year against the dollar after Standard & Poor's Ratings Services cut Portugal's credit rating two notches and downgraded Greece's debt to "junk" territory, a first for a euro-zone member. The move is bound to worsen Greece's already dire fiscal situation and hamper a recovery. The news sent the bond yields in both countries soaring, a sign of distress.

The Dow Jones Industrial Average fell 213.04 points, or 1.9%, to 10991.99, suffering its worst decline in both point and percentage terms since Feb. 4. The pan-European Stoxx Europe 600 index tumbled 3.1%. As investors opted for the safety of bonds, the yield on Germany's 10-year benchmark was pushed down to 2.99%, moving below 3% for the first time in more than a year. Yields on U.S. Treasurys also dropped as investors bought.

Asian stock markets tumbled in early trading Wednesday on renewed worries about Greece's problems, with Japan's Nikkei 225 stock average shedding 2.8%.

The force of the market reaction to the downgrades suggests that the EU's fraught, months-long effort to stem Greece's debt crisis has all but failed. Portugal's stagnant economy has been viewed as among the weakest in the euro zone, although its deficit and debt levels aren't as high as Greece's. The debt rating downgrade on Tuesday, to A-minus from A-plus, fueled concerns that Portugal is on the same trajectory as its southern neighbor, despite its more solid fiscal position.

Greece's own turmoil was triggered in part by a similar ratings downgrade in December amid growing concerns about its debt. >>> Matthew Karnitschnig, Stephen Fidler and Tom Lauricella | Tuesday, April 27, 2010



TIMES ONLINE: ‘Greece infection’ spreads as stricken nation’s debt is rated junk: Greece plunged deeper into financial turmoil last night after its government bonds were rated as junk by financial markets. The Portuguese government debt also took a hammering after panic spread that a Mediterranean virus of insolvency and bad debts would infect the rest of Europe. >>> Carl Mortished and David Wighton | Wednesday, April 28, 2010

THE TELEGRAPH: Greece acts to stop speculators as debt crisis escalates: Greece has moved to stem panic in the country and stop speculators taking advantage of its escalating debt crisis. >>> Malcolm Moore in Shanghai | Wednesday, April 28, 2010

Greek Unrest Spreads: Solidarity Protests Across Europe Turn Violent
Demonstrators in Rome. Photo courtesy of SpiegelOnline International
SPIEGELONLINE INTERNATIONAL: As Greece entered its sixth day of unrest sparked by the police shooting of a 15-year-old boy, violence spread to other parts of Europe on Thursday. Solidarity protests in cities including Rome, Madrid and Copenhagen turned into skirmishes between demonstrators and police.

The unrest that has gripped Greece for days has started to spill over into other European capitals, with arrests made in Rome, Copenhagen and Madrid on Wednesday night after solidarity demonstrations descended into violence.

The situation in Greece itself had calmed somewhat by mid-morning Thursday following pre-dawn violence which saw students clash with police. Youth threw stones and fire bombs at police in the early hours of the morning in the sixth day of protests since the fatal shooting of 15-year-old Alexandros Grigoropoulos ingited anger over police brutality. The events have also stoked public anger with the government -- resentment that was already widespread following a series of financial scandals and unpopular reforms.

Much of the worst violence has been perpetrated by young anarchists, the so-called Black Bloc. But there is growing anger among the wider public about the inability of the government to control the situation and restore calm. On Wednesday a general strike across Greece halted flights and closed banks, schools and some hospital services.

Meanwhile, flourishes of violence spread to other parts of Europe. In Istanbul about a dozen Turkish left-wing protestors daubed red paint over the front of the Greek consulate, while the country's embassies in Rome and Moscow were attacked by fire bombers and stone throwers. In the Italian university town of Bologna, five police officers were reported injured after clashing with demonstrators outside the Greek consulate. >>> smd -- with wire reports | December 11, 2008

GLOBEANDMAIL: Ugly Tactics of the Rioters Now Coming Under Attack

Watching television and video coverage of the riots that have swept through Greece this week, it is hard not to notice something curious: The police, for the most part, do not seem to be fighting back.

Except when stoned or pelted with Molotov cocktails themselves, they often left the rioters alone to smash store windows and set fire to buildings.

That apparent restraint springs from a November night in 1973 when the forces of a six-year-old dictatorship battered their way onto the campus of the Athens Polytechnic. No one knows the exact toll, but something like 40 people were killed, and the anger over their deaths helped bring down the military government.

Ever since, student protesters have enjoyed a special status in Greece. Lionized for bringing down the regime of the colonels, they take to the streets with a frequency and a ferocity that is unusual even in Europe. >>> Marcus Gee | December 10, 2008

TIMESONLINE: Greek Violence Spreads across Europe

Suspected anarchist protests which have dogged Greece for the last week spread outside the country today, with mobs causing violent scenes in Italy, Spain, Russia, Denmark and Turkey.

Greek diplomatic missions were vandalised in the attacks, while police, local authority and media representatives were also targeted in what appeared a co-ordinated escalation.

The upsurge took place as protests continued in Greece following the killing last Saturday of Alexandros Grigoropoulos.
Today, mobs pelted 20 police stations with rocks and bottles, overturned cars and blocked streets in central Athens. Police responded with tear gas as sporadic violence persisted amid Greece’s worst rioting in decades.

Four people were detained and at least one man was hospitalised with injuries, authorities said. In a gesture which appeared designed to ease the violence, MPs held a minute of silence for Mr Grigoropoulos.

Yet what were originally relatively localised protests over the killing have since been hijacked by mobs of self-styled anarchists who authorities say are looking for trouble, and today they spread out of Greece for the first time.

In Denmark, a total of 32 people were arrested in Copenhagen after protests turned violent while, in Madrid and Barcelona, several police officers were injured and 11 people were arrested following clashes.

The violence also spread to Turkey, where a dozen protesters were reported to have painted the Turkish-flag red on the Greek consulate. In Moscow and Rome, meanwhile, petrol bombs were reported to have been aimed at Greek Embassies.

Meanwhile, a crew of television journalists from Russia were attacked by 50 youths as they filmed clashes in Exarchia, Greece, a known hotbed of student radicalism. One correspondent from the NTV television station was injured. >>> David Byers | December 11, 2008

The Dawning of a New Dark Age (Paperback & Hardback) – Free delivery >>>

Greece's Defence Minister Threatens to Send Migrants Including Jihadists to Western Europe

THE DAILY TELEGRAPH: Panos Kammenos, Greece's defence minister, threatens to open country's borders to refugees – including potential members of Islamic State of Iraq and the Levant (Isil) - unless Athens receives debt crisis support

Greece will unleash a “wave of millions of economic migrants” and jihadists on Europe unless the eurozone backs down on austerity demands, the country[‘s] defence and foreign ministers have threatened.

The threat comes as Greece struggles to convince the eurozone and International Monastery Fund to continue payments on a £172billion bailout of Greek finances.

Without the funding, Greece will go bust later this month forcing the recession-ravaged and highly[-]indebted country out of the EU’s single currency.

Greece’s borders with Turkey is the EU’s frontline against illegal immigration and European measures to stop extremists travelling to and from Islamic State of Iraq and the Levant (Isil) bases in Syria and Iraq.

Panos Kammenos, the Greek defence minister, warned that if the eurozone allowed Greece to go bust it would give EU travel papers to illegal immigrants crossing its borders or the 10,000 currently held in detention centres. » | Bruno Waterfield, Brussels | Monday, March 09, 2015

France, Greece and Germany Election Results Send Austerity Shockwaves Through Europe
THE SUNDAY TELEGRAPH: The stunning victory of the French Socialists and wipe-out of mainstream parties in Greece sent shock waves on Sunday night crashing throughout the continent of Europe.

François Hollande's election threws [sic] down the gauntlet to Angela Merkel, the German Chancellor, who has railroaded the eurozone into agreeing a new "fiskalpakt" treaty enshrining Germany's austerity doctrine.

The economic doctrine of austerity, to cut the burden of state spending to free up the economy, has ruled supreme with the support all of Europe's leaders, the European Union and financial markets.

But political leaders were on Sunday night conceding the consensus had been shattered beyond repair.

With Europe's economies plunging further into recession and as unemployment in the eurozone breaks record levels, voters demands for a new approach had finally become to great to ignore.

The popular backlash to EU imposed austerity to the centrist New Democracy and Socialist parties in Greece threatens the existence of the euro itself.

Greece is potentially ungovernable as a minority government must try and pass a new raft of austerity measures next month which are a condition of an EU-IMF bailout and Greek membership of the euro.

In France, while Hollande, the Socialist President-elect is a centrist, he is sitting on a powder keg of resentment at measures that his government will have to pass if it is not spark a meltdown of financial markets.

He has refused to ratify the treaty unless the eurozone and EU also sign up to a "growth pact". » | Bruno Waterfield, Devorah Lauter in Paris and Matthew Day | Sunday, May 06, 2012

THE HUFFINGTON POST: Greece Elections 2012: Nikolaos Michaloliakos, Extreme Right Leader, Warns Greek 'Traitors': ATHENS, Greece -- The leader of an extreme-right, anti-immigrant party on course for shock success in Greece's general elections Sunday lashed out at those he described as "traitors" responsible for the country's financial crisis and said his party was ushering in a "revolution." ¶ The far-right Golden Dawn party is set to win 7 percent of the parliamentary vote, according to early projections, as Greeks punished the traditionally dominant parties who backed harsh austerity measures tied to debt-relief agreements. » | Nebi Qena | AP | Saturday, May 05, 2012

Related »

Euro Rebounds After EU Pledge to Support Greece
TIMES ONLINE: The euro rebounded in early trade today as European finance ministers prepared to begin a second day of talks on Greece’s debt crisis after telling the country that it has 30 days to prove its austerity plan will work or introduce new measures to control its deficit.

The European single currency jumped to $1.3757 by afternoon in New York from $1.3600 late Monday after assurances from EU states that Greece could count on their support if the situation showed no signs of improvement.

However, finance ministers said that Greece would have to prove that it was on track to meet its target of cutting its deficit by four percentage points this year or come up with further measures.

The offer of further help came after Greece warned that last week’s offer of support by EU leaders may not be enough calm market anxiety about Greece and other governments in the region, such as Spain and Portugal.

However, Jean-Claude Juncker, Luxembourg’s Prime Minister and chairman of the finance ministers’ meeting in Brussels, said: “Financial markets are completely wrong if they think they can destroy Greece.” >>> Peter Stiff | Tuesday, February 16, 2010

Time to Admit Defeat: Greece Can No Longer Delay Euro Zone Exit

SPIEGEL ONLINE INTERNATIONAL: After Greek voters rejected austerity in last week's election, plunging the country into a political crisis, Europe has been searching for a Plan B for Greece. It's time to admit that the EU/IMF rescue plan has failed. Greece's best hopes now lie in a return to the drachma. By SPIEGEL Staff

There are many things Alexis Tsipras likes about Germany. The leader of Greece's Coalition of the Radical Left (Syriza) party drives his BMW motorcycle to work at the Greek parliament in the morning, Germany's über-leftist Oskar Lafontaine is one of his political allies, and when it comes to his daily work, his colleagues have noticed a certain tendency toward Prussian-style perfection.

Tsipras could easily count as a friend of the Germans, if it weren't for the German chancellor. Greek magazines have frequently caricatured Angela Merkel dressed in a Nazi uniform, because she imposes her fondness for balanced budgets and austerity on the rest of Europe. The Greeks, says Tsipras, want to "put an end" to the Germans' requirements and their "brutal austerity policy."

Tsipras is the new political star in Athens. While the country's washed-up mainstream parties struggled for days to form a new government, the clever young politician has been dominating the headlines with his coalition movement of Trotskyites, anarchists and leftist socialists.

In the recent elections, Tsipras' Syriza party advanced to become the second-largest political force in the country, and Tsipras is making sure his gray-faced opponents from the Greek political establishment know it. Surrounded by cameras and microphones, he stood in the Athens government district last Tuesday, put on his winner's smile and called upon the two traditional parties, the center-left Socialists (PASOK) and the conservative New Democracy, to send a letter "to the EU leadership" and cancel the bailout deal that Athens made with the EU and the International Monetary Fund (IMF).

Tsipras knows what many Greeks are thinking. At the end of last week, his poll numbers rose to a new record level of almost 28 percent.

Turning Point

Two years after the government in Athens requested the first emergency loans in Brussels, the European debt crisis is reaching a turning point. Europe and the international community pumped about €240 billion ($312 billion) into the Balkan nation, government employees were let go, pensions were slashed and a series of restructuring programs were approved.

But even though the country is virtually being governed by the European Commission and the IMF, Greece's debts are higher than ever and the recession is worsening. As the political situation becomes increasingly chaotic, new elections seem all the more likely.

At the Chancellery in Berlin, the television images from Athens now remind Merkel's advisers of conditions in the ill-fated Weimar Republic of 1919-1933. Back then, the Germans perceived the Treaty of Versailles as a supposed "disgrace." Now, the Greeks feel the same way about the austerity measures imposed by Brussels. And, as in the 1920s in Germany, the situation in Greece today benefits fringe parties on both the left and the right. The country's political system is unraveling, and some advisers even fear that the tense situation could lead to a military coup.

Greece has been in intensive care for years, but the patient, instead of recovering, is just getting sicker and sicker. In a confidential report, which SPIEGEL has seen, experts from the IMF arrive at a devastating verdict. The country, they write, has only "a small industrial base" and is characterized by "structural incrustations" and an "excessively large role of the public sector." » | SPIEGEL Staff | Monday, May 14, 2012

Greece Crisis Escalates as IMF Witholds Support for a New Bail-out Deal

THE TELEGRAPH: Talks over new rescue package are derailed after less than a week as IMF seeks explicit assurances over debt relief from the Europeans

Talks over an €86bn bail-out for Greece have been thrown into turmoil after just four days as the International Monetary Fund said it would have no involvement in the country until it receives explicit assurances over debt sustainability.

An IMF official said the fund would withhold financial support unless it has guarantees Greece can carry out a "comprehensive" set of reforms and will be the beneficiary of debt relief from its European creditors.

The comments came after the IMF's executive board was told that the institution could no longer continue pumping more money into the debtor nation, according to a leaked document seen by the Financial Times.

The Washington-based Fund has been torn over its involvement in Greece - its largest ever recipient country. The world's "lender of last resort' said it would continue talks with its creditor partners and the Leftist government of Athens, but made it clear the onus of keeping Greece in the eurozone now fell on Europe's reluctant member states.

"There is a need for difficult decisions on both sides... difficult decisions in Greece regarding reforms, and difficult decisions among Greece's European partners about debt relief," said the official.

"One should not be under the illusion that one side of it can fix the problem." » | Mehreen Khan | Thursday, July 30, 2015

Greek Rescue in Danger as Deputy Prime Minister Attacks 'Nazi' Germany
THE TELEGRAPH: Greece has greatly damaged its chances of an EU bail-out by lashing out at Germany over war-time atrocities and accusing Italy of cooking its books to hide public debt.

The escalating dispute came as a general strike in Greece spilled over into violent clashes between hooded youths and riot police in Athens. Chants of "burn the banks" are a foretaste of tensions once austerity measures bite in earnest later this year.

Public and private sector unions joined forces to bring the country to a standstill for 24 hours, halting flights, trains, and shipping, and shutting schools and hospitals.

Theodoros Pangalos, deputy prime minister, said Germany had no right to reproach Greece for anything after it devastated the country under the Nazi occupation, which left 300,000 dead. "They took away the gold that was in the Bank of Greece, and they never gave it back. They shouldn't complain so much about stealing and not being very specific about economic dealings," he told the BBC.

Twisting the knife further, he said the current crop of EU leaders were of "very poor quality" and had botched this month's crisis summit in Brussels. "The people who are managing the fortunes of Europe were not up to the task," he said.

One banker said the situation was surreal. "How can they call the Germans incompetent Nazis and still expect a bail-out?"

Mr Panagalos has gone even further than premier George Papandreou, who said Greece had become a "guinea pig" for squabbling eurocracts playing power games.

Athenian rhetoric has confirmed fears in North Europe that the ruling PASOK party is still in denial about the crisis and will not deliver on promises. The insults have caused bitterness in Germany, increasing the possibility that Europe's paymaster will lose patience and leave Greece to its fate after all. >>> Ambrose Evans-Pritchard, International Business Editor | Wednesday, February 24, 2010

Related:

Greece Grinds to a Halt Amid Strikes (Video) / Scharfe Attacke aus Griechenland gegen Deutschland / In Krise wollen Griechen deutsches Geld wegen Nazi-Besatzung / La Grèce paralysée par la grève générale >>> | Wednesday, February 24, 2010

Alexis Tsipras Warns Greek Crisis Is Also Europe's

THE GUARDIAN: Greece's leftwing leader tells Paris audience that other EU countries will be next if they fail to oppose radical austerity drive

The rising star of Europe Alexis Tsipras, the radical left Greek leader, has arrived in Paris to warn EU countries that their turn would come if they failed to oppose the radical austerity that is driving Greece to the brink of "collective suicide".

Tsipras, who is leading an austerity-backlash, said the future of Europe and the euro depended on the outcome of the Greece debt crisis. And he said he could feel a "wind of change" blowing across the continent that he hoped would lead to the "complete re-founding of Europe based on social cohesion and solidarity".

To continue down the path of austerity, he warned, would turn the Greek tragedy into an European catastrophe.

"Greece is a link in a chain. If it breaks it is not just the link that is broken but the whole chain. What people have to understand is that the Greek crisis concerns not just Greece but all European people so a common European solution has to be found," he told a press conference in Paris.

"The public debt crisis is hitting the south of Europe but it will soon hit central Europe. People have to realise that their own country could be threatened.

"We are here to explain to people in Europe that we have nothing against them. We are fighting the battle in Greece not just for the Greek people but for people in France, Germany and all European countries."

"I am not here to blackmail, I am here to mobilise," he said.

"Greece gave humanity democracy and today the Greek people will bring democracy back to Europe." » | Kim Willsher in Paris | Monday, May 21, 2012

Related »

Greek Debt Crisis Spreading 'Like Ebola' and Europe Must Act Now, OECD Warns
THE TELEGRAPH: The Greek debt crisis is spreading “like Ebola” and Europe must act now to protect the stability [of] the financial markets, according to the Organisation for Economic Co-operation and Development.

The Parthenon, Greece. Photograph: The Telegraph
“It’s not a question of the danger of contagion; contagion has already happened,” OECD secretary general Angel Gurria said.

“This is like Ebola. When you realise you have it you have to cut your leg off in order to survive,” he added, saying the crisis is "threatening the stability of the financial system".

Alistair Darling, the Chancellor, called for Eurozone countries to "urgently" agree a bail-out for Greece or risk a further decline in stock market confidence.

Mr Darling said it was "absolutely essential" that Greece's problems were sorted out "quickly, effectively and decisively", following a torrid 24 hours for world markets.

Asked on LBC Radio about the drop in the FTSE on Tuesday, the Chancellor said stock markets rise and fall but added: "That's my argument about the situation in Greece – we have got to make sure that it gets sorted out.

"But the primary responsibilities are for the other members of the euro group.

"They know that they have got to sort it out. They have promised money, and what I would say is they need to make that money available as soon as possible."

He added: "If we can sort out the problems in Greece quickly, then that will make people more confident."

The crisis in Greece sent stock markets and the euro reeling for a second day as fears grew that it would not be able pay its debts. >>> | Wednesday, April 28, 2010

ECB May Have to Turn to 'Nuclear Option' to Prevent Southern European Debt Collapse
THE TELEGRAPH: The European Central Bank may soon have to invoke emergency powers to prevent the disintegration of southern European bond markets, with ominous signs of investor flight from Spain and Italy.

Greece’s fortunes were dealt yet another blow as Standard & Poor’s slashed its credit rating to junk status - BB+ - the first time that has happened to a euro member since the single currency was created, pushing yields on 10-year Greek bonds up to a record 9.73pc.

The credit-rating agency also cut Portugal’s sovereign debt ratings by two notches to A-, as the swirling storm hit the country with full-force.

“We have gone past the point of no return,” said Jacques Cailloux, chief Europe economist at the Royal Bank of Scotland.“There is a complete loss of confidence. The bond markets are in disintegration and it is getting worse every day.

“The ECB has been side-lined in the Greek crisis so far but do you allow a bond crash in your region if you are the lender-of-last resort? They may have to act as contagion spreads to larger countries such as Italy. We started to see the first glimpse of that today.”

Mr Cailloux said the ECB should resort to its “nuclear option” of intervening directly in the markets to purchase government bonds.

This is prohibited in normal times under the EU Treaties but the bank can buy a wide range of assets under its “structural operations” mandate in times of systemic crisis, theoretically in unlimited quantities. >>> Ambrose Evans-Pritchard, International Business Editor | Tuesday, April 27, 2010

Greece Nears Euro Exit as Bailout Talks Break Up without Agreement

THE GUARDIAN: Last-ditch negotiations to resume on Sunday after eurozone’s fiscal hawks put up fierce resistance to Alexis Tsipras’s rescue plan

Greece’s final attempt to avoid being kicked out of the euro by securing a new three-year bailout worth up to €80bn ran into a wall of resistance from the eurozone’s fiscal hawks on Saturday.

Finland rejected any more funding for the country and Germany called for Greece to be turfed out of the currency bloc for at least five years.

The last-chance talks between the 19 eurozone finance ministers in Brussels ended at midnight, as they struggled to draft a policy paper for national leaders at yet another emergency summit on Sunday that was billed as the decisive meeting.

With Greece on the edge of financial and social implosion, eurozone finance ministers met to decide on the country’s fate and on what to do about its debt crisis, after experts from the troika of creditors said that new fiscal rigour proposals from Athens were good enough to form “the basis for negotiations”.

But the German finance minister, Wolfgang Schäuble, dismissed that view, supported by a number of northern and eastern European states. “These proposals cannot build the basis for a completely new, three-year [bailout] programme, as requested by Greece,” said a German finance ministry paper. It called for Greece to be expelled from the eurozone for a minimum of five years and demanded that the Greek government transfer €50bn of state assets to an outside agency for sell-off. » | Ian Traynor in Brussels | Saturday, July 11, 2015

More Cracks in the Eurozone Despite Likely Deal for Greece
THE SUNDAY TELEGRAPH: Europe's leaders will do their best to put on a show of unity as early as Monday when they announce that they stand ready to help Greece recover from its financial disaster.

But the deal is just a thin veneer over permanent disagreements about how to run the European Union, and Brussels is about to embark on another round of damaging internal debate which will further distance it from the bloc's 500 million citizens.

Greece is the weakest but not the only member of the 16-country eurozone in deep trouble. It must borrow over 50 billion euros on the international markets this year or else it could go bust. The other countries that use the euro, led by Germany and France, are likely to say that their private banks will guarantee to help meet those financing needs should willing investors turn out to be in short supply. That, allied to a massive round of spending cuts inside Greece designed to reduce the budget deficit, should be enough to calm markets and stabilise the situation.

It won't stop Greeks from rioting, however. Just as in the UK, US and everywhere else, ordinary workers can't see why they have to swallow pay cuts, tax rises and cuts in services as a result of incompetent politicians and mendacious bankers. Greece's socialist government, recently elected, is suffering from internal dissent at the price to be paid for outside help. The deficit is more than four times higher than eurozone rules allow, but reducing it could be a dangerous process in a country plagued by social unrest and which was under military rule as recently as the 1970s.

As for the rest of the eurozone and the European Union, the big beasts of the continent - the UK, France and Germany - have never seen eye to eye on the level of economic oversight and political interference they would countenance from Brussels. It was hoped that the passage of the Lisbon Treaty, the reforms of the EU's rules and institutions just enacted after much pain, would still that debate and end internal wrangling for a decade.

Instead, Greece's problems, and those yet to be played out in full in Spain, Portugal, Ireland and elsewhere, have exposed the messy and inadequate compromises agreed for the co-ordination of vastly disparate economies. It hasn't worked; a new framework is required. >>> Adrian Michaels and Bruno Waterfield | Sunday, March 14, 2010

Euro Will Still Fall Despite Sarkozy


Greece Will Come Through Crisis Without Bailout, IMF Head Says
THE GUARDIAN: Dominique Strauss-Kahn remains confident that Europe's leaders can resolve the Greek crisis

The head of the International Monetary Fund believes Greece will resolve its debt crisis without an IMF bailout, and today dismissed fears that other European nations will be engulfed by the crisis.

Dominique Strauss-Kahn insisted this morning that other eurozone countries with large public deficits would not be forced into the same predicament as Greece. Speaking to Reuters in Nairobi, Strauss-Kahn said the wider European economy was still strong - despite fears that Greece might default on its debts. While the IMF is poised to assist Greece if needed, Strauss-Kahn remains confident that Europe's leaders could resolve the issue.

"The eurozone wants to deal with the problem itself, and I can understand that," he said. "I think they can do it … and we're just here to help."

Strauss-Kahn also argued that those who claim that Spain or Ireland could suffer a debt default are simply trying to "scare" the financial markets.

"We have a problem with Greece. We don't have a problem with Spain to date. The eurozone has to deal with the Greek problem. They are doing this," said Strauss-Kahn.

"No one knows what's going to happen tomorrow morning but there's no reason why the spillover to Portugal or to Spain will take place," he added. >>> Graeme Wearden | Monday, March 08, 2010

Europe's Original Sin: National Leaders Ignored Greece's Soaring Debt for Years
THE WALL STREET JOURNAL: Europeans are blaming financial transactions arranged by Wall Street for bringing Greece to the brink of needing a bailout. But a close look at the country's finances over the nearly 10 years since it adopted the euro shows not only that Greece was the principal author of its debt problems, but also that fellow European governments repeatedly turned a blind eye to its flouting of rules.

Though the European Commission and the U.S. Federal Reserve are examining a controversial 2001 swap arranged with Goldman Sachs Group Inc., Greece's own budget moves, in clear breach of European Union rules, dwarfed the effect of such deals.

Predicaments of the sort Greece is facing—years of overspending, leaving bond investors worried the country can't pay back its debts—weren't supposed to happen in the euro zone. Early on, countries made a pact aimed at preventing a free-spending state from undermining the common currency. The pact required countries adopting the euro to limit annual budget deficits to 3% of gross domestic product, and total government debt to 60% of GDP.

But an examination of budget reports to the EU shows Greece hasn't met the deficit rule in any year except 2006. It has never been within 30 percentage points of the debt ceiling. >>> Charles Forelle and Stephen Fiddler | Wednesday, March 03, 2010

Germany Drawing Up Plans for Greece to Leave the Euro
THE DAILY TELEGRAPH: Plans for Greece to default, potentially leaving the euro, have been drafted in Germany as the European Union begins to face up to the fact that Greek debt is spiralling out of control - with or without a second bailout.

The German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets.

Eurozone finance ministers meet on Monday to approve the next tranche of loans from the EU and the International Monetary Fund, designed to stave off national bankruptcy while the new Greek government puts the country's finances in order.

But the severe austerity measures being demanded have caused such fury in Greece, and the cuts required are so deep, that Wolfgang Schäuble, the German finance minister, does not believe that any government would be able to implement them.

His pessimism has been tipped into despair with a secret European Commission, Central and IMF report that even if Greece made good on its promises, it would not be enough to reach the target of bringing total debt to 120 per cent of GDP by 2020.

"He just thinks the Greeks cannot do what needs to be done. And even if by some miracle they did what has been promised, he - and a growing group - are convinced it will not pull Greece out the hole," said a eurozone official. » | Bruno Waterfield, Brussels | Saturday, February 18, 2012

Günter Grass Attacks Merkel for Athens Policy

THE INDEPENDENT: The Nobel laureate sends a stinging rebuke to the German Chancellor for her uncompromising attitude to the struggling economy

The world's leaders and economists, having put in their euro's worth on Greece and currency union – to no great discernible effect, so far – yesterday, one of the planet's most respected literary figures joined in. Germany's Nobel literature laureate Günter Grass criticised the treatment of Greece in the debt crisis, describing it in a new poem as a "country sentenced to poverty".

The 84-year-old's latest work, "Europe's Disgrace", was published in the daily Sueddeutsche Zeitung. It comes less than two months after Grass triggered a storm of criticism with another intervention on a political issue – a prose poem sharply criticising Israel amid the dispute over Iran's nuclear programme. As Greece struggles with austerity and reform programmes demanded by creditors in exchange for rescue loans, and speculation grows that it may leave the 17-nation eurozone, Grass springs to its defence, and, by implication, criticises his own country's attitude to it.

The poem is a stinging rebuke for Chancellor Angela Merkel's conservative-led government which has insisted that austerity is the only way that Greece can balance its books. The author accuses Europe of forcing Greece to drink from a poisoned chalice and describes it as a "country now hardly tolerated". In the poem, he says Greece has been "pilloried naked as a debtor". He writes: "You will waste away spiritlessly without the country whose spirit, Europe, conceived you." » | David Randall, Tony Patterson | Sunday, May 27, 2012

EU Austerity Policies Risk Civil War in Greece, Warns Top German Economist Dr Sinn
THE TELEGRAPH: Greece’s austerity measures cannot prevent default and will lead to a breakdown of the political order if continued for long, a leading German economist has warned.

Hans-Werner Sinn, head of Germany's prestigious IFO Institute, said it was impossible to cut wages and prices by 30pc without major riots. Photo: The Telegraph
“This tragedy does not have a solution,” said Hans-Werner Sinn, head of the prestigious IFO Institute in Munich.

“The policy of forced 'internal devaluation', deflation, and depression could risk driving Greece to the edge of a civil war. It is impossible to cut wages and prices by 30pc without major riots,” he said, speaking at the elite European House Ambrosetti forum at Lake Como.

“Greece would have been bankrupt without the rescue measures. All the alternatives are terrible but the least terrible is for the country to get out of the eurozone, even if this kills the Greek banks,” he said.

Dr Sinn said Greece is an entirely different case from Spain and Portugal, which still have manageable public debts and can bring their public finances back into line with higher taxes.

“Greece would have defaulted in the period between April 28 and May 7, had the money not been promised by the European Union,” he said, describing the failure of the EU’s bail-out strategy to include a haircut for the banks as an invitation to moral hazard.

“There should be a quasi-insolvency procedure for countries. Creditors have to accept a haircut before any money flows for rescue plans, otherwise we’ll never have debt discipline in the eurozone,” he said.

Greek society has so far held together well, despite a wave of strikes and street violence in the early months of the crisis. However, unemployment is rising fast and political fatigue with such austerity policies typically sets in the second year. >>> Ambrose Evans-Pritchard in Cernobbio, Italy | Friday, September 03, 2010

Greece: Bail-out Money Is 'Reparation' for Second World War
THE TELEGRAPH: While high-finance will – or maybe not – save Greece, it is the low-ground that people both there and in Germany are scrabbling over to play the blame game.

Greece is already into a boycott of German goods and services, ranging from Miele fridges to VW cars to pharmaceutical products.

But it is the war, and the brutal German occupation of Greece, that really gets up the noses of Teutons whose leader pledged 22 billion euros this week to save them from themselves.

An altered picture from the 'Eleftheros Typos' newspaper showing the statue of Victoria in Berlin holding a swastika was the forerunner for Greeks to mention the war.

The mayor of Athens, Nikitas Kaklamanis, led the call for Germany to pay reparations for the conquest and occupation, saying; "You owe us 70 billion euros for the ruins you left behind."

Greece's deputy prime minister, Theodoros Pangalos, also dragged up the war, stating; "The Nazis took away the Greek gold that was in the Bank of Greece, they took away the Greek money and they never gave it back."

A Greek magazine also last month carried a 10-page article detailing for its readers Germany's Nazi past. >>> | Wednesday, May 05, 2010

Greece Sinks to Its Knees
THE SUNDAY TELEGRAPH: The recent bail-out, which imposes strict new austerity measures on the Greeks, will deepen a crisis that has already driven up the suicide rate by 40 per cent. David Blair reports from Athens on a nation that eyes the future without hope.

If popular protest in the graffiti-stained heart of Athens is the most obvious sign of Greece’s burgeoning crisis, a handful of volunteers gathered inside a suburban office provides a quieter, but no less painful, symbol of the country’s agony. These restrained, dedicated people meet in the modest headquarters of Klimaka, a mental health and social integration charity serving as Greece’s version of the Samaritans.

In a country where suicide is so vehemently stigmatised that it amounts to the social problem that dare not speak its name, a specialised telephone service offering counselling to those in despair began as recently as 2007. Today, the psychiatrists and psychologists who answer whenever someone dials “1018” are busier than ever. As the national economic crisis has worsened, so the volume of calls has grown.

In 2010, the service spoke to 2,500 people judged to be contemplating suicide. Last year, Greece’s first euro bail-out failed and the country’s unemployment rate rose by half in the space of 12 months, climbing from 13.9 to 20.9 per cent. As more and more people confronted redundancy and destitution, the plaintive calls to Klimaka more than doubled: 5,500 people thought to be at serious risk rang in 2011.

Today , the German parliament will vote on whether to endorse a second bail-out that was agreed by eurozone finance ministers last week on condition that Greece implements some of the harshest austerity measures ever imposed on a Western democracy. After five years of recession, Greece must now endure almost a decade of further economic self-flagellation in order to reduce its national debt from 160 per cent of gross domestic product to 120.5 per cent in 2020. That is the language of Brussels communiqués and central bankers; but the true voice of economic crisis is heard by Klimaka’s volunteers every day. » | David Blair | Sunday, February 26, 2012